The market for developing farmers is a significant concern in the agricultural industry, and the absence of development in future commercial farmers is a worrisome prospect.
During the recent AgriFuture SA conference in Pretoria, Tebogo Mokgoadi, the head of socio-economic development at Kagiso Trust, discussed strategies that focus on establishing formal connections to the market to empower small-scale farmers with Malapane Thamaga, an agricultural economist and trustee of the Maize Trust.
Governance plays a vital role
Thamaga said to address the problem, it was important to consider factors such as product quality, quantity, and consistency to ensure a steady supply to the market.
According to him, the government is the largest purchaser of agricultural products. This includes programmes such as school feeding schemes, hospitals, and the South African National Defence Force (SANDF), and as such government should be buying in bulk from up-and-coming farmers.
“If we can get just a mere 10-20% of those products coming from emerging farmers, I think we would make a huge impact in terms of market access for the emerging farmers,” he said.
Mokgoadi said it was very important to note, especially to financial institutions, that the needs of small-scale farmers vary depending on their situations and skill sets.
“Some may have technical skills, while others may not. Therefore, a blanket solution will not be sufficient to support farmers. Rather, it is essential to conduct individual assessments and provide support accordingly,” he said.
Mokgoadi added that the focus should be on community-based organisations as they have great potential to make a difference in their communities, but they often lack the resources they need to succeed.
“There is hope by working together and reducing dependency on aid, these organisations can build the capacity they need to become self-sufficient,” he said.
Mokgoadi said, “We cannot build solutions from top to bottom, we have to build from your bottom up.”
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Improve the use of aggregation
According to Mokgoadi, aggregation is a key concept for aspiring commercial farmers to understand, as it can play a vital role in their success.
“While aggregation can bring many benefits, there are also some challenges associated with it. One of the biggest challenges is the ‘merchant’ problem, which refers to the issue of a few large players dominating a market and squeezing out smaller players.
“This can lead to a lack of competition and can hinder innovation and growth. Another issue is governance, which can be a challenge when trying to get different parties to work together towards a common goal. These issues need to be considered when implementing an aggregation strategy,” he said.
Partners, rather than competitors
Meanwhile, Thamaga stressed the importance of building relationships and working together in farming communities. He encouraged farmers to think of each other as partners rather than competitors and to consider ways they could collaborate and support each other.
“This could involve sharing resources, knowledge, and labour, and could ultimately lead to more successful outcomes for everyone involved. The goal is to foster a spirit of cooperation that helps everyone grow and thrive.
“Only if we can learn to work together and appreciate that we are not competing as neighbours, we are playing a complementary role,” he said.
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