Increasing odds of success through characterizing value chain actors

A fine-grained view of agricultural opportunities in most developing countries can result from better  characterization of value chain actors such as farmers. In addition to revealing interdependencies between value chain actors, a nuanced understanding of African agriculture can foster dynamic resource allocation. However, accurate farmer characterization remains a pain in the Palahuru for financiers and policy makers – making it difficult to identify unmet needs and spot new opportunities.

Charles Dhewa

A hard-boiled look at farmer characterization

Competitive pressure in agricultural markets is making it clear that characterizing farmers in terms of farm sizes or types of commodities is no longer enough. For instance, the market can show the extent to which some farmers use agriculture as a stop-gap measure for supplementing their incomes while others use agriculture as retirement backwaters. Many young people use agriculture as a stop gap measure while looking for formal employment. A number of pensioners are willing to retire into agriculture although they may lack the required knowledge and experience. On the other hand, some formerly employed people use agriculture as a fall-back position to supplement their low incomes.

A more reliable category comprises professional farmers who are in it for the long haul and use agriculture as their source of livelihood. Women farmers are another category but these often have unique driving forces for getting into agriculture. Some are widows who are forced by circumstances beyond their control to take farming as a source of livelihood.  Other women use agriculture to supplement their incomes but have no control over resources because the husband may be the one who has put finance. Another category of farmers hold onto the land for hereditary purposes and can keep a few cattle just to be seen to be doing something.  Some of them have children in the diaspora who support them.

Professionals-cum-farmers

Economic hardships have forced many African formally employed professionals into freelance farming. Financial institutions prefer extending agricultural loans to these part-time farmers who can use their payslips as a guarantor. These farmers do not use their farming business as collateral because financial institutions are more attracted to payslips. However, this practice denies agricultural finance to full time farmers who take it as a profession. Since they no longer have payslips, most pensioners do not get agricultural loans. Pensioners who have acquired houses as part of their life saving hesitate to use their houses as collateral, afraid they may lose what they have worked for all their lives.

On the other hand, youths who are keen to take farming as a career path lack instruments that can be used to measure their commitment to agriculture. Those who are luck can use their parents as guarantors. Another category that is on the increase include Africans in the diaspora who want to invest in agriculture. This group has financial resources but lack implementers on the ground. They cannot contract other farmers to farm on their behalf.  Having already invested in residential properties, this group wants seriously invest in agriculture but there are no clear mechanisms in which they can access land.

Unanswered questions from the market

In the absence of clear characterization, agricultural markets will continue struggling to fully understand diverse categories of farmers. When the market fails to tell which farmer category is in the market for the long haul and who is an opportunist, it becomes difficult to build sustainable agribusiness models and concrete knowledge. Some farmers with predatory market participation tendencies, especially those with other sources of income, can dump commodities in the market without waiting for better prices. For such farmers, cost benefit analysis is not between the cost of production and the selling price but what the individual wants to do, for instance, quickly depositing a stand or flying out to the diaspora.

Some of the big questions being asked by the market include: What motivates different people to get into farming? Is it free inputs, good prices on the market, passion, utilizing land, livelihood requirements or opportunity-taking (trying some luck in farming)? Is it a last resort or what?  Unfortunately, most farmers do not reveal reasons why they get into agriculture. Some get into agriculture because they have been retrenched and cannot get formal employment.  Another puzzle is where some farmers get into the market pretending to be part of the value chain for a long time yet they want to get quick money and disappear.

Limitations of ‘prostitute’ farming

The market does not want to relate with producers and traders in unpredictable ways. That is why it has a way of punishing pretenders. Upon getting into the market, farmers soon realize that the market has several ways of finding out why you are here, where you are coming from and for how long you want to play in the market? How do you balance formal employment and agriculture?  The more value chain actors open up, the better it becomes to understand market behavior.  Unfortunately, many farmers suffer from a bandwagon effect where they continuously follow commodities that are seem to be earning more at particular times. Such ‘prostitute’ farming is not sustainable and disrupts the smooth functioning of markets. In fact, market failure is often caused by actors who embrace a bandwagon effect where they take resources from agricultural markets to other sectors.  If you take $5000 from the food market and put it into the clothing business, you are depriving the food market of money that should be supporting and sustaining the agricultural ecosystem.

