To sell or not – decision making challenges in unstable economic environments

A majority of African farmers tend to make decisions based on their experiences, expectations and fears, especially in an unstable economic environment and changing climate. At the beginning of each  marketing season, a question in every farmer’s head is “Should I sell now or later?”  Since the future is unpredictable from both an economic and climate perspective, farmers are taking long to make decisions.  Most farmers are unwilling to sell in a hurry as they try to make sense of the fluid economic and environmental situation. This presence a challenge for processing companies who are end up not being guaranteed of surplus.

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A catch 22 scenario

A farmer might be pushed to sell quickly in order to buy inputs before the price of inputs surges. In almost all African countries it is now known that input prices are always on an upward trend.  Where the farmer decides not to sell immediately, s/he will be expecting commodity prices to appreciate more than the past year given that the competitive environment is very thin due to climate change induced drought. Uncertainties on the next season may also compel a farmer against selling now in order to counter the rising price of food, for instance in Zimbabwe and other countries in East and Southern Africa.

Another issue is currency.  Due to currency uncertainties and rumors in countries like Zimbabwe, farmers may wonder: “If I sell now, what happens to my income if the currency changes?” This decision-making crisis is worsened by the fact that farmers do not have attractive savings or investments in which they can invest their earning from agricultural commodities. To sell commodities worth USD10 000 a farmer should have reliable and valuable uses. A smart farmer cannot keep the money in a bank where tomorrow the value of the money may be less by 25% due to inflation.

Consequently, farmers would rather store wealth in tangible commodities like grinding mills or livestock.  Most farmers are selling agricultural commodities to get something they can use immediately. If there was reliable information on who is selling what and who wants to buy what, a swapping economy would simplify some decisions and reduce pressure on cash. For instance, if somebody selling soya bean wants to buy a tractor while the tractor owner wants to invest in soya bean production, the two would easily meet and transact.

Re-imagining a new role for government extension

African agricultural extension services should be empowered to assume new roles in facilitating decision-making among farmers who are struggling to make sense of a dynamic and complex environment. Since the dawn of industrial agriculture in Africa, extension officers have been assisting farmers to produce the same agricultural commodities for decades. There is no longer any new knowledge on producing such old commodities. To stay relevant in a changing environment, agricultural extension officers should acquire new skills which include gathering fluid data using modern technology, interpreting evidence for farmers and facilitating aggregation of commodities at community level as well as guaranteeing fair trade.

Government extension officers can only protect farmers from unfair market practices if they have accurate data. Where private companies want to buy more than 100 tons of groundnuts from one community, extension officers with data on their finger-tips should easily mobilize such commodities in appropriate grades. They can also prevent cases where farmers compete to supply commodities to one buyer in ways that knock prices down. Most of the data should be collected at farmer level because every farmer knows where his/her commodity is going. Relying on production data alone for decision-making explains the poor state of our agriculture system. Production side data on its own is not enough. It needs to cover end to end along entire value chains.

The role of extension services in building rural finance models

Lack of data is a major reason why developing countries are failing to come up with robust rural finance models. If local extension officers have data from Chimanimani district of Zimbabwe or Taveta in Kenya showing that US$20 000 worth of bananas leave each of these districts daily for Harare and Nairobi, it becomes easy to build rural finance models in these districts.  Such data should be captured at source together with what remains for local consumption because a farmer knows better where s/he takes his/her commodity. This evidence will assist ministries of agriculture in negotiating resources from the fiscus and accurately predicting harvests in ways that also help farmers to make accurate decisions. Using data, the government can organize production to minimize unpredictable price fluctuations.

When extension services departments are able to collect and analyze data at local levels, they become reference points for financial institutions keen to work with specific value chains. Evidence-based farmer characterization can show farmers at different income levels ranging from $100 to $20 000 and such information can be used to craft appropriate collateral systems for different farmers. Most smallholder farmers do not have a banking history because much of their trading happens in the open market where data is often not recorded. Once a farmer’s local production records are consolidated with his/her market records that should automatically constitute collateral. Extension services can authenticate these facts.

Policy makers should not use price as a carrot

Most African governments are not using data to guide farmers what to produce. Instead, they are using price announcements as a carrot to lure farmers to produce a crop. Ideally, data should be used to convince farmers to produce diverse crops and livestock by showing gaps in food security and commercial opportunities.  Better prices can then be offered to incentivize farmers and control numbers.  In this case, data gives direction so that there are no gluts and shortages. Once farmers show interest to produce certain commodities it becomes possible for floor prices to be set.  That is how policy makers can re-allocate resources. Currently bumper harvests come with costs in the form of post – harvest losses.

In the absence of data, development agencies end up spending resources and time conducting baselines when agricultural data should be on the finger-tips of the ministry of agriculture like an exchange rate.  Unless farmers know the value unlocked by their commodities in the market, they cannot price such commodities correctly on-farm. That is why informed conclusions have to come from both the market and production side. Comparing market performance with production performance can only happen if there is fluid collection of data. Price is no longer the main decision-making determinant for farmers.  If that was the case, farmers would rush to deliver maize each time government announced a price.

Charles@knowledgetransafrica.com  / charles@emkambo.co.zw / info@knowledgetransafrica.com

Website: www.emkambo.co.zw / www.knowledgetransafrica.com

Mobile: 0772 137 717/ 0774 430 309/ 0712 737 430

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How marketing systems in developing countries penalize poor farmers

Whether it is potato production in the highlands of Rwanda, cassava production in Northern Mozambique or sweet potato production in Gokwe South district of Zimbabwe, the marketing season presents the same headaches for farmers. While production is now much easier, profitably moving commodities from farms to markets remains a nightmare that cannot be solved by price information or ICT platforms alone.

charles dhewa

Processes through which farmers continue losing money

Several visible and invisible costs are incurred by farmers when moving butternuts, potatoes, sweet potatoes and many other commodities from the farm to the market. The following steps reveal the extent to which the movement of agricultural commodities from field to fork does not favor poor farmers:

  1. Transport to move commodities from the farm to urban markets. Most transporters are based in cities where the farmer has to go and identify appropriate transport, thus incurring costs of going to look for transport.
  2. Cost of empty bags and tying strings – like transport, these are also often found in the city.
  3. Cost of food for the farmer on the way to and back from fetching empty bags, tying strings and transport. Farmers often ignore this cost yet it actually chews into their profit.
  4. Communication costs (phoning and texting) – farmers spend a lot of money calling the market.
  5. Labor costs for loading at the farm and off-loading at the market.
  6. Vehicle entry fee into the market. Depending on size, a two toner truck can pay at least $4 while a seven toner truck pays $7.
  7. Selling space fee in the market ($6 or more).
  8. Cost of security overnight if commodities arrive for selling tomorrow or if there are left overs.
  9. Cost of sales assistant who helps the farmer to sell in the market while the farmer collects money from customers and puts it in the bag.
  10. Cost of food for the farmer and sales assistant during eight hours in the market (5am – 1pm).
  11. If commodities are leftover for selling tomorrow, transport cost for the farmer and sells assistant who have to travel to and from a relative’s residential place in the city.
  12. Cleaning fees for the space which might be too dirty for ordinary cleaning services.

