Using market intelligence to purposefully direct agricultural finance

Many developing countries are struggling to direct agricultural financing in more purposeful and moral ways. For instance, if contract farming was the main ticket out of poverty, most farmers who have been contracted to produce cotton, tobacco, sorghum and dozens of other commodities for generations would have completely moved out of poverty into sustainable self-reliance. The fact that progress has been unsatisfactory suggests a lot is still unknown. Rather than continue with traditional financing models where agricultural finance is put in banks, funders, including government, can consider alternative ways of directing capital towards improving communities as opposed to individuals.

emkambo

Towards informed targeting

Targeted agricultural financing can result from accurately assessing demand patterns which are increasingly becoming diffuse. Unfortunately, banks are still using traditional ways of assessing financing decisions. For example they continue to prioritize availability of land, water, labour and other tangible assets. Unknown to financial institutions is that the definition of off-takers is evolving from referring to formal institutions like processing companies to encompass relationship-based niche markets whose characteristics can only be understood through robust evidence pathways.

A decision to set aside a US$50 million horticulture fund should be informed by evidence from the demand side. Without evidence such a decision can see that facility going to less than 30% of farming regions where horticulture is prevalent at the expense of other deserving production zones. As if that is not enough, putting that facility in traditional banking institutions is like putting new wine in old bottles. Besides prioritizing their own funding models, banks will ensure such financing is accessible to individuals as opposed to farming communities and irrigation schemes which do not have individual financial identities. The fact that farming communities and irrigation schemes are not taken as private companies implies they will not access such funding although they may produce better outcomes.

Cash model for informal markets

Just as farmers involved in the production of cash crops like cotton, cocoa, sugar cane and tobacco get first preference in accessing cash, actors in the informal markets such as farmers and traders should have a similar facility extended to them. That will add more meaningful value because a lot of cash circulates in informal African food markets every day. The fact that cotton and tobacco farmers handle cash once a year means that money does not circulate as fast and efficiently as in informal markets.  Absence of a cash facility is the main reason why cash is not flowing properly along informal market value chains.  Traders end up keeping cash within their networks. The end consumer buys commodities in cash from the vendor who also buys in cash from the trader who also buys in cash from the farmer. It means cash dominates the whole transaction process.  Other means of transacting are not available to consumers.

The farmer is the one who needs cash due to the absence of appropriate systems that can facilitate meeting of subsistence and other expenses such as school fees, medical expenses, transport and other uses which consume 70% of the farmer’s income.  The other 30% goes to inputs.  In the absence of appropriate transaction facilities, traders end up paying cash all the way.

Smoothening middle actors

There is need for a cash model that covers middle actors like traders. That can be an overnight or weekly facility, ensuring availability of cash when traders need it. Currently, when a trader buys from the farmer using cash, s/he sells to the vendors using cash. By 10 am or noon every day, the trader will have finished trading and now keeping money which could be put in a bank if a facility was available.  In some cases, traders who deal in bulk commodities like potatoes spend two to five days selling so that they build up cash for going back to the farmer. Ultimately the trader can go back to hoard commodities with $5000.  However, during the time the trader is trading, s/he could be putting his/her money in the bank and only withdraw when s/he needs to go and fetch the commodities.

A cash facility through banks can make this a viable option. The money should be in the bank and available on call. This model can sustain itself from the rate at which transactions take place (the velocity of transactions in informal markets). In this case, the speed of transactions becomes the main revenue stream. If such a facility is set up in informal agricultural markets, farmers who trade commodities like tomatoes over a week or two may see the wisdom of not taking money home every day but leave it in the bank. They can withdraw their money after a month when they want to buy inputs or invest in livestock.  Eventually, farmers and other market actors see the convenience of paying school fees and meeting other requirements through the facility.

Building a sensible agency banking model

A financial facility in the market can lay the foundation for sensible agency banking models to be built from the market. For instance, tomato farmers from different production areas can become connected with banks and other actors through the market via this self-contained financing model.  The facility can be membership-based in such a way that members are given special cards that entitle them to priority status like what happens in some financial institutions.  If tobacco farmers who do not use cash regularly have a special facility that enables them to withdraw $1000 a day, what about traders and farmers who handle cash every day? Since there are limited online facilities in most African farming areas, it is currently difficult to see how cash received by farmers producing cash crops like cocoa and tobacco travels along value chains. That is why a special agricultural marketing fund will stimulate agricultural growth.

