Unsuspecting farmers
left high and dry
Ray Smuts
AS FRUIT producers reflect on what has possibly been the worst year in living memory, the realisation has dawned that it is up to them to increasingly take charge of their own destiny.
An often-heard story in the industry has it that the only requirements for a fruit export agent are a cellular 'phone, a bakkie and in the case of some unscrupulous foreigners, a tourist visa for South Africa.
Capespan logistics expert Dr Dawie Ferreira says a number of farmers have ended up with 'egg all over their faces', embarrassed at having been taken in by foreigners who took their fruit, sold it overseas and pocketed the proceeds.
Emphasising he did not wish to come across as derogatory, Ferreira told FTW: Our farmers have been extremely naive for a number of reasons; they were never educated in the ways of the market under the old (pre-deregulated) system and so they now need to understand what and where the markets are and how this impacts on their business.
They need to realise the risk they take when they give fruit to some agent who often comes here on a tourist visa, takes fruit and disappears overseas, never to be heard of again.
Grape farmers have taken the lead in forming alliances to co-ordinate their export and marketing efforts to mutual benefit and indications are that a larger crop than last year can be expected - provided the weather plays ball. (The number of grape exporters has already declined)
Ferreira says it is encouraging to note that farmers are getting together to determine criteria for exporters which includes selecting them carefully and limiting the number allowed to take fruit.
In other fruit areas there is also some form of consolidation taking place though perhaps not as formal as grapes, and this is positive as those who own the fruit are taking responsibility for their own destiny. Export agents will now have to position themselves accordingly as the rules of the game are changing.
Last year, there were 166 citrus and 169 deciduous exporters in South Africa, according to Perishable Products Control Board (PPECB) statistics, regarded by many as far too high, Ferreira among them.
I do not think more than 300 exporters is in any way sustainable and it is absolutely detrimental to the fruit industry.
A few strong exporters would have power out there in the market but when you have 300 there is no power whatsoever and when it comes to pricing policies guys just take you to the cleaners.
Ferreira said that the good, reliable, exporters would survive but the 'cowboys and fly-by-nights' would fall by the wayside.
Capespan currently holds between 55% and 60% of market share but Ferreira believes there is room for optimism ahead. Amid consolidation in producer ranks, a 'significant swing' has occurred back to Capespan, he says, which makes him confident that the organisation could increase market share to at least 65% next year.
The swing back to Capespan can be attributed to people who got caught by promises of prices in the market and they have seen during this year that we have to a large extent been able to deliver on returns predicted.
Competing internationally requires muscle in the market and we have kept our promises this past season.
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