Gauteng Smallholder Gauteng Smallholder November 2011 | Page 3

GAUTENG COMMENT, by Pete Bower MAGAZINE HOW TO MAKE YOUR PLOT PROFITABLE Vol 18 No 11 November 2017 PUBLISHED BY Bowford Publications (Pty) Ltd Established 1985 (Reg No 2004/019727/07) PO Box 14648, Bredell 1623 Tel: [phone] or 076 176-7392 Fax: [phone] website: www.sasmallholder.co.za facebook.com/gautengsmallholder PUBLISHER & EDITOR Pete Bower email: [email protected] RESEARCH EDITOR Vanessa Bower email: [email protected] GRAPHIC DESIGNER Mark Hageman email: [email protected] ADVERTISEMENT SALES Pete Bower email: [email protected] ADVERTISING RATES ( All Rates Full C o l ou r , incl VAT ) Full Page - R7 480 Half Page - R 4 620 Quarter P age - R2 570 1/8 page - R1 360 Smaller sizes: R 104 per col cm (Minimum size - 4 col cm) ( Black only: colour rate less 2 0% ) Booking discounts Payment lumpsum in advance. 3 insertions - less 10% 6 insertions - less 15% (other payment and discount options are available) Circulation More than 1 9 000 copies * distributed free through outlets in the Agricultural Smallholding settlements of Gauteng and adjoining provinces. * excluding on-line readers. By Mail To receive the Smallholder by mail subscribe for only R210 per year. See coupon in this edition. Online Magazine www.sasmallholder.co.za Online Classified Ads www.sasfox.co.za Copyright Title and contents protected by copyright. No part of this publication may be reproduced or stored in any form whatsoever without the prior written permission of the publisher. Disclaimer While every care is taken to ensure the accuracy of the information in this journal, neither the Editor nor the Publisher can be held responsible for damages or consequences of any errors or omissions. The Publisher does not stand warranty for the performance of any article or service mentioned in this journal, whether in an advertisement or elsewhere. FRONT COVER Lone Nguni in the Magaliesberg Mountains Success is possible G ood news for consumers last month was that food prices ~ at least in certain categories ~ are actually dropping in the supermarkets. The foodstuffs that consumers are likely to find are a bit cheaper now are fruit, vegetables and staples such as maize meal. The decreases in prices are a result of better harvests, resulting in more produce being available on market floors. In the case of maize, the excellent harvest in the past season resulted in markedly lower prices being paid to farmers, and these lower prices are now beginning to work into the system, resulting in a lower price for the consumer (in the case of maize there is a considerable lag between the low off-farm price and the time that price reveals itself on the supermarket floor, because maize is the ultimately storable commodity). So, isn't this good news? Well, yes. And no. It's good news because any reduction in food prices is good for consumers, particularly when the price reduction applies to staple products that make up much of the food- spend of low-income households. But it’s not such good news if one recognises that prices are “downwardly inelastic”, which is just a fancy way of saying that while any producer or shopkeeper is happy to increase his price if he thinks he can get away with it (because it means more profit for him) ~ hence “upwardly elastic” ~ he will be reluctant to decrease his price because it will directly cut into his profits. Thus, he will wait to see what his competitors do first before reducing his price by as little as possible ~ hence “downwardly inelastic.” Thus, the current swathe of REDUCED food prices is but a small fraction of what is possible. Put another way, don't cry for the middlemen and retailers as they re-price the goods on their shelves: they're not suffering at all. Who is suffering, (apart from the ever hard-pressed consumer), is the farmer who, because crops have been better this season, is faced with ever-lower prices at market. Thus, the fact that he is able to deliver more crop to market doesn't mean that the farmer receives a proportionately increased return for this efforts. As we pointed out last month the market system, combined with the grip held over the total food processing and distribution chain by food corporates and retailers, is a far more potent threat to South Africans' food security than climate change or natural disaster, because it makes the growing of food for profit at best a dicey affair and more realistically impossible for all but the most ruthless and giant growers (and is thus resulting in fewer and fewer farmers). Certainly the central market system is not designed to help smallholder growers to enjoy sustainable profits, whatever initiatives the markets say they have in place for small farmer assistance. Far better, therefore, for small farmers to find their own outlets, away from the formal market structures. These could be through spaza shops, informal traders, farmers' markets or by direct supply to cafes, hotels or restaurants in their area. And, happily for consumers and growers, certain supermarket chains are starting to source their fresh produce on their doorsteps, cutting out the market floor and, thereby, many food miles in delivery. In this way it is now becoming possible for small growers, dairies, or bakers etc to sell their produce through mainstream channels, thus cutting out the big markets in their operations. Yes, this requires a rethink of the entire farming enterprise, however small it may be. No longer is the emphasis on the crop, its wellbeing through correct watering, weed control and fertilization, and the decision on when to harvest for maximum yield. Rather, the entire operation becomes premised on the need, before ground is broken, to secure a market for the crop. This, in turn, makes the exercise much more complex because a small buyer such as a local restaurant is going to want an assurance of supply over a lengthy period, meaning that the farmer must plan a succession-planting strategy, among other things. While it complicates things, working up an integrated marketing plan and incorporat- ing therein one's production plan is not impossible, of course, and it will ensure financial success. For, make no mistake, there's money to be made in growing food. You just have to know your market first, as an article by Agricultural Research Council writer Sandile Mahlangu in this edition makes abundantly clear. SAY YOU SAW IT IN THE GAUTENG SMALLHOLDER