Moving decision making closer to points of impact and knowledge

In most developing countries, decisions that affect farmers and rural communities are often made by policy makers and development agencies who do not reside in those communities. However, digital technologies are revealing the benefits and possibilities of improving the quality of services by moving decision-making to where impact is felt. For instance, using mobile phones to provide information that allows informal markets to make their own decisions has created the right conditions for agricultural success unlike trying to impose formal operational and communication procedures

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Toward an evidence-based local economy

Sporadic agricultural assessments and research initiatives by different organizations with no central repositories of findings and outcomes hinders informed decision making. This also leads to waste of resources and losing track of important trends, for instance from one crop harvest to another.  There is a tendency to conduct one assessment before the planting season and another assessment after harvesting. In such cases, the most important trends that are missed include consumption patterns between these two assessments as well as losses between one harvest and the other.   It seems data collection focuses on quantities of the major crops harvested with no regard for different uses and losses associated with those commodities.  Yet a community can harvest a lot of commodities like maize or sorghum but become food insecure quickly due to absence of other income sources. Households are forced to trade all their commodities to meet school fees and other critical needs.

Enabling communities to identify their priorities

African rural and farming communities are not always waiting for outsiders to come and help them. They are always innovating and coming up with solutions to their own challenges. That is why development organizations should not just bring their own ideas but start by identifying each community’s development priorities. eMKambo has realized that a critical capacity building component is assisting communities to value their own local resources before looking for external resources. A monetary value for local commodities and resources can be easily determined through a culture of gathering evidence over time.  Each community can be able to know how many tons of grain or number of livestock it is trading per month or per year.

While African national revenue authorities are more interested in private companies declaring their annual sales, a lot can be gained by compelling local communities to do the same.  If properly collated and consolidated, local data can show the extent to which some communities are much bigger than some famous private companies listed on the stock exchange.   In the new knowledge economy, a national balance of payment should not just be expressed through volumes of imports and exports at the exclusion of socio-economic activities at community levels where enormous value is exchanged. Some communities bring in more external resources than others while those which continue to lose resources or commodities may signal the need for nearer communities to assist their neighbors before selling everything to far-flung areas like urban centres.  Without a culture of data collection and analysis, it becomes difficult to pick all these trends.

Local copying strategies and new rules of engagement

Development interventions should be built around each community’s existing copying strategies. That is why a centralized community data collection system is very important. Such an important role cannot be left to national statistical agencies which, apart from taking long to process and avail data, find it difficult to disaggregate evidence down to community levels in ways that resonate with local people and their contexts.  Tracking data along value chains can make it possible for communities to see differences between volumes of commodities going to the market and those remaining in households for local consumption.  How much is consumed locally, how much is lost along the way and how else are some of the volumes being utilized?

Data and evidence can also be used to inform new rules of engagement.  Existing laws and by-laws in most African countries are no longer relevant in the new hybrid economy comprising formal and informal ways of working. On the other hand, new value chain actors are more willing to participate in the formation of new rules and legislations. This implies crafting new socio-economic legislations can no longer be a preserve of members of parliament, most of whom are far removed from the new economy and related wisdom.  If you see the majority of economic actors breaking and bending rules that signals limitations of conventional rules.

 Welcome to new literacies

Although formal education continues to receive all the attention, the new hybrid economy is demanding new literacies that include emotional intelligence, socio-economic literacy, digital literacy and bio-empathy, which involves learning the principles of nature to develop leadership styles. Nature works in cycles like seasons, not straight lines like logical frameworks. Farmers who are quickly mastering the principles of nature can cope better with a changing climate.  They can also build more reliable early warning instincts than those who depend on limited sources of knowledge. Unfortunately, policy makers and development agencies are struggling to recognize structures within the new hybrid economy characterized by unique executives and Communities of Practice.

