Dynamics of the restructuring fresh produce food markets in the southern African region.

Reports/papers (non-specific)
Published: August 2009
Product code:X00068

Contributed Paper prepared for presentation at the International Association of Agricultural Economists Conference, Beijing, China, August 16-22, 2009 Agri-food markets are restructuring, characterised by an increased consolidation and concentration of the industry, as supermarkets continue to expand at an exponential rate throughout the region. Unlike the global phenomenon where the formal markets are replacing informal markets, this is not so in the region. The informal sector is also expanding characterised by a significant level of restructuring. The major supermarkets have restructured their procurement strategies through the introduction of private standards, centralised procurement systems and distribution centres. Despite the increase in agri-food commodities emanating from the expansion of the retail sector, there have been little or no opportunities for smallholder farmers. The restructuring process is likely to exclude farmers from food markets in two ways; firstly through displacement of traditional markets by formal food chains; and secondly, the restructuring process will exclude farmers through the introduction of private standards. Previous studies have ascertained that smallholder farmers prefer informal markets such as hawkers as there are fewer complications with these markets. Informal markets are therefore integral for the survival of smallholder farmers. To redress the negative effects of the restructuring process certain issues need to be addressed. This calls for different stakeholders (public and private sectors and producers) to harmonise their objectives and visions for the sake of smallholder farmers in order for the great potential there is in harnessing the benefits of the restructuring process to be realised. This publication forms part of the Regoverning Markets project.