 

Register for eMKambo Masterclasses – First Session :  http://www.emkambo.co.zw/?page_id=1385

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

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

eMkambo Call Centre: 0771 859000-5/ 0716 331140-5 / 0739 866 343-6

 

 

eMKambo Masterclasses – First Session

As agricultural niches become congested and highly competitive, evidence-based decision making has never been so important. It is against these trends that eMKambo (www.emkambo.co.zw) will be conducting a series of master classes to answer the following questions:

  1. How can farmers and other value chain actors set prices for their commodities without passing through a complex web of intermediaries? From price takers to price setters.
  2. How can new value chain actors by-pass hurdles and insert themselves in existing value chains and ecosystems?
  3. How can smallholder farmers and other value chain actors build self-sufficiency?
  4. How can farmers enter and exit contract farming models towards self-sufficiency?
  5. How can digital technologies be used to harness the competitive intelligence dispersed among diverse value chain actors?

For more information and bookings, get in touch through the following channels:

charles@knowledgetransafrica.com  – +263 772 137 717

clever@knowledgetransafrica.com  – +263 772 137 768

tafadzwa@knowledgetransafrica.com – + 263 772137771

Overcoming the limitations of membership based organizations

Like other arrangements that make sense on the surface, African agriculture and rural development efforts are characterized by membership-based organizations. These range from farmer unions and diverse sizes of cooperatives to chambers of commerce. While coming together for collective bargaining purposes makes a lot of sense, members should be aware of several blind spots. After many years of existence, some African agricultural membership-based organizations are beginning to realize that success is no longer just about achieving high yields and winning prizes at agricultural shows. It is becoming more about adaptation and resilience.

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That calls for more investment in actionable knowledge in order to overcome assumptions that keep popping up. For instance, a membership focus assumes farmers have the same needs. That results in too much pressure being exerted on the organization with everyone expecting it to provide all the answers.  This creates a dependency syndrome where members expect the organization to look for the market, finance and meet individual requirements of each member. Besides limiting innovation, over-reliance on a membership organization reduces individual members’ creative potential. Most agricultural membership-based organizations struggle to adequately address different needs of their members.  For instance, farmers at various levels of production capacity and experience receive the same short message service through the same channel, irrespective of commodity complexities.

Over-reliance on the secretariat

Agricultural membership organizations also tend to over-depend on the secretariat. There is an assumption that the secretariat has all the knowledge yet the most important knowledge and experience is   dispersed among individual members. This is worsened by the fact that most farmer organizations do not adequately characterize farmers by capacity, age, gender, experience, knowledge and other important parameters which should inform targeted service delivery. As a result, information is not properly characterized to meet different needs. In terms of matching services to farming regions, there is also too much generalization of information yet members in high rainfall areas have different needs and experience from those in low rainfall areas.

Lack of growth paths

In addition, most membership based organizations do not have growth paths or weaning strategies which should see members graduating into some kind of upward social mobility.  New members need different knowledge and capacity from the old members. There should be a knowledge-driven graduation mechanism.  Membership should not just be subscription based. In the absence of clear focus, most farmer unions have limited knowledge sharing platforms that take into account members’ different stages.  Consequently, many farmers waste time in training programmes that are not relevant to their context.

 Potential role in aggregating commodities

The most important role that can be fulfilled by agricultural-based membership organizations is aggregating diverse commodities and looking for markets to support economies of scale. That should be the basis of organized production and meeting supply requirements of different specific markets.  When properly organized, farmer unions should be able to quickly see commodity over-supply, shortages and gluts in their members. They should also be able to build business models together with financial institutions in ways that reveal appropriate collateral.  Business models should be the ones constituting collateral as opposed to individual assets. Farmer unions should also assist in national data and evidence collection through profiling each member adequately.  If 70% of farmers are members of farmer unions, information on production, household consumption, sales and surplus for the market should be readily available.  Simple tools for collecting data should be introduced as part of knowledge management.

Combining a membership drive with market-driven models that take into account food security could be the right approach in the new economy.  Ultimately, membership organizations should be able to open local, regional and international markets. Rather than leaving everything to local authorities, farmer unions should mobilize resources for building market infrastructure that can benefit their members.  That is how a warehouse receipt system can become easy to establish, with members gaining capacity to set up business models for particular commodities.  Farmer unions should also be able to support commodity exchanges between their members in different regions – livestock from Gwanda with Potatoes from Nyanga.