While formal Chief Executive Officers, whose companies now constitute less than 10% of whole national economies, continue to receive training in governance and other formal practices, new executives and leaders in the new hybrid economy are not receiving any training commensurate with their new roles. In the past decades, cultural literacies used to anchor most African communities from which there was a transition to formal work-related literacies such as apprenticeship.  These taught a person one trade until s/he retired to start surviving on the proceeds of his/her pension.  Currently, most Africans are retiring into agriculture but there have not been efforts to develop literacies that can transition people from one career to another, for instance, nursing to agriculture. New literacies have to be developed based on local contexts. In addition, financial institutions in developing countries also need new literacies if they are to continuously upgrade their relevance in the new economy.

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

 

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Why everyone should pay attention to knowledge life cycles

If you did not know that knowledge has a life cycle you are not alone.  However, that should not be a consolation. Effectively managing knowledge begins with realizing that knowledge has a life cycle. Just as each valuable commodity has a life cycle, knowledge has a life cycle especially in the current knowledge economy. To the extent that knowledge changes form as it diffuses through a community or an ecosystem such as an agricultural market, it has several life cycles.  Value chain actors who understand the dynamics of knowledge life cycles are better able to determine their knowledge needs and develop the right methods or tools to manage such knowledge.

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Making sense of knowledge life cycles in African agriculture

While African agriculture and local socio-economic development is anchored on knowledge, skills and  ability to apply (practical wisdom), trust and relationships remain fundamental in acquiring and applying knowledge.  Farmers can have knowledge but lack skills to convert it into practical outcomes like crops, meat, milk and honey.  The ability to mobilize resources, methods and navigate environmental challenges may be lacking due to poor understanding of existing knowledge life cycles.

On the other hand, instead of starting with knowledge, most development interventions start at the skills level. This is revealed through excessive emphasis on skills training which does not adequately consider farmers’ ability to apply what they learn from outsiders. Emphasis on outputs by development interventions also tend to ignore the application of knowledge, skills and abilities to produce better outcomes such as improved livelihoods, income, better decision making processes, wealth creation and employment creation, among others. Agricultural markets are mainly interested in the outcome of combining knowledge, skills and abilities, expressed through volumes of commodities, profit, growth-orientation, etc.,.

Knowledge life cycles drive project life cycles

Behind every project that has a life cycle is a knowledge cycle that functions as a mental software for the project. The knowledge life cycle can be surfaced through identifying knowledge gaps, mobilizing relevant knowledge, storing and classifying the knowledge appropriately. Most local knowledge in developing country communities is fragmented due to lack of storage systems where it can layered according to commodity orientation, farmer-level orientation, consumer-orientation and origin, among other parameters.  This calls for the need to pay particular attention to developing knowledge life cycles.

Commoditizing through utilization

When they understand knowledge life cycles in their community and sector, farmers should be able to determine for which customers to convert skills into knowledge and commodities that satisfy market niches. This is where revenue generation starts through sharing, exchanging and filtering knowledge into  different contexts.  As local people and farming communities utilize knowledge they commoditize it in ways that continuously generate knew knowledge.  Tangible value can be seen through commodities in the market.

Storing knowledge means using it over time and when it reaches its peak it becomes common knowledge or common sense.  For instance knowledge required to produce staple crops like maize, small grains and vegetables has become common sense and stagnant.  It can now either be enriched, updated or discarded completely, depending on different users. When hunting ceased to be an economic activity, related knowledge also disappeared.  Some pesticides have reached their sell-by date and can no longer kill insects. It means new pesticides come with new knowledge that replaces old knowledge that was associated with pesticides that have moved out of circulation. The more users the more knowledge becomes common. When it reaches its peak, its competitiveness goes down. For instance, tomato production competitiveness has almost gone down. The market can tell you the point at which you should start considering export markets and related knowledge.

 Managing climate change requires new knowledge life cycles

Many African communities, policy makers and development agencies realize the absence of new knowledge life cycles that can manage a changing climate. A decrease in crop yields and quality has caught most knowledge workers off-guard. There is urgent need to accurately identify knowledge gaps and arrange such knowledge appropriately before utilizing it.  Continuous updating can enable knowledge curves to stay up until they reach a common sense level.  This effort can start as upgrading the same commodities through value addition.  For instance, producing new varieties or new products. Consumers can assist in identifying, sharing, classifying and utilizing knowledge related to different commodities.

