Asking and answering fundamental questions through informal markets

Street markets or roadside food markets have remained a permanent feature in most developing countries. The fact that these markets continue to flourish alongside emerging shopping malls shows they occupy a unique position in commercial activities.  Informal markets were previously designed for disadvantaged, low income households with ad hoc incomes who were considered not able to buy from supermarkets and formal value chains.  However, spending years in the informal business has seen some of the traders and vendor upgrading their standards to cater for diverse consumer classes. Consequently, informal markets are now part of a business growth path comprising food chain stores, hotels, restaurants and formal institutions.  In order to stay in this game, traders and farmer have been compelled to acquire a certain level of tertiary knowledge, resources and entrepreneurial skills.

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On the other hand, this evolution in markets has brought its own challenges in many African countries where agriculture continues to be the backbone of the economy. The formerly employed and pensioners with reliable sources of income have been attracted to moonlight in informal markets, pushing out poor and low income traders in whose name informal markets were originally set up. Instead of being a domain for the poor, informal markets are now for every business-minded individual. Most of these markets have become part of solid business value chains able to ensure consistency in supply as opposed to ad hoc participation in the market.

Solidifying the aggregation role of informal markets

African food markets are no longer just seasonal events where farmers come to the market according to seasons.  Middle class farmers who have embraced farming as a business are now found in the market consistently since they have built niche markets that have to be continuously served. In order to consolidate its aggregation role, each informal market now requires resources to be able to ensure necessities like potatoes, vegetables, eggs, fish and other commodities are always available.

As niches become highly competitive, ad hoc traders and market participants are being pushed closer to the supply side like road side markets in farming areas and village markets. In these areas, ad hoc traders become small aggregators with just enough resources for pulling a few resources from farming areas.  Once in a while, marginal traders can go to big urban markets where they buy a basket of banana and a crate of tomatoes for selling in local markets where these commodities are not produced.

Need for middle class markets

With urban informal markets becoming part of regular value chains, the need for middle class markets, different from supermarkets or food chain stores has become more urgent in many African cities. New land uses, accompanied by investment in agricultural value chains by different classes of actors, are producing more commodities than can be handled by supermarkets and informal markets traditionally meant for the poor. This has seen many of the commodities overflowing into street sales, some sold from stationery vehicles and makeshift market stalls. Middle class markets from which food chain stores, processors and even exporters can get commodities consistently represent the future of agriculture in developing countries.

Almost everyone now knows how to produce commodities but very few know how to deal with perishables once they have been harvested. Neither are many producers able to anticipate the speed at which consumers consume and come back to buy or re-order.  Ministers, members of parliament, bankers, lawyers, accountants, university professors and other professionals interested in agriculture are all competing in producing and selling agricultural commodities through informal markets when they should invest in building a middle class market of their own.  How can a whole minister compete to sell cabbages in the same informal market with grandmothers struggling to feed orphans?

Need for careful characterization of markets 

In addition to congestion in most informal markets, there is limited differentiation in terms grading and quality. For instance, the prices of a box of tomatoes can range from $1 to $8 in the same informal market yet such a market should be for low income consumers and traders. A trader who sells fruits for $1, another  one who sets a price by counting the number of fruits in a pile and yet another one who sells for $10 for the same commodity quantity, are all found in one market.  While this is good for diversity, it inhibits definition of business boundaries.  Absence of proper clustering means you cannot separate classes or good products from bad products.

Clear characterization and classification can support the evolution of a middle class industry and ensure the definition of Micro, Small, Medium and Large does not just remain on paper.  Different classes should be in specific locations – building layers of one enterprises on another. Where these classes are all in one space, micro and small enterprises end up being over-shadowed by medium and large actors.  It should not just be about numbers of actors in one category but different capacities.  Some commodities can have differently entrepreneurial capacity, quality, standards, formality like registration and markets. For instance, those in processing industries may not want to see commodities being delivered in baskets.

Appeal to a broad section of the middle class

There is need for middle class traders, saving the up-market and farmers like pensioners with high capacity to produce more volumes. For most pensioners, farming is the next career step so they should have appropriate markets. Most pensioners have resources and need a market that can ensure good return on investment (ROI). Some have built networks in government institutions, hotels and even foreign markets. For instance former ambassadors in foreign countries need a market that acts as a holding centre before they connect and ship commodities to their networks in foreign countries. They cannot use informal markets or their farms as holding centres.

