10. Operating and maintaining the market

STAGE 10
OPERATING AND MAINTAINING THE MARKET

Introduction

Clear arrangements must be set up for the management of markets. Although this is presented as the final stage in this guide, in fact, investments in rural markets should not be made without a management system being previously defined and a market committee being in place. Rules for market operation need to be agreed at an early stage as well as methods of leasing spaces and the setting of fees.

Market management

A complex management structure is not appropriate for rural markets.

Primary markets. For small primary markets, the presence of full-time market staff is not usually viable and the management options are limited. The simplest solution is for management to be undertaken by local government, particularly when rents for stalls or pitches are collected on a monthly or annual basis. Apart from daily rubbish collection, an adequate system of management normally requires only regular visits to the market by local health inspectors.

Where fees are collected on a daily basis, it is sometimes necessary to give a local government officer responsibility for fee collection. Alternatively, the market can be run as a franchise operation, with a private company or individual tendering for annual fee-collection rights. It can also be operated by a traders’ group or association. Whatever the case, the operations must be overseen by an elected market management committee.

Assembly markets. Larger assembly markets usually require full-time market staff. The operation of the market might be the responsibility of a local authority or private enterprise and come under the overall supervision of a market manager or superintendent. He or she provides the main channel of communication to the market committee and may be assisted by a small staff. An assembly market manager, for example, may have three basic functions:

• revenue collection, administration and record keeping;

• security and traffic control; and

• cleaning and maintenance.

It is necessary at the outset to agree on minimum staffing requirements and qualifications, job descriptions, selection procedures, levels of remuneration, promotion criteria and training needs.

Role of market management committee

After construction has been completed major problems may still occur with the effective operation of a market. Issues such as disputes over space allocation and rent levels, delays in appointment of staff, and lack of working capital for operation, staff salaries and recurrent maintenance need to be resolved before the market is commissioned. Cash-flow projections should be made. The market management committee’s responsibility is to operate a well-functioning organization, which includes defining procedures for ensuring:

• effective market operations;

• application of rental and stall-allocation policies;

• revenue collection and appropriate revisions to rental levels and daily fees;

• operation of market rules and regulations;

• dispute resolution procedures;

• effective traffic control and management;

• enforcement of environmental, public health and food safety requirements;

• mechanisms for meeting recurrent and periodic maintenance requirements; and

• future improvement and expansion of facilities.

For small rural markets without full-time staff but with permanent traders, many functions could be delegated to a traders’ organization. The market management committee would need to initiate meetings with the traders on a regular basis in order to resolve specific issues.

Step 10.1
Commission the market

It is usually necessary for the project promoter or financier, such as a local authority, to draw up an agreement covering market operations and maintenance.

Market operations. The scope of an agreement should cover the following areas:

• Who will be on the market management committee, and will it have specified representation from traders and farmers?

• How often will committee meetings be held?

• How will temporary space be provided in the market for producers?

• How will market fees be collected?

Market maintenance. Agreement will also need to be reached on recurrent maintenance.

• Procedures should be defined and arrangements made for daily cleaning of the common areas and of the individual premises, particularly stalls and equipment in meat and fish sections and where cooked food is being prepared.

• Procedures should be defined for cleaning and maintenance on a periodic basis of the building fabric and main infrastructure services, such as roads, water supply, drainage and sewerage.

• An agreed percentage of the market fees should be reserved for market operations and maintenance (a minimum of 30 percent).This is usually calculated in advance, so that the money can be put aside.

• Agreements should be made with relevant authorities for their involvement in the collection of solid waste, street lighting, site security, surface water drainage and environmental health issues.

Step 10.2
Agree on space allocation and leases

The market committee should prepare, in consultation with the users, draft agreements on how space will be allocated in the market and what form lease arrangements should take. Discussions should have been held with the traders at the design stage; however, until the new facilities have been completed it is not really possible to finalize such arrangements.

Space allocation. This has two aspects: distribution of space between permanent and temporary traders, and allocation.

