A survey of 52 smallholder fresh produce farmers was conducted in the
Gauteng province of South Africa to grasp how risk and its management
affect the mainstreaming of smallholder farmers into formal, high-value
markets. The study employed a supply chain analysis approach, which
focused on the functions and risks that occur along the fresh produce
chain. The results highlight the risks that impede the participation of
smallholder farmers in formal, high-value chains. At the production level,
risk is prominent from input procurement through to the post-harvest
stage of the chains. At the retail and consumption level, risks are linked
to the adherence to quality and quantity standards, including prescribed
packaging, grading, labelling and traceability and transport requirements.
As a result of these risks across the formal chain, smallholder farmers
often resort to distributing their products in low-value informal markets.
The consequence is that smallholder farmers tend to remain trapped in
poverty, in part, because of their risk appetites and their ability to bear
8Further research is required in the areas pertaining to smallholder
farmers’ risk appetite and risk-bearing ability and mechanisms to deal
with the particular risks in the value chain that impede their all-round
ability to escape the “smallholder dilemma”.