Public-private partnerships needed to save fresh produce markets

NATIONAL fresh produce markets lie at the very heart of local food supply chains, but deteriorating infrastructure and a lack of municipal oversight may soon see farmers abandon these sites altogether.

Critically, the central locations of these markets are key to reducing travel for low-income households, informal traders and resellers looking to obtain fresh produce at competitive prices. The markets thus play a vital role in price-setting, as well as in broadening access to fresh foods for remote communities while generating significant income for municipalities.

Demonstrating their significance to food supply chains, the Department of Agriculture, Land Reform and Rural Development’s latest report on fresh produce markets showed that, despite the pandemic, nearly 3.2 million tons of fresh fruit and vegetables to the value of R19 billion were sold at the 20 major South African markets in 2020.

Of this, potatoes were the most popular, totalling 37.4 percent or more than a third of all vegetable sales at markets alone.

Potatoes South Africa believes that the rand amount could be closer to R21.5bn in 2022 with one caveat: markets need better support, maintenance, and an immediate reinvestment into upgrading infrastructure and security to prevent farmers from seeking alternative solutions.

Should municipalities be unable to provide the necessary capital and oversight, they should then urgently consider entering public-private partnerships to protect the future value of their assets.

Growing crisis at markets impedes trade

Over the past decade, market conditions have unfortunately declined to the point where farmers and customers find it increasingly difficult to trade.

Basic infrastructure such as buildings, floor trading spaces and ablution blocks are deteriorating, while market floors are failing the basic hygiene standards needed for the sale of fresh fruit and vegetables.

Even the roads leading to markets are in disrepair, making it difficult for producers to get their fresh goods into the market space.

Additionally, there’s an insufficient number of cold store units at many market locations, and those available for use are often inoperative due to load shedding and under-performing diesel generators.

Together, these factors lead to considerable product wastage, causing farmers huge financial losses.

Ultimately, however, consumers are perhaps the worst affected, as farmers are forced to either raise prices to account for losses, or simply decide not to return to markets at all, reducing the supply available.

Public-private partnerships a winwin option

The government is a civil institution which provides common services to a group of people who cannot afford to attain those services themselves. But the dire state of national fresh produce markets points to the failings of this system, as despite the fact that markets generate millions in annual revenue, they consistently fall prey to other budgetary concerns and political priorities.

So, as municipal pockets increasingly feel the pinch of a growing economic and fiscal squeeze, it may be time for the government to consider other options such as inviting private stakeholders on board to help alleviate the burden on State resources and improve the markets’ efficiency.

By entering a public-private partnership, municipalities would receive an immediate injection of vital capital to address infrastructure, security and hygiene concerns.

Additionally, private partners would be able to assist with ongoing maintenance and help to ensure greater financial transparency and managerial oversight in the long term.

The Cape Town Market exemplifies the benefits of this approach, setting a high standard for other fresh produce markets across the country.

Failing this, farmers will continue to turn to alternative solutions such as private markets. Three such markets have already been established and are turning a healthy profit.

The implication is that without a marked improvement in maintenance, private entities are willing and able to create their own spaces, which will ultimately lead to a loss of income for municipalities. But due to the centralised location of most markets, farmers want to see them succeed and to continue supporting them.

With this in mind, we again implore local, provincial and national government to urgently consider the appalling state of national fresh produce markets, and commit to either intensifying maintenance efforts or bringing in private partners to help resolve management issues.

Willie Jacobs is the chief executive of Potatoes South Africa.