Depending on distance, the above costs can be highly prohibitive for most farmers who live more than 100 km from the market. In addition to fetching transport, empty bags and strings from the market in the city, farmers are expected to pack commodities according to grades, standards and volumes acceptable to the market. Such knowledge is often missing in farming areas. The farmer should also know how to properly tie up the bag in the way the market expects for long distances or final destination.

Selective treatment of farmers and the power of relationships

The transporter has more confidence in the trader or middlemen than the farmer because he deals with traders regularly, thus the transporter often takes advantage of farmers by over-charging especially where the relationship is only once-off.  Transport hired by the farmer tends to be more expensive than if hire by the trader or middlemen. A major reason is that middlemen or traders are good negotiators who have also built good relationships with transporters, among other actors. They also know distances to most production zones while farmers do not have such knowledge and that comprises farmers’ pricing and negotiating power. Farmers are also often asked to pay cash upfront to the transporter before the commodity leaves the farm.

On the other hand, the trader pays after selling. In fact, when the traders goes to buy commodities on-farm, he summons the transporter to come once the consignment is ready.   Transporters also tend to over-price in order to justify or hide behind cost of vehicle maintenance. Most of the transport is highly localized in cities and cannot go outside as the owner wants to monitor it and also prefer local roads so that vehicle maintenance is kept to a minimum. Rural roads are very bad such that they increase wear and tear. To justify these challenges, the few transporters willing to go to rural areas tend to over-price farmers with the costs being passed over to the consumer.

While farmers may not be sure about different commodity grades and quality specifications in the market, traders often have such details on their finger-tips. Absence of knowledge about grades and standards makes it difficult for famers to negotiate the cost of transport because low grade and high grade commodities use the same amount of fuel on the road. Another challenge is that the farmer has no guarantee of getting selling space and if s/he finds the market full s/he is forced to off-load in order to sell the following day. Off-loaders at the market also tend to over-charge farmers than traders with whom they have a long-term relationship.  As if that is not enough, most first-time farmers in the market do not know customers so their commodities sell slowly unless they hire a sales assistant. Farmers coming to the market for the first time also do not know where to get health food and water so they end up buying expensive food where as traders get food from caterers on loan and pay end of day or after some days.

Conventional marketing systems favor regular participants in the market

Both formal and informal systems of marketing agricultural commodities in African countries favor traders and a few farmers who are always in the market building relationships with transporters, food caterers and every actor. Marketing costs are so random that there is often no clear basis for charging. For instance, security people in the market have their own criteria for charging fees. It is very easy for farmers to throw away a lot of money in the process. When selling is not completed, marketing can continue to the following day and this means the entire process can take more than three days. Strangely, most farmers want to complete the sale within a day. They lack patience to sell a commodity that will have taken at least three months to grow.

 Middlemen or traders do not make money on fair pricing but it is the farmer who has to adjust the price downwards. Unfortunately, the farmer cannot succeed in persuading input providers to reduce the cost of inputs. In any case, the farmer will have bought inputs before producing commodities and cannot go back to negotiate with input providers for a reimbursement. Meanwhile, African governments remain stuck with marketing institutions that have become irrelevant to the new dynamic context. If you hear the so-called Agricultural Marketing Authorities advertising their activities you would think they have solutions for most of these challenges that have been confronting farmers for decades yet those institutions are only interested in levying value chain actors including the poorest of the poor.

The majority of smallholder farmers cannot produce enough surplus that can be profitably taken to distant markets in the city. This is where aggregators become very important. In the absence of an aggregator or efficient transport system, farmers in distant areas end up selling locally at a loss or resort to barter trade. All farmers want to sell on time in order to get into production cycles of other commodities. Since traders/buyers do not often come on time, farmers end up taking lower prices in order to run with the next production cycle but they will be under-cutting themselves.

 

Charles@knowledgetransafrica.com  / charles@emkambo.co.zw / info@knowledgetransafrica.com

Website: www.emkambo.co.zw / www.knowledgetransafrica.com

Mobile: 0772 137 717/ 0774 430 309/ 0712 737 430

 

Extent to which inherited knowledge systems are constraining African Imaginations

The introduction of exotic crops, fruits and livestock into Africa was initially guided and informed by the way indigenous crops, livestock and fruits performed in different micro climates. Unfortunately, instead of cultivating co-existence between exotic and indigenous foods, the colonial knowledge system has sought to completely replace indigenous crops, fruits and livestock with exotic food systems

charles dhewa

A telling example is how African agronomists and horticultural specialists have been equipped with knowledge on promoting plantations of apples, oranges, peaches and other exotic fruits. They cannot imagine plantations of indigenous fruits like Masawu, Matohwe, Tsvubvu, Nyii and many others that respond well to a changing climate. In addition to maize and wheat, exotic leafy vegetables have also been over-researched such that there is no longer any new knowledge about these food commodities. On the other hand, thousands of indigenous crops, fruits and vegetables are yet to be researched and commercialized for the benefit of consumers.

 The folly of replacing natural ecosystems with exotic foods

As seen in most rural communities, you don’t need foreign currency to produce indigenous fruits and vegetables. By embracing exotic foods at the expense of local foods, African policy makers have destroyed local knowledge about different food systems. The entire agricultural and nutrition curricular focuses more on generating knowledge about the production, processing, marketing and consumption of exotic foods whose market base is no longer expanding. Financial systems are also biased towards exotic agricultural commodities on the pretext that they have off-takers.

