New Era journalist Nuusita Ashipala (NA) talked to Agro-Marketing and Trade Agency (AMTA)’s Managing Director Lungameni Lucas (LL) on the benefits of AMTA partnering with Fysal Fresh Produce in a public-private partnership.
NA: How does Fysal’s collaborating with the Ongwediva Fresh Produce Business Hub help AMTA fulfil its mandate to promote and develop locally grown produce at the expense of foreign produce?
LL: AMTA’s mandate in terms of the hubs is to facilitate marketing and trading of fresh produce in partnership with private sector business entities that act as agents in our facilities, hence, Fysal is one of them. The main priority is to move volumes of mainly local fresh produce with a minimum of 44 percent before the importation of any other fresh produce is allowed. Fysal has the capacity to buy up the intake of locally grown produce, which will then increase the commission to AMTA for sustainability.
NA: How is AMTA going to ensure that Namibian produce continues to enjoy an advantage in procurement, and receive prominent retail shelf space at Fysal retail shops? Currently, Fysal already markets and sells more than 60 percent of produce bought directly from South African farmers. How is AMTA going to facilitate the reduction in that percentage to favour Namibian produce, as dictated by the HDI?
LL: Agents, traders of fresh produce, including Fysal, are mandated to source locally produced fruits and vegetables, under the Market Share Promotion (MSP) ensures that all traders procure a minimum of 44 percent of local fresh produce before they are issued with an import permit, hence Fysal is no exception. The operations of Fysal at the hubs are in terms of the ‘agent’ on the hubs. It must, however, be noted that Namibia is a net importer of fruits; therefore 90 percent of fruits consumed locally are imported from elsewhere. That situation is not likely to change any time soon due to required climatic conditions to produce most of these fruits. Therefore, in terms of the existing rules, Namibian produce will continue to enjoy the procurement advantage before imports.
NA: How far is AMTA from rolling out a high-quality packaging system and grading of produce from local producers, which compete at the same level with South African produce, such as those that come aboard Fysal trucks?
LL: Most farmers have been trained in packaging, sorting and grading with the assistance of stakeholders. However, AMTA will continue to provide technical support to farmers who may still be finding it difficult to master the trade. AMTA has put out a public request for the private enterprises out there with an interest in packaging and related services to set up shop(s) at AMTA-serviced land. This arrangement should also encourage the youth to take advantage of the opportunities available at the hubs, including being a trading agent or agency through the provided trading floors or setting up their own value-addition services.
NA: How does AMTA rate the competition of Namibian produce compared to South African produce? Have the Namibian product reached a level where they can compete fairly with South African products?
LL: The Namibian produce is of superior quality and there are no problems with quality of the local produce. The only advantage the South African produce may have is price because of the fact that Namibia is a net importer of agricultural inputs, which eventually pushes the prices higher. It should also be noted that South African Fresh produce are zero-rated and Namibian ones are not. However, with the MSP in place, such competition is 44 percent eliminated.
NA: Perhaps AMTA can also tell us the rationale behind the partnership with Fysal.
LL: Of late, most of AMTA agents lacked the capacity to procure enough stock to supply retailers with a range of fresh produce on time as well as to pay farmers. It is for this reason that there was a need for a bigger trader to come on board and assist other smaller agents to penetrate retail and chain stores.
NA: Former President Hifikepunye Pohamba asked AMTA to offer market-related prices to farmers, saying the current rates are too low. How does AMTA decide the rate offered to farmers? How do these rates compare to the market rates, such as the South African weekly fruit and vegetable prices.
LL: Prices are negotiated with farmers based on the demand and supply of a produce. South African market prices are mostly very low due to lower production costs and economies of scale in their country. Therefore, this cannot be used as a benchmark for local produce pricing.
NA: Local farmers were previously reluctant to bring their produce to the hub because they were not paid on time. Has that been resolved? What is the current payment system?
LL: AMTA has a standing policy of paying farmers within four to seven days after the produce are sold and this is only applicable to commission. [On the basis of interactions between agents and farmers] agents and farmers agree on the payment time frame.
NA: Apart from selling to individuals, including vendors who frequent the hub, how many Namibian retail chains and shops are currently supplied by AMTA’s hub? Are we able to have a geographical indication of where these retailers are?
LL: Most retail shops prefer to source directly from farmers. However, we have a number of retailers who are supplied by AMTA, these include in Rundu area Cash & Carry, OK Foods, Woermann Brock and Oceano. In Ongwediva we have Woermann Brock, Choppies and Spar.
NA: If possible can you give us an indication, in percentages, of how many tonnes of local produce AMTA supplies to Namibian retailers, vis-à-vis the imported produces, on an annual basis?
LL: In total, AMTA has about 3 percent of the total market share of the horticultural industry. More than 60 percent of our throughput is sourced from local farmers, except in times when such produce are in short supply.