Challenges with the proliferation of farmer unions

In Zimbabwe and other developing countries, the proliferation of farmer unions has destroyed the natural culture of communities of practice.  Due to poor characterization, different classes of farmers are found in all farmer unions where benefits are not properly customized. This is mimicking the break down between retailing and wholesaling that has become common place over the past decades.  Ideally, there should be a transition mechanism that allows members to graduate from one farmer organization to another or from one chamber of commerce to another at a higher level.  That way, clustering becomes easy.  It is counter-productive to have four or five farmer unions scrambling for members in one community.  Given that members in the same community often have the same characteristics, existence of many farmer unions creates silos.  In such situations, a membership focus fragments commodities and makes it difficult to aggregate commodities for the market.  It also fuels disorganized production and information asymmetry.  Farmer unions should work together in consolidating curricular informed by reliable farmer characterization.

Towards appropriate funding models

When agricultural membership organizations are properly organized, it should be possible to come up with appropriate funding models where funders work directly with farmer organizations in a revolving fund scheme with local banks as fund managers.  Rather than the current scenario where individual farmers hassle with banks to access finance, farmer organizations should become guarantors whose role is to vet and recommend their members for funding. In the absence of diverse ways of characterizing farmers and articulating value, financial institutions fail to see the folly of using a farmer’s house worth $100 000 as collateral when the farmer only wants to plant a hectare with inputs worth less than $5000.  A business plan should be enough to unlock finance as opposed to irrelevant requirements.  Membership based organizations should enable financial institutions to experiment with diverse progressive models.

Turning agricultural shows into marketing shows

If African agricultural membership organizations were really strong, they would turn national agricultural shows into marketing events as opposed to events where big businesses show their hitech machinery whose price is beyond smallholder farmers. Rather than being a mere window showing what countries are producing, agricultural shows should be marketing shows for diverse buyers who can place orders. Show-casing is not enough without focusing on marketable products, volumes, capacity to supply and price negotiations where diverse buyers can bid for commodities. It does not help to show agricultural commodities when the majority of farmers are stuck with commodities and do not have money in their pockets.

African smallholder farmers have a lot of unanswered questions. Each community has lived with more questions than answers for decades. There are also numerous partial answers which do not provide a complete picture. Data can assist in pointing out trends and minimize cases where potential investors and value chain actors get lost in the weeds. To avoid the scourge of unsolicited messages, agricultural knowledge has to be demand-driven. A lot of farmer statistics and profiles should be collected and consolidated in order to improve characterization.

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

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

eMkambo Call Centre: 0771 859000-5/ 0716 331140-5 / 0739 866 343-6

At what point can we say we are making a difference through agriculture?

While a lot of resources continue to go into African agriculture, those supporting the sector are still to figure out at what point they will be sure to have made a difference through agriculture.  To what extent can increasing yield per hectare or kilogrammes of meat per feed or litres of milk per feed or dozens of eggs per chicken feed provide enough proof that we are changing lives through agriculture? Some economists are beginning to suggest that African agriculture can start making a difference when smallholder farmers start earning at least $90 to $200 per month from their agricultural activities.

emkambo

At the moment most African smallholder farmers are stuck in activities that give them less than $10/month.  For example, some farmers in Gokwe district of Zimbabwe have been persuaded to dance with a crop called Sesame which barely gives them enough to meet their household needs. Why should an expensively trained economist be proud to supervise a programme that gives farmers less than $10/month? Ideally, farmers should be able to meet their income and health outcomes from their agricultural activities.

External factors also influence the extent to which agriculture can make a difference to livelihoods. One of the factors is consumer population.  You can only do so much within a small population because it sets the boundaries around which you can innovate for a particular demand. The majority of African smallholder farmers are competing for small populations of consumers whose disposable incomes are erratic. Large African cities like Cairo and Lagos have more than 12 million people each, close to the population of a whole country like Zimbabwe whose population is around 13 million.  It means Lagos alone can offer the same size of market for agricultural commodities as the whole of Zimbabwe.

How the export market is not a walk in the park

Getting into the export market makes a lot of sense for many African farmers. However, export markets demand a much tougher proposition and sophisticated mindset. Collecting mangoes from scattered households and bulking them is a tough call.  Evidence and knowledge are critical for a good investment judgment.  While tons of sweet potatoes are required in Europe, a lot more discipline and social mobilization is required to aggregate such commodities for a foreign markets. Agriculture is a sparsely distributed activity and requires distributed management.  There is no money that lies in a busy street.  You need others to succeed and have to sweat for real money and profit.

