Agricultural produce agents’ council (APAC A look at fresh produce markets

Francois Knowles, Registrar and CEO at the Agricultural Produce Agents Council (APAC) has a long history in the Fresh Produce industry. Undercover Farming interviewed him prior to the Undercover Farming Western Cape Conference 2021, where he will also be presenting an overview on APAC and the current state of the fresh produce industry that he regulates. Francois shared figures for the 12 months (1 July 2020 to 30 June 2021) relating to the turnover and mass sales which are handled by 23 Fresh Produce Markets around the country and 16 Off-market Agents (Agencies performing under the same rules as Fresh Produce markets). In total 39 market platforms handles fresh produce in South Africa (SA).

INCREASED TURNOVER

According to Francois, the turnover figures up to 30 June 2021 indicated R20.04MM against the previous book year’s R18.2MM (Growth 9.8%; taking into account growth of inflation, price increases, etc.). “We are perturbed over volume figures reported by markets. In the same year a growth was reported, there was a decrease of 11.7% in volumes sold at markets. This could largely be due to the influence of the Covid-19 epidemiology, adverse weather conditions which influenced optimal production, logistical problems at chain groups and unfortunately, the lootings in Kwa-Zulu Natal. A recent visit to a city market revealed the shocking conditions that can only be due to poor management. The market areas and general infrastructure that is totally neglected, poor service delivery and overall, dirty conditions in which no buyer or even public would want to do business, gave Francois the idea that management lost interest in their market. APAC advises that security at fresh produce markets should be upgraded. If conditions are not safe for buyers at markets, they will resist visiting such markets. There is a shortage in proper maintenance, and a gaping hole at the entrance gate is enough to have regular buyers turn away and seek other resources. Hygiene plays a major role at fresh produce markets; nobody will be in a buying spirit if there is dirt, smelly produce or other objects where foodstuff is displayed which actually should attract buyers. “Proper management is a precursor to a flourishing market – if it is not in place, disorder and eventually less buyers on the floor is imminent,” Francois said.

COVID-19 2020 EWA

Early warning action was taken when APAC met the management team at Johannesburg Market with representatives of market agents as they have foreseen problems which could arise during the pandemic period. Covid -19 protocols were designed as a team and a minimum requirements list was drawn up together. Hygiene measures included spraying of hands, wearing masks, keeping social

distance, cleaning of premises, and more. APAC played a very pertinent part in establishing protocols at Johannesburg Market after which it was rolled out to the rest of South African markets. During the whole pandemic all markets were open for business as usual as it is an essential service. “At first, we experienced pressure on potato stocks, since informal markets closed as well as restaurants. Though, many new clients visited the fresh produce markets and consumers returned to purchasing basic foodstuffs. A small impact was experienced in the fruit sector as people purchased necessities. Generally speaking, markets did not do bad at all and held their own through the Pandemic,” Francois said. “The first signs of Covid-19 appeared at the Pietermaritzburg market in April 2020, but with APAC’s protocols in place, processes were fast-paced to keep the market on an even keel. As such, I am confident and proud of our markets to come through the Covid period smoothly,” Francois mentioned.

COMPETITION COMMISSION

During the pandemic, the Competition Commission responded with concern to the President’s request that food prices be stabilized. On behalf of APAC, Francois approached the Commission when fresh produce prices soared. He explained advantages of price discovery to markets. Once one stirs at demand and supply, it is possible to sow devastation in the industry. There were out-of-the-middle lane lines such as garlic and ginger, of which either home-made medicines, or beer from pineapples was made. Therefore ginger jumped up to R2 000.00 per ten kilogram box at a stage. The Competition Commission immediately asked APAC to answer why ginger skyrocketed and suitable answers were given to have them understand the tendencies and influences which factored price.

KZN LOOTING

The disastrous lootings at business premises in KZN, immediately had market managers and agents at Durban and Pietermaritzburg defend their individual markets in solidarity. Thus the market at Pietermaritzburg was closed for only four days and Durban five days. APAC arranged with Potatoes SA and the main tomato producers to carry on with supplies to the markets. Generally, markets were functioning at full capacity by the fifth day.

EXPORTS

“During the Covid-19 period Transnet Port Terminals declared themselves a ‘force majeure.’ On 22 July their computer system was hacked and held ‘hostage’, with the result the system could not handle in- and exports and the logistics around fresh produce cargo. The only conclusion drawn is that it was blatantly mismanaged. Durban Harbour handles around 60% of containers arriving in, and being transported from South Africa. Therefore, over and above the looting acts, Covid pandemic and a poor economy, this incident added to their demise. Throughout this incident APAC was involved to assist with whatever was required and to use this as a learning curve for future similar situations elsewhere. Fresh produce export agencies were under pressure while APAC was involved in keeping harbours open for in and exports from the country. Harbours are still far from operating optimally and only because of poor Transnet infrastructure. The harbours are unquestionably an important factor to the economy of any country and government must be held accountable for concurrent investment and maintenance of such infrastructure. There were blockages in harbours as far as export flow is concerned, but through APAC involvement, these were sorted out to a large extent.

WAY FORWARD

“According to available statistics, The SA population count reached 60 million people. The increase of the population (with deaths calculated) is about 750 k annually. This is an unbelievable opportunity for fresh produce producers and markets as this increase adds to the numbers who have to be fed. Looking at the decreasing figures of produce reaching the current market floors, it can only reach consumers through other channels. Therefore, if the fresh produce markets do not increase their customer’s (producers, agencies) awareness and satisfaction, the number of farmers marketing their produce directly or through other means to retailers or consumers, will increase,” Francois Knowles warned. “Markets are where prime prices are obtained and are the only firm platforms where consumers are able to gauge whether the price they see at different stores are on par with market-related prices. Another major reason why fresh produce markets are important is to offer the semi-commercial producer a place where prices are negotiated at a level that is acceptable by the average consumer – much different from where he have to subject to a single consumer or dealer’s offer for his produce. “Private markets are on the rise in recent times. These are not subjected to municipal regulations and lengthy administrative issues, therefore much easier to deal with by the producer.

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Herbert Stolker Consultant KZN, Gauteng, Mpumalanga and Limpopo T +27 (0) 72 545 5757 E h.stolker@delphy.nl Yulandi Holtzhausen Consultant Cape Town region T +27 (0) 82 896 2156 E y.holtzhausen@delphy.nl

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