The accessibility of smallholder farmers of South Africa in high value markets.

Topics: Agriculture, Poverty, Agricultural economics Pages: 14 (4255 words) Published: April 22, 2015
Agricultural markets are promoted as a possible pathway to rural development, as they are seen as important for economic growth and addressing poverty (IFAD 2010). As agriculture and society develops, marketing becomes more important in South Africa and other developing nations in the world. In subsistence agriculture, a farmer will mainly be feeding himself and his family. The local community’s taste and requirements are well understood. As the populations of the cities increase, farmers have the added responsibility of feeding not only the rural market but also the growing distant urban markets (Monde, 2007). According to Obi and Van Schalkwyk (2011), markets continue to be seen as the means for ensuring that smallholder producers of agricultural products are effectively integrated into the mainstream of national economies, especially in developing countries. Importantly, markets provide the opportunity for farm production to contribute to poverty reduction through the cash income realised from sales of farm produce. In turn, markets drive production as farmers strive to meet the demands of consumers and end-users in terms of quantity and quality. But their very existence, or how effectively they function, cannot be guaranteed in many developing countries. In South Africa, there is a certain urgency to address the real concern that, in spite of considerable investments into restructuring the smallholder agricultural sector since 1994 and directly tackle agrarian and land reform, poverty is still rife and there is the clear indication that much of this arises from farmers not being able to sell produce at a profit (Obi et al 2011). Unlocking markets for this group of farmers is therefore considered a crucial developmental necessity. 1.2Problem Statement

Where poverty reduction is a central goal of economic policy, market access for smallholder agricultural producers assumes immense significance. Recent studies on the role of trade and market access have shown that significant gains can accrue to farmers if systems and procedures for the marketing of surplus produce are improved, especially in the African context (Roe, 2003; Van Schalkwyk and Jooste, 2003). However, with two decades years into these reform measures, there has yet been too little visible change in the circumstances of the rural smallholder agricultural producers of South Africa. The measures aimed at liberalising the domestic food market and integrating the country into the international system may actually have hurt rather than helped the smallholder farmers within the former homelands of South Africa (Makhura and Mokoena, 2003; Mokoena, 2002; Ndirangu, 2002; Nyamande-Pitso, 2001; Van Schalkwyk et al., 2003). While the role of South African agriculture has grown in regional and international trade, it appears that smallholder farmers have hardly been part of this process (Makhura and Mokoena, 2003; Van Schalkwyk et al., 2003). In South Africa, poverty is more prominent in the former homeland areas, where majority of the poor are located (Machethe, 2004). Many of the South African rural inhabitants are linked either directly or indirectly to agricultural activities (Pauw, 2007). In South Africa, agricultural produce from smallholder farmers is often lost after production because most smallholder farmers grow perishable crops which requires storage, care in handling and speedy delivery to consumers. Some of the challenges the smallholder farmers face are lack of market access information, institutional factors, long distance between farm and market, high transaction cost and poor infrastructure such as storage facilities, transportation etc. These challenges reduce smallholder farmers’ ability to participate in markets which make it difficult for the farmers to shift into commercial farming and thus, lead to reduction in economic development....

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