Agribusiness is no longer for the uneducated or illiterate. It is now export- focused and a career path for many people. With high literacy levels, it means a lot of ethical considerations like licensing, book keeping and other formal requirements are critical. Unfortunately, governance approaches in developing countries still focus controlling than enabling the growth of local informal economies. Public expenditure is also not taking these markets into account. Collecting and sharing evidence can assist in positioning informal markets for public expenditure. Government input programs tend to absorb a lot of the public expenditure but incentivize corporate industries. Informal markets are different from shopping mall-driven models where people are working long hours for low wages.  On what terms are smallholder farmers in developing countries participating in contract farming models and value chains?  In most cases they are just providing land, cheap labor and pushed into debt cycles for the sake of obtaining inputs. An integral part of informal food markets is the capacity of people to mobilize and exchange food commodities, informed by an intuitive cultural value of food.

 

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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The merits of an effective marketplace for agricultural evidence

Discovering and maintaining agricultural commodities markets is not enough for developing countries. They have to build a culture of synthesizing and sharing evidence in real-time. Absence of a culture of synthesizing information and knowledge from diverse sources remains a big challenge among farmers, economic actors, consumers and policy makers in the majority of developing countries. Formal education is still not adequately build the capacity of students to share what they learn and integrate new knowledge within existing contexts. Farmers and other value chain actors continue to rely on information that is out of date, incomplete and biased. For instance, they end up taking everything that comes from a single seed company or livestock breeder as gospel truth.

The role of evidence in dealing with emergent situations

A critical consequence of failure to bring evidence together is lack mechanisms for rapidly drawing together evidence to inform emergent situations such as a sudden fall in market prices, an outbreak of livestock diseases and crop pests like Fall Army Worm. Advice that comes when a problem has already covered the entire community is useless and may even disrupt local coping strategies. As if that is not enough, Government departments like the Meteorological services and National Statistical agencies are still more reactive than proactive partly because they tend to ignore evidence from alternative sources like private knowledge brokers.

Instead of relying on national statistical agencies which generalize information and insights at a national level in ways that do not adequately embrace local contexts, developing countries should seriously consider promoting local evidence synthesis platforms where decision making can be built on concrete situations. Local informal markets can provide a starting point in cultivating such platforms which local farmers, traders and consumers can easily identify with.  In addition to facilitating quick trading, informal markets are bumping spaces for accidental encounters that stimulate conversations and meaningful knowledge sharing.

Need for an effective market place for synthesizing local evidence

A dynamic marketplace for evidence synthesis can enrich public debates on issues like genetic engineering, organic food and others not fully understood by the general public. To the extent that it is populated by government departments, development agencies, churches, the private sector and farmer organizations, African agriculture’s sources of evidence are as fragmented as organizations working in the same sector. An institution that will be able to create an effective marketplace for synthesized evidence will have provided a game-changing solution. Such a platform will encourage academics, researchers and other actors to synthesize evidence from their work knowing that there is demand for it.  Keeping such evidence in specialized journals or elite conferences will limit societal benefits. If local people and policy makers know where to find the best evidence, there will search for it. A local evidence synthesis platform also underpins the identification of relevant research themes for ordinary people and vocational institutes – enabling them to address real needs such as micro-climate changes and evolution of local consumption patterns.  As shown below, alternative knowledge brokers generate a lot of data that policy makers prefer to either ignore or under-utilize.

Without capacity to rapidly synthesize evidence, local authorities and governments cannot respond more tactically to emergencies like sudden dry spells or day-to-day socio-economic activities. In a rapidly globalizing economy, communities should be empowered to identify and diversify sources of evidence that can inform long-term decision-making on issues like drought, market failure, livestock diseases and dynamic post-harvest handling of agricultural commodities. Where there is no rigorous evidence synthesis, there are high chances of biased decisions, leading to costly mistakes.

Demonstrating consensus or contention

Another major role of local evidence synthesis is showing areas of consensus and contention as well as fundamental disagreements. Without a disciplined evidence market place, it is impossible to habitually synthesize evidence to provide answers to enduring questions surrounding malnutrition, poverty and unemployment.  Given that the development sector has existed for generations, by now we should be seeing consolidated models on issues such as financial inclusion. In the absence of evidence, financial institutions continue to disguise their resistance to finance new innovative projects by asking a thousand questions which have nothing to do with genuine curiosity. A knowledge platform will provide a mechanism for continuously refreshing synthesized evidence unlike leaving things fragmented.  However, collecting evidence and making it usable is a time-consuming mix of art and science.

