RSA Group Reflections September 2025

Dear friends

Disintermediation has been one of the major commercial forces of the 21st century. New, digitally powered ‘platforms’ have thoroughly changed the taxi industry, supermarket businesses, restaurant trade and romance and dating – to name just a few!

South African agriculture is no exception. Digitallypowered approaches to trade have emerged in recent years in the fresh produce industry, for example, and it’s been fascinating to observe the different reactions from seasoned professionals. I often hear sentiments of defensiveness, or sometimes even aggression, toward the ‘challengers’. Personally, I take a slightly different view. Digitisation is an inevitable reality in all sectors across the global economy, and there can be no doubt its long term influence will be positive in terms of its ability to optimise what we do, and how we do it. This is a pervasive trend that is by no means restricted to new industry players, or platforms, and which, despite the popularity of the idea of disintermediation, does not necessarily always involve the restructuring of value chains. Most businesses at most levels are taking advantage of the immense power of fast-evolving technologies and tools, the impact of which is not the sole domain of ‘the new’.

I also believe that the emergence of new digital platforms in our industry offers a brilliant opportunity for us to re-look and re-understand the strength of our fundamentals; and that the digital evolution we’re currently experiencing is a lovely mirror which, if approached correctly, allows us to gain clear sight of our fundamental strengths.

First and foremost, it’s important to recognise that despite the significant volumes being moved through new platforms, the trade carried out at just the Joburg Fresh Produce Market far outweighs any other channel. While the hype around digital trade often focuses on its impressive volume growth, this is coming off a low, start-up base, and fresh produce markets are the pace setters with regards to number of sales, and customers, and the sheer speed of the transactions processed daily.

Massive trade volumes, carried out at high speed across the country, are the foundation of our global price discovery reputation. We should never forget that our industry is recognised across the world for its ability to accurately interpret a blizzard of incoming signals to discover accurate prices according to prevailing supply and demand forces. Conversely, it is unclear how prices are actually discovered on new platforms, other than by referencing the prices discovered at fresh produce markets. Which begs the question, do such platforms view themselves as part of the price discovery process? Or do they view themselves as not subject to the forces of supply and demand? Or, is the platform actually beholden to an externally dictated price, effectively positioning producers as inflexible price takers?

And then there’s transparency. South Africa’s fresh produce markets are fundamentally transparent, with all trade data accessible by all parties, including the general public. But, whether you’re looking at agriculture or transport or dating, digital platforms are often black box operations, where it is very difficult for anyone outside the platform to access data or even understand how the system functions. Lacking the raw aggregation that is such a feature of fresh produce markets, digital platforms claiming high levels of transparency are often clearly taking more than a few liberties in this regard.

The black box is also relevant when it comes to notions of efficiency. When you don’t have insight into how a platform actually functions, it can be difficult to assess how efficient it may or may not be, regardless of grand claims made. Within this, it’s also important to consider what happens to product that is not efficiently processed by a platform. Again, this can be tricky to understand, because there are no numbers available, but a significant percentage of such volumes will surely ultimately end up, ironically enough, being traded through fresh produce markets.

So, back to my original idea about the mirror, and what we see in it right now. Well, I see a robust, proven open market system that trades massive volumes in a highly transparent way and that, therefore, has unparalleled price discovery ability.

This means, crucially, that the risk of every transaction is evenly shared across all role players participating in the ecosystem. Conversely, with new platforms we have to ask who actually carries the risk of the trade in an inherently volatile and variable industry. Is it the farmer? The buyer? The platform itself? The answers are currently unclear.

As I have expressed many times over the last few years, there is clearly a huge amount of work that needs to be done within the South African fresh produce open market system – especially in terms of the management and maintenance of municipal fresh produce markets. But let’s also recognise the value and power of what we see in the digital mirror as we evolve along with our industry: the indisputable fact that the commission-based open market system delivers Rands and Cents value to producers and buyers that is extremely difficult to match.

Best wishes
Jaco Oosthuizen