Unfortunately, too many fragmented agricultural interventions not backed by evidence. There are cases where development partners have invested hoping that the private sector would take advantage but that has not happened maybe due to lack of readiness or capability. On the other hand, most big institutions are not reaching out, preferring to stay distant from ordinary people’s socio-economic action. While top down approaches have not always worked, bottom up approaches have also been found wanting.  That is why brokers are critical. Success comes from taking into account many factors including people’s capacity of meet their social needs, not just income.

Pulling together knowledge along value chains

Making sense of agriculture goes beyond characterizing farmers but understanding commodities from production all the way to marketing and several value addition processes. Important elements include knowledge, skills base, information access, technology, natural resources, individual resources/income and markets. At all nodes of value chain actors, there is need for consolidation of knowledge instead of building knowledge from scratch.  Knowledge already exists at producer level, market level (traders).  Processors and SMEs have raw knowledge still to be understood. This knowledge is supported by that from the production side.  How can this knowledge be pulled together to inform models? Tracking volumes into markets provides a framework for building consumption patterns.  This path connects with prices so that it becomes possible to understand which 10 commodities were moving together and competing in the market and which one disturbed tomatoes on its entrance for the past six months.

Seeing the market as an ecosystem

Farmers and all value chain actors should broaden their view of agricultural competitors and opportunities.  That will enable them to see markets as fast moving ecosystems in which they should be able to identify new sources of value. A critical part of understanding agricultural ecosystems is following the data which are becoming the coins of the realm. Competing effectively means collecting large amounts of data and developing capabilities for storing, processing and translating the data into actionable agribusiness insights. Data diversity is a real source of value as opposed to relying on narrow pools of data which hinder finer micro-segmentation in the whole ecosystem.

Better data can support analytically driven scenario planning and inform how ecosystems will evolve. For instance, data enables informal markets to become superior at interpreting the integrated nature of agriculture and nutrition. Without data, it is easy for value chain actors like financial institutions to become irrelevant.  Instead of meeting entrepreneurs where they are, financial institutions will continue changing labels and recycling models. For instance, most conventional lending models force women and youths into chicken projects and cross-border trading instead of meaningful and innovative enterprises.  Funding innovation is one way of unlocking dormant potential in most of our communities and build trans-generational businesses in ways that tap into reservoirs of soft knowledge that have made other economies grow.

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

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

eMkambo Call Centre: 0771 859000-5/ 0716 331140-5 / 0739 866 343-6

Using market intelligence to purposefully direct agricultural finance

Many developing countries are struggling to direct agricultural financing in more purposeful and moral ways. For instance, if contract farming was the main ticket out of poverty, most farmers who have been contracted to produce cotton, tobacco, sorghum and dozens of other commodities for generations would have completely moved out of poverty into sustainable self-reliance. The fact that progress has been unsatisfactory suggests a lot is still unknown. Rather than continue with traditional financing models where agricultural finance is put in banks, funders, including government, can consider alternative ways of directing capital towards improving communities as opposed to individuals.

emkambo

Towards informed targeting

Targeted agricultural financing can result from accurately assessing demand patterns which are increasingly becoming diffuse. Unfortunately, banks are still using traditional ways of assessing financing decisions. For example they continue to prioritize availability of land, water, labour and other tangible assets. Unknown to financial institutions is that the definition of off-takers is evolving from referring to formal institutions like processing companies to encompass relationship-based niche markets whose characteristics can only be understood through robust evidence pathways.

A decision to set aside a US$50 million horticulture fund should be informed by evidence from the demand side. Without evidence such a decision can see that facility going to less than 30% of farming regions where horticulture is prevalent at the expense of other deserving production zones. As if that is not enough, putting that facility in traditional banking institutions is like putting new wine in old bottles. Besides prioritizing their own funding models, banks will ensure such financing is accessible to individuals as opposed to farming communities and irrigation schemes which do not have individual financial identities. The fact that farming communities and irrigation schemes are not taken as private companies implies they will not access such funding although they may produce better outcomes.

