Drought concerns grow for WC farmers
FRUIT and vegetable farmers in the Western Cape will be hoping for good rains this winter to replenish dams and enable the province to maintain its share of supplies to the country.
Unlike other parts of South Africa, which have experienced widespread rainfall in recent months, the Western Cape is still beset by drought, which affects those vulnerable fruits and vegetables that are largely produced under irrigation.
“The [drought] situation is a concern in the sense that it could affect supply and the pricing of fresh fruit and vegetables,” said general manager for the Institute of Market Agents of South Africa Michael Cordes which represents market agents of the country’s 22 fresh-produce commission markets.
The fruit and vegetable sector, which generates R39-billion in annual turnover, forms part of the wider horticultural sector.
Excluding exports, the freshproduce commission markets generate about R16-billion a year.
Almost half of the vegetables produced in the country are sold through fresh-produce markets, which have recently drawn attention from the competition authorities for suspected collusive behaviour.
Last month, the Competition Commission raided the premises of at least nine fresh-produce market agents, which serve as intermediaries between farmers and buyers of fruit and vegetables.
The agents are suspected of being involved in cartel and price-fixing conduct in contravention of the Competition Act.
It is alleged that the agents – which include RSA Group, Subtropico and Dapper Market Agents – are involved in prohibited coordinated activities aimed at undercutting the prices charged by smaller intermediaries.
General manager for trade and markets at Hortgro Jacques du Preez said the drought in the Western Cape and volatile rand were some of the key concerns in the deciduous fruit industry.
The weaker rand flatters revenue that is estimated at R10.4-billion a year, but also inflates production costs such as fuel, fertiliser, chemicals, transport and shipping.
The province produces about 75% of the country’s deciduous fruit, which is mainly destined for export markets, including Europe, Africa, the Middle East, Far East and Asia. — TMG