Rather than exploring and developing local food systems, development agencies are also supporting the production of exotic commodities, most of which have reached their ceiling. Community irrigation schemes are being compelled to produce exotic crops and fruits using inputs whose knowledge and ingredients are also exotic such that foreign currency is required if production is to continue. Development efforts have a wide pool of indigenous crops, fruits, tubers and vegetables from which to choose instead of bringing Chia and other exotic crops for production in Africa.

Having destroyed their natural resources through unregulated industrialization, some developed countries are now curious to get new food systems from Africa. This is a huge opportunity for African countries to develop their own indigenous foods and use diaspora populations to promote consumption of African food in developed countries. Traditionally, Africans have developed tastes and preferences for foods that grew naturally without destroying local economies and ecosystems. This is what the new generation of Western consumers are craving for. African countries should not squander an opportunity to provide unique food with distinct flavor to the world just as Africa is now a haven for tourists from Asia and the West.

The role of African research institutes, universities and financial institutions

There is a limit to which African research institutes and universities can continue using exotic knowledge to produce exotic food just for the sake of earning foreign currency. An African agricultural research institution should ensure more than 90 percent of the commodities being researched on are indigenous.  Exotic knowledge and methodologies have to be creatively combined with Indigenous Knowledge Systems. African gene banks should contain more local and indigenous seed and planting materials than exotic ones.

Universities and research institutes in Africa should play a leading role in regenerating indigenous natural foods as an important way of minimizing the effects of climate change and foreign currency deficit. Currently the whole African agriculture system is anchored on foreign currency yet local knowledge on natural products can be a solution to foreign currency challenges. Once developing countries are able to apply knowledge in developing natural resources they can create markets for new commodities unlike exporting commodities to countries where those commodities originate. It is not sustainable to continue earning foreign currency from commodities that originate externally.

African financial institutions like the Africa Development Bank should ensure more than 75 percent of their agricultural funding supports indigenous crops and livestock unlike promoting exotic commodities that have reached their ceiling and are no longer resilient to climate change. You will never find a European bank or an American bank financing research and production of purely indigenous crops, fruits and livestock in Africa because these institutions have vested interests in promoting hybrids and equipment from their countries. When will African financial institutions wake up to this reality?

Harnessing the power of collective community knowledge

Meanwhile, African rural communities are already using their knowledge and food systems to cope with a changing climate. On the contrary, formal research institutes continue focusing on exotic food systems and related knowledge. Unfortunately, community knowledge tends to be individualized when it should be layered the way academic knowledge is built through layers from primary school to PhD level. This is where   knowledge brokers can play a fundamental role in layering local knowledge in diverse ways including by age, gender, location and culture.

The starting point in transforming African agro-based economies is obtaining comprehensive knowledge on local food systems and natural ecosystems. Where necessary, imported knowledge should be combined with local knowledge in producing and preserving natural foods and ecosystems. This can be achieved though the following activities:

  • Conducting research and consolidating knowledge on indigenous foods, starting from seed, production and all the way to plantations for natural trees. Thorough research should also be conducted on livestock including guinea fowls that are game animals and very resilient.
  • Introducing data gathering tools to capture supply, demand, prices, tastes, preferences, sources of indigenous fruits, tubers, vegetables and livestock flowing into the mass market across Africa.
  • Establishing a basis for frequent analysis of market data to inform production and preservation.
  • Exploring value addition options – porridge, snacks, flour and others in the market given that more than 90% of indigenous crops, tubers, fruits and vegetables are consumed raw.
  • Initiating continuous policy papers that inform policy reviews on the promotion of indigenous foods as part of local content.
  • Government funding directed at researching the extent to which exotic knowledge systems continue to substitute IKS. In all African countries, more than 80 percent of decisions are based on local indigenous knowledge while in cities less than 5% of decisions are informed by indigenous knowledge. To what extent is urbanization eroding IKS in Africa? As African countries grow their towns and growth points, to what extent are they destroying IKS?

We are not advocating for the complete reversal of the gains associated with exotic knowledge. There is no doubt that imported knowledge and technology has contributed to some measure of progress in African countries. Given that each knowledge system has its limitations, Africa is likely to benefit more through intentionally promoting co-existence between exotic and indigenous knowledge, especially in relation to food systems under threat from climate change. Eating habits, tastes and preferences are beginning to be influenced by a rapidly changing climate.

charles@knowledgetransafrica.com  / charles@emkambo.co.zw / info@knowledgetransafrica.com

Website: www.emkambo.co.zw / www.knowledgetransafrica.com

Mobile: 0772 137 717/ 0774 430 309/ 0712 737 430

 

 

The opportunity cost of industrialization in developing countries

The African spiny horned cucumber (pictured below) is abundant in Southern Africa this farming season. Like other natural crops, it does well in seasons characterized by global warming-induced drought such as the one ravaging Mozambique, Malawi, South Africa, Zambia and Zimbabwe this year. Replaced by the English cucumber, the African cucumber has been completely ignored by policy makers and researchers who have not bothered to find out its properties and potential uses. While in Africa it’s now considered a weed to be destroyed by herbicides, in the USA consumers buy it in supermarkets.

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Using local resources to respond to climate change

While climate change remains a topical issue in Africa, the majority of organizations are competing in raising awareness of its existence than generating solutions based on full understanding of its root causes. As African countries are restless to industrialize their economies, they are paying a blind eye to the contribution of industrialization to climate change. What has largely been ignored is the opportunity cost of transitioning from ecosystems in which natural forests, human beings, insects and wild animals existed without external forces trying to change the natural ecosystem.

The unfortunate notion of developing an economy is about building physical infrastructure, creating employment at all costs, increasing the Gross National Product (GNP) and the Gross Domestic Product (GDP), export promotion and improving standards of living. But what is the opportunity cost of pursuing  these goals? Infrastructure development focuses on constructing physical structures like roads, railways, high rise buildings, residential areas as well as clearing land for mining and plantations, among others.  How are developing countries replacing natural resources that existed before setting up these structures?

Replacing natural ecosystems with external resources

African countries are destroying their natural ecosystems which they are replacing with colonial imported assets. At the end of the day they are crying foul about climate change without trying to find solutions within existing natural ecosystems. More importantly, they are not thinking about using abundant natural food systems to develop their economies. Traditionally, Africans have developed tastes and preferences for foods that grew naturally without destroying local economies and ecosystems. Having destroyed natural forests to produce hybrids and other imported foods in pursuit of industrialization, African countries are now importing inorganic knowledge to replace organic knowledge.  When you destroy natural food systems you also destroy embedded knowledge.