Cash model for informal markets

Just as farmers involved in the production of cash crops like cotton, cocoa, sugar cane and tobacco get first preference in accessing cash, actors in the informal markets such as farmers and traders should have a similar facility extended to them. That will add more meaningful value because a lot of cash circulates in informal African food markets every day. The fact that cotton and tobacco farmers handle cash once a year means that money does not circulate as fast and efficiently as in informal markets.  Absence of a cash facility is the main reason why cash is not flowing properly along informal market value chains.  Traders end up keeping cash within their networks. The end consumer buys commodities in cash from the vendor who also buys in cash from the trader who also buys in cash from the farmer. It means cash dominates the whole transaction process.  Other means of transacting are not available to consumers.

The farmer is the one who needs cash due to the absence of appropriate systems that can facilitate meeting of subsistence and other expenses such as school fees, medical expenses, transport and other uses which consume 70% of the farmer’s income.  The other 30% goes to inputs.  In the absence of appropriate transaction facilities, traders end up paying cash all the way.

Smoothening middle actors

There is need for a cash model that covers middle actors like traders. That can be an overnight or weekly facility, ensuring availability of cash when traders need it. Currently, when a trader buys from the farmer using cash, s/he sells to the vendors using cash. By 10 am or noon every day, the trader will have finished trading and now keeping money which could be put in a bank if a facility was available.  In some cases, traders who deal in bulk commodities like potatoes spend two to five days selling so that they build up cash for going back to the farmer. Ultimately the trader can go back to hoard commodities with $5000.  However, during the time the trader is trading, s/he could be putting his/her money in the bank and only withdraw when s/he needs to go and fetch the commodities.

A cash facility through banks can make this a viable option. The money should be in the bank and available on call. This model can sustain itself from the rate at which transactions take place (the velocity of transactions in informal markets). In this case, the speed of transactions becomes the main revenue stream. If such a facility is set up in informal agricultural markets, farmers who trade commodities like tomatoes over a week or two may see the wisdom of not taking money home every day but leave it in the bank. They can withdraw their money after a month when they want to buy inputs or invest in livestock.  Eventually, farmers and other market actors see the convenience of paying school fees and meeting other requirements through the facility.

Building a sensible agency banking model

A financial facility in the market can lay the foundation for sensible agency banking models to be built from the market. For instance, tomato farmers from different production areas can become connected with banks and other actors through the market via this self-contained financing model.  The facility can be membership-based in such a way that members are given special cards that entitle them to priority status like what happens in some financial institutions.  If tobacco farmers who do not use cash regularly have a special facility that enables them to withdraw $1000 a day, what about traders and farmers who handle cash every day? Since there are limited online facilities in most African farming areas, it is currently difficult to see how cash received by farmers producing cash crops like cocoa and tobacco travels along value chains. That is why a special agricultural marketing fund will stimulate agricultural growth.

Financial institutions can easily identify farmers and traders in need of loans based on their special accounts with the fund.  Ultimately farmers will bring cash into the banking system.  Loans to farmers can be transferred into value chain actors’ accounts but repayment will be in the form of cash. Other options like buying inputs can be built into the facility. The model will have special rights that support   sustainability. It will be membership-driven through subscriptions and enable purely cash-on-call. The facility will also make the introduction of plastic money smooth through nodes in the value chains.

Eventually farmers will see no need to continue carrying cash. A major value proposition for this facility is in the velocity of transactions. A super-agent or aggregator will be responsible for facilitating the process through, for instance, handling cash flow requests for each day. At the moment, most agency banking models are not connected to other value chain actors. For instance, there are no Point of Sale (POS) machines among the majority of service providers in most farming areas. That is why mobile money models are not reaching their potential. When traders send money to farmers and the farmers do not get that money through mobile money agents, the whole system is not worthwhile for actors. To avoid some of these challenges, the cash model can be backed by a revolving loan fund which anchors growth and sustainability.  If the market has $50 000 in circulation, the revolving fund can inject another $50 000, thus planting the seed for growth.

Getting the better of opportunists

Without smart ways of purposefully directing agricultural capital, opportunists will access finance at the expense of genuine aggregators who fully understand production and market dynamics. Most African countries currently do not have funding for genuine aggregators who can use their knowledge to build the capacity of producers so that they meet the deep needs of consumers.  Instead, a few opportunists masquerading as aggregators are keeping knowledge to themselves and simply taking commodities from farmers which they supply to super markets without adding much value except a bit of cleaning, grading and packaging. There has to be mechanisms for avoiding conflict of interest between aggregating and knowledge brokering. At the moment, African informal markets fulfill an important knowledge brokering role by ensuring information is not hidden from actors. This is unlike opportunists who thrive on information asymmetry. Carefully characterizing actors will make it possible to identify genuine aggregators who share knowledge with farmers and consumers in transparent ways.

