16 July 2020
Urban agriculture markets are growing popular alternative marketing channels and are becoming more important in light of the burgeoning urban population, growing purchasing power and ever-changing food tastes and preferences of urban consumers, juxtaposed with the serious, yet often missed, scourge of urban food insecurity.
Agriculture constitutes a significant part of the economies of all African countries.
Given the importance of the sector, the New Economic Partnership for African Development believes the sector can contribute meaningfully towards the eradication of poverty and hunger, increasing intra-Africa trade and investments, accelerating industrialisation, job creation and shared prosperity, amongst other continental priorities.
In the past 30 years, Africa’s population has doubled and tripled in urban areas and by 2030, more than half of Africa’s population will reside in urban areas.
Rapid urbanisation has created an “invisible” crisis of urban food security.
About 26 percent of the South African population was considered food insecure by the South African Health and Nutrition Examination Survey in 2013.
Food insecurity has implications on the local economy, the environment, public health, and the wellbeing of communities.
The disparities between rural and urban environments are vast, and are often misunderstood, and hard to quantify. The 2011 Millennium Development Goals Report showed that although progress had been made in addressing food insecurity, the majority of efforts had missed the most vulnerable and rural areas.
In South Africa, urban food access issues are less understood and the reliance on rural food assessments as standardised instruments of analyses could overstate or understate the food security situation in non-rural environments.
On the other hand, rapid urbanisation has created opportunities, including a huge urban market for food and other related agricultural product.
Market demands for agricultural and food products have been historically one of the most important factors determining the choice of agricultural production systems and choice of enterprises by farmers in Southern Africa. International and national factors have historically dominated the process and consequently increased demand for both staple and lifestyle foods assuming a greater role.
It is imperative for producers of agricultural products and policy makers to understand the marketing of agricultural and food products in urban areas. Urban markets for agricultural and food products are complex systems dogged by a number of challenges thus require understanding and proper governing.
Improving the structure and function of agricultural markets should address the following tenets:
• Eliminating market failures, such as concentration and anti-competitive behaviours by dominant market players;
• Absence of services such as credit facilities, insurance, for example;
• Provision of transport infrastructure, bulk storage facilities, access to energy and water, information on prices, etc.; and
• Market regulations addressing distortions caused by international markets, price volatility and integration with global markets.
It is worth noting that while African agricultural production has increased over the years, it has not kept apace with population growth thus demand for food outstrips supply leading to the importation of food products from international markets. Furthermore, it should be noted that the increase in African agricultural production has largely been due to increased area under planting rather than productivity growth.
It is believed that the food market in Africa will triple by 2030 to account for more than a $1 trillion (R583trl) compared with $313 billion in 2013. It would be amiss for Southern Africa not to capitalise on opportunities presented by urban agricultural markets in the face of the growing urban population and the concomitant demand for food.
In South Africa, the four largest National Fresh Produce Markets are located in Johannesburg, Tshwane (Pretoria), Cape Town and Durban. These four markets account for more than 74 percent of turnover and volumes traded through fresh produce markets. The Johannesburg Fresh Produce Market is the largest in the country in terms of volumes of fresh produce traded and income generated accounting for 47.7 percent of revenue generated in 2014/15 while Tshwane Market, being the second largest, accounted for 21.8 percent during the same period.
The trend in fresh produce marketing is moving away from traditional wholesale marketing channels. Farmers’ markets are a growing across Africa. Farmers’ markets aim to bring producers and consumers together under direct marketing schemes as alternative food networks. Farmers’ markets are increasingly becoming commonplace and the phenomenon is spreading into neighbouring countries within the Southern African Development Community (SADC).
The proliferation of farmers’ markets is fuelled by several factors, including farmers’ recognition of the value farmers’ markets offer them. The advantages of farmers’ markets include direct selling to consumers thus cutting out the middleman and increasing revenue and also connecting with the consumers thus better understanding the consumers’ tastes and preferences.
From the consumer’s point of view, farmers’ markets offer fresh food directly from the farm and satisfies the consumer’s need to consume locally produced food with a lower carbon footprint. Furthermore, consumers perceive farmers’ markets to a “special atmosphere”, friendly, personal and smaller places compared to supermarkets.
Although agriculture is generally perceived as a rural activity, the rural-urban linkages are part of the local reality. Thus, policies and strategies for enhancing urban agricultural markets should also be aimed at linking rural and urban areas to overcome the urban-rural divide by incorporating the foregoing reality into development frameworks and, further, identify policy measures to foster mutual benefits for both town and country households.
Top of the list of support services for creating an enabling environment for large and urban agricultural markets to thrive is the provision of quality infrastructure linking rural areas to urban areas such as good quality road network. A good road network also reduces transportation costs and time spent travelling between two points thus ensuring that agricultural goods reach their destination in good quality.
Increased urban agricultural production, both in the cities and peri-urban areas would ensure sufficient throughput of marketable agricultural produce within shorter distances to large urban markets thus enhancing their viability and efficiency.
Policies and strategies aimed at enhancing urban agricultural markets would also invariably improve food security in urban areas through increasing the supply of food and reducing the price of food positively responding to improved availability, accessibility and affordability of food.
Large agricultural markets will continue to play a pivotal role in agricultural and economic development of African countries.
There is no denying that urban markets are a major market outlet for agricultural products due to the high populations in urban areas and the proximity to export market. Urban agricultural markets play an important function in generating income, employment creation and addressing food security.
Urban agricultural markets will continue to grow and expand throughout the Southern Africa region and integration between neighbouring countries will grow.
Source: Independent Online