Effective information access and automated traceability in fruit export chains in South Africa

Olivier, R. ; Fourie, L. C. H. ; Evans, A. (2006-12)

The original article is available at http://www.sajim.co.za/


The South African (SA) export fruit industry is vital to the SA economy, contributing about 20% (or 4 million tons) to agricultural production. As a one billion US dollar export industry in 2002, the country exports about 42% of its fresh fruit production (Shepherd 2003:2), contributing 75% of all farm income for fruit (Kriel 2002:4). The industry is well positioned with regard to its southern hemisphere competitors (Argentina, Australia, Chile and New Zealand) in terms of average growth in export volumes. However, the market requirements are constantly changing and competition is fierce due to the general oversupply of fruit in major markets. The limitations of the regulated environment eventually led to deregulation in August 1997 and to the phasing out of the statutory bodies. The new deregulated market structure radically changed the competitive profile of the industry by lifting the artificial barriers that existed for fruit exports. However, there was still a major barrier to performance – having the knowledge and ability to deal with export processes (S. Rigotti, personal communication, 13 June 2003 – Manager Information Systems, Capespan, P.O. Box 505, Bellville, South Africa, 7535). Exporters experienced a combination of problems. Few had proper systems, which meant that access to critical information was severely hampered. It was, for instance, difficult to record and verify the cost, quite often resulting in serious losses. Producer payments were inaccurate and late most of the time; sometimes payments only occurred during the harvesting of the next season. Data integrity on the supply chain was suspect, because of fragmented information channels and duplicated capturing at various points in the chain. The internal challenges were compounded by a difficult time in the markets. Strong competition, globalization and the effects of world-wide overproduction, caused prices to drop dramatically. Consequently many farmers and exporters incurred enormous debts and went bankrupt (Van der Ham, Becker and Guis 2002a; 2002b). In 2000, the third year after deregulation, the fruit export industry as a whole lost an estimated one billion rand in export earnings and declared itself in crisis (Mather 2003). SA's international image slipped because of all the negative consequences of deregulation (Symington 2003:5).

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