Farmer's Weekly (South Africa)
On the Market Floor
FreshPlaza.com recently carried a worrying article about the possibility of a new ‘banana war’ erupting in Europe.
Apparently, Aldi, a leading German supermarket group, recently took a unilateral decision to reduce the price of bananas from the Caribbean by €1 per box. At the current exchange rate, that’s a whopping R16,50.
It’s not much different for suppliers in the Caribbean. If you’re a banana grower in Jamaica, say, you could potentially be losing about J$140 (R16) per box.
a cautionary tale for south african farmers
All this might be of no direct concern to South Africa. But it’s certainly a lesson for our local growers, not only banana farmers. In short: be keenly aware of whom you sign up as buyers of your produce.
History teaches us that there is invariably some individual or organisation lurking in the background wanting to control farmers and their supplies.
the deal that’s Too good to be true
I’m not saying that farmers should avoid doing business with a reputable buyer. I‘m simply saying, ‘Beware and be alert!’
Above all, watch out for the ‘silver-tongued fox’. Don’t allow greed to overpower your common sense. Walk away from those deals that sound too good to be true; they usually are!
When buyers have so much power that they can drop the price of an item without consulting the supplier, a dangerous and unequal situation exists. Those who act in this way are usually so powerful they feel they are above normal repercussions, such as outraged suppliers.
playing it safe
My answer, as always, is that producers should balance their marketing. Supply some buyers directly, if you wish, but keep a substantial portion of your supply for sales on the fresh produce markets.
There are many advantages to choosing the market option. One of the most important is the element of competition: no single buyer calls all the shots. • Michael Cordes is an agricultural journalist, consultant, trainer and former farmer. Email him at farmersweekly@caxton.co.za. Subject line: Market floor.