Fewer growers with fewer options

North Otago used to have lots of market gardeners.

Among the options for selling their produce was an auction market in Oamaru where local shops and supermarkets did most of their buying.

As supermarket power increased and buying centralised the demand at the auction fell and the market eventually closed.

There’s now no local auction and a lot fewer local market gardeners.

Local supermarkets still buy some produce locally but most of our vegetables go to a central market in, I think, Christchurch. It goes all over the country from there and some may even end up back in local supermarkets.

Having fewer growers with fewer options means they have less power to negotiate and are price takers rather than price makers.

That doesn’t however, explain why the price most have to take is so often well below the price their produce eventually makes at the supermarkets.

A lot of factors contribute to the difference in the price growers get and consumers pay including transport, overheads and wastage.

But more people between paddock and plate usually means a lower return to producer and greater cost to consumer. This is one of the reasons for the rise in popularity of farmers markets where produce goes directly from grower to eater.

However, that’s not necessarily the most efficient way to shop which is why supermarkets have a place. Unfortunately for producers that place often seems to be the one which gives them the worst return.