Financial institutions can easily identify farmers and traders in need of loans based on their special accounts with the fund.  Ultimately farmers will bring cash into the banking system.  Loans to farmers can be transferred into value chain actors’ accounts but repayment will be in the form of cash. Other options like buying inputs can be built into the facility. The model will have special rights that support   sustainability. It will be membership-driven through subscriptions and enable purely cash-on-call. The facility will also make the introduction of plastic money smooth through nodes in the value chains.

Eventually farmers will see no need to continue carrying cash. A major value proposition for this facility is in the velocity of transactions. A super-agent or aggregator will be responsible for facilitating the process through, for instance, handling cash flow requests for each day. At the moment, most agency banking models are not connected to other value chain actors. For instance, there are no Point of Sale (POS) machines among the majority of service providers in most farming areas. That is why mobile money models are not reaching their potential. When traders send money to farmers and the farmers do not get that money through mobile money agents, the whole system is not worthwhile for actors. To avoid some of these challenges, the cash model can be backed by a revolving loan fund which anchors growth and sustainability.  If the market has $50 000 in circulation, the revolving fund can inject another $50 000, thus planting the seed for growth.

Getting the better of opportunists

Without smart ways of purposefully directing agricultural capital, opportunists will access finance at the expense of genuine aggregators who fully understand production and market dynamics. Most African countries currently do not have funding for genuine aggregators who can use their knowledge to build the capacity of producers so that they meet the deep needs of consumers.  Instead, a few opportunists masquerading as aggregators are keeping knowledge to themselves and simply taking commodities from farmers which they supply to super markets without adding much value except a bit of cleaning, grading and packaging. There has to be mechanisms for avoiding conflict of interest between aggregating and knowledge brokering. At the moment, African informal markets fulfill an important knowledge brokering role by ensuring information is not hidden from actors. This is unlike opportunists who thrive on information asymmetry. Carefully characterizing actors will make it possible to identify genuine aggregators who share knowledge with farmers and consumers in transparent ways.

 

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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Learning from Invisible CoPs: The role of informal actors and relationships in African food systems

Background

Climate change-induced food insecurity and global socio-economic instability compels us to continuously revisit   food demand and supply models, especially in developing countries. Conventional approaches like the notion of formal value chains are no longer enough to fully understand food systems. In many African countries, it seems invisible Communities of Practice (CoPs) such as informal markets offer new pathways of forging new relationships and interpreting realities around food. Rather than present food as a mere market commodity, these CoPs demonstrate the extent to which food is linked to people’s identities. On the other hand, modern value chain approaches seem limited to the economic sense and tend to over-simplify soft issues like knowledge, trust and relationships. Yet in most African informal markets, knowledge sharing adds more value than processing commodities into finished products. By fostering knowledge exchange between different commodities and people, informal markets build national food baskets supported by different food sources and values.

However, we cannot talk about food demand and supply models without mentioning the convening power of cities and urbanization. African cities like Harare, Lusaka, Nairobi, Maputo, Kampala, Kigali, Accra, Lagos, Addis Ababa, Lilongwe and Johanesburg, to mention just a few, provide larger ecosystems in which CoPs innovate, mingle, share and combine ideas from different vantage points and traditions. These cities draw together key sectors and economic drivers such as producers, transporters, buyers, processors, input suppliers, development agencies and government departments. Important players in this nexus are rural councils which are also contending with rapid urbanization.

KM4Dev gathering: Harare – 25 – 26th July 2017

Knowledge Transfer Africa (www.knowledgetransafrica / www.emkambo.co.zw) and its partners will be convening a Knowledge Management for Development (KM4Dev) gathering in Harare (25 – 26 July 2017). The event seeks to inspire various actors and disciplines to engage and learn from the practices of informal food CoPs that connect production areas with urban consumers. While relationship-based food demand and supply models are increasing in many developing countries, lack of coherent knowledge pathways limits the extent to which these CoPs can influence development practice, theory and national food policies. Part of what remains unknown and unappreciated are informal food CoPs’ motivations, dynamic practices and contribution to regional and international food systems as well as the role of cities in food demand and supply.

