How ‘informal’ agriculture markets generate and distribute power!

If you have become accustomed to think of power in terms of electricity or political power, evidence from the people’s market indicate you should think again. ‘Informal’ agriculture markets have remarkable ways of dealing with power. The market has become smart at distributing power among value chain actors such that no single agricultural value chain actor holds power forever.

1Power of the people’s market

Farmers hold power around production, use of land, inputs as well as ownership of livestock among other assets. Without these assets, the market will stop functioning. To that end, farmers have power to determine life in the market. On the other hand, by informing farmers about market expectations as well as sorting and aggregating commodities, traders have power to determine the value of farmers’ agricultural commodities. Through creative interaction and relationship building, traders and farmers do not just exchange commodities and money but power.

Not to be outdone in the power game are transporters. Transporters determine whether commodities will arrive on the market on time and in a fresh state. They also influence packaging. The size and number of crates of tomatoes a farmer can bring to the market depends on available transportation. However, some agricultural commodities influence transport choices. Commodities like peas certainly demand cold chain while some bulk commodities like potatoes coming from Nyanga to Masvingo or Harare can’t be viably transported in anything smaller than 10 -30 ton trucks. Still, other high value crops require careful handling, small trucks and specific ways of packaging.

Inputs providers and agro-dealers also have power to distribute inputs and influence production. This power is drawn from producers and the market. Without inputs there is no food on the market. The market also distributes power between local authorities (Harare City Council, Bulawayo City Council, Mutare City Council, Masvingo City Council, etc) and market committees. Local authorities have power to allocate market infrastructure while committees have power to organise traders and regulate the movement of commodities. The committees draw power from local authorities and vice versa.

Of course, we can’t ignore consumer power. Any market shock (positive or negative) reveals the power of consumers. A positive increase in consumer incomes translates to an increase in demand for commodities and sales on the market. Consumer tastes and consumption patterns can influence supply trends significantly. eMkambo has seen an improvement in the taste of small grains and nutritional awareness driving consumer demand for these commodities. At any given time, if consumer incomes increase, there is an effect on the operations of the market and value of commodities. The market often performs well during the festive season when civil servants receive their bonuses. As a result, the market draws bonus income to a central place and distributes it to other value chain actors. Transporters, vendors and those involved in packaging end up smiling all the way home.

In the market, power also travels from people to commodities and vice versa. Like people and institutions, some agriculture commodities and markets set the tempo and pace of the market. On the other hand, some commodities just follow the leader. In most markets such as Mbare, Bulawayo, Masvingo and Mutare, the tomato tends to be a leader because it is involved in the preparation of every food. If the tomato misbehaves or becomes scarce, other commodities like cabbages and fruits are affected not because they are of poor quality but merely because the leader is not behaving normally. The tomato can influence the performance of sugar beans in ways that ordinary farmers can’t understand. This power is also transferred to value chain actors so much that the economic performance of a potato on the market empowers potato farmers, traders, transporters, processors and input suppliers. Potato seed producers whose crop performs better on the market end up enjoying more seed sales when consumers testify to the superiority of their variety.

To sum it up: The market is at the centre of power generation and distribution vertically and horizontally, depending on value chain actors. Horizontal power sharing is with the market institution and other actors like traders while the vertical connection is with processors and policy makers. Downward integration is with transporters, agro-dealers and producers. All these power dynamics reinforce vertical and horizontal power integration within the market, contributing to sustainable markets.

So what?
Unless you have evidence in terms of figures, you can’t qualify the amount of power, produce or business generated from the market along the value chain towards economic development. The power of each commodity speaks to its position in national food reserves. Maize is not as powerful as other commodities like potatoes and thus should not be over-rated. Agriculture-based economic drivers can only be supported with evidence and statistics, especially from the market which is the ultimate barometer. The power of an agricultural commodity to be an economic driver can been seen by its numbers on the market. There is no doubt that potatoes and oranges are economic drivers in Nyanga and Mazowe districts of Zimbabwe respectively. Livestock is a key economic driver in Gwanda and Matobo districts of Zimbabwe. Numbers in the chart below illustrate the power of different commodity classes in the market.