Where do we start when identifying and building a knowledge life cycle?

A sensible starting point is data gathering. Such data has to be contextualized and converted into information which answers questions like who, what, where and when? Answering such questions generates usable knowledge (how and why?).  Some of the insights can show why agricultural commodities behave the way they do on the market. When this awareness reaches its peak, it becomes wisdom and actors can either go back to start looking for more knowledge elements.

It is also important to figure out the source of building a knowledge cycle. If it’s about the consumer, the process boils down to creating awareness and knowledge about commodities.  This is where it becomes critical to classify knowledge by consumer class and niche markets. The next step is satisfying knowledge needs embedded in commodities such as crop varieties, fruit type & quality, etc.. Ultimately this translates into customer loyalty or specific niche markets.  Given that consumer tastes and preferences continue to change, they can signal the need for new knowledge life cycles based on new tastes, preferences, levels of income, etc.  As a result, the need to develop new knowledge cycles become apparent.  It means carefully monitoring the changing consumer needs and consumption patterns.

Mapping knowledge life cycles along agricultural value chains such as production, marketing, processing and consumption is very important.  This will avoid cases where knowledge life cycles at production level get to their peak level while consumption level knowledge life cycles are still very low and unstructured. In such situations, you don’t just remove a crop variety out of circulation without consulting consumers or the market. On the other hand, processors can end up having their own variety which has nothing to do with knowledge existing at production levels. The prevalence of different knowledge life cycles compels farmers, informal markets, formal markets and processors to work together in order to harmonize their different knowledge life cycles.

Helping people, communities and organizations to identify and build knowledge life cycles

eMKambo has started rolling out master-classes whose themes include helping farmers, communities and organizations to identify and create their knowledge life cycles. For a long time, eMKambo has observed that most enterprises in developing countries focus on the production life cycle (revenue and volumes traded) yet behind the production life cycle is the knowledge life cycle that should be updated continuously. What happens on the consumer side signals competitiveness and shows the extent to which knowledge is now common sense and no longer unique. That influences the production life cycle.

The capacity to identify key elements of an effective knowledge-management strategy can no longer be over-emphasized. Most blue chip enterprises are collapsing because their knowledge cycles have reached their ceiling and cannot adjust to the new agile knowledge economy. Too many copy-cats are increasing competition.  Likewise, extension models have reached their ceiling. Farmers need new knowledge life cycles. In the African education field, the curriculum has remained the same for decades. Attempts to tweak it are not adequately informed by the principles of effective knowledge generation, management and development of meaningful knowledge life cycles. Too much repetition of the same content with nothing really new to be considered value addition is the main reason why many ordinary level students can now achieve 20As at ordinary level. But this does not make the students practically knowledgeable.

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 niche markets influence agricultural commodity prices

One of the most persistent myths in African agriculture is that commodity prices are set by traders, negatively referred to as ‘middlemen’. Paying lip service to understanding market dynamics has seen most interventions designed to get rid of ‘middlemen’ failing dismally. Working with agriculture markets for the past years has opened eMKambo’s eyes to the role of niche markets and different classes of consumers in setting prices of diverse commodities.  The power of consumers and niche markets to set commodity prices is based on taste, levels of income, background, age, gender as well as professional and health considerations.

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Producers need to know who has the power to determine prices and how.  For instance, low income consumers set prices of basic necessities like leafy vegetables and tomatoes while high income households set prices of high value commodities like peas, carrots and others.  On the other hand, the extent to which a commodity is frequently consumed or used determines whether it remains a necessity or becomes a luxury. Income levels also control consumer tastes. Rarely do consumers develop tastes for commodities beyond their income levels. To the extent that some low income households are often bigger than their incomes, household size is another key influencing factor.