From farmers to consumers or end-users, more than 70 percent of African food passes through informal food CoPs in informal markets based in cities. These CoPs and markets have become powerful sources of knowledge for farmers, traders and other actors. During the Harare KM4Dev gathering, participants will be immersed in Mbare Informal food market in Harare where more than a dozen knowledge pathways have been identified: farmer to farmer; farmer to trader; trader to farmer; trader to trader; farmer to transporter; transporter to farmer; trader to transporter; consumer to farmer; consumer to trader; trader to financier and many others. The event hopes to generate reflections and answers to the following questions:

  • How do informal food CoPs respond to the needs of diverse consumers and knowledge seekers?
  • What could be the potential role of culture and cities in shaping food demand and supply models?
  • To what extent do existing theoretical approaches and concepts around food speak to the peculiar roles of informal food CoPs, urban centres and traders?
  • How do informal food CoPs and traders negotiate power and neutralize the politics of food?
  • How can the development sector harness informal knowledge sharing pathways that are used by the majority of African food producers and suppliers to make decisions?
  • What can we learn from the way knowledge travels through cities and informal food supply models?
  • How can we recognize invisible CoPs that make informal agriculture markets resilient?
  • How can we use the KM4Dev toolkit and other approaches to learn from the informal food market?

When the event is over, our collective achievements should include the following:

  • We will have discovered new and immediately useful sources of agricultural knowledge that is all around us.
  • We will have explored and applied the Wenger-Trayner value creation framework with a local knowledge perspective.
  • We will have explored the role of cities in empowering the participation of CoPs in food supply and demand models.
  • We will have inspired new theories and interpretations of the social, economic, ethical, cultural and political characteristics of food systems.

Event Structure

Day 1: 25 July 2017

  • Introductions and why we are hear –  Charles Dhewa
  • Learning visit to Mbare Informal Agricultural People’s market.
  • Experiences from Uganda – John Kaganga
  • Experiences from Zambia – Lutangu Mukuti
  • Test-drive Wenger-Trayner Value Creation framework

Day 2: 26th July 2017

  • Recap of Day 1
  • The role of urban centres in food distribution and economic development – Mr Livison Mutekede, Secretary General – Urban Councils Association of Zimbabwe (UCAZ)
  • Small grains value chains video – KTA and IMC- BEEP
  • Story-telling (weaving food stories and local music) – Renowned Poet and Story teller: Chirikure Chirikure and Mbira music from local female Mbira musician – Hope Masike; story about how the local Mbira music.
  • The notion of Knowledge Cities and Knowledge Societies – Catherine Piloto and Charles Dhewa
  • How Big Data and Social Media can surface knowledge in Informal Agriculture markets – Open Space Discussion led by the African Capacity Building Foundation.
  • Tying loose ends and conclusions.

Organizers

 

Venue

Monomotapa Crown Plaza Hotel, Harare – https://www.visitzim.com/hotel/crowne-plaza-hotel-monomotapa/

For more information:

Charles Dhewa

Chief Executive Officer

Knowledge Transfer Africa (KTA)

Mobile: +263 774 430 309 / 772 137 717/712 737 430

Email: charles@knowledgetransafrica.com / charlesdhewa7@gmail.com ? dhewac@yahoo.co.uk

Website: www.knowledgetransafrica.com / www.emkambo.co.zw  Skype: charles.dhewa

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

Making sense of differences between communicating evidence and facilitating its use

Besides promoting linear ways of communicating information, most efforts by policy makers and development agencies in Africa continue to confuse dissemination of evidence with facilitating its use. Instead of speeding up the adoption of new knowledge, social media is also generating noise which gets in the way of adoption. If they were facilitating adoption and use of evidence, organizations would direct more resources to engaged reflection activities, mentoring evidence users and walking together with people in need of new ideas.

making-sense-of-differences-between-communicating-evidence-and-facilitating-its-use

The difficulty of removing information from public discourse

Among those working with farmers and rural communities, there is an emerging realization that practices that have taken decades to solidify will not be changed overnight. That is why falsehoods and myths continue to compete with objective facts. While a lot of money still goes into producing documents, published information is not changing practices. Supporting the adoption and use of evidence requires thoughtful interventions.  For instance, you cannot change nutrition practices through advertisements because there are many reasons why people are not adopting new nutrition practices. One of the reasons may be that people cannot afford nutritional food due to various constraints.  Agricultural production manuals are not changing practices.

Examining factors that enable the use of evidence

Effective communication of evidence is important but incomplete. Given an increase in information and diverse sources, most people no longer have the time or energy to sift through the ocean of available information in order to identify what is critical for decision-making. The situation is worse among  policy makers like Members of Parliament who are exposed to disparate forms and sources of evidence such that they end up choosing what appeals to them although that may not be the most useful evidence for policy making.

