Integrating Small-Scale Producers into the Mainstream in South Africa: A Retailer in Venda and Local Farmers

Integrating Small-Scale Fresh Produce Producers into the Mainstream Agri-Food Systems in South Africa: The Case of a Retailer in Venda and Local Farmers

By André Louw, Hester Vermeulen & Hilton Madevu

for Regional Consultation on Linking Farmers to Markets: Lessons Learned and Successful Practices. Cairo, Egypt, January 28 - February 2, 2006

Abstract

The forces of globalisation and economic liberalisation have exposed small-scale farmers in South Africa to new market prospects as well as new challenges. The market changes in South Africa have brought about market concentration in the agro-food sector. The dominant market players tend to favour suppliers who can ensure high volumes, consistent quality and can do so in the long run. These criteria have tended to favour the more capitalised commercial sector over the emerging sector.

However, despite the hurdles faced by small-scale farmers in South Africa, the case study presented in this paper illustrates the potential for successful, mutually beneficial engagement between the commercial sector and small-scale farmers, based on the case of small-scale vegetable farmers supplying the SPAR supermarket in Thohoyandou, Venda.

The supermarket provides a market for the vegetables of the small-scale farmers, as well as a number of support services. In return the supermarket receives a regular supply of fresh produce, rapport and patronage for its investments in community development. The supermarket's pro-poor policies, among other things, have catapulted its market share from zero when it opened in 2002 to a dominant 66% only two years later and remaining at that level to date. This model has also since been taken to five other SPAR outlets.

This case study illustrates that private entities can serve as important facilitators of market entry for the emergent sector.