Market access a lifeline for small-scale farmers
Many small-scale farmers dream of turning their operations into profitable businesses. However, access to markets remains a big hurdle. Drawing from her childhood experience, one agricultural commodities trader developed a system that could change things for struggling farmers.
Jim Rogers, the man who accumulated vast fortunes b y maki n g d a r i n g investment bets alongside his one-time friend and legendary investor George Soros, is evangelical in preaching that the next generation of billionaires will emerge f rom agriculture. Rogers encourages anyone who cares to listen to learn to drive a tractor and profit from the world’s insatiable appetite for food. However, Ezkiel Skhosana (right), a Mpumalanga-based mixed vegetables farmer (and skilled tractor driver) has yet to hit t he agricultural jackpot predicted by Rogers.
“I am good at producing vegetables, but I am struggling to get access to markets. I need help with f inding buyers,” admits Skhosana.
His inability to f ind reliable, longterm buyers in the fresh produce market has led to Skhosana giving away four of the seven hectares of land he inherited from his late father to neighbours.
I n 2 01 2 , t he de p a r t ment of agriculture, forestr y and f i sheries released f igures that showed a total of 3.15m tons of f r esh f r uit a nd vegetables – valued at R10.8bn – were sold at 19 major fresh produce markets in South Africa.
The Johannesburg market – the largest by far – accounts for roughly 41% of sales, followed by Tshwane (18.8%), Cape Town (9.7%) and Durban (9.3%). The remaining 21.2% is split between 15 markets. According to Prudence Ngomane, an agricultural commodities t rader, Skhosana’s predicament is one of many in which small- sca l e fa r mers can’t f ind markets for their fresh produce. An estimated 1.4m black farmers have access to roughly 14m hectares of farmland, but they compete for market access with 36 000 large-scale farmers that control anything between 75m and 86m hectares of prime farmland in South Africa.
Ngomane’s c ompany, Bewalt Global, was set up in 2013 to unlock hard-to-penetrate supply chains of the fresh produce markets for small-scale farmers that face marketing and sales challenges. Not only do they get their feet in the door, but also receive fair prices for their hard toil.
“The farmer will provide a list of fresh produce, price and quantity to Bewalt. We then market this produce and when we find an interested buyer, a sales agreement is signed.
“The buyer then makes a payment before picking up the produce. This ensures that the farmer is protected from fraud and paid on time while the agreement protects the buyer – Bewalt will be responsible should the produce not be available,” explains Ngomane.
Bewa l t does not c ha r g e t he farmers for its ser vices, but adds a mark-up or commission to the selling price to recover costs and make a profit. Negotiating a fair price for a farmer is a hurdle, but Bewalt also assists them in negotiating corporate red tape and obtaining paperwork associated with supplying major food retailers. Documentation required may include health inspection certificates, paperwork proving that the farmer is supplying a South African product, grading certificates and proof of farm ownership.
Finweek caught up with Ngomane at Skhosana’s fa r m i n Siyabuswa, Mpumalanga, where she was visiting the farmer to assess his readiness to supply hard-to-please customers – mainly exporters and supermarkets. Skhosana’s l ack of commercial experience has already cost him dearly and he believes Bewalt will help him negotiate tricky contractual curveballs thrown at him by sophisticated food buyers.
“Last year, I lost over 10 000 heads of cabbage after the department of education in Mpumalanga reneged on