South Africa’s informal farming sector and its contribution to the economy and food security is far more than what is actually being recognised, an expert says. While increased support to develop the informal sector is needed, farmers point to informal markets as a definite way to go, especially for new entrants.
According to Professor Ferdi Meyer, managing director for the Bureau for Food and Agricultural Policy (BFAP), agricultural data does not reflect the contribution that the informal sector makes to food security.
“It is not true that there are only large-scale white farms in South Africa who contribute greatly to employment and exports. 93% of all VAT-registered farms are small and micro operations that only contribute 23% of the income, but 37% of employment in the sector,” Meyer says.
Data shows that there are over 40 000 commercial farming units that contribute to food security in the country. According to the General Household Survey 2019, there are 300 000 smallholder operations and another 2,3 million households that should be included when counting contributors to food security.
Meyer believes that these statistics do not necessarily take into account the around 214 000 households that, in recent surveys, indicated that they receive at least a secondary income from agricultural activities such as raising pigs and chickens.
“If we don’t understand where these producers are, how can we support small SMME operations with credit and infrastructure?
“The media only reports on the contribution of commercial farming. No one reports on the informal sector and its real contribution to food security,” he says.
‘Informal markets offer better prices’
Meanwhile, farmers tell Food For Mzansi that informal markets are the way to go, especially for new entrants.
Leshalagae Mojapelo, a butternut farmer in Limpopo, says small-scale farmers should not be in a hurry to sell off their products to big retailers or make use of third-party agencies to sell their products. These agencies, he says, can take up to 15% a farmer’s profit, which is a lot for those producing on a small scale, he says.
“In the direct market you can set your prices [and make it] non-negotiable. They do not have to be compared to someone else’s prices.”
“In retail, you will be selling a lot of bags at a go, but the prices are already set. It might be half or even below half of your informal market price,” he explains.
Mojapelo says he prefers selling his produce on street markets and to school feeding programmes.
“The street market is the one that gives us a reasonable return because the big supermarkets, retailers and agencies rip emerging farmers off. Although the demand from them is higher, you end up working for them.”
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‘Informal markets offer control’
Another farmer and founder of Ya Maja Bital, Segwarihle Siesegoana, says for him, the advantage of selling in the informal market is that it helps him feel more in control.
“I sell my produce according to the orders I received. If there is an order for 50 units, I will harvest that and sell them. If you harvest everything and wait for them to be bought, rats might mess with them in storage.
“I believe in leaving the produce on the veld and not taking them out until they are bought, so that one does not experience any type of loss in storage,” Siesegoana says.
Meanwhile, Meyer says that developing the small-scale sector remains a challenge.
However, he reckons that the private and public sector must work together to develop skills and build supply chains that include the informal sector.
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