While digital technology is threatening to diminish the role of intermediaries in African agriculture, there are signs that smart intermediaries will be around for some time. Although it is spreading connectivity among farmers, traders, consumers and policy makers, digital technology will always need people who translate services between value chains actors, most of whom may struggle to appreciate each other’s contribution.
Digitization of agriculture and rural communities is increasing need for customized services that are too expensive or rare for farmers, traders or consumers to consolidate on their own. For instance, very few farmers have the capacity and resources to follow their commodities along the entire value chain or ecosystem. On the other hand, digitization is accelerating the movement of commodities and information in ways that make it difficult for farmers and other value chain actors to keep pace with opportunities and threats.
Intermediaries as creators of value
As agriculture and food supply models become more complex, intermediaries that will not disappear overnight are those able to build sustainable models. Failure to do so means they will find themselves on the endangered list. The intermediaries that persevere will be those that adapt and produce unique value such as:
- Consolidating each value chain actor’s comparative advantages in ways that prevent some value chain actors from falling into avoidable pitfalls.
- Building relationships and providing a neutral space for competitors to share reliable information. Without such a space, competitors tend to mislead each other. There are circumstances where it makes sense for competitors to collaborate through facilitating information and knowledge exchange. Unfortunately, competitors often hide useful insights from each other because some will have incurred costs in gathering business intelligence and may not recoup such costs if such knowledge is made a public good.
- Rationalizing the utilization of resources in order to avoid duplication of efforts. Farmers who get into a new market often require guidance from intermediaries. There are cases where traders may pretend not to have financial services when the opposite is true and they are only interested in testing financial facilities from new players in comparison to what exists. On the other hand, some farming communities may pretend they don’t have coping strategies in order to get free inputs and services when in fact they already have better ways of coping with challenges. All this requires intermediation.
Integrating ICTs into needs-based content development
ICTs are not independent of human skills and capacities in terms of efficiency. Developing needs-based content requires an intermediary. For instance, what informs the development of a mobile application or a short message service? The most important input is the quality of content that makes a short message service a conversational tool. ICTs can fuel the interpretation of invisible relationships into strategies that would otherwise remain locked within actors. Sometimes value chain actors preserve knowledge to their advantage in ways that hinder knowledge sharing and flow. Allowing knowledge to flow enhances competitive advantages.
For instance, Mbare agricultural market has its own knowledge which has to be consolidated and connected with knowledge from other markets, producers, consumers, processors and others. eMKambo is already using ICTs to accelerate and sustain this process. Just as commodities are pushed from producers to consumers, the same happens to knowledge. It is often difficult for knowledge to move from farmers to consumers directly. How can a rural farmer communicate with an urban consumer whose income and consumption patterns are hidden from farmers? All these conversations have to stay fluid, instead of each of the millions of farmers trying to communicate with millions of consumers. That is how trends become a consolidated value-added product for diverse value chain actors.
Information and knowledge are different from seed, fertilizer or other inputs. If knowledge is to be shared productively, many actors have to be involved. Some of the value is found at the extremes of value chains than in formal markets. Intermediaries become more critical in facilitating transactions between producers and consumers as well as interpreting high level patterns within the ecosystem. By monitoring and herding commodities and actors, they close gaps between disconnected value chain actors that require one another to survive. In many developing countries, most value chain actors do not have access to those they need in order to stay alive. As technology deepens connections between producers and consumers, smart and dynamic intermediaries will continue satisfying a high value function.
eMkambo Call Centre: 0771 859000-5/ 0716 331140-5 / 0739 866 343-6