 

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

 

 

Opportunities to enrich your agricultural decisions with data

With the importance of data and evidence in African agriculture gaining momentum, eMKambo has historical data that can enable diverse value chain actors to understand their agribusiness planning, budgeting and decision-making. Over the past five years, eMKambo (www.emkambo.co.zw) has been collecting data from more than 20 agricultural markets in Zimbabwe. Major parameters of the data existing include: Name of farmer; Contact details; Type of produce supplied to the market; Volumes supplied by each farmer; Source or farming area and gender of the farmer. Also available are historical and current daily market prices for more than 50 agricultural commodities that form a food ecosystem.

Data categories

You can get raw data in excel sheets for your own needs-based analysis as well as analyzed and interpreted evidence, covering for the following commodities:

Vegetables: Here the data covers a wide range of vegetables from staples to high value crops – cabbages, tomatoes, leafy vegetables, onion as well as peas, green beans, peppers green, yellow & red), garlic, cauliflower, carrots, broccoli, lettuce and others.

Fruits: On the fruits side, existing data is on locally produced fruits like bananas, oranges, apples, avocado pears, pine apples, lemon as well as imported fruits like apples, plums, strawberries and others.

Tubers: sweet potatoes, yams (magogoya, madhumbe), potatoes, Livingstone potato (tsenza).

Wild fruits: Baobab fruit, tsvubvu, masawu, matohwe.

Field crops: maize, sorghum, pearl millet, finger millet, green mealies and indigenous rice.

Legumes: sugar beans, soya beans, cow peas, groundnuts, roundnuts.

Other foods: sugar cane, madora, matemba, soya chunks, rabbits, honey and others.

Poultry and related products: broilers, layers, indigenous chickens, ducks, turkeys, guinea fowls, eggs and others.

14 ways in which the data can be used

  1. Matching agricultural production to consumption patterns, consumer tastes, preferences, market standards and quality expectations.
  2. Identifying periods of gluts and shortages as well as levels of competition at different periods.
  3. Showing responsiveness of particular commodities to changes in their own prices as well as responsiveness to demand, supply and prices of other commodities which may be complements or substitutes.
  4. Bringing out niche markets for various commodities as well as requirements of different niche markets in terms of volumes per given period.
  5. Showing supply corridors for different commodities.
  6. Indicating opportunities for value addition.
  7. Revealing seasonality and consistency in supply.
  8. Identifying value chain actors for collaboration and agribusiness modelling.
  9. Signaling climate change and community resilience.
  10. Showing revenue gathered in various markets and amounts going back to support agriculture and livelihoods in production areas.
  11. For academics – showing areas for research, learning and curricular development.
  12. For financiers – showing opportunities for targeted financing through farmer characterization and capacity assessment.
  13. For input suppliers – surfacing opportunities for targeted promotion of seed varieties, fertilizer, packaging material, equipment and other inputs.
  14. For processors – simplifying aggregation of commodities and ensure sufficient stock.

 

If interested get in touch through the following contacts:

 

charles@knowledgetransafrica.com  / clever@knowledgetransafrica.com

Mobile: 0772 137 717/ 0712 737 430/ 0774 430 309/0772 137 768

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

 

Carving and sustaining economic identities in evolving agricultural ecosystems

While billions of dollars have gone into African agriculture, smallholder farmers and other food producers are yet to be characterized and structured in ways that give them a recognizable economic identity. Unless value chain actors have a clear economic identity, it will remain difficult for them to participate in a fast-moving global agricultural market where traditional advantages are being eroded. Carving an economic identity includes understanding local markets and accounting for surplus at farm gate. That way it becomes possible to see how much surplus is available for processing and regulate the entire agriculture industry.

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Optimizing data capture, standards and integration

African agricultural policy makers have to invest in different avenues of generating and interpreting data in order to optimize data capture and integration.  For instance, a single smallholder farmer generates thousands of data points daily beyond basic details like size of household and farming category.  Integrating disparate data such as hundreds of decisions made by each farmer daily is very important.  Besides lack of standardization of data so that it becomes easy to share, data sharing is hampered by numerous factors, including inadequate financial and nonfinancial incentives. For example, regular data capturing and sharing has not been adequately written into job descriptions of government extension officers. These officers are only invited to participate in ad hoc crop and livestock assessments. As a result, it is impossible to introduce new and novel ways of gathering evidence in real time if potential data collectors are not equipped with the basics. Extension officers are not paid on the basis of data collection efforts, encouraging farmers to participate in research or conducting experiments but on high yields by farmers.