 

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

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

eMkambo Call Centre: 0771 859000-5/ 0716 331140-5 / 0739 866 343-6

How and why relationships move more food than markets

As containers of knowledge, African agricultural markets continue to inspire, clarify and reorient our awareness. Latest evidence gathered by eMKambo shows how and why the movement of food from farming communities to urban markets is based mostly on relationships as opposed to money. Agricultural markets are not just an endless parade of stories and examples but enlightening ideas that spark immense possibilities. Energizing and empowering agricultural transformation cannot be achieved without seeing and sharing the whole picture. It is through making sense of things together that value chain actors can see the whole ecosystem and start honoring their collaborations.how-and-why-relationships-move-more-food-than-markets

The role of relationships in market penetration

Agricultural commodities do not just penetrate formal and informal markets in a linear fashion. A new commodity begins with entering households where relationships foster adaptive consumption. People in different households share food, seed and other commodities via relationships expressed through gratitude for either paying a visit or hosting a traditional event where relatives come together. From households, appreciation of commodities moves to communities, cities and eventually, to the market. Associated knowledge is also transferred through relationships, emerging from households. This knowledge transition can happen along gender lines – father to son to son-in-law or mother to daughter to daughter-in-law.  Knowledge can also transfer through age – old to young people in a community or through peer to peer food and knowledge exchange.

Although these knowledge patterns are fundamental to the regeneration and sustainability of agricultural ecosystems, they are easier to take for granted.  They remain largely unnoticed to modern commercial mindsets which are becoming used to linear processes like value chains.  The movement of agricultural commodities from households to extended families and to communities cultivates local markets from which external markets can obtain what is available in particular communities. Adaptive consumption takes place from households all the way to markets. That is why most African agricultural commodities are associated with their original sources in terms of production communities.

Relationships as anchors of local markets

Visitors enter new markets through relationships and that marks the evolution of new relationships. Labour markets are also prevalent in most agricultural communities and such services are paid for through commodities whose value is agreed upon by the community. Where a farmer was supposed to go and look for money from a bank or borrow from elsewhere, labour payments are made in the form of commodities.  This reduces pressure from the national monetary system because cash is not involved in every transaction. In most African countries, cash circulation is concentrated in urban centres and that means rural communities have less cash in circulation. Why should everyone who wants to eat food be forced to look for scarce cash when local commodities can easily substitute cash in ways that smoothen the exchange of valuable services and commodities?

Relationships also play a critical role in building various food baskets riding on visits such as rural to rural and rural to urban, all the way to the market. As producers get into markets they build relationships through totems, home areas or through networks built by someone already in the market for a long time.  These relationships drive agricultural transformation.  Given different ecological regions that characterize many African countries, there are many cases where farmers from drought prone areas migrate to high rainfall areas, leaving behind many of their relatives.  Eventually, those left behind create a market for commodities produced by their relatives who will have migrated to high rainfall areas. Seed, crop varieties and livestock breeds are exchanged through visits and these create a market in areas of scarcity.  Relatives in high producing areas also function as a food reserve for their relatives in low production areas. In most cases, commodities kept for relatives do not find their way to the formal market.

Rather than making conclusions on the basis of food that gets into formal and informal markets, it is important to find ways of figuring out volumes of food exchanged through relatives from one community to another.  This practice has an impact on the functioning of formal and informal markets.  Where markets will be expecting consumers to come and buy, relationships will be satisfying more than 70% of consumers’ requirements.  When conducting visits, most people carry a farmer’s eye.  A livestock farmer is on the look-out for good livestock breeds and same with a crop farmer.  Farmers visiting their relatives like sons, daughters or in-laws in new communities use their local relatives to access good breeds and crop varieties from new communities. A community usually develops its own market in the local community.  Through relationships, some commodities penetrate areas where they didn’t use to exist.  For instance, Avocados from Makoni find their way to Chivi districts of Zimbabwe, same with mangoes and other crops making in-roads into new areas.

