Smallholders and Agro-food Value Chains in South Africa: Emerging Practices, Emerging Challenges

"A key emerging strand in the development of smallholder agriculture in South Africa is the effort to integrate smallholders into corporate food retail value chains. In this, the private sector and government have a common agenda, which is to build a commercial smallholder class that does not require ongoing financial support for survival, but which is able to stand on its own feet and compete in the market. Both government and the private sector recognise the need for some kind of ‘start-up’ support, and Walmart-Massmart’s recently announced supplier fund will put pressure on other food retailers to deepen their own activities in this regard.In many cases, integration of smallholders into corporate value chains can make profitable economic sense. The sugar, poultry, cotton, tobacco and forestry sectors have been doing this for a long time already, without any government compulsion. The arena opening up now is the small-scale production and delivery of fresh fruit and vegetables to supermarkets. These new opportunities have emerged as a result of the expansion of supermarkets into more distant rural areas, previously only served by informal markets, and government black economic empowerment (BEE) procurement policies have added to the logic."