The value of demand and supply data in agricultural value chains

The value of demand and supply data in agricultural value chains

Integrating data on demand and supply of agricultural commodities in both formal and informal markets can reveal interdependencies between diverse agricultural commodities.  For instance, it is through data collection and analysis that policy makers, development agencies and potential investors can see the relationship between fruits, tubers and vegetables.

The fact that commodities in the market compete for the same consumer budget, it means a sudden increase in the supply of fruits can affect the demand for vegetables as consumers shift a large portion of their budgets from vegetables to fruits which will have become more affordable. Likewise, a sudden over-supply of vegetables can affect the demand for tubers like potatoes which often substitute leafy vegetables in some households. An oversupply of particular vegetables can result in consumers shifting from fruits to vegetables, thus pushing some fruits into the luxuries categories.

 How data fuels transparency and risk assessment in agricultural value chains

Without data on supply and demand, it is difficult to ensure greater transparency in the distribution of agricultural incomes and wealth among value chain actors.  Contractors and middlemen may continue to reap more rewards from agricultural commodities at the expense of farmers. By collecting data and analyzing it properly, it becomes possible to see profit centers or nodes along supply chains. One of the reasons financial institutions are risk-averse against the agriculture sector is because there is no data for reliable risk assessment. When data is available, financial institutions can easily see over-subscribed agricultural commodities as well as track the movement of commodities to pre-empty side-marketing.

The increasing power of ICTs

By limiting physical movements, COVID19 has raised the profile and role of ICTs like mobile applications as a major solution in agriculture-related data collection, communication and transacting. Farmers who were previously reluctant to embrace ICTs have started mastering Open Data Kit (ODK) and other digital tools. The demand for smart phones has also surged as farmers strive to stay virtually active in agricultural value chains. Government departments responsible for agriculture and ICTs have started spending more on digital technologies, with this trend set to continue intensifying.

After decades of conducting crop and livestock assessments manually, extension officers are fast jumping onto digital data collection platforms and tools.  This has slashed the cost of collecting data as well as time spent collecting data. Instead of spending months cleaning and analyzing data, statistical agencies are now able to do the work within a few weeks and producing results while data is still fresh.

Improving data management and processing is already improving the quality and speed of information flows across all agricultural supply nodes such as production, harvesting, grading, transportation, marketing and value addition. Data is beginning to reduce cases where farmers spend more time in the market, competing with each other to sell the same commodity. Situational awareness among farmers and other value chain actors has increased through integrating information from diverse sources.

Addressing fragmentation

Digitally-enabled data collection and analysis, is addressing fragmentation of information and decisions within farmers, traders, transporters and other value chain actors. Various non-standardized databases among different agricultural service providers like input providers, supermarkets, mass markets and processors will soon be a thing of the past in many African countries. Consistent data collection and analysis will empower policy makers to strengthen their relationships with value chain actors. Ultimately, governments will be capacitated to creatively engage with ICT Service providers in order to carefully consider issues related data security and sovereignty. This will enhance the capacity of farmers and other value chain actors to know how data collected from them is used and for that purposes.  / /

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Written by Charles Dhewa

Charles Dhewa Agricultural Knowledge Broker Charles Dhewa is the CEO of Knowledge Transfer Africa, which he founded in 2006 after realising that agricultural value chain actors in developing countries needed a knowledge broker to keep reminding them of what they could be forgetting and under-estimating. Working at the intersection of formal and informal agricultural markets in Zimbabwe, his organisation has setup a fluid knowledge and information platform called MKambo which tracks, trends and ensures agricultural value chains are driven by knowledge, technology and innovation. Charles is always clarifying opportunities and influencing policy through his thought leadership blog ‘eMKambo’.

Write to us : eMKambo