Competition Commission SA to Establish a Market Inquiry Into the Fresh Produce Market

Competition Commission SA to Establish a Market Inquiry Into the Fresh Produce Market
Photo: FitNish Media / Unsplash 31.03.2022 156

The Competition Commission SA has launched a public market inquiry into the fresh produce market to examine whether or not there are any features in its value chain which lessen or prevent competitiveness.

The Commission believes that a study of the fresh produce market is essential in order to understand not only the state of competition within the industry and  the market features affecting price outcomes, but also the challenges currently faced by farmers (especially small-scale and emerging farmers). The sector is also important to the economy, employment, and welfare of citizens.

Agriculture plays a significant role in the South African economy as it contributes to food production, job creation, raw material supply to agro-industrial and manufacturing sectors, as well as export-driven foreign exchange income.

According to the Commission's press release, the fresh produce market inquiry will focus on particular issues at each layer of the value chain — from the farmer's sale of fresh produce to the supplier to the end customer.

The Commission will focus on four main issues:

  • Efficiency of the value chain. The Commission's experts will determine how the value chain, different levels of concentration at various levels, and route to market  impact prices within the sector and its efficiency.
  • Market dynamics and impact of key inputs for growers. The key inputs for growers will be examined: seeds, fertilizers, agrochemicals (herbicides, fungicides, and pesticides), and farm equipment. Many of these inputs are imported or priced based on international bases and can lead to significant cost effects at the grower.
  • Small growers and the extent of their market participation. The inquiry will consider the barriers to market entry faced by small and HDP growers, as well as issues around access to fresh produce markets or retailers through contract farming.
  • Barriers to market entry related to the regulatory environment. Here, the Commission would focus on examining the broad regulatory environment that prevails in the fresh produce industry.

Source:  Compcom.co.za

food markets  South Africa 

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