In addition to providing adequate data collection infrastructure and financial incentives, policy makers should improve data governance and introduce approaches that enable farmers and other value chain actors to participate directly in data gathering and sharing.  As if that is not enough, much of the data currently being collected by government departments, contract companies, mobile service providers and development organizations from farmers and rural communities lack some critical nuances that can pinpoint real solutions.

Aligning crop and livestock assessments with the market

Continuous data flow should be an integral part of the decision-making hygiene in agricultural value chains. It is not enough to assess crops and livestock in farming areas without extending such efforts to what is in the market and household food storage. Assessing food security among farmers and rural dwellers is not enough without considering deficit and surplus situations in urban populations. In most African countries, urban populations consume more than 50% of the food produced in each country. Most farmers do not consume as much as they produce due to post-harvest losses and a desire to earn income from selling to urban markets where buying power is concentrated.  Ideally, each community should have statistics showing how much is produced, sold and consumed locally.

Establishing a robust farmer characterization criteria

Trying to flesh economic identities for farmers by looking at the availability of resources like access to loans, soil, water, irrigation and pack shades is a common mistake by policy makers and financiers in African countries. A more complete economic identity can come from taking into account intangible attributes such as knowledge, attitudes, risk appetite, patience and other hidden factors. Due to absence of robust characterization, it is difficult to identify farmers who specialize in specific commodities who can then be upgraded to participate in export markets. Sampling 50 farmers from a total of more than five million to participate in exports is not a viable initiative.  The majority of farmers engage in trial and error by trying potatoes one season, cabbages next season and peas the following season, based on short-term incentives.

Informal markets as toll gates for food

Given the extent to which informal markets dominate the supply of food to urban consumers in most developing countries, an effective data collection system can turn these markets into a food toll gate that can efficiently inform the entire agricultural sector.  Introducing plastic money continues to be a challenge due to lack of a system that can enable the introduction of plastic money at the local farmers’ market and link it with other local actors before connecting with national institutions. In the absence of a system, a few informed actors continue to prey on the system and deprive farmers of benefits that should accrue to them. Collecting statistics for one commodity like tobacco and ignoring more than 50 other commodities translates to unbalanced economic decision-making. Strengthening the system starting from local farmers markets will make it easy to introduce an export facility directly to farmers. Farmers able to produce for export can be assessed from their participation in the local market.

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

Succeeding through a secret mix of competencies and data

The fact that farmers and students exposed to the same capacity building initiatives produce different results suggests training alone does not lead to success. In the majority of developing countries, farmers in the same environment and with access to similar resources achieve different outcomes. On the other hand, agricultural economists and agronomists who did the same course can achieve different results. If it is difficult for sophisticated graduates to translate knowledge they have acquired during four years of university education, why should we expect farmers and semi-literate people to find it easy?

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Limitations of trying to professionalize local indigenous knowledge

Instead of addressing structural and institutional barriers, African policy makers, private companies like seed houses and development agencies are blaming farmers for not adopting new technologies to lift themselves out of poverty. There is no realization that knowledge application is context-sensitive such that for many innovative farmers, it is a secret mix of competencies. That is why most of the farmers who are asked to describe what makes them succeed may not know what really contributes to their success but go on to share surface intuitions. If it is about hard work, every farmer works hard. While farmers and rural entrepreneurs are expected to share knowledge, each actor tends to have a secret set of skills and competencies hidden from the surface. Very few farmers and traders have the ability to apply what they know under pressure in order improve their level of quality. In the absence of clear market channels and processes, farmers can do everything right but face different prohibitive rules on the market.

Failure to account for contextual dynamics is one of the reasons why efforts by development actors to turn local indigenous knowledge into professional communication products like videos, manuals and formal reports is reaching a dead end. To the extent this effort does not take into account the value of the oral and fluid nature of local indigenous knowledge, it remains communication lipstick. For instance, aggregating commodities among smallholder farmers for the market is often very difficult due to different circumstances and needs among farmers. Some want to sell immediately while others may have other options like remittances from their children based in urban centres.

Benefits of a nuanced understanding of consumers

For food producers in developing countries, an important part of secret competencies is understanding consumers at a granular level.  This is where data and analytics become vital. Value chain actors who are beginning to embrace a culture of data collection and analysis are building a nuanced understanding of their customers. For instance, three classes of consumers are emerging in many African countries – those who want to go back to traditional food systems; those trying to balance traditional with modern food choices and; the last group comprising those not sure what they really want (lukewarm by-standers who consume whatever comes).  Efforts to promote organic food should consider these issues.