In all sectors, African countries are trying to develop their economies without strategies for replacing natural ecosystems that are destroyed in the process.  Road networks are good but to what extent are they benefitting natural ecosystems?  In most cases, roads are used for exploitative purposes and destroying natural resources. For instance, most big roads going to areas where cocoa, sugar cane, tobacco, tea, cotton and other commodities dominate are mainly for exploiting those crops. Developing countries have not developed roads for business models around natural foods.

The cost of forging alternatives

Opportunity cost refers to the cost in terms of forgoing alternatives. If you clear 10 000 square metres of land for mining and related infrastructure, what strategies are there for re-establishing or re-generating the previous ecosystem?  When you build large dams how are you going to use the large body of water to replace the previous ecosystem? Unfortunately, when large dams are built the main focus shifts to irrigation of monocrops using imported knowledge. In their obsession with economic growth, African countries have not developed pathways of developing or propagating local knowledge in order to increase production and utilization of natural foods.  They have embraced food systems from countries that have done thorough research on their foods which they are bringing to Africa for production in abundance.

To that end, African countries have become a food production zone for countries that have destroyed their natural ecosystems.  For instance, less than 2% of tobacco is smoked in Zimbabwe, with the rest exported.  As the country produces tobacco it is destroying its natural ecosystems, soils and micro climates on which natural foods used to grow.  Honey which used to grow naturally has gone down and we are trying to use scientific methods of keeping bees. We no longer have sufficient bees and it’s not clear to what extent this is affecting pollination on which maize, butternuts, cucumbers, tomatoes and other crops depend.

Developed economies have destroyed their food systems toward satisfying their markets. They are now aggressively expanding their markets to developing countries through replacing or substituting local food systems.  The proliferation of fast food outlets, supermarkets and hotels whose menus constitute less than 5% of local natural foods is an example.  This shows developing countries have become a market for western imported foods through either consuming western food or producing food for western countries.  To strengthen this model, Western countries are selling seed to developing countries so that these countries satisfy western tastes and preferences. Imported seed is coming with knowledge on how to produce food but not how to reproduce seed.  Such vital knowledge remains in the West.

Developing countries competing among themselves

When developing countries produce western food, they compete in exporting to each other. For instance, when Zambia has excess maize it exports to Zimbabwe not to western countries. When you are using foreign knowledge to produce foreign food to earn foreign currency from your neighbor or brother that is not economic growth because it’s just taking from the right hand to feed the left hand. It also increases opportunity costs which negatively affects local food systems. To worsen matters, food research in developing countries continues to follow colonial academic curricular meant to support Western food systems.

As developing countries continue to lack innovation around their food systems, they are producing for Western countries to add value. The best chocolate factories are in Europe although European countries do not produce cocoa. African countries have not invested in developing business models for local natural commodities like wild fruits, African horned cucumber, sweet potatoes and many others. Much of the research has gone into crops like Irish potato which is in the same family as sweet potato.  Tastes for the imported Irish potato seed have been developed mostly in the West where knowledge on producing  diverse finished products is held.

Market capture at several levels

Developed countries have used a market capture strategy through forcing developing countries to export selected commodities to them while also cultivating local markets for foreign food.  Market capture has happened at the following levels:

  • Equipment – Developing countries are not able to manufacture durable equipment so they end up importing from the West where hybrid seed and livestock breeds also originate.
  • Inputs (chemicals, seed, fertilizer) – Most developing countries do not manufacture these inputs so they depend on the West.
  • Knowledge, skills and labor – where developing countries are supposed to use their knowledge and skills in researching and producing their natural foods, they spend their knowledge on understanding and producing foreign food through export-oriented strategies.
  • Processing – Instead of producing for processing locally, most developing countries produce and sell raw commodities like cocoa, cotton, tobacco as well as minerals which should be processed locally to finished products.

 How much imported knowledge is used to improve local natural ecosystems? 

Most African countries have not been able or willing to answer this question. When we destroy and replace our natural resources in a bid to grow our economies using external knowledge, what is the opportunity cost? It is now obvious that we are trading our natural resources and ecosystems with imported knowledge. Where we talk in terms of dollars and cents in relation to a trade balance (exports versus imports), we have a huge knowledge deficit through importing Western knowledge and exporting less. When we import knowledge, it comes through commodities like seed, livestock semen, chemicals and equipment. We spend foreign currency to import external knowledge. How much knowledge are we importing to for improving our natural resources so that we can export natural commodities?

However, all hope is not lost

There is still scope for regenerating indigenous natural foods as an important way of minimizing the effects of climate change and foreign currency deficit. Currently the whole African agriculture system is anchored on foreign currency yet local knowledge on natural products can be a solution to foreign currency challenges. Once developing countries are able to apply knowledge in developing natural resources they can create markets for new commodities unlike exporting commodities to countries where those commodities originate. It is not sustainable to continue earning foreign currency from commodities that originate externally. The starting point is obtaining knowledge on our food systems so that we know much about our natural ecosystems. Importing knowledge and applying it on natural ecosystems is going to support external ecosystems in Africa.

The following activities form the starting point in the regeneration process:

  • Raising awareness on the potential that exists within natural food systems – not only focusing on human benefits but a holistic approach that embraces wild life and nature.
  • Conducting research, not only for academics, but for consolidating knowledge on indigenous foods, starting from seed, production and all the way to plantations for natural trees like mopane for Macimbi, Matohwe, Nyii, Tsvubvu, African horned cucumber, pumpkins and many others.
  • Value addition – processing and preservation.
  • Export promotion.

Creating awareness without providing alternatives is a meaningless effort. At the moment, climate change messages are focusing on telling communities what to do without providing alternative solutions. It’s not enough to discourage communities from cutting down trees when they need to survive.  Let’s ensure they see benefits of natural resources and they can then see reasons for protecting forests. The whole ecosystem can benefit including wild animals like birds.  It’s important to provide climate-mitigation measures that show benefits of preserving natural food systems. Instead of boasting about minerals like gold and platinum, it is better for developing countries to develop and preserve indigenous knowledge on natural resources. Such knowledge can be used to deal with climate change.

