Across the entire country there is a general concern over price levels of fresh produce in South Africa. In response the Competition Commission has decided to perform an inquiry into the cost of many of these foods. Believing that “there may exist market features which impede, distort or restrict competitiveness of the South African Fresh Produce Food Market”.
Following the law, the commission has published a notice in the Government Gazette announcing the plans for the market inquiry. Allowing the public until April 25th 2022 to comment. Written submissions by the public can be sent to ccsa@compcom.co.za for attention of Ms. Mapato Ramokgopa.
Foods Included in the Costs Inquiry
The investigation is going to primarily focus on fresh produce and “agro-processing” within the country. This includes unprocessed products such as fruit and vegetables. It is a sector that is a main source of staple food as well as being a division which creates “significant employment opportunities”. Furthermore, the fresh produce industry forms an important part of South Africa’s agricultural exports.
The Commission adds that “In the context of the Covid-19 health crisis, it has become clear that nutrition and affordable healthy foods are important for household health as well as maintaining a country’s food security”.
They state that the main fruits produced and consumed in South Africa include:
- Apples,
- Bananas,
- Oranges (and other citrus),
- Pears,
- Avocados,
- Grapes.
While the main vegetables are:
- Potatoes,
- Onions,
- Tomatoes,
- Carrots,
- Cabbage.
The Purpose
The purpose of the investigation is “to examine whether there are any features in the fresh produce value chain which lessen, prevent or distort the competitiveness of the South African fresh produce market”. For example, during the Covid-19 pandemic the Commission’s records show that there were a total of 713 cases of excessive pricing related to basic food. Of which 322 were for ginger and garlic. Showing the potential for “abusive conduct where market circumstances change”.
Challenges Faced by Farmers
While performing the inquiry in the cost of foods, The Commission will also take into account the various challenges faced by farmers, especially small scale farmers. Some of those noted are:
- Technical capabilities.
- Low bargaining power.
- Lack of market access.
- Access to important production inputs (like quality seeds and fertilizers).
- Ability to reach food safety levels.
- Poor infrastructure (such as limited storage facilities).
- Logistics such as the poor condition of available transportation systems.
- Unsustainable farming practices which have caused the degradation of agricultural soils.
- Severe weather such as droughts or heavy rainfall.