Competition Commission blames the failure of some on the success of others

The Competition Commission's investigation into the fresh produce sector has yielded few results, despite allegations of unfair practices that ostensibly kept prices high and transformation low. Lindi Botha reports.

- Lindi Botha

Dilapidated markets, loadsheddding, undriveable roads, and high health and safety compliance costs have been listed as reasons for the lack of transformation in South Africa's fresh produce industry.

The Competition Commission released its Fresh Produce Market Inquiry (FPMI) provisional report on the state of the fresh produce industry in mid-June after a 14-month investigation. The purpose was to examine whether competition in the market was being restricted and whether historically disadvantaged persons (HDPs) and small-scale producers were being purposely kept off the playing field.

While the report provides recommendations to address identified issues, it lacks concrete solutions to tackle the systemic problems at the root of the issues. Instead, it lists recommendations that largely focus on forcing the inclusion of more players in the market, without detailing how those players will get up and running amid a host of infrastructure challenges.

The report is also being criticised for trying to shift blame to successful farmers and market agents, while acknowledging that all role players are being burdened by a challenging business environment.

TRANSFORMATION

The FPMI showed that less than 1% of the gross value of sales in the national fresh produce markets (NFPMs) comes from smallholders. Not only do new entrants find it difficult to get their produce onto the market, but their survival rates are low. Hardin Ratshisusu, deputy commissioner of the commission, said that the barrier to entry for small-scale producers was high, and that access to financing was challenging since these farmers did not have water rights.