All African countries have gone for years importing knowledge such that the graph for Indigenous Knowledge Systems (IKS) needs to be raised. Research on the extent to which imported knowledge has substituted IKS is urgently needed. To what extent is urbanization eroding IKS? As we grow our towns, we are probably destroying IKS. Methods of connecting knowledge systems and promoting co-existence are badly needed. Each community has different knowledge levels with concentration differing with individuals, communities and households as well as tradition or culture.

 

charles@knowledgetransafrica.com  / charles@emkambo.co.zw / info@knowledgetransafrica.com

Website: www.emkambo.co.zw / www.knowledgetransafrica.com

Mobile: 0772 137 717/ 0774 430 309/ 0712 737 430

From academic and scientific research to commercial and social viability

When academic and scientific research came into African economies, communities were already surviving on Indigenous Knowledge Systems (IKS). In agriculture, for instance, a long tradition of seed selection, multiplication, retention and preservation exists up to today. Conservation Agriculture and other related forms of knowledge have also been part of community assets since time immemorial. The same applies with livestock where knowledge on selecting, multiplying and preserving breeds has been passed from one generation to another. Different types of indigenous chickens, goats and cattle were selected and preserved based on micro-climates, but informed by IKS

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Farmers also knew who had good breeds/seed and in which communities. To date farmers and communities have continued to keep track of cycles of seed or livestock breeds brought from other communities. For instance, a sweet potato variety called Mai Chenge in Gokwe South district of Zimbabwe was named after a woman from the district who brought it from Murewa district in Mashonaland East where she had visited her relatives.

Co-existence between scientific research and indigenous knowledge

An enduring challenge for developing countries remains transitioning from academic/scientific research to commercial and social viability. Cultivating co-existence between scientific research and indigenous knowledge could have enhanced this process. Unfortunately, failure to tap into IKS has seen modern scientific research efforts resorting to aggressive replacement strategies instead of exploring ways of co-existence. While academic and scientific efforts have focused on replacing IKS, they have not been able to answer several outstanding questions from farmers, communities and ordinary people.

For instance, smallholder farmers who have been witnessing their indigenous cattle and goat breeds getting smaller in size for years are yet to get convincing answers from science. In the absence of meaningful scientific knowledge, the farmers continue to attribute the decrease in the size of their breeds to decreasing grazing. Where scientific research has been conducted, it has not generated usable knowledge on natural adaptation. The confusion has been worsened by development agencies suggesting to farmers that the best way to increase the size of local goats and cattle is to bring big breeds from other communities or commercial farms. But farmers continue to ask “What has happened to our Mhesisi and Jamluthi?”

 How and why have birds become enemies?

This is another question from many farmers who have been producing small grains and co-existing with birds for generations. How and why have birds become so voracious predators to the extent of pushing farmers from small grains to other crops in communities that have predominantly been known for producing small grains?  If, as suggested by small grains seed breeders, the solution is growing varieties that cannot be eaten by birds, how will birds survive now that forests are being cleared for extensive monoculture? Should science focus on improving crop varieties without thinking about the environment and ecosystem?

In relation to livestock pastures, scientists and development agencies have been aggressively promoting exotic grasses like banar grass, lablab and others. But communities are keen to know why there has not been deep research on natural pastures which grow naturally and are easily available in communities. When farmers are struggling with low productivity due to decreasing land sizes, how sensible is it to reserve some land for planting exotic pastures? Is it a coincidence that as natural grasses are being ignored by science, indigenous livestock breeds are getting depleted?

According to many farmers who practice mixed farming in Africa, natural pastures have their own unique tastes and medicinal properties that have not been adequately investigated in the rush to import scientific knowledge. The farmers are convinced that African scientists have become colonial informants and subjects of external solutions. During the time communities depended on their local natural food, food-related illnesses were fewer. Communities are now no longer sure of the long-term effects of science that is being injected in food/seed/livestock using laboratories and formula – rendering the food less natural. To what extent is science taking over and destroying natural ecosystems? This is another question.

Unfortunate absence of knowledge loops

Academics and researchers have not developed information and knowledge loops with other value chain actors. They have remained scientists. A PhD graduate is not able to share knowledge with value chain actors at the bottom of the pyramid like smallholder farmers. That is why most PhD graduates either lock themselves in laboratories at research stations or go back to university where they concentrate on converting more students into PhDs with whom they can converse on equal terms based on the same language. From a knowledge perspective, extension officers tend to be more valued by communities because they are more deeply rooted in local realities.

What has worsened the situation is loss of reliable pathways and processes through which communities shared knowledge in the past. Instead of sharing genuine knowledge, the promotion of maize and other hybrids is now dominated by advertisements which are more about persuasive messaging and attracting customers from competitors. Farmers have become confused to see five seed companies promoting more than five maize varieties in one ward. They have started questioning the motive by seed companies to  push more than five different varieties in one community and one shop. What is the difference between the varieties being promoted? Farmers end up making decisions based on hearsay from other farmers or the way the varieties are advertised at demonstration plots or field days which are largely stage-managed events than authentic knowledge sharing platforms. Most field days and exhibitions are now more about selling than knowledge exchange. The actual research into seed remains hidden and not simplified.

Developing countries have also not been able to commercialize research findings in order to increase production and demand in ways that develop value chains. For instance, scientific knowledge on value addition has also remained locked within extreme positions. For instance, apart from beer brewing and subsistence consumption, science has not been intentional in enabling smallholder farmers to obtain other benefits from small grains.  On the other extreme is research that is done by companies to produce small grains beverages that can last for years but the intricacies of such knowledge are not shared farming communities. Farmers continue to hear that cornflakes can be produced from small grains but such products are only produced by corporates.

Identifying and addressing the missing middle link

Who can facilitate authentic knowledge sharing platforms in marginalized communities? Currently, information and knowledge is locked in researchers who prefer keeping it to themselves. On the commercial side, competition is forcing companies to lock knowledge like recipes and keep it to themselves. The same applies with development organizations who keep ideas to themselves in order to win donor funding ahead of other competitors. All these actors are targeting the farmer and each actor is bringing a piece of information or knowledge separately.

There is need for a knowledge broker who can bridge these information and knowledge barriers in an increasingly competitive environment. On one hand we have pure academic/scientific researchers focusing on issues like artificial insemination, tissue culture and others. On the other hand is a market for diverse finished products. In between is a farmer who should make sense of the research from science and implement it on the ground.  When seed is produced by researchers, there is no pathway for such seed to enter local commercial entities like agro-dealers who can reproduce indigenous seed/breeds for running commercially viable enterprises, the way seed companies do with hybrids. This means there is a missing link in reproducing research results and distributing to other players. Since extension services and research institutes are not commercial entities, what they promote may not stand the competitive landscape.