Unfortunately, instead of supporting these natural and organic processes of food and knowledge exchange to unfold and continue, financial institutions and development organizations tend to intervene superficially when relationships and local markets can do a good job. Rather than spoon-feeding farmers and forcing them into narrow value chains, development agencies and financial institutions should carefully examine and support relationship-based food demand and supply models. They can also usefully support exchange of commodities between commodities to avoid situations where food leave communities to urban areas and then back to adjacent farming communities where they are mostly needed.  Besides tracking and accounting for local food movements, such efforts can open new markets for diverse commodities looking for a market during long periods of the season. Community to community commodity exchange will prevent cases where commodities are pushed to urban centres before the market’s absorptive capacity has been ascertained.

Reviving the power local markets

While local markets have existed for centuries, their recognition has taken too long. Many African communities are getting concerned about how their indigenous food and knowledge systems are being lost to scientifically-produced foods, at the expense of the naturalness of our food systems.  This is also destroying the social fabric which was built through people congregating around local beer, mahewu and cultural practices in which food was a glue. However, the proliferation of ICTs is now making it possible for communities to capture the power of informal distributed markets that function through households, extended families, clans and communities.

Lack of markets is provoking all these questions. Following a bumper harvest in Zimbabwe and other southern African countries, local communities are stuck with tons of commodities while local people continue to consume commodities from other countries or urban centres. For instance, many communities have tons of small grains like finger millet, pearl millet and sorghum yet industrially-produced opaque beer flows from urban centres to rural business centres when local resources badly need value addition into local beer and other products. This practice is also sweeping away the little cash available in rural communities back to urban centres. The good thing is that communities are beginning to revive their relationships through which to sell commodities. ICTs are empowering these processes to by-pass formal markets. This is also releasing pressure from formal and urban informal markets which can no longer cope with the influx of commodities following a bumper harvest.  Commodities shared through these relationships include pumpkins, sweet reeds, vegetables and livestock breeds.

Using relationships to build resilient socio-economic strategies

Embedding rural economies and enterprises into the money economy has weakened local communities where commodities were previously used to obtain knowledge, skills and services like labour. Unfortunately, a few commodities being produced under contract farming models cannot be used as currency in cases where money is not available. For instance, a farmer cannot pay for labour through bales of tobacco because workers prefer money even if it is not readily available. On the other hand, farmers are compelled to put their best resources (soil, water & time) to a few contracted commodities.

Models that were built through relationships should be revived so that commercial models can ride on these. Most SMEs that are now producing agricultural tools like ploughs and hoes acquired their skills from indigenous knowledge systems. This knowledge has moved to growth points and urban centres.  Modern grinding mills were inspired by traditional grinding stones, mortar and pestle whose evolution can be traced to gender-informed traditional value addition practices.  All this knowledge is on the verge of extinction, in the name of modernization. It should be captured and recognized as an economic driver for rural industrialization and development.

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

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

eMkambo Call Centre: 0771 859000-5/ 0716 331140-5 / 0739 866 343-6

How informal food markets disrupt and correct the notion of staple foods

For a very long time, each country has had what it considered a staple food for its citizens.  However, climate change, globalization and changes in consumption patterns are disrupting traditional staple foods. My word web describes staple food as a necessary commodity for which demand is constant. Rather than continue promoting a few staple commodities, countries are being forced to think in terms of broad nutritional food baskets. A major question is: How can developing countries tap into the resilience and flexibility of smallholder farmers, traders and informal markets to build nutritional security for the next generation?how-informal-food-markets-disrupt-and-correct-the-notion-of-staple-foods

Mobilizing, redistributing and rationalizing nutritional baskets

One of the most under-estimated virtues of African informal agriculture markets is their capacity to harness the convening power of urban centres to pull together food baskets from diverse farming areas. As each informal market breaks bulk it mixes and matches commodities according to diverse nutritional needs. For instance, in Zimbabwe, commodities travel in bulk from Mbare market in Harare to Malaleni in Bulawayo where the local market consolidates food baskets for local consumers. This mixing and matching role needs to be fully understood because it influences consumption patterns.

When the consumer budget is strained, some commodities are rejected. This is how commodities are given weight in terms of whether they are necessities or luxuries.  For instance, luxuries like carrots, peas and cauliflower can sometimes be forgone in preference for tomatoes and leafy vegetables.  A necessity is hardly substituted fully and that is why a tomato is always in the market because it is a necessity. For those that are considered necessities, when demand is high, prices tend to be high due to an intrinsic tendency by consumers to have an appetite for them. Lettuce, carrots, peas and fine beans are not produced in large quantities because they are sometimes considered luxuries not necessities.  Unfortunately, while these are highly perishable, most countries have not developed appropriate preservation methods for them, besides putting in the fridge (which in some cases affects taste).

