The Inquiry proposed 31 recommendations aimed at promoting competition, reducing barriers to entry, and promoting a more inclusive fresh produce value chain.
On Monday, January 13, the Competition Commission of South Africa published the final report on the fresh produce market inquiry, which was launched in 2023.
The Inquiry's primary objective was to identify features within the fresh produce value chain that may impede, restrict, or distort competition. It focused on five fruits: apples, citrus (notably oranges and soft citrus), bananas, pears, and table grapes, along with six vegetables: potatoes, onions, carrots, cabbage, tomatoes, and spinach.
These products are staples in South African households. Initiated by the Commission under the Competition Act 89 of 1998, the Inquiry began on 31 March 2023. It assessed the fresh produce value chain across three main themes:
1. Efficiency of the value chain, concentrating on fresh produce market facilities.
2. Market dynamics of key inputs and their impact on producers.
3. Barriers to entry, expansion, and participation.
The Commission engaged extensively with stakeholders throughout the Inquiry process, beginning with consultations to define its scope and followed by public hearings, farmer workshops, and a provisional report released on 18 June 2024.
Subsequent feedback from stakeholders helped refine the Inquiry's recommendations. The Inquiry identified significant barriers to competition, including inefficiencies in municipal fresh produce markets, the conduct of market agents, high input costs (especially for fertilizers and seeds), regulatory hurdles, and systemic challenges for small-scale, emerging, and historically disadvantaged farmers. It also 2 highlighted the limited access these farmers have to formal retail channels and national markets, emphasising the need for transformation in the sector.
Trade and Industry Minister Parks Tau officially received the Competition Commission’s final report, hailing it as a significant step toward economic transformation and food security.
“The fresh produce market is more than just a commercial sector; it is a lifeline for households, a source of livelihoods for farmers, and a driver of food security,”
Tau remarked.
In the photo, in the center: Doris Tshepe, Parks Tau, Hardin Ratshisusu © x.com/TauParks
Despite the fresh produce market's annual value exceeding R53 billion (excluding informal sales and exports), the participation of historically disadvantaged farmers remains minimal. This underrepresentation reflects historical inequities and underscores the urgent need for meaningful transformation.
In total, the Inquiry proposed 31 practical recommendations aimed at promoting competition, reducing barriers to entry, and promoting a more inclusive fresh produce value chain. These include calls for policy reforms, market restructuring, and targeted support for small-scale and historically disadvantaged farmers.
The final report marks the beginning of an essential phase for implementing these recommendations. It serves as a roadmap for addressing identified distortions in the fresh produce value chain and urges all stakeholders - policymakers, industry participants, and civil society - to collaborate in the execution of these actions.
“The final report reflects the Commission’s commitment to promoting competitive markets that contribute to economic growth and broader societal objectives in a transparent and evidence-based manner,”
said the Commission in a press release.
Chairperson of the Fresh Produce Market Inquiry, Deputy Commissioner Hardin Ratshisusu said the investigation into the conduct of producers, market agents and retailers is expected to help shake up and transform the industry.
According to him, the final report provides rich insights into the domestic fresh produce market and more importantly, a path into economic inclusion.
“It reflects the need to address entrenched challenges and creating a market that works for all – from the smallest farmer, to the largest farmer, to the retailer and even the consumer,"
said Ratshisusu.
Acknowledging the scale of the task, Tau emphasised the need for collective action as transforming the fresh produce value chain will require “collaboration across the public and private sectors, as well as robust engagement with communities and stakeholders.”
He also described the report as a "call to action" and confirmed his commitment to tabling the report in Parliament, as required by the Competition Act, to ensure its recommendations receive the attention they deserve within prescribed time frames.
Sources: Compcom.co.za, OFM News, EWN