A case for building business models starting from the farmers upwards

Most business models are being developed from the top based on what we think communities and farmers want. There is no careful assessment of community cognitive capacities and readiness for external knowledge. Interventions by several development agencies are not adequately informed by what communities really need or want. This is because many development agencies start conducting baseline surveys after receiving funding. There is no room for pre-funded research that should inform proposals. Instead, proposals are written first before the baseline when it should be the other way round.

Major institutions and sectors are still defined by their mandates politics for politicians, businesses for profit-oriented organizations, researchers for academic purposes, development organizations for pro-poor initiatives, traditional chiefs for safeguarding culture, etc. In between is a farmer who is supposed to embed all these mandates. A farmer is a politician, researcher, profit-oriented person, a pro-poor traditional leader and, so on, all in one. Rural communities need knowledge hubs where all these knowledge mandates can be harnessed and synthesized for farmers, investors and different information and knowledge seekers. That is where a knowledge broker becomes critical in clustering and synthesizing knowledge. Such efforts go beyond digital platforms. When knowledge is in pockets, opportunists increase and that renders the economy fragile.

 

Charles@knowledgetransafrica.com  / charles@emkambo.co.zw / info@knowledgetransafrica.com

Website: www.emkambo.co.zw / www.knowledgetransafrica.com

Mobile: 0772 137 717/ 0774 430 309/ 0712 737 430

How people’s markets value satisfaction more than colonial measurements

The formal education system in developing countries has not taken time to explain and justify colonial measurements that continue to be used in attaching value to agricultural commodities. Consequently, smallholder farmers wonder why some commodities are measured in kilograms and liters.  In the absence of meaningful explanations, consumers and farmers surmise that these measurements were mainly introduced to support money as a medium of exchange by simplifying figures. There is also a feeling that these measurements were adopted for conversion purposes like from kilograms to metric tons, from millilitres to litres, from acres to hectares, from metres to kilometres, and, so on.

emkambo

Importance of democratizing measurements

Failure or reluctance by science or formal education to clarify what is behind most measurements has fueled the growth of informal open markets where almost everyone understands measurements in use. Informal open markets recognize the fact that communities have a lot of knowledge and value which should not be ignored by conventional forms of measurement. In these markets, value is not about kilograms but the extent to which commodities exchange value – “If I trade a bucket of small grains, will I be able to go and buy two chickens?”

Behind every transaction in the people’s market is some value attached and that value cannot be adequately expressed through kilograms. It is more about satisfaction – “are you satisfied with the value of the commodity or not?” Where there is a struggle around satisfaction when using conventional measurements as a point of satisfaction for two actors (seller and buyer), the meeting point is the satisfaction point for all actors, not the measurement.  If a farmer can use one handful to define a bundle of vegetables and the customer is satisfied to pay, it means both are satisfied. Any other measurement becomes meaningless.

Measurements in relation to the rate of transactions

The fast rate of transactions in informal open markets is a major reason why these markets cannot wholly depend on colonial measurements like kilograms. Putting all commodities on scales can be too time-consuming to a point of grinding the marketing process to a halt.  Imagine 5000 people trading more than 100 different commodities within a small space and trying to do business within four hours.  If scales are used in these situations it means half the time is spent focusing on unit of measurements.  Even if farmers use scales on the production side, verification at the point of trading becomes a frustratingly slow process.

It is more about value than volume and weight

While measurements may seem important, commodity trading is more about value.  It is more about how the farmer values his/her commodity and how the customer values the commodity brought by the farmer to the market.  That is why for every measurement there is always interest in physical factors like number of bananas within a crate not just kilograms, which can mean anything. It is satisfying to talk in terms of heads of cabbages consumed by a family of six than kilograms of cabbages consumed by the family per week.

Trading in most rural settings uses observation and other human senses like lifting a chicken to feel its weight unlike using kilograms.  This confirms the importance of value. For instance, it’s not possible to compare a cork and hen.  A cork may weigh 10 kg but a hen that weighs less may be more valued because it produces chicks and eggs. Although kilograms tend to be used in livestock markets, observing a steer, bull, goat, pig or sheep is more satisfying in concluding deals than relying entirely on kilograms.

Conventional measurements like kilograms and liters can be valuable when used to compare commodities of the same size, same products, same quality and taste. If you slaughter two beasts, they may have different tastes due to age and other factors. This means using kilograms may not produce the correct comparison because kilograms are not identical for the two beasts.  The same applies where two chickens are slaughtered, taste and quality can be very different due to various factors.

The power of traditional measurements that embed both economic and social benefits

Informal people’s markets have become adept at using traditional forms of measurements that embed both economic and social benefits.  To a large extent, these markets have tended to be consistent in terms of units of measurements such that they have resisted being pressurized to use kilograms or other forms of measurements. It also appears the open market has collectively decided to use packaging as a form of measurement. For years they have been using wooden boxes, 20l buckets,50 kilogram bags for commodities in transit, baskets, plastic sandaks and dozens. Also in greater use across most open markets is counting, bundles, observation and many others.

Irrespective of measurements, what has remained important is staying in tune with market forces – supply and demand.  Whether a box of tomatoes is 5kg or 15kg is not important. Most of these measurements in the open market have not changed for decades. Except in rare cases, commodities in the informal market are not distributed in kilograms but packaged into 20l buckets, sasasekas, baskets, truck loads, push-carts and many other bulky measurement. Correspondingly, prices fluctuate within those units of measurement that have become standard across all people’s markets. Temporary packaging has greatly become accepted as a unit of measurement such that when prices go up the units are adjusted accordingly.

People’s markets as valuation institutions for satisfying different actors

One question from smallholder farmers is: Why should we use kilograms for consumed commodities when manufactured commodities like tractors and scotch-carts are sold on value?  A farmer can decide to either part with $1000 for a scotch-cart or spend the money on something else.  The open market does not care about moisture content which can see a 20kg bucket of maize weighing less at one time and triggering serious disputes. There is also a strong view that conventional measurements like scales can easily be manipulated. A buyer can manipulate a scale or machine but you s/he cannot manipulate a bucket which can be observed and seen by naked eyes.