The market as a nutrition basket and how it responds to seasonality

In much of Southern Africa, food crops start flowing into informal food markets as from January all the way to July.  This period accommodates 90% of commodities and their varieties.  The diversity covers field crops, staple foods, cash crops, fish, eggs, varieties of meat, legumes and small grains.  After harvesting, around March and April or May, farmers re-allocate their time from field crops to horticulture, poultry and fish farming, among other critical socio-economic activities. They start producing tomatoes and all kinds of vegetables.  As the winter season comes to an end and water becomes low, farmers switch to commodities like carrots, peas and broccoli which do not occupy large spaces and use less water.

While seasonal changes influence the demand and supply of different commodities, winter tends to have the biggest variety of commodities which translate to better nutrition. Consumers consciously decide what they can eat in the cold season.  In winter Mondays, consumers take advantage of low prices to buy in bulk and avoid braving the winter cold going to the market.  However, during the hot season, they can buy in small batches because trips to the market may not be affected by the weather. When bulk buyers come to the market once a week, commodity prices tend to be reduced during the middle of the week.

Commodities like avocadoes, bananas and other fruits that are ripened on-farm or at the market ripen at a slower pace during the cold season and this affects the rate at which they enter the market.  It is said sugar in these commodities influence the speed of ripening because sugar hastens fermentation processes which also influence taste. The cold season is also characterized by a broader nutrition basket comprising tsanga midzi, garlic, mhiripiri, lemon, magaka, masawu, tsunga vegetable, a wide range of fruits, zviyo porridge and other foods that are traditionally believed to cushion people against cold. The supply of chickens and eggs tend to be low during winter because chickens do not eat or drink a lot during this period compared to other seasons. With increasing awareness, consumer choices are influenced by nutrition although income is another determinant.

Knowledge as a builder and conveyor of nutrition baskets

Farmers who bring commodities to informal markets make it a point to speak to consumers so that they fully understand market requirements. Sharing knowledge makes it possible for them to become aware where tomatoes are being produced in abundance so that they decide to change to other commodities rather than going back home to produce what other areas are producing better and in more volumes. That is how knowledge becomes a builder and conveyor of nutrition baskets. During winter, most smart farmers who participate in the market acquire knowledge which they use to plan for the next season’s winter production. They get to learn what type of commodity to grow and when?

Exchange of nutritional knowledge is also high during this period. Nutritional knowledge is associated with commodities and source areas. Each commodity has nutritional explanations from the areas where it is produced and used for subsistence. That knowledge is extended to the market and becomes a Unique Selling Proposition for particular commodities. On the other hand, the diversity of commodities on the market compels consumers to rationalize their budgets and pick commodities through nutritional lenses.  They try to ensure their budgets accommodate fruits, vegetables, tubers, field crops – building a complete nutrition basket. In most cases they do it unconsciously without knowing specific nutrition elements or vitamins in their choice of commodities.

The power of gathering evidence

Continuous evidence gathering is critical for identifying and updating nutrition basket drivers from various climatic regions. Such evidence should be built into models and investment plans towards national nutrition security reserves. Just as African countries build food reserves in the form of maize silos, they need to focus on building reserves of other nutritional components in order to balance the national nutrition equation. Continuous maize production and consumption exacerbates nutritional challenges. Up to date evidence can enable increasing the shelf life and consistency in the supply of nutritional commodities. Ultimately, it should be possible to build an all year round nutritional basket.

Financing should be tailored accordingly rather than congesting funding in a few commodities in ways that skew the national nutritional balance.  This big picture can only result from connecting the dots. To the extent that focus on value chains results in all support going to a few value chains, transformative agriculture can result from a unified nutritional basket framework approach. That way, financial institutions move from financing over-subscribed value chains like sugar beans, soya bean, tobacco, maize, cotton and sugar cane to funding elements of a nutritional basket based on gaps in the nutritional framework.  Growing cash crops like tobacco and cotton in order to supplement missing nutritional elements is not sustainable partly because it is impossible for such measures to sustainably fill all nutritional gaps, some of which can easily be met locally.

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

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

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