Blueberry farmers despair as Transnet strike costs them valuable windows of opportunity abroad

20 Oct 2022

The local blueberry industry is a job multiplier with enormous potential, but getting its product to market in Europe and the UK is becoming uneconomical owing to the protracted strike and other issues at South African ports.

It’s a nascent industry, with a budding future, but its products are dependent on a smooth-flowing and efficient cold chain. Without the ability to get products to market expeditiously and economically, South Africa’s blueberry farmers say they stand no chance of competing on the international stage if they cannot get their berries to their biggest markets – the UK and Europe.

And buyers for Marks & Spencer, Sainsbury’s and other supermarket chains won’t think twice about seeking out other suppliers from Peru and elsewhere if South Africa cannot deliver on its orders. It is also denting South Africa’s reputation of being able to deliver quality produce, reliably.

The local berry market might be small, but it supports hundreds of jobs – most of which are held by women in rural communities.

The protracted Transnet strike has been a killer for the sector, explains Simon Back, who owns the Blueberry Bar in Simondium.

Back, whose Backsburg Family Wines group was one of the first in South Africa to venture into blueberry farming – explains that the South African market is relatively small: it’s mostly export.

“South Africa developed a name for itself for producing really high-quality berries which are largely being exported to the UK and Europe, with a little bit into the Middle East,” Back says. Since they started farming berries 15 years ago, the nature of the industry has changed: as recently as five years ago, blueberries were selling at such a premium that they warranted sending them via air freight to Europe. Now, with growing competition from countries like Peru, that’s no longer the case, forcing farmers to ship the berries.

“Any disruption at the port and shipping can have a devastating impact on growers and the industry at large. It’s been a rough couple of years in terms of shipping, Back says, with the supply chain being “quite the mess”.

That’s an understatement: on the back of Covid, a broken gantry at the Cape Town terminal and now the crippling Transnet strike, the Back group was forced to transport berries by road to Durban. Blueberries, especially newer and longer-lasting cultivars such as Snowchaser, can stay fresh more than a month from harvest, but a disrupted cold chain is the death of them.

Read in Daily Maverick: “Record SA citrus crop fails to juice up farmers’ profits due to soaring freight costs”

In the past, farmers could rely on three weeks of shipping and then expect to see their produce on European shelves, but in the past year there were times when loaded ships were anchored in South Africa for up to two weeks, delaying export. “When you’re dealing with a crop like blueberries, which is highly perishable, it can be a major issue,” Back says.

“Last year we were faced with a number of claims around quality because by the time the berries finally arrived at their destination, there were issues.”

‘Horrific’

Back describes the latest blow as a disaster for farmers, at the height of blueberry harvest – “and that’s not hyperbole”.

“We’ve missed various shipping departures. We have fruit piling up on this side of the world. We have missed certain windows [of delivery] so what is happening is double the amount of fruit that’s destined for a particular week on a ship arrives, so that means potentially discounting the fruit. We’re faced with options like literally dumping the fruit, or sending it to freezing, which is a complete loss-making exercise.

“The story is horrific and the fact that Transnet can be held hostage in this way and that there’s absolutely no contingency plan is very hard for growers to wrap their heads around. It’s going to result in job losses.”

Thousands of jobs are on the line – not in this season but further down the line. Being unable to sell fruit or being forced to discount the product has a material impact on the business case for berries. The industry as a whole supports about 40,000 jobs. This latest crisis is a “kick in the teeth”, says Back, adding: “I don’t see a way that we’re not going to take some kind of haircut this season.”

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Blueberries are a capital-intensive crop: depending on whether they are grown under shade cloth or in polytunnels, blueberry farming can cost anywhere from R1.5-million to R3-million investment per hectare.

It’s tough going as a farmer or as any kind of business person in South Africa, Back says, because it feels like they are playing in the market with their hands tied behind their back.

“It’s frustrating because there’s a real opportunity for South Africa and South African agriculture in this space. We’re still quite a small industry relative to other parts of the world. To have this kind of goal is just very frustrating.”

Agri entrepreneur Justin Mudge, managing director of Chiltern Farms and the chairperson of berry producers association BerriesZA, says harvested blueberries are being stored in a packed format, either in containers in the harbour or at inland cold storage sites, waiting for shipments to resume. Some will be sent via air freight, even though the differential between shipping and air freight is significant – it’s been a “necessary evil” to keep customers happy.

“We have to mitigate it, but it comes at a huge cost to the producer,” Mudge says. “The ports have seen such significant failures in terms of expenditure on maintenance and rejuvenation, while our exports have been growing significantly; something doesn’t stack up. Why is the additional revenue not being redeployed to the ports to make sure that they are healthy and functional?”

Properly managed, berries have a shelf life of about 50 days at best, but with shipments delayed by weeks, producers do not know how long it will take for the backlog to clear.

“That’s lost shelf life that you’ve taken away from your customer [abroad], who needs time to manage the flow through the retail outlets,” Mudge says. “And you need flexibility in the market to be able to play the market. Otherwise you’re a part-taker at best.”

Ready to seize the opportunity is Peru: It mainly supplies the US market but is primed to seize markets elsewhere. And its growth has been phenomenal. Peru’s blueberry industry started in 2010 and they are now farming nearly 17,000 hectares, while South Africa currently has just under 3,000ha. South Africa needs to exploit its opportunities, Mudge says, but now we’re playing catch-up.

Read in Daily Maverick: “Transnet reaches three-year pay rise deal with key trade union”

“There’s very good alignment between South Africa and markets in Europe: the time zone, the language, a historical culture of working within other fruit types, and the quality perception, but with the disruptions that we’ve had to shipping in the past four seasons, we will be eroding that perception and that’s going to come at significant cost.”

Losing out on an opportunity now means producers will struggle to find future opportunities in a saturated market. “The only mechanism that we now have is price. And so that puts producers at a significant disadvantage because there’s no concomitant reduction in costs. It just comes straight off the bottom line,” Mudge adds.

It’s not only a berry problem – the stone fruit season hasn’t yet started, but to pre-empt supply chain issues BerriesZA is working with Hortgro, the stone fruit producers association, to ensure berries and stone fruit gain priority over other fresh produce. Apples and pears are marketed 12 months of the year, so they will be affected.

“We’ve had to stop our packing operation for apples and pears at Chiltern Farms indefinitely.” Then there’s still citrus to be shipped and the table grape season is around the corner. That’s going to put added pressure onto the situation as well. So it’s never going to be a good time.”

Job losses

Future job losses are a real concern. Mudge says that because the berry industry is so labour-intensive, it creates more than three permanent and 10 harvest positions for every hectare, depending on the productivity of the orchard.

“Those are the kinds of figures we don’t mention, it’s a fantastic multiplier of jobs.”

Meanwhile, local efforts to sell export-quality blueberries have helped sell more than two tonnes of the product, through the Food Club Hub in Cape Town.

The hub’s coordinator, Jessica Merton, says they are focused on zero food waste and a circular economy, so when they heard about Back’s issue with blueberry exports, they worked their network of food clubs to sell some of it.

“We had no idea of the scale. It’s the first time we’ve done something like this where we’ve tried to mobilise people around such an issue, and we don’t normally get involved with large-scale agriculture. But we do want to ensure food doesn’t go to waste or get dumped, which would emit greenhouse gas and waste precious resources. This event is an exception to the norm for us.”

Western Cape residents can order blueberries directly from the Blueberry Bar or follow them on Facebook and Instagram.

If you are in Cape Town or Gauteng and want to be part of buying great-quality food, direct from farmers at good prices, get in touch with an active food club in your community at [email protected]. BM/DM

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