The industry was dealt a second blow this year when the COVID-19 pandemic reached South Africa, and the subsequent lockdown regulations caused further disruptions due to the implementation of additional restrictions on auctions. Many auction houses, buyers and producers have embraced electronic auctions in order to adapt to the current situation.
The only viable alternative
Electronic auctions are regarded as the only workable solution to continue with sales during a time in which restrictions on the movement of both animals and people threaten the sustainability of traditional auctions.
Auctions play a crucial role in agriculture as they form an integral part of trading in the industry and allow for safer transactions, which is why it is the preferred trading mechanism for livestock. During an auction, sellers put lots up for sale and buyers bid on each lot. The winning bidders then receive the lots on which they bid, and the sellers receive payment for the products offered in their sold lots.
Auctions can be held in the following three ways:
• Traditional auctions, which consist of multiple buyers and sellers physically gathering at a central auction site.
• Virtual auctions, which are conducted exclusively on an online platform with no physical presence of sellers, buyers or lots at the auction site.
• Online auctions, which are a combination of physical and virtual auctions. Off-site buyers get access to a physical auction through an online platform.
Electronic auctions include both virtual and online auctions, whereas physical auctions refer to traditional auctions.
Benefits of electronic auctions
Bu hikaye FarmBiz dergisinin September 2020 sayısından alınmıştır.
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