By Maile Matsimela
In a significant move that could transform market access for smallholder farmers, Marcus Morune, Chief Agronomist of AGT Foods Africa, discussed the company’s use of offtake agreements to help farmers access markets during a panel discussion at the two-day Gauteng Agro-Processing Summit held at the Gallagher Convention Centre in Midrand.
“There are opportunities for farmers. We do off-take agreements so that our farmers can access the markets,” Morune stated during the discussion on enabling policies to address market access challenges.
Connecting Local Farmers to Global Markets
Representing AGT Foods Africa, Morune introduced his company as a “global leader in value-added processing of pulses, grains, stable food and ingredients” with the slogan “From Producer to the World.”
He explained that AGT Foods sources its products from farmers in over 45 countries, including the US, the UK, Australia and South Africa, and ships to over 130 countries worldwide.
The company works to create value in the agricultural ecosystem by processing agricultural commodities into food ingredients, supported by their international sales network.
Morune acknowledged the challenges that exist in helping farmers access markets. “There are challenges. Ladies and gentlemen, I’m going to highlight some of the challenges we are facing as AGT Foods trying to help the farmers to access the markets and probably add value to this food security to be part of the value chain,” he stated.
While smallholder farmers face numerous obstacles, including compliance issues, limited land size, infrastructure gaps, insufficient technical knowledge, inconsistent supply and market penetration difficulties, these are common industry challenges that AGT Foods encounters in their work with agricultural producers.
Offtake Agreements: A Practical Solution for Market Access
Offtake agreements represent a practical intervention to address market access barriers. By providing farmers with guaranteed markets for their produce, companies like AGT Foods Africa can help eliminate uncertainty and enable farmers to plan their production more effectively.
These agreements are particularly valuable for smallholders who typically lack the bargaining power of larger commercial operations and are vulnerable to price fluctuations and buyer unreliability.
In his role, Murune travels over “10 000 kilometers a month to supervise farmers”, demonstrating AGT Foods’ active involvement in providing technical support to their supplier base.