Not all evidence has to be standardized

Contrary to efforts by organizations to turn all available evidence into documents and publications, more than 70 percent of knowledge in African communities may not need to be documented into lifeless publications but baked into best practices and rituals.  Not everyone wants to read a manual or standard operating procedures on how to produce all kinds of agricultural commodities. Many farmers are satisfied with following procedures and rituals into which evidence has been embedded.  This makes sense because it does not over-load memory. It leaves people with some cognitive space necessary for human well-being.  Rather than foisting evidence on communities, it is important to ensure it is demand-driven.  When evidence is demand-driven, it is put to use quickly and in its richest form unlike when it is not demand-driven. Cognitive bias is also minimized when people use evidence for specific purposes.

 Navigating the interconnected nature of opportunities and risks

Given the complexity and interconnected nature of opportunities and risks in African agriculture and socio-economic development, disseminating information is no longer enough. Building sustainable value chains requires facilitating the use of evidence. Numerous knowledge gaps cannot be solved through information over-load.  Instead, value chain actors have to be assisted in aligning their values and resources in ways that ensure business innovation and socio-economic impact. It means development partners and policy makers have to be better at communicating not just the moral imperative of positive change but also the market incentive which can be understood by the private sector. All this is not just about communicating evidence but availing appropriate evidence and facilitating its uptake by all actors.

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

Key elements of market – informed agribusiness Models

Like all businesses, agribusinesses should be built around a product/service and a niche market. Ideally, more products and services spawn more business models with some models eventually becoming separate business units.  When that happens, it becomes easy to assess the viability of each business model. Contrary to some beliefs, in a business model, money is just like salt. Without meat or vegetables, salt is useless.  The salt owner should be interested in those with meat, potatoes, tomatoes and other products. On the other hand, while some commodities need salt, some consumers don’t need much salt.

key-elements-of-market-informed-agribusiness-models

Confusing a business plan with a business model

Most agribusinesses lack models.  They confuse a business plan with a business model yet a plan assists in executing a model.  A model is an attempt to turn your innovation into profit or economic value.  The following pillars help to characterize a business model without over-simplifying the complexity in agricultural value chains

    1. The owner -who will provide the product or service.
    1. Value proposition – What need or solution do you want to address?  Have you addressed a need?  Absence of a value proposition is the main reason why we end up with copycats who just watch what another person is doing and try to imitate rather than focusing on the customer.  A need is a value proposition.  What loans are needed from the customer’s perspective?  To what extent is a reasonable interest rate a solution to farmers?  What if loan amount is the real need?  What if the main issue is unfavorable conditions that insist on collateral not in line with the agribusiness?
    1. Market segmentation – Who are you targeting?  Are you targeting farmers, traders, transporters or individual consumers?  A clear target will enable you to model in line with business behavior.  Most models, especially financial ones, are locked in systems.  It is important to create your own market niche that can inform what products to provide.
    1. Distribution channel – What is your distribution channel?  How are you going to reach your customers cost-effectively?  Most banks ended up setting up brick and mortar structure to establish presence. However, the entire value chain may be better supported by ICT-inspired channels.  Where Point of Sale (POS) machines are missing at other value chain nodes, clients get stuck.  For instance, loan disbursement will not be useful if traders cannot transact from rural agro-dealers where they stay.  Neither can loan repayment be smooth.  When clients get money, they want to use it somewhere.  It is important to understand destinations where money will end up being used.  That will enable building of other networks like between farmers and agro-dealers who also know what farmers need.  Concentrating on the immediate client is a big mistake, particularly in the network economy.
    1. Identify niche markets – Invest in building relationships or ride on partners who have already built networks. That is how you can build more models and networks.
    1. Best use of resources – resource configuration.  Should you go and rent a building or work through agents?
    1. Identify core competencies – What are the skills, knowledge, abilities, expertise and attitude available for supporting all other pillars?
    1. Networks – You cannot work in isolation.  Which partners are you going to collaborate with?  Trying to dominate the whole value chain speaks to unjustified enrichment at the expense of other actors.

Some of the fundamental considerations in agribusiness models

It should be about capturing everyone.  Start with early adopters who can assist you in refining as you go.  Do not dream of creating wealth if you are not creating wealth for others. Starting with others builds a sustainable base for your wealth.  From early adopters you are able to refine your financial strategy. Most business models have too many messages which end up confusing potential clients. Concentrate on a core message and few benefits.

If tobacco farmers who come to the market once a year get preference for cash from banks, what about traders who are in the market throughout the year and drive food markets?  That ignorance is counter-productive because it lures many farmers into tobacco, leaving other potentially lucrative commodities.  Why don’t banks enable traders to also get cash when they need it?  That is why traders end up locking their money in the market with their relationships with farmers.  They know that once they bank it, the money will be given to external value chain actors who are not interested in agricultural markets.

