> Personally, I think it's more because of the retailers being cutthroats than any other reason.
It's rare that supermarket chains have direct contracts with farmers. Usually there are one to three middle men in the chain that all want their cut - on the farmer side a cooperative or other association (e.g. with milk it's common that a milk processor buys the milk from the farmers and then sells the processed milk on), then wholesale markets, and finally cooperatives on the supermarket chain themselves - for example, the supermarket chain "Edeka" actually not only runs their own stores, but also is a cooperative of independent store owners, as their name "Einkaufsgenossenschaft der Kolonialwarenhändler" reflects.
- Fresh Produce Market (for most around 8% agent fee + 8% market fee = 16%; for potatoes it is 5% + 8% for historical reasons)
- Supermarket (40%–60% fee)
So in our case the middle men are not that significant compared to the supermarkets. I know the situation is different for cooperatives, but they are either export orientated or in separate markets like wine or grain, both not considered fresh produce.
Cutting out the FPM actually tends to increase the end cost to the consumer as they tend to be higher value products to start out with. Typically it's berries, naartjies or apples and not staples like potatoes. But like I mentioned above, this is something that changes a bit every year.
Another interesting thing is that in rural areas you can cut out the supermarket instead, as many people like buying directly from the market or buying from people who resell it with small bakkies (pick-ups) to street sellers:
Farmer -> Market -> Pick-up truck reseller -> Street reseller
In the case of resellers on the street, I think they charge anywhere from 10%–70% commission, but it's difficult to say as these are all informal cash transactions.
It's rare that supermarket chains have direct contracts with farmers. Usually there are one to three middle men in the chain that all want their cut - on the farmer side a cooperative or other association (e.g. with milk it's common that a milk processor buys the milk from the farmers and then sells the processed milk on), then wholesale markets, and finally cooperatives on the supermarket chain themselves - for example, the supermarket chain "Edeka" actually not only runs their own stores, but also is a cooperative of independent store owners, as their name "Einkaufsgenossenschaft der Kolonialwarenhändler" reflects.