If a commodity can easily be put in a container, why would another measurement like kilograms or litres be used when they do not lead to another value like nutrition or a superior grade? Farmers think that kind of double-measurement does not add value. Why should a kilogram or a litre be the only major expression of a commodity’s worth? The quality of a soccer player is not measured by height or kilograms but intrinsic gifts like dribbling skills, mental fortitude, speed and many other factors.

Challenges in translating satisfaction into business viability

While open and informal markets have found creative ways of using value as a satisfactory intersection for traders, consumers, buyers and farmers, there is still a hanging question.  How do we make sure value as satisfaction is economically translated into viable business? This question has to be answered from the social and economic perspectives. One of the reasons it has remained difficult to commercialize smallholder farmers is because satisfaction with agriculture is not just about money. For the majority of African smallholder farmers, meeting the needs of the immediate family, extended family, relatives and the community is a fundamental motivation into agriculture.

That is why most transactions in rural communities are not much of trading but giving. If a cork is slaughtered for you as a visitor, the economic value of the cork is not a major consideration.  If you are given a bucket of groundnuts, the giver does not convert the bucket’s value into dollars and cents. From an economic perspective, the farmer who gives you a bucket of groundnuts will have incurred losses because s/he cannot recover costs of production. How do we compare an economic loss due to giving with the social benefits of giving?  If the value of a goat that a farmer has given to his daughter-in-law is $50, the satisfaction of giving can have more value than the $50. The same if a cork worth $10 is slaughtered for a visitor, the visitor’s appreciation can be more than a Chicken Slice box worth $30. If you bring groceries worth $200 to your mother, the social benefit you earn can be far more than $200. The only challenge is when farmers try to use economic benefits to sustain their production and productivity. For instance, a traditional form of discount (Mbasela) is a social benefit-driven discount, but can be considered a loss from an economic perspectives.

Importance of examining the socio-economic landscape

Farming communities always live with a trade-off between trying to satisfy the customer or relatives and satisfying economic benefits. That is why it is important to invest in understanding the landscape in which farmers exist and how they arrive at decisions to leave surplus for the market. Before thinking about surplus for the market, the primary focus for most farmers is social benefit. If you are trader coming from marginalized communities, you cannot take everything to the market and leave the community starving.  That is why, business champions from marginalized communities tend to be rare.  The moment you start becoming a champion, the social pressure for giving starts increasing. As a way of navigating this dilemma, many profit-oriented enterprises like some food chain stores or processing companies try to stay outside marginalized communities, especially communities from which company owners come from.  They are trying to run away from social pressures which may end up compromising profitability.

 

Charles@knowledgetransafrica.com  / charles@emkambo.co.zw / info@knowledgetransafrica.com

Website: www.emkambo.co.zw / www.knowledgetransafrica.com

Mobile: 0772 137 717/ 0774 430 309/ 0712 737 430

How ICTs are being misused to perpetuate poverty

Contrary to the hype in which ICTs are presented as a panacea, ICTs-related costs in many African countries eroding the meagre promised benefits. Countless studies and articles (including this one – https://www.techzim.co.zw/2019/03/cost-of-mobile-data-in-zimbabwe-should-we-even-compare/) show that the cost of data is increasing in Africa when such costs are decreasing in other parts of the world. This is dampening hopes of an ICT-driven industrial revolution.

charles dhewa

Impact on agriculture and rural livelihoods

At the moment, if a Zimbabwean or Zambian farmer wants to sell 10 indigenous chickens at $10 each and uses a mobile phone to call buyers for 10 minutes at $2, the cost of communication translates to $20 which is more than 20% of the expected revenue from the chickens. This does not include other costs like transport and inputs that are also continuously increasing. The bigger the portion taken by costs of knowledge and information, the bigger the negative implication on agribusiness and livelihoods.

Increasing the costs of information and knowledge sharing translates to business costs. Emerging business opportunities are lost and misinformation increases as value chain actors try to take advantage of each other. When farmers don’t have accurate and timely information they also produce commodities that do not match market expectations. The other impact is on innovation. Raising the cost of accessing external knowledge forces farmers and ordinary people to rely on local ideas which may not be enough for competing in the fluid and dynamic market. Resultantly, competitiveness goes down especially for the disadvantaged farmers who end up resorting to what exists within their localities and what is affordable.

ICTs benefits being eroded

In the past few decades, ICTs had started generating some benefits such as accelerating information and knowledge sharing. Collaboration between banks through facilitating electronic bank transfers has also been increasing, fueling economic growth. Also notable has been the transformation of the education system through laying the foundation for online and distance learning. In addition, for a long time, agricultural extension services and medical services have been classroom-based and hospital-based respectively until ICTs came in with innovations like e-extension, e-health as well as e-administration which is one of the current fascinations in governments trying to digitize their operations.

The social fabric had also started counting the benefits of leveraging ICTs. Daughters and sons living in cities could easily talk to their parents in rural areas several times a week.  This was unheard of before the ICT revolution. Parents with children in the diaspora could also stay in touch with their children and grandchildren. All these benefits had strengthened the social fabric unlike the previous period when letters and word of mouth were the main means of communication. It also became easy to send money home from the diaspora or city, thanks to embedding ICTs within financial systems.

Is the honeymoon is over?

All the above mentioned benefits are being rapidly eroded. For instance, in spite of having full-fledged public relations and marketing departments, banks have not been able to convincingly explain the rationale for regularly increasing bank charges. These charges, including the cost of mobile money, are becoming highly prohibitive such that traders are failing to buy commodities that will have been identified through information and knowledge sharing among value chain actors.

Bank clients deserve to know what it is about account maintenance that attracts a fee of $9/month. What  it is about point of sale transacting that causes $0.85 to be deducted from a client’s account. What it is about bank to wallet transfers that attracts a $3 deduction for every transaction above $100. What justifies a $10 charge for an RTGS?  After paying $9 account maintenance fee, why should a client be charge $0.99 service fee? Why is someone sending money through mobile money charged an eye-watering amount of money and the recipient on the other side is also charged the same amount of money? Reluctance by financial institutions to answer these questions breeds enormous suspicion and explains why cash is now in the streets and people are keeping money in their homes. People are realizing that gone are the days when saving money was part of wealth creation through interest earnings.

Invisible costs

High costs of ICTs and financial transacting are stalling economic development, starting from an individual trying to communicate with many value chain actors, especially those at the Bottom of the Pyramid where agriculture constitutes 70% of economic and social value. One of the challenges is that costs of failure to communicate due to high costs of ICTs are invisible to the point of not being taken seriously compared to the cost of tangible items like seed, fertilizer, chemicals, heifers, bulls and equipment such as ploughs, among others.