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

If acronyms were a solution, poverty would be history in many African communities

Almost all development interventions into Africa are framed into acronyms. eMKambo will not give examples because there are far too many acronyms to mention and you know what we mean. Although they are designed to make programmes easy to remember, most acronyms turn development interventions into slogans. As if that is not enough, acronyms have not become embedded into African idioms or metaphors through which Africans have traditionally filtered ordinary ideas into knowledge routines.

if-acronyms-were-a-solution-poverty-would-be-history-in-many-african-communities

Failure to gauge readiness levels

Condensing programmes and projects into acronyms has masked the need to gauge a community’s readiness for a new intervention. The underlying assumption in every new community project is that communities are always ready for what comes from outside.  Yet in reality, readiness may take much longer than three years, at which point some programmes will be phasing out. African communities are not always waiting for new projects but continue innovating and coping with challenges whether new programmes come or not. Sometimes old knowledge prevents new knowledge from coming into the community.  It takes keen interest to make sense of that situation. A lot of resources have been wasted and continue to be wasted due to unwillingness or inability to figure out whether communities are ready for new projects/ideas/concepts/knowledge and practices.

Toward knowledge readiness indices

eMKambo is more than three years into identifying and codifying contextual readiness indices for agricultural communities. A critical question in this process is: What is the minimum level of readiness for farmers and specific value chain actors to understand principles and potential outcomes of an agricultural intervention? Without thorough understanding of readiness levels, it is easy to waste resources since adoption may not be achieved. Gauging readiness also implies understanding what people are currently engaged in, sources of knowledge, capacity to unlearn and accommodate new knowledge.

African communities have been exposed to too many ideas, mindsets and approaches from diverse sources including NGOs and politicians such that it is a mistake to assume that they will simply jump for any new idea immediately. It may take more than two years for readiness to seriously kick in. A related question is: How do we figure out the market’s readiness for new commodities or new finance? Acronyms cannot answer such a question, neither are they effective in creating awareness about a development programme’s principles and potential outcomes. They are not vehicles for skills or knowledge acquisition because that requires experiential learning.  That is why a readiness assessment index becomes very important.

Filtering community knowledge into engagement

Knowledge is most useful when it can be translated into meaningful community engagement and that goes beyond acronyms. It means communities have to be adequately informed in order to take part in a much longer and meandering path for increasing the quality, impact, and effectiveness of knowledge-driven community engagement. People may have all the information but that does not translate to community engagement without intentional efforts at brokering relationships.

A fundamental part of developing a community’s readiness index is building local people’s skills and tools in identifying the most relevant and credible evidence for their context. Whether communicating among themselves or making their case to policymakers and prospective funders, it is crucial that communities are confident in assessing and using relevant sources of evidence. Generating high-quality evidence is a community effort and is the result of everyone’s willingness to ensure members are fully equipped with the information they need. Rather than be passive recipients of what comes from outside, community members have to actively engage in the production and sharing of evidence.

Farmers and communities are not mere recipients of information

A community’s ability to evaluate the quality and credibility of information is becoming more important today as information sources are continuing to increase. It means they have to continuously update their evidence using their own individual and collective learning skills. Very few development agencies focus on strengthening communities’ ability to critically assess the information they receive. Instead, they continue pushing information to communities irrespective of readiness to receive and absorb such information. As a result, acronyms are forgotten as soon as the programme ends and communities go back to their routines and knowledge rituals.

When high quality evidence is available, farmers and communities can develop stronger awareness of the implications and risks associated with their potential choices. In this regard, the key imperative identifying and understanding what constitutes appropriate evidence and how to put that into practice.  In an era in which the availability of information is no longer a problem, African communities should be assisted to use credible sources of evidence.  Every time information is provided to farmers, it needs to be logical in structure and clearly communicate objectives and outcomes rather than be too general.

When farmers and communities are appropriately engaged in information generation and dissemination, they can facilitate professionals and researchers’ understanding of their needs.  In most cases, acronyms hide more than they should reveal in empowering communities. On the other hand, local knowledge sharing routines and rituals in most African communities are designed to enable heart to heart communication among all community members. That is how trust is built and community solidarity is enhanced. Rather than sticking with acronyms, developments actors can use these community approaches to reach more formal results faster, with less resistance to change. Each farmer or community member has a unique way of combining wisdom from diverse sources.  That is why an individual farmer absorbs knowledge from an agronomist, animal scientist, nutritionist, engineer, economist, environmentalist and many other professions and still continue to remain sane.

Charles@knowledgetransafrica.com  / charles@emkambo.co.zw / info@knowledgetransafrica.com

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

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