Analysing the value chain for African leafy vegetables in Limpopo Province, South Africa

Figures & data

Figure 1. A simplified agricultural value chain

Figure 2. Linkages of ALV value chain actors in the Limpopo Province

Source: Author’s presentation. Current chain

Missing link/actors

Table 1. List of interviewed ALV value chain actors, 2015

Activity	Actors	Location in Limpopo Province
Input procurement	NTK (4)	Tzaneen, Giyane, Thohoyandou, Polokwane
	Supermarkets (4)	Tzaneen, Giyane, Thohoyandou, Polokwane
	Limpopo Department of Agriculture (LDA) (3)	Mopani, Vhembe, and Capricorn districts
	Other smallholder farmers	Mopani, Vhembe, and Capricorn districts
Growing/producing	Smallholder farmers (126)	Located in the 3 districts of Limpopo
Traders	Shoprite (4)	Tzaneen, Giyane, Thohoyandou, Polokwane
	Pick ‘n Pay (2)	Tzaneen, Polokwane
	Spar (2)	Tzaneen, Polokwane
	Woolworths (2)	Tzaneen, Polokwane
	Food Lovers’ Market (2)	Tzaneen, Polokwane
	Goseame open market (1)	Polokwane
	OK (1)	Giyane
	Boxer (1)	Tzaneen
	Street vendors (4)	Tzaneen, Giyane, Thohoyandou, Polokwane
Consumption	Consumers (299)	Located in the 3 district of the Limpopo Province

Source: Survey data

Table 2. Estimated gross margins for market participants in different ALV marketing chains, Limpopo Province, 2015

Marketing channel	Market participants	Production and marketing costs	R/Bundle	Ratio of gross margin to consumer price^ (GM/CP)*100
1	Producers	Production variable cost (PVC)	2	64% (Producers)
		Marketing cost (MC)	0.5
		Consumer price (CP)	7
		Gross margin (GM) = CP−(PVC + MC)	4.5
2	Producers	Production variable cost (PVC)	2	56% (Producers)
		Marketing cost (MC)	1.5
		Selling price to retailer (SP)	8
		Gross margin (GM) = SP−(PVC + MC)	4.5
	Retailers	Purchase price (PP)	8	15% (Retailers)
		Marketing cost (MC)	0.5
		Consumer price (CP)	10
		Marketing margin (MM) = CP−PP	2
		Gross margin (GM) = MM−MC	1.5
3	Producers	Production variable cost (PVC)	2	50% (Producers)
		Marketing cost (MC)	1.6
		Selling price to middlemen (SP)	7.2
		Gross margin(GM) = SP−(PVC + MC)	3.6
	Middlemen	Purchase price (PP)	7.2	6% (Middlemen)
		Marketing cost (MC)	0.3
		Selling price to retailer (SP)	8
		Marketing margin (MM) = SP−PP	0.8
		Gross margin(GM) = MM−MC	0.5
	Retailers	Purchase price (PP)	8	15% (Retailers)
		Marketing cost (MC)	0.5
		Consumer price (CP)	10
		Marketing margin (MM) = CP−PP	2
		Gross margin (GM) = MM−MC	1.5

Source: See Table 1

Channel 1: Producers → Consumers

Channel 2: Producers → Retailers → Consumers; and

Channel 3: Producers → Middlemen → Retailers → Consumers.

^Gross margin ratio to consumer price measures how much out of every R1 of sales to consumers a market participant earns in the respective channels.

Table 3. Key constraints faced by actors of the ALV value chain in Limpopo Province, 2015

Actors	Challenges	Potential interventions required
Input suppliers	Low input demand	Awareness of ALV production to commercial farmers
	Low quality of ALV seeds	Agribusinesses to develop new quality varieties
Farmers	Lack of production technical advice	Promote and disseminate information on production techniques
	No contractual arrangement with buyers	Training on business and contract negotiations management
	Lack of access to finance	Promote tailor-made finance sources to ALVs smallholder farmers
	Poor infrastructure	Invest in the improvement of infrastructure
	Low market price	Inform consumers about the health and environmental benefits of ALVs
Traders	Poor infrastructure	Public and private sector invest in infrastructure
	Low quality ALVs and inconsistent supply by farmers	Production of quality ALVs and creation of strong farmer associations for consistent supply
	Lack of processing and packaging services	Training and skills in processing and packaging of ALVs by public and private sectors
Consumers	Unavailability of ALVs all year round	New varieties to be produced all year round
	Unavailability of ALVs at supermarkets	Encourage all actors to participate in marketing of ALVs
	ALVs not processed to meet the standard required by consumers	Encourage public and private sectors to invest in processing activities

Source: See Table 1