The Domestic Market for Horticultural Produce
Domestic production of fruit and vegetables on the local market is carried out at three different levels; the subsistence level; the commercial level and the export market level.  Production for the export market actually compliments the local market as according to the rule of thumb 50% of product grown for the export market is exported.

Farmers market their fresh fruit and vegetables through the following channels -
•    Supply to wholesalers in urban markets.
•    Supply to municipal markets such as Mbare Musika in urban areas.
•    Supply directly to retail outlets, hotels, restaurants, schools, hospitals and other Government institutions.
•    Sell directly from the farmer or roadside stalls/kiosks.
•    Street vending

Supplying vegetables through wholesalers has evolved into quite a sophisticated formal method of marketing fruit and vegetables and ensuring as wide coverage as is possible in most cities, towns and other small urban settlements.  The major distributors countrywide are Wholesale Fruiterers, Favco, Harare Produce Sales followed by the likes of Manica Produce Sales, Cairns, Willsgrove in Bulawayo, PGS, Valley Fresh, Honeydew Farm and others.

Some Fresh Produce Wholesalers have in recent years developed into multi-purpose organisations involved not only in marketing, but providing agronomic backup, input supply, packaging, processing and research and development to communal and resettlement farmers.

Municipal Markets
Municipal markets, particularly those in the major cities of Harare, Bulawayo, Gweru and Mutare remain the significant force in fresh fruit and fresh vegetable wholesaling and retailing.  In fact, they are the major source of determining the producer, wholesale and retail prices of fruit and vegetables.  The volumes of vegetables and fruit they handle far outweigh that handled by the formal wholesale and retail markets. 

The downside, however, is that the municipal markets are largely informal; they cannot guarantee continuity of supply of a wide produce range and quality required by supermarkets and hotels.  In times of price control, they can offer farmers more, as they have very little overheads and do not pay tax.

Determination of Fresh Produce Prices
Farmers largely base their producer prices on the cost of factors of production, plus a margin for profit.  In the formal market, farmers either enter into a contract with wholesalers and retailers, sell on credit terms or sell cash on delivery.

The fresh produce market is very competitive and is largely driven by supply and demand of product.  Supply is also seasonal for almost all fruit and vegetables giving rise to different prices during peak season and low season.  Transport costs, crop yields and quality of produce have to be factored in.  Prices are high at the beginning of the season, averaging at full season and rising again out of season.  Fruit such as citrus apples and vegetables such as onions are kept in cold stores out of season which again is an additional cost.

The winter period, from the beginning of April up to September, is the most favourable period for the production the bulk of the vegetables.  There are, however vegetables like the cucurbits (germ squash, cucumber, butternut, courgettes, pumpkin) that are susceptible to frost during the winter season.  They can only be grown in outlying warmer areas such as Middle Save and transported to markets like Harare and Bulawayo at very high cost.  Prices of these varieties generally double in winter.

Citrus fruit is also harvested from April to September, with banana production also peaking during the same period.  Generally, fruit and vegetables do not do well during the rainy season due to disease infestation, hail, abundance of rain and very hot temperatures.  So, the cycle is that during winter there is usually an oversupply of fresh produce and in the rainy season supplies reduce drastically leading to depressed and high prices respectively.

Another significant issue affecting the pricing of fresh produce is the perishable nature of the product and it can be costly for farmers, wholesalers and retailers to engage in speculative activities.  Unlike dry goods, fresh produce does not lend itself well to hoarding and so price fixing is out of the question.  A large percentage of the produce is scrap because of damage, rotting and wilting. This results in a high mark up (up to 100%) because of the high rate of wastage.
Therefore, for the fresh fruit and fresh vegetable industry, the 18 of June 2007 could not have come at a more inopportune moment, when prices are at their lowest.   To compound the problem, 18 June was after a severe frost and cheap frost damaged product was on the market.

Transport costs vary according to location of the farm and distance to the market.  For example, potatoes produced in Manicaland and Mashonaland and transported all the way to Bulawayo incur huge transport costs which the seller has to recoup.  In the same vain, the price of oranges transported from Beitbridge to Harare and bananas ferried from Burma Valley to Bulawayo has to reflect the transport cost element over long distances.  The transport cost of the oranges and bananas ends up being higher than the cost of the produce itself.

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