South Africa has seen a steady decline in commercial farmers over the last decade and increasing concentration levels in certain areas, a new report by the Competition Commission shows.
The regulator said that there had been a 73% decline in producer numbers in the dairy sector alone, from around 3,899 farmers in January 2007 to only 1,053 reported in January 2021.
“The agricultural value chain in South Africa is highly industrialised and characterised by the super commercialisation of production via large-scale farming as well as concentrated upstream inputs and concentrated processing,” the commission said.
“This structure risks placing smaller farmers under margin pressure as input suppliers with market power increase small-farmer input costs through high or discriminatory prices, while processors may exercise buyer power to suppress the price received by small farmers.”
The ‘large-scale or nothing’ dynamic in food chains also serves to limit the scope for small-scale participation in
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