South African farmers need stronger market knowledge, better business skills and diversified income streams to improve profitability and reduce their reliance on being price takers.
According to Limpopo farmer and agripreneur Matjee Mokgoadi, many farmers produce quality crops but lack the skills and information needed to negotiate effectively.
“From my experience working with farmers and as a farmer myself, many farmers are not yet fully equipped to negotiate prices effectively.
The challenge is not only production; many farmers can produce good quality crops, but the ability to understand the market, calculate production costs, access market information, and engage buyers from a position of strength,” Mokgoadi said.
How to strengthen market position
He added that many emerging farmers work individually, which limits their bargaining power and often forces them to accept prices that do not reflect their production costs.
Mokgoadi believes farmers need stronger support in market intelligence, financial literacy, record-keeping, cooperative development and understanding value chains.
“This is why my work focuses not only on production, but also on helping farmers build systems around their businesses – because a farmer who understands their numbers and their market is in a better position to negotiate,” he said.
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Mokgoadi said farmers should move beyond simply accepting market prices.
“Farmers should not see themselves only as price takers. Agriculture is a business, and like any business, farmers need to understand their value and negotiate where possible.”
While acknowledging that supply and demand influence prices, Mokgoadi said farmers can strengthen their market position through collective action, better planning, stronger market linkages and value addition. He added that the future of agriculture depends on farmers evolving beyond primary production to become agripreneurs with a sound understanding of production, business and markets.
Diversification improves resilience
Gauteng livestock farmer Simphiwe Hlubi said modern farmers need multiple revenue streams to remain financially sustainable.
“I think it’s very key that you have multiple revenue streams that you would generate, especially from the farming operation, because just one thing, you cannot survive doing just one thing.”
While his farm breeds goats, he said the enterprise alone cannot cover ongoing operational costs.
While acknowledging that supply and demand influence prices, Hlubi said farmers can strengthen their market position through collective action, better planning, stronger market linkages and value addition.
He said the future of agriculture requires farmers to evolve from primary producers into agripreneurs with a sound understanding of production, business and markets. “You need to try to create multiple revenue streams for you to keep being sustainable on the farm. It’s not easy, but we keep pushing forward.”
Consumer demand creates new opportunities
National Agricultural Marketing Council (NAMC) agricultural economist Buhlebemvelo Dube said changing consumer preferences are creating opportunities for smallholder farmers in both formal and informal markets.
“South African consumers are becoming more demanding not only about the cost of food but also about how it is sourced. The channels through which they receive their food, both formal and informal, will affect how farmers get their produce to market,” he said.
Dube said informal markets continue to provide flexibility for smallholder farmers, particularly vegetable producers, while formal retailers have improved access for some producers, but more integration is still needed.
“In the formal market, smallholder farmers have seen improved market access and are now able to get their fresh produce to some supermarkets. However, more has to be done to integrate these smallholder farmers with the formal market.”
He added that consumers are increasingly choosing locally produced food and supporting smallholder farmers.
Dube said formal retailers have made progress in integrating smallholder farmers into their supply chains, but increasing these efforts would not only expand market opportunities for producers but also appeal to consumers who are increasingly seeking locally sourced food.
Changing social, economic and geopolitical forces are reshaping food supply chains, Dube added, making smallholder farmers increasingly important to South Africa’s agricultural economy.
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