Knowing the market includes detailed characterization of consumers. Targeted marketing messages can only be developed from drilling down into detailed nuances of different classes of consumers based on their incomes levels and culture, among other indicators. Without digging deeper into the attitudes and behaviours of consumers, it is difficult for traders to plan and build sustainable businesses. Competencies in manipulating data can reveal more meaningful layers of insights into what influences choices by low income consumers who patronize African informal markets.  Although many consumers are becoming health-conscious, sporadic incomes and poverty often force them to consume whatever comes.

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On a more revolutionary note, a new breed of dynamic value chain actors is harnessing ICTs to build data- informed businesses that undermine traditional agribusiness models like contract farming. This trend is transforming the nature of competition in African agriculture such that supermarkets and processors no longer have monopoly on consumers and market segments. Collecting data regularly in fluid informal markets is enabling smart value chain actors to capture patterns at a very detailed level in ways that cultivate a culture of fluid knowledge development. That is why policy makers, financial institutions and development agencies should invest in monitoring of agricultural markets for new insights and best practices.  Best practices in agricultural production are meaningless without insights from the market.

 

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 market price is not a major determinant of profit in agribusiness

A keen interest by African farmers to know the price of commodities on the market is understandable. However, tracking activities in informal agricultural markets by eMKambo over the past few years has proved that price is not a major determinant of profit-making in agribusiness. Profit-making is a result of creatively managing production costs, quality, losses and aggregating commodities.  The market is always available, usually with set prices.  It is about how a farmer’s commodity becomes competitive per given price. As an ecosystem, the market is a collection of many factors including ideas and experiences.

Converting resources into dollars and cents

Profitability is about converting water, soil and labour into commodities that give you dollars and cents.  Farmers should figure out best ways of converting their knowledge into products. Indigenous knowledge has to be embedded in competitive commodities not just price on the market. Price is just an expectation guide. A good price may mean nothing if a farmer has already incurred losses. Approaching agriculture from the market’s big picture provides a growth pattern that can enable farmers to make choices within available resources. Informed by the big picture, farmers can choose to diversify into high value crops.

 

The market also shows who else is producing what a farmer is trying to produce and the number of players involved. Such intelligence will avoid the band wagon effect where farmers get into the same commodity irrespective of competitive advantage. Unless farmers track their commodities, it is difficult to intelligently plan and project outcomes on the market. Trends surrounding a farmer’s particular commodities can provide an idea on how the farmer can adjust costs and quality in line with his/her resources. The market provides a general map and guidance that empowers a farmer to make intelligent choices.

 

The power of understanding competition dynamics

Where the market segments commodities into 1st price, 2nd price and 3rd price, farmers have to fit their commodities in those price parameters. While lack of organized production in the whole agricultural sector can be beyond an individual farmer’s influence, commercially-minded farmers should make an effort to understand supply levels and competition dynamics in the market. It is also important for farmers to know other competitive forces outside their commodities. For any given commodity volume, price might fall or increase not due to gluts or shortages but due to new entrants and exits in the market that either stretch or release the market budget.  For instance, if U$500 000 is circulating for given volumes of commodities in the market and one commodity, accounting for 5% cash in circulation, moves out of the market, it means the same budget begins to cover fewer commodities.  On the other hand, if for the same amount of cash in circulation, a new commodity enters the market, the budget in circulation is stretched in ways that translate to less demand for other commodities.

 

Buying power is determined by the influx and withdrawal of various commodities. Unlike the situation with mono crops like tobacco which do not have substitutes and whose price is determined by demand and supply only, in informal markets more than 70 commodities can substitute each other. For instance, following a good rainfall season, besides maize, other commodities like sweet potatoes and groundnuts start competing with maize. An increase in sweet potatoes means people will eat less porridge which is a derivative of maize.  Sweet potatoes, pumpkins and cow peas all compete with maize.

 

Matching standards with market expectations

Farmers can also reduce losses through market-oriented production calendars that inform them when to produce. Understanding market standards and expectations also reduces losses. It is usually through a mismatch between market standards and expectations that farmers lose out.  Another key issue is grading. If farmers do not understand commodity grades and how to aggregate their commodities, they end up depending on the market’s umbrella decisions about quality and other critical factors. When well-informed, farmers can be able to grade appropriately and push medium to high quality commodities to the market while low quality commodities can be re-purposed for livestock and other uses.