Chart 1: Expected Revenue (E R ) per produce class in Mbare Farmers Market – January 2015

2

Monitoring and Evaluation (M&E) approaches by agriculture-related development organizations and financial institutions should strive to develop indicators from the market. Pertinent questions should include: How much volume of commodities from beneficiaries were traded on the market and how much income was generated by beneficiaries during the project life? Financial institutions should also be interested in a question like: Out of the US$300 million extended to the agriculture sector, how much volume of commodities was traded? It’s highly misleading to measure hectares of commodities financed because a lot happens between production and marketing with some of the losses difficult to account for. If the banking sector extended US$300 million to farmers, how much percentage of sales did this money generate?

Currently, most M&E approaches have no indicators from the market. Instead of baseline questions including a question on how much each household generates from sales of agricultural produce, conventional questions focus on: (a) own capital/savings, (b) loans from the bank, (c) from relatives or remittances. There is an assumption that poor people don’t need a market. Yet if you ask farmers you realize how far they have used their own means to start projects or uplift their status. If you ask rural people how they have acquired a plough or a scotch-cart, it is common to hear the answer being: “ I sold my cattle or my crops during a good season”. If you say to a rural woman: “How did you end up owning plates and pots among other cooking utensils?, the answer can be: “I sold my vegetables, goats, chicken and other things”. If you want to find out how they acquired clothes, the answer can be barter trade involving agricultural commodities such as chickens and groundnuts.

While in many districts of Zimbabwe development partners emphasize goats, sorghum and other commodities as economic drivers, the market shows 50% of the income that goes to Buhera is drawn from wild fruits like Mawuyu (baobab fruit), for instance. This shows Mawuyu is becoming a powerful economic driver. In addition, you don’t hear the role of Masawu in development interventions targeting Muzarabani and other areas where Masawu fruit is abundant yet the market shows the fruit’s exciting performance. Interventions that move people from subsistence to commercial levels have to be anchored on the market. The market can be a powerful baseline for each district or community and points to levels of resilience as well as sustainability strategies.

Lack of focus on market intelligence has resulted in financial institutions failing to make a mark in rural areas. Banks should focus on supporting commodities and farmers not farmers alone. If you want to effectively support farmers from Mutoko, the market can give you entry points to sustainable interventions. Don’t just focus on resources like land, water, labour, transport, etc. All these are important but not on their own because when farmers produce but fail to market, there is no improved livelihood. That is why in most communities, there is poverty in the midst of important natural resources. The market has power to draw commodities and people together in ways that minimize costs. Through the market, financial institutions can extend loans to farmers in groups which can easily manage each other.

More information:
Charles@knowledgetransafrica.com / charles@emkambo.co.zw
Clever@knowledgetransafrica.com / clever@emkambo.co.zw
tafadzwa@knowledgetransafrica.com / tafadzwa@emkambo.co.zw
tenjiwe@knowledgetransafrica.com / tenjiwe@emkambo.co.zw
farai@knowledgetransafrica.com / farai@emkambo.co.zw
wilson@knowledgetransafrica.com / wilson@emkambo.co.zw
tembie@knowledgetransafrica.com / thembi@emkambo.co.zw
tariromk@knowledgetransafrica.com / tariro@emkambo.co.zw
Laizah@knowledgetransafrica.com / laizah@emkambo.co.zw
Website: http://www.emkambo.co.zw / http://www.knowledgetransafrica.com

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

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2 thoughts on “How ‘informal’ agriculture markets generate and distribute power!

  1. a very gd research informing us abt the mkt.yes t ís our wil as farmers to see financial institutions playing a pivotal role in agric sector

    Like

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