Significance of customer characterization

While different categories of customers are key determinants of commodity pricing and the behavior of commodities on the market, the development of a niche market begins with the origins of particular commodities. Most commodities do well in particular natural regions where they become staples for local people and tastes are honed. When people from different communities migrate to cities, they move with their food systems and associated tastes.  Where the market uses its convening power to pull commodities from different natural regions, urban consumers from those regions are the first port of call for commodities from their original areas.  Those who grew up eating tubers like cassava or yams are quick to fetch these commodities from the market and those who grew up eating small grains provide the first demand zone for commodities from their home areas.

How commodities cultivate their own niche markets

Once commodities are in the public market, they start building their own niche markets through characterizing customers by gender, age, level of income, etc.,.  The development of niche markets is driven by knowledge sharing. Consumers are exposed to knowledge on how to use particular commodities they see in the market for the first time. Through informal markets, there is sharing of knowledge on the benefits, preparation methods and all unique features attached to commodities. As tastes improve within a particular niche, the commodity stabilizes and this strengthens its sustainability in the market together with price elasticity.  Any changes in supply will not affect price elasticity. In fact, the commodity price stabilizes in ways that solidifies consistent supply.  This is unlike once-off commodities that are bought only during festive seasons like Christmas or when consumers earn a bonus.  Such commodities are not good at sustaining business.  They can only be good for particular niche markets like high income households. Niche markets drive the promotion of a commodity in the markets.  It is important for producers to understand niche markets.

Changes in staple food status

Due to continuous presence in the market, some commodities carve a staple food status for themselves.  For instance, in most African cities, western leafy vegetables and Irish potatoes have become part of staple foods.  These commodities have developed their own niche markets defined by household income and household sizes.  As long as producers are able to meet standards and specifications, agribusiness viability is assured.

Some of the consumption patterns are being driven by age, status and health consciousness. From an age perspective, the young generation’s diets are largely influenced by external diets.  Young people’s choice of commodities is slowly taking the route of western diets.  That is why they flood food chain stores.  It means producers and value chain actors keen to tap into this young consumer base have to mimic food chain stores in everything including packaging and transactions methods. However, they have to also be on the look-out for the band wagon effect among youths who influence each other through peer pressure to consume commodities that are not good for their health.

Status and health consciousness

Some consumers are being forced to eat specific commodities due to health recommendations.  Those who have become conscious of healthy eating are deliberately and carefully choosing health diets. Some choices could be influenced by level of income and status in the community.  The gender dimension of consumption decisions is also worthy examining.  For instance, pregnant women can consume certain foods as informed by healthy practitioners and institutions.  What remains to be explored is the role of health consciousness in triggering taste, especially among low income households where choices are mainly controlled by income.  If done properly, this could address malnutrition which has a bearing on national budgets of many developing countries.  Prevention is better than curing. From a status angle, some consumers do not want to be associated with public markets, preferring to buy in food chain stores.  This is more a status thing than rational nutritional consideration.  In most cases, the market ends up following this customer niche to meet its demands.  However, there is price discrimination which is why up market prices tend to be at least 30% higher.

Tracking progress at meaningful levels of detail

Having looked at many factors from a market perspective, producers can be adequately informed to decide for whom to produce specific commodities and in what quantities. Without customer segmentation, characterization and preference mapping, price alone is no longer informative for decision-making. Data and evidence can show how much each niche market is absorbing.  If all farmers produce peas who will take them?  High value commodities may not meet the interests of more than 70% of the consumer base.  From eMKambo’s experience, customers tend to build blocks by diversifying taste – first into their budget and then adjust the ladder either upwards or downwards according to circumstances.  Within customer segments there is transition from one class to another depending on changes in circumstances like new income streams.  That is why real-time evidence cannot be over-emphasized in generating trends. Policy makers and financial institutions should be able to accurately tell whether the consumption of potatoes or any commodity is increasing or decreasing so that production can adjust accordingly.

 

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