 

Consistency in production and supply is also a very important factor. It is not possible for a commodity to perform well throughout the season. Farmers should specialize on at least three commodities in order to spread their risk.  That way there are 60% chances of getting better prices.  A strong relationship with the market can also be cultivated as farmers become famous for being consistent suppliers. Traders do not often want to waste time and resources looking for new suppliers. Commodities destined for the market face competition, based on factors like price, buyers, standards and specifications. When producing for the market, farmers should make sure the best resources are devoted in order to satisfy customers’ value for money. It is unlike when farmers are producing for satisfying their own household tastes. Consumers have competing forces on their budgets.  Why should a consumer buy your sweet potatoes instead of bread?

 

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 the market can inform better farmer characterization

In a rapidly changing knowledge economy, it no longer makes sense to continue characterizing farmers in developing countries by the size of land on which they produce agricultural commodities. Informal agriculture markets provide various ways through which African farmers can be characterized beyond the smallholder, communal, commercial and other forms which are becoming inadequate. For instance, a farmer’s participation in the market can better suggest the extent to which s/he is business-oriented than can be expressed through the size of land s/he owns.

A smallholder farmer who consistently participates in the market is more commercial than one who owns a large commercial farm but does not regularly participate in the market. Factors that can be used in categorizing farmers include: seasonality of production practices; frequency of market participation as well as commodities and volumes supplied to the market.  Additional elements include market outreach (in which other market does the farmer participate, e.g., food chain stores, local markets and others? Payment method is also another important attribute. For instance, some farmers pay their labour using commodities.

 Characterizing through collective surplus at community level

At community level the best characterization is around collective surplus – how much surplus does the community produce for the market? In a community, it can be a mistake to characterize individual smallholder farmers through their individual production because high volumes of commodities by an individual farmer may not translate to surplus for the market. For example, if a family is large, subsistence consumption can exceed 80% due to the presence of more mouths to be fed.  On the other hand, a small family can produce three tons and consume one ton with the rest going to the market.

An ideal characterization approach can begin with identifying major commodities produced in a particular community. A quick survey can reveal how much of each commodity is produced and how much exists for the market, especially when aiming to set up a warehousing facility at community level.  Defining farmers by size of land excludes important factors like passion, experience, knowledge, household size, taste, household income and others. No farmer can produce every commodity and become a champion. One farmer can be good with groundnuts while another can be good with livestock. Consolidating diverse characteristics at community level can reveal investment opportunities in particular farming communities.  While climatic conditions can be given by nature, a good climate does not make farmers in a favorable climate commercial producers.

 

Characterization around value chains and networks

When characterizing from the market vantage point critical steps include identifying varieties and volumes of commodities that leave from a particular farming community straight to the urban farmer’s market where breaking bulk happens.  What is the proportion that goes into the wholesale market for eventual distribution to other markets in bulk?  If, for instance, 60% of butternuts travel from Harare to Bulawayo, there is justification for setting up a reliable commodity exchange to support this movement. In most informal markets, the wholesale market fulfils the role of aggregation, handling and rationalization with other markets. In all value chain nodes and networks, there is need for consolidating knowledge. Tracking volumes flowing into markets provides a framework for building consumption patterns, connected with prices.  A key question can be: For the past six months, which 10 commodities were moving together and competing in the market and which commodity, upon its entrance into the market, disturbed a necessity like a tomato?

In most informal food markets, vendors tend to be the biggest group that buys from farmers for onward selling to end-users. On the other hand traders with permanent stalls purchase commodities in bulk and often deal directly with communities. Farmers bring bulk produce into the farmers’ market where bulk is broken. Where buyers bring commodities straight from production areas, this volume is stocked in the wholesale market for other informal or formal markets like processors.  Bulk purchasing does not happen from the farmers market for commodities destined for high density areas.

On the other hand, individual consumer choices comprise food baskets. The market pulls together a food basket from bulk commodities coming from diverse farming areas. As it breaks bulk it mixes and matches commodities according to diverse consumer needs including nutritional factors.  This mixing and matching role needs to be understood as it influences consumption patterns. For instance when the consumer budget gets strained, some commodities are sacrificed. This is how commodities are given weight in terms of whether they are necessities or luxuries. Many farmers have learnt to stop producing commodities like lettuce, carrots, peas and fine beans in large quantities because they are sometimes considered luxuries not necessities.  However, necessities like tomatoes are rarely substituted fully because they participate in the preparation of many relishes.

 

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