In real terms, the cost of information and knowledge can be much higher than the cost of tangibles particularly for those at the Bottom of the Pyramid and SMEs. What is ignored is the opportunity cost of not gathering information and knowledge timely. Agriculture is driven mainly by knowledge and information sharing more than other sectors like manufacturing and mining. For instance, mining depends on in-house skills. While markets are already established, mine employees receive the same kind of training. There is not much expected in terms of communication-related information and knowledge sharing. For agriculture, only a few agricultural commodities like cocoa, tobacco and sugarcane, have well established markets. Knowledge-related costs for these commodities may only relate to extension.

The situation is different in horticulture and other field crops where farmers have to stay up to date with diverse trends. If the cost of knowledge goes up, it increases the cost of business since farmers have to continuously seek appropriate knowledge and information from diverse markets. Farmers who fall behind end up relying on low quality information which translates to low quality commodities and poor market performance. For instance, when farmers stop participating on the market, they fail to know about new varieties. On the other hand, as major producers for the majority of households, SMEs in the food sector end up pushing the costs of communication to consumers or end-users. No one will blame traders for deducting the cost of airtime from what they pay farmers for commodities. This leads to high inflationary tendencies where farmers and buyers embed costs into products.

Failure to innovate by financial institutions and ICT players is exacerbating climate change and deforestation. Rather than keeping their money in the bank where bank charges can consume all the savings within a few months, farmers are investing in livestock and this is causing over-stocking/over-grazing. Instead of putting money in the bank, some farmers are investing in short cycle horticulture commodities – depleting soil nutrients, water sources and contributing to gluts.

What explains negative circumstances surrounding ICTs?

Instead of taking ICTs as enablers, Mobile Network Operators (MNOs) and financial institutions have resorted to using ICTs as cash cows. They are not investing in understanding the implications of increasing the cost of ICTs on information sharing and financial transacting. Farmers who had begun to use ICTs to improve decision-making are beginning to realize that all is not rosy. Given the prohibitive costs of using mobile phones compared to the gains, consumers such as farmers and traders have started realizing that calling for a minute can be more expensive than getting onto a bus to meet the person you want to call. Depending on the amounts involved, jumping onto a bus and going to deliver money is much cheaper than using mobile money or sending it via a bank.

The high cost of ICTs has also started damaging the social fabric. At the beginning of the ICTs revolution, parents living in rural areas had become used to receiving calls from their children living in the cities almost daily. Since the frequency of these calls has gone down due to high costs of communication, parents are beginning to think that their children no longer love them.

Individualism in the ICTs Sector much to blame

Instead of collaborating, MNOs prefer to compete yet sharing resources would reduce costs through economies of scale. In countries like Zimbabwe where the sector has gone for a long time without new competitors, the few actors function like an oligopoly by conniving to set the same prices as if they incur the same costs. It is not surprising that at the end of the year, MNOs and banks declare millions of profit which confirms they are abnormal profit-seekers. The situation also reveals the pitfalls of commercializing communication services. If communication is 100% commercialized, the majority will not be able to share information and knowledge. Government should play a leading role just like in the water and energy sectors which if left to market forces the majority would go without water and energy.  Commercializing ICTs is risky for economic growth, which is why governments are now failing to control social media.

Limitations of an import-dependent ICTs sector

ICTs are more than 20 years in Africa. When will African countries stop importing ICT-related knowledge? These countries are not developing local skills enough to be able to rely on their own ICT expertise instead of continuing to import gadgets and knowledge. As long as this continues, these countries will be importing inflation through SMS and USSD gateways. Why should messages shared between farmers and the market go through an international gateway? Paying US$0.3-4/SMS for such routing obviously increases the cost of communication.

 Poor business modelling

Financial institutions and MNOs have failed to develop viable and growth-oriented business models. They prefer working in isolation even when collaboration would be more profitable. Tariffs are always increasing because MNOs do not have content.  It is nonsensical to charge consumers just for talking to each other irrespective of content. If MNOs had content consumers would be comfortable paying at whatever cost.  Unfortunately consumers are being punished by incompetence within MNOs who do not want to creatively collaborate with content providers towards reducing the cost of communication.

The situation would be better if MNOs were willing to provide holistic packages. Currently, mobile phones are sold by different actors from those selling airtime and consumers are forced to move around all these actors. There is also no integration in relation to airtime. Instead of forcing consumers to buy three separate airtime cards, why can’t MNOs invest in one airtime card and share revenue?

From necessity to emergence use – what can policy makers do?

When costs continue to increase, mobile calling and short message services end up being used for emergence only rather than for enhancing business operations. Farmers fail to communicate with the market and the market also fails to communicate with farmers. Where a trader has to call 10 – 20 farmers and try to do negotiations over the phone, costs become completely unaffordable and s/he eventually stops doing so. People end up using formal financial systems when they have no option, for instance, when contractors insist on paying through the bank. It means communities are going back to the Stone Age where letters were send through buses and money was also sent via the bus driver/conductor for delivery to rural relatives rather than using banks or mobile money.

If these issues are beyond financial institutions and MNOs, policy makers have to urgently step in to assist so that farmers and marginalized people stay in the global information, knowledge and financial loop. Meanwhile, community knowledge hubs where farmers and other actors congregate to share content are emerging to try and solve some of these challenges. Farmers and rural communities are waking up to the fact that, in addition to lacking appropriate content, ICT platforms owned by MNOs are merely channels of self-promotion. Each community requires a community of practitioners who can generate context – specific and needs-based content.

To avoid cases where community knowledge hubs can become white elephants, knowledge brokering is becoming an emerging profession where community knowledge brokers are capacitated to gather, process and share knowledge with the outside world using various means at their disposal. Communities are also beginning to frequent local knowledge hubs where they connect with the world in cost-effective ways than each person trying to call the market or seek information individually. These are some of the ways in which communities are re-defining the role of ICTs for knowledge sharing and better decision-making.

 

charles@knowledgetransafrica.com  / charles@emkambo.co.zw / info@knowledgetransafrica.com

Website: www.emkambo.co.zw / www.knowledgetransafrica.com

Mobile: 0772 137 717/ 0774 430 309/ 0712 737 430