Why African agriculture requires a market-based rapid response system

In almost every African country, smallholder farmers have problems dealing with external and internal factors that affect agriculture as a business. This is one area where the market can act as an important rapid response system. While weather reports are important at a general level, when rain falls, farmers often need real time advice based on the amount of moisture in their particular soils.  Some of their challenges include estimating the amount of rainfall or moisture in their soils, how long to wait before planting, time taken by crops to germinate and planting depth depending on specific amounts of moisture.  These issues can only be addressed through localised context – specific advice as soon as rain touches the ground.

Rainfall is an external factor on which farmers need assistance so that they can accurately manipulating it.  Currently, the majority of farmers follow the reactions of lead farmers. However, a farmer in sandy soils requires different advice from the one who produces in clay soils.  Desperation is worse when rainfall comes late and this results in losses among farmers.

eMkambo

Accurate information as a basis for an agricultural rapid response system

Information is the basis of a rapid response system in the agriculture sector. Agricultural extension departments should be capacitated to gather as much information as possible about production in their areas as well as surplus for markets. At the moment extension services are mainly biased towards production, leaving farmers to handle marketing on their own. On the other hand, farmers lack information and knowledge around demand projections.  Very few farmers know what is required by a particular market in the next two to three months in terms of volumes, varieties and probable prices as well as location.  Farmers under contract farming models have some idea about the price offered but not the size of the market and consumer preferences.

More than 90% of useful information is obtained from the people’s market where the majority of consumers buy commodities.  However, in most African countries there is no one responsible for consolidating information in these markets. Yet farmers have to know how much is demanded by 20 Agriculture markets that can feed five to seven million people in one African city like Harare or Nairobi in the next one to three months.  Gathering such information requires a policy framework and support from players working in agriculture markets.  Currently farmers rely on ad hoc information from one or two traders, peers and some farmers unions.  Information asymmetry is leading to mismatches between production and supply in terms of yield, varieties and volumes.  In most cases farmers lose out because there is no demand during gluts.  They also get low value for their commodities thus worsening their production capacity.  All this leads to a reduction in farmers’ capacity to continue producing. It also affects other value chain actors such as equipment suppliers, input providers – thus threatening our food security.

African agriculture will never be sustainable unless there are deliberate efforts to carefully understand and develop markets.  Information shouldn’t just be about prices because prices without volume and variety of commodities are just one piece of the puzzle. Development partners should not only extend their support to production, ignoring markets where farmers ultimately earn better incomes. Helping farmers to produce without a market condemns them to frustration and more poverty.

Once producers have a relationship with the market, it becomes easy for financiers to promote their services via the market.  In fact, financial institutions can innovatively support both farmers and the market.  Local markets can also be a good model for financiers.  Knowing how much a particular community produces per month or year can be a huge motivating factor for more production through competition among communities as they strive to grab a particular market. Investment in transport should be guided by the market.  At the moment people are just buying trucks with the assumption that there are so many commodities to carry and deliver without an idea of the volume of commodities in a particular area.

All these issues illustrate the importance of clearly understanding agriculture as an ecosystem.  A rapid response system is critical because demand is usually triggered somewhere.  For instance, more than 5000 households may want to eat potatoes from Mbare tomorrow but this demand may not be known at the moment.  This means more than 30 tons of potatoes are needed tomorrow.  More than 70% of these assessments are done by vendors.  Ten farmers can supply potatoes for 1000 households but the farmers may not be aware of this information due to lack of coordination.   Markets have a tendency to communicate with each other and this should be enhanced.  If we don’t organize people’s markets, regional integration will be difficult to achieve in Africa.  Markets should communicate with other markets, with farmers and with other actors. 

Mbare wholesale market (Harare) analysis – May 2015

The month of May 2015 saw the wholesale market in Mbare, Harare generating an estimated revenue of above US$ 1.8 Million from the sale of 15 products. Holding all factors constant a total of 72 agricultural produce traders were recorded as having sourced products from various farming areas around Zimbabwe and a few imports from neighboring South Africa. This therefore implies that each trader took home a whooping $ 25,956.98 though this figure is inclusive of the transaction costs incurred.  Without monitoring the market and gathering intelligence, eMKambo would not have become aware of this information.

