FOOD FOR 9 BILLION -- September 26, 2012 at 4:30 PM ET
As Supermarkets Spread in Africa, Some Farmers Find It Hard to Compete
In the next installment of the "Food for 9 Billion" series, Gretchen Wilson of Homelands Productions visits the mountain kingdom of Lesotho and Zambia where some farmers are finding it hard to compete with large farms and food companies. She wrote the following report:
Supermarket chains are jockeying to serve millions of new customers in the developing world, including Africa. This year, Wal-Mart finalized a merger with a major African retailer. The supermarket juggernaut could be an opportunity, or a curse, for the continent's tens of millions of struggling small farmers.
At the Bauleni outdoor market in Lusaka, Zambia, it's market economics 101. Hawkers pile tomatoes and beans on rickety tables. Here, anyone can bring something to sell, and anyone can come to barter. Amid crying babies and clucking chickens, the tables stand on dirt. There's no refrigeration. The air is thick with the smoke of cooking fires.
Across much of sub-Saharan Africa, these informal markets still are where most people get their groceries.
"I've seen rotten meat," said Joyce Chitja of the African Centre for Food Security at the University of KwaZulu-Natal. "Meat that looks like it shouldn't be at a marketplace, being sold, because there's no other options."
Increasingly, there is an option. Supermarket chains are rapidly expanding all over Africa. And they're not just changing the way people shop -- they're transforming the way food is produced in a region where agriculture provides almost 60 percent of all jobs.
"The main problem of the small farmer is market access," Chitja said. "How will they put (their goods) into the marketplace?"
As supermarkets spread, they could lift millions of small farmers out of poverty by buying from them, or competition from big commercial farms could ruin them.
Pick n Pay, which like many chains is based in South Africa, opened a store in Lusaka two years ago. It looks like an American supermarket.
"Everybody shops at this store," said Andy Roberts, the chain's manager in Zambia, "from very high class to people who've only got a dollar to spend on merchandise."
Pick n Pay now has four stores in Zambia, and two more will open this year. "We believe that we could do 20 stores here," Roberts said. "So, yeah, it is a land of opportunity."
In Zambia, the farmers union is politically powerful. So when Pick n Pay opened its stores, the government insisted it buy at least half of its goods from Zambian suppliers. Today, more than three-quarters of the stores' produce comes from within the country.
On their own, small farmers often struggle to supply the quantities and quality the big grocery chains need. In Zambia, some producers work together. Near Lusaka, an independently owned packhouse consolidates produce from about 60 farmers, who bring their tomatoes or onions in pickup trucks -- or even wheelbarrows -- whenever they can.
"The majority are small farmers," said Troy Dingle, who runs the packhouse. He said he gets five or six phone calls a day from farmers wanting to supply Pick n Pay.
"The first thing we would do is ask them for a sample," Dingle said. If the sample's good enough, his team visits the farm, checks the water supply and then trains the farmer in quality standards.
"We try and assist and purchase from whoever approaches, as long as it is to our requirements," he said.
The packhouse is where produce is prepped for supermarket shelves. A woman in a hairnet stood at a stainless steel table, trimming corncobs with a cleaver. Other women hunched over cling-wrapped broccoli, slapping on price stickers before the vegetables went in trucks to the store.
Down a dirt road near the packhouse is a 6-acre farm owned by Arnold Chimfwembe, a tall and trim 62-year-old. He strode through his fields in rubber boots and pointed to his favorite kind of cabbage.
"See how nice it looks like?" he said. "It's always green like that. This one is resistant to rain, anything."
He used to sell vegetables at outdoor markets, but there were a lot of lean times. Then he approached the packhouse, and when the first Pick n Pay opened in Lusaka, it was his leafy greens that made it on the shelves. He now delivers to the packhouse two or three days a week.
"I think I'm one of the most consistent suppliers," he said.
One reason is that he's organized four of his neighbors to grow vegetables, too. So when the packhouse calls his cell phone with a big order, he can deliver. He says he earns a decent income.
"The money that I get, it, you know, caters for my upkeep of the vehicle, electricity, things like that," Chimfwembe said. "Then I'm very happy. I can do better -- maybe go into other ventures, like keeping pigs or keeping chickens."
Research shows that across southern Africa, smallholders who sell to supermarkets do improve their incomes. But the ones who benefit are still a small minority. Chimfwembe said that if he lived 5 or 10 miles farther from the packhouse, he wouldn't bother taking his vegetables there.
"It's not worth it, because all that money will go to fuel," he said. "So that's a big challenge."
Globalization often means small farmers also have to go up against cheap imports from places like the U.S. and Brazil. Ed Mabaya, assistant director of the Cornell International Institute for Food, Agriculture and Development said, "You're seeing farmers not only having to compete against their neighbor, but against the world."
That's true in Lesotho, a small mountainous country landlocked by South Africa. More than half of its 2 million people engage in farming, but an estimated 99 percent of supermarket goods are imported from South African agribusinesses through border posts. That leaves little room for 73-year-old Tseliso Lebentlele, who farms a sliver of land in Maseru, the capital city next to the border. He pulled on his wool hat against the chill, then walked down the narrow rows.
Like most small farmers, he carries all the financial risks himself, and he's been wiped out time and again. His crops have been stolen by thieves and trampled by cattle. Last year, he managed to lease a field out of town and was about to harvest green beans and pumpkins.
"And floods just wiped me out completely," Lebentlele said. "I had to start from scratch."
But he keeps trying. "People in farming have sawdust in our heads," he said. "We carry on regardless."
The farmers union in Lesotho is just getting started, and the government is weak, so there are few advocates for farmers like Lebentlele. He bought a few pigs, but the supermarkets told him that they don't trust the hygiene standards of local butchers. "These supermarkets will not touch them," he said. "Because -- look, if anything, let's say, were to go wrong, then they would be liable."
So he's growing a few rows of cabbage and spinach in a borrowed greenhouse. They're beautiful. But alone, he just can't produce at the scale that the supermarkets want.
"I'm scared of going to these companies and saying to them, 'Look, I can supply you with this and this,' " Lebentlele said. "Because I am a small man. If you cannot supply on a continuous basis, it is very, very difficult to hold markets."
Food policy experts say Africa's small farmers could compete. They need the same things commercial farmers already have: credit, market information, transportation and storage, and supermarkets ready to buy from them. By boosting the incomes of tens of millions of farmers, the chains also could create a new crop of shoppers.