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Farmers Get Short End Of The Stick As Food Prices Balloon

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9 July 2020 – Retailers appear to be the only winners when it comes to the fresh produce industry as consumers complain of rising overall food costs while farmers’ margins are growing increasing tight.

In an international survey conducted by Ipsos in 26 countries from 22 May to 5 June, the majority of people said the overall cost of food, goods and services had increased for them and their families.

81% of South Africans said they were really feeling the pinch, putting them in line with respondents in Argentina, with Mexico (81%), Turkey (80%) and Chile and Belgium (79%) coming close behind.

They strongly feel that food and utility prices have increased extraordinarily in comparison to other costs.

Farmers, on the other hand, are not reaping the benefits.

Eric Mauwane, a vegetable farmer from Tarlton, north-west of Krugersdorp, said within the first two months of the national lockdown the prices of his main crops had dropped tremendously. “I was receiving R4 for broccoli and red cabbage and about R1.50 for my lettuce. I was told that it is because the restaurants and the fast food outlets were closed,” he said.

“But the only surprising part was the prices (only) went down at the farm gate. The retail stores were probably charging about 400% more. So, the very thing they were buying for R1.50 to R2 they were selling at R14,” he said.

Mauwane said farmers had nothing to look forward to in coming months. “Even though “sit down” in restaurants is again permitted, there is no guarantee that consumers will actually visit the restaurants for fear of contracting Covid-19.

“A lot of farmers are saying that they are currently planting for end of September and October when it starts to get hot, because by then chances are the Covid-19 cases might have gone down.”

According to Grow Fresh Produce agent Deon Van Zyl market agents determine the price of the fresh produce market based on supply and demand. 

“That’s how the market works. We as market agents can’t decide to lift the prices. We compete with each other with the same product line and we try and sell to the best of our abilities. If my opposition sells the product cheaper, I have to call the farmer (to lower the price) because if he is too expensive he is not going to sell,” he said. Source (FreightNews)