New markets, good rains and the imminent demise of single channel marketing are some of the positive growth indicators.
FTW's Alan Peat and Leonard Neill take a closer look at issues and developments in this dynamic sector.
It's a new world! Independents look forward to better prices It IS a whole new world of adventure out there in the fruit export market, according to Valdy Jensen, a Cape fruit farmer, and chairman of the Independent Fruit Growers/ Exporters Association.
His point of reference for this is the new agricultural products marketing act - a government decree which moves fruit exports out of their previously strictly-controlled environment, into near free market conditions.
Free enough at least, according to Jensen, to give every grower/exporter the freedom to export his crops how, and to whom, he chooses.
Not that Jensen and his fellow growers - like Marlene Hoekstra of Hoekstra Fruit Farms - don't recognise the difficulties they face.
We realise that marketing, transport and farming are all different fields, where you need to know different things to do well, said Hoekstra. But you'd be surprised just how much expertise there is in our industry, and amongst the people we associate with. And facing the possible pitfalls of a free market is not daunting Jensen. Our expectation is that we'll have a lot to learn, he said. But, I can assure you, we'll learn it pretty quickly. Also, remember, the SA fruit farmers are not entirely new to the business of marketing their products - and all the problems that this raises.
Some eight years ago, said Jensen, the local market was deregulated. While the first problem was that the increased competiton for market share meant that, overall, prices did decline somewhat, we still welcomed this deregulated market.
The big bonus for us as farmers was that our yield improved substantially. We didn't have to pay all these middlemen along the way, and more revenue accrued directly to the growers. Jensen is also happy to be getting shed of the pool system of payment. This meant the two giants in the fruit export marketing industry - Outspan for the citrus products, and Unifruco for the deciduous - exported all the fruit deemed of high enough quality by the PPECB (Perishable Products Export Control Board). Although each export consignment sold at the best price of the moment, all this income was pooled, and shared out amongst all the farmers on an average basis.
This didn't do much for those farmers who produced a better quality product, said Jensen. While the market might have paid more for his fruit, he would still get the common average price. The price tags were not recognising the differentials in the products. Now, though, the farmers and exporters will get what the market perceives their fruit to be worth - although not without them facing all the risks involved in the volatile fruit market. But, while the risk is there, said Jensen, the rewards accruing if you succeed make it all worthwhile. Jensen anticipates that many of the farmers in the industry will quickly realise the benefits that will arise from taking their own fruit to market. Jensen also suggests that - although Europe has to remain a primary destination for SA fruit exports (it currently takes about 70% of the output) - seeking out new markets will be an essential attribute of the new breed of grower/exporter. You'll be surprised just how many new markets we'll find, he said. We will not be dealing in large consignments of our products, so - provided we can get them there economically - we will be able to get better prices from these niche markets. Freedom of choice. That's what these exporters are looking for. That, and speedier and better returns.