Distribution. Sometimes permanent traders try to prevent temporary traders from using a market. This can be avoided by allocating a section of the market to temporary traders. Temporary users should pay fees on a daily or, sometimes, a weekly basis.

Allocation. The allocation of permanent space needs to be done in a fair and transparent manner. Two common ways to achieve this are to:

• at the planning stage hold an auction or a lottery for the right to apply for a lease on market space, so that the potential market revenues can be determined at the outset; or

• place a limit on the maximum amount of space any individual trader can lease.

If the use of the market is to be restricted to trading in agricultural products, or part of the market is to be reserved for specific products, applicants would have to confirm that they would only trade in such products before being allowed to take part in auctions or lotteries.

An important role for market management is to ensure that spaces reserved for agricultural products in general, or for specific agricultural products, are in fact used for those purposes. This frequently is not done. A common experience with urban markets is that traders in dry goods and clothing gradually take over space allocated for agricultural trade. This particularly applies to indoor markets.

Leases. The contract terms and duration should be specified, including renewal or termination conditions (i.e. the period of notice and how it is to be given).Ideally, contracts for the renting of fixed stalls should not exceed one year. The lease conditions should include requirements for traders to maintain their stalls open during the working hours and for the duration of the contract. Sanctions in case of default in payment should be defined (normally requiring the termination of a contract), together with the liability of traders for any damage caused by them or their personnel, either to the common parts of the market or to the allocated stand or stall.

Disputes. The market management committee should also reserve the right to terminate the contracts of users with records of bad relationships with other traders, the market administration or the general public.

Step 10.3
Agree on the market fee schedule

There are a number of different ways in which markets can collect revenues. The collection method should be simple and inexpensive to administer and should correspond to normal practices. The collection method should be seen to be fair and highly visible. The types of fees collected will depend on whether the traders are permanent or temporary (such as farmers selling their own produce).

Temporary traders. The following types of market fees are usual for temporary traders:

• Daily ticket fees should be set on the basis of the space occupied or the quantity of produce brought in for sale.

• Stand or pitch fees are for daily or weekly use of an area and are based on the size of the pitch and, sometimes, its location in the market area (e.g. fees are normally higher for pitches near the entrance).

• Parking fees are charged on entry and based on the type of vehicle (this system is more likely to be used for assembly markets).

Permanent traders. The following types of market fees are usual for permanent traders:

• Stall rents can be charged on a monthly, quarterly or annual basis for the use of a meat, fish or other fixed stall or for a lock-up shop (rents are usually based on area used and location).

• Licence fees are paid by specialized market users, such as butchers, fishmongers or slaughtermen.

The market committee should draw up a possible fee schedule and discuss this in detail with the market users. Particular care must be taken to ensure that revenues are set at a sufficiently high level to fully cover all operation and maintenance costs.

The normal practice is for the local authority to collect the fees. However, an alternative approach is for the rights to the fees to be sold in advance to a private individual or company. This can be done by auctioning or competitively tendering the right to collect the fees on an annual basis. Such an approach has several advantages for the market:

• the revenue to be received is known in advance;

• market employees are not needed to collect fees;

• there is no danger of corrupt collusion between market users and staff to avoid payment or pay reduced fees; and

• problems associated with handling cash are reduced.

Step 10.4
Agree on the market regulations

The smooth operation of a market and the proper use of its facilities require the promotion of and strict compliance with a set of realistic regulations. Appropriate legislation needs to be in place and this is usually provided in the form of local government acts or, more rarely, special market legislation. Such legislation should permit an authority to enact or modify by-laws.

Regulations should be prepared by the market committee in collaboration with staff and users. They should be realistically enforceable and culturally acceptable taking into account existing practices. The regulations need to be clear, concise and written in language intelligible to every user. A public signboard giving a summary of the main rules, principally those relating to hours of operation, traffic, public and users’ behaviour, should be put up at the entrance and in conspicuous places within the market.

Details of market regulations are included in a number of the FAO publications in Further Reading at the end of the guide. The usual scope of such regulations is listed in the box.