Table 1: E R by Produce type, tonnage and percentage share of total ER

Product Quantity UNITS SOURCE Tonnage   UNIT  PRICE   PRICE/TONNE  E R
POTATOES 78,203 Pockets (15 kg Av Weight) BEATRICE 1173.05  $ 12.00  $ 800.00 $ 938,440.00
WATER MELONS 36,700 SINGLES (5 KG AV WEIGHT) BIKITA 183.5  $ 8.00  $ 1,600.00 $ 293,600.00
BANANAS 23,772 Crates (18 kg Av Weight) BIKITA 427.9  $ 12.00  $ 666.67 $ 285,266.67
CABBAGE 107,400 Heads (2.5 kg Av Weight) BINDURA 268.5  $ 1.00  $ 400.00 $ 107,400.00
ONIONS 9,600 Pockets (10 kg Av Weight) A/ZIM 96  $ 10.00  $ 1,000.00 $ 96,000.00
CUCUMBER 7,950 Pockets (10 kg Av Weight) BEATRICE 79.5  $  6.00  $ 600.00 $ 47,700.00
BUTTER NUTS 10,066 Pockets (15 kg Av Weight) NYANGA 150.995  $ 3.00  $ 200.00 $ 30,199.00
APPLES 1,606 Boxes (18 kg Av Weight) NYANGA 28.9  $ 13.00  $ 722.22 $ 20,872.22
CARROTS 2,000 Pockets (10 kg Av Weight) KWEKWE 20  $ 8.00  $ 800.00 $ 16,000.00
GREEN PEPPER 1000 BOX (10 KG AV WEIGHT) MAZOWE 10  $ 10.00  $ 1,000.00 $ 10,000.00
LETTUCE 8,125 Head (1.6 kg Av Weight) MAZOWE 13  $ 1.00  $ 625.00 $ 8,125.00
RED PEPPER 500 BOX (10 KG AV WEIGHT) BINDURA 5  $ 10.00  $ 1,000.00  $ 5,000.00
PEAS 800 BOX (10 KG AV WEIGHT) MUREHWA 8  $ 6.00  $ 600.00 $ 4,800.00
MANGO 1000 Boxes (5 kg Av Weight) NYAMAPANDA 5  $ 4.00  $ 800.00 $ 4,000.00
GREEN BEANS 250 Box (10 kg Av Weight) BEATRICE 2.5  $ 6.00  $ 600.00 $ 1,500.00
TOTAL $1,868,902.89

Table 2: Potato price trend

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Chart 1: E R Share by produce type

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Chart 2: E R share by province

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Table 3: E R by district

DISTRICT  E R %  AGE SHARE OF TOTAL ER
MAZOWE  $      409,041.67 22%
BINDURA  $      335,672.33 18%
MAKONI  $      208,600.00 11.16%
NYANGA  $      207,266.67 11.09%
HARARE  $      206,866.67 11.07%
MAKONDE  $        85,283.33 5%
BIKITA  $        53,600.00 3%
HURUNGWE  $        45,733.33 2.45%
SEKE  $        37,250.00 1.99%
ZVIMBA  $        36,800.00 1.97%
SHURUGWI  $        28,800.00 1.54%
BEIT BRIDGE  $        27,655.56 1.48%
MARONDERA  $        27,000.00 1.44%
MT DARWIN  $        26,400.00 1.41%
SHAMVA  $        23,200.00 1.24%
GOROMONZI  $        21,000.00 1.12%
WEDZA  $        19,733.33 1.06%
MUTOKO  $        19,200.00 1.03%
SOUTH AFRICA  $        12,000.00 0.64%
KADOMA  $          9,200.00 0.49%
MWENEZI  $          8,000.00 0.43%
MUDZI  $          6,000.00 0.32%
GUTU  $          5,600.00 0.30%
GOKWE  $          4,400.00 0.24%
KWEKWE  $          4,000.00 0.21%
MUREHWA  $              600.00 0.03%
 TOTAL  $  1,868,902.89 100%

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

simbarashe@knowledgetransafrica.com / simbarashe@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: www.emkambo.co.zw / www.knowledgetransafrica.com

eMkambo Call Centre:

0771 859000-5

0716 331140-5 / 0739 866 343-6

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