Dutch Agri companies toured the Joburg Fresh Produce Market this week to learn more about South Africa’s unique free market approach to the fresh produce value chain.
On 18 October, 2023, the Embassy of the Kingdom of the Netherlands in South Africa facilitated a tour of the Joburg Fresh Produce Market (JFPM) for leading Dutch agri businesses.
The purpose of the tour was to introduce the Dutch delegates to the workings of the Joburg Fresh Food Market, focusing specifically on the unique commissioned-based system used at the market.
“The direct sales and wholesale approaches currently utilised internationally are noteworthy for their low transparency levels, and the fact that product is owned by individual entities rather than primary agri brands,’ explains Emiel Mulder, from the Embassy of the Kingdom of the Netherlands. ‘Conversely, the South African system is a neutral trading platform featuring high visibility, with prices discovered daily on the basis of current supply and demand factors. This allows agri businesses of different types and scale to compete and grow their own brands, while servicing all South African consumers, including the millions of citizens who access fresh produce via informal trade networks.’
The tour began at 6:00 am, well into market’s daily routine, and included conversations with producers, sales agents, market management and others who are essential to the day-to-day running of the market at different fruit and vegetable floors. They shared personal reflections on working in the agricultural industry, how the industry functions, and how their own careers have grown within it.
“The tour was followed by a great session at the RSA Group offices at the JFPM, where RSA Group CEO, Jaco Oosthuizen, offered the party an excellent, detailed overview of how South Africa’s fresh produce markets ecosystem functions,” says Mulder, from the Emb. “There were many fascinating insights on offer, and the group also appreciated the opportunity to hear from Wandile Sihlobo (author and Chief Economist of the Agricultural Business Chamber of South Africa) and to receive copies of both of his books.”
Another unique feature of South Africa’s National Fresh Produce Markets is their status as a transparent value transfer mechanism able to convert fresh produce harvests into revenue that goes back to farmers, as well as to local authorities, in the form of sales commissions.
To the uninitiated, converting a harvest into revenue may sound like a natural part of farming, but this aspect of agri business is actually highly complex, with many farmers struggling to establish a reliable sales channel mix that that allows them to sell all their produce in a predicable, sustainable way. While most global governments incur significant subsidy costs to secure their national fresh produce value chains and ensure farmers are offered enough incentives to keep producing, the South African free market fresh produce system functions very effectively in this regard, at no cost to the state.
“Our system is very different to Europe and the USA, and international visitors are always interested in finding out more about how we do it,” says RSA Group CEO Jaco Oosthuizen. “It’s been an absolute pleasure to guide our Dutch friends through our different processes and systems, and to introduce them to the incredible members of our fresh produce community.”
“South Africa is a major fresh produce exporter, and has strong and important relationships with fresh produce businesses across the world, especially in Europe,” concludes Oosthuizen, who is also the International Fresh Produce Association Southern Africa Country Council Chairperson. “Interacting with global agri businesses in forums like this is vital to the health and vibrancy of our community, and the trade reception was another excellent opportunity to strengthen key relationships and take our industry forward.”