Market literacy is more important than financial literacy

Market literacy is more important than financial literacy

Financial literacy has gained prominence as a necessary intervention in most developing countries. However, what has become clear in most agro-based African countries is that market literacy is more important than financial literacy because the market provides the broader context in which financial literacy can be understood.

While almost everyone can grow crops or keep livestock, very few people are literate enough about market processes to be able to earn incomes that sustain their agricultural operations. This is because dynamics in agricultural markets go beyond what is taught in farming as a business courses or what is written in text books that are used in schools or colleges.

The power of literacy about market processes

In most cases farmers and value chain actors lack critical literacies on market processes. Ideally, such literacies should start at harvesting when farmers should carefully think about how to handle commodities in ways that will meet the needs of different markets (formal and informal markets). This is will prevent cases where the majority of farmers who take their commodities to African mass markets like Mbare in Harare or Makola in Accra have no idea who they are going to meet and how the commodities will be received. 

Farmers should also strive to know operating hours for different markets as well as shifts in those operating hours depending on seasons and other factors. For instance, most African farmers mass markets open around 4:30 – 5am and close between 12 noon and 1pm so that farmers go back to the farms on time. Usually the wholesale market sells to consumers what will have been hoarded from farmers. There are also instances where the retail and wholesale markets operate concurrently. However, shorter trading hours for farmers have a bearing on the number of farmers who should be in the market per day as well as volumes that should be brought by those farmers.

Knowledge around measurements and packaging

Measurement and packaging is often used by middlemen to get more commodities from unsuspecting farmers for less money. That is why farmers should be aware of different types of measurements and packaging used in the market before they bring commodities.  For instance, in Zimbabwe, more than 45% of potato pockets are now sold from Mbare market.  There are specialists who import and sell much cheaper than formal companies.  They are the same pockets used to pack onions, butternuts and garlic. Plastic polybags are used in the market, mostly by vendors wherever they do their business to pack chilli pepper, okra and other commodities.

Although there are companies which produce sacks, Mbare handles more than 50% of the 50kg bags in circulation, all types, some new and others re-used. Companies that import bran, flour and feedstock often dispose of the sacks which end up in Mbare. Popular measurements are sacks called Saseka or Semia. Like most packaging, choices for saseka and semia where informed by vendors of butternuts and cucumber. When these vendors tried to break bulk from 50kgs into heaps they discovered that the 50kg bag contained less commodities and as they looked around they stumbled on the 62kg saseka which landed itself very well to breaking bulk, heaping and other forms of repackaging that happen in smaller residential markets. The other influence came from transportation where it was discovered that given that transporters charge per bag and not per entire load, the 50kg was expensive to transport although it contained fewer commodities. 

Another permanent feature in mass markets is the wooden crate. The introduction of the wooden crate into the market was driven by communal tomato production but are gradually being replaced by plastic sandaks.  The 8kg wooden box is also targeted at low income consumers who cannot afford large packages. No one is researching the possibility of coming up with an alternative container that can replace the wooden box and of smaller weight.  Manufacturers are not investing in research and development and the market has not strongly expressed the need for that to happen.  However, the wooden box is slowly moving out as most communal farmers engage with traders who are bringing 30kg plastic crates to the farm as standard measurement. The nature of the product exchange at the farm is replacing the role of the wooden box.

Understanding market processes is key for policy formulation and enforcement

When financial institutions lack literacy on market processes, chances of financing over-subscribed commodities and agribusiness models are very high. That is why financial institutions should finance the development of robust information and knowledge ecosystems around agricultural markets.  It is not enough to invest in piece meal corporate social responsibility initiatives mainly designed for marketing or self-promotion. On the other hand, in order to come up with the right market policies, policy makers should be adequately literate about prevailing market processes.  / /

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Potential for youth employment through making livestock feed from urban agriculture

Potential for youth employment through making livestock feed from urban agriculture

While the majority of youths in African countries are still interested in white collar jobs, a monthly salary or wage, agriculture offers new platforms for young people to participate in creating their own employment. These opportunities extend from communal to urban farming. The growth of urban agriculture has been driven by the need for urban dwellers to meet household food security in response to the increasing cost of food commodities and loss of jobs.

Adding value to urban farming by-products

Good rainfall seasons always reveal how urban farming cannot only be source of food security but a strong foundation for youth employment as well as a source of livestock feed. However, most urban agriculture skills have largely been on producing maize and other crops like legumes and small grains. As urban farming gains momentum, there is scope for adding value to by-products such as maize husks and other crop remains like what happens in farming areas where crop remains are turned into livestock feed. This is also how urban youths can tap into indigenous knowledge on adding value to urban agriculture.

In rural areas, value addition of grasses focuses on grazing and thatching. Rural communities know that if they feed cattle with natural pastures, the cattle will be strong enough to provide draught power and milk which is a rich source of nutrition.  Cattle and donkeys have remained a major source of draught power. With healthy cattle and other animals, farmers get good harvests which guarantee food security. Bumper harvests also provide sufficient mashanga or stover which is preserved as cattle feed for use in the lean winter season.  Another bonus is manure from the livestock. 

Making livestock feed in cities

Using the same technology and systems that have sustained rural agriculture for decades, urban youths can add value to urban agriculture through:

  • Making basic stock feed from maize stalks in several urban fields. Maize production has increased in African cities like Nairobi, Addis Ababa, Kampala, Maputo and many others following good rainfall seasons. 
  • Making hay from grasses found in open areas, along roads and streams.

Products from the above two activities can have ready market in dry regions where climate change is negatively affecting the availability of livestock feed throughout the year.  One of the issues is that in most rural areas, grasses and maize husks as well as other crop residues have multi-purpose uses. Good grass is used for thatching houses while maize stalks have a short period for cattle and mainly consumed while still in the field. By harvesting mashanga and grasses, youths will clear dangerous areas and minimize incidences of theft especially against women. Local authorities and development organizations can be approached to provide resources for committed youths. Both young men and women can champion this initiative that has high potential for generating income.

Connecting urban and rural youths

The above efforts can be linked with rural youths who can be assisted to set up feedlots at community level. Development agencies like the FAO and others focusing on livestock value chains may be convinced to support the intervention.  Currently, stock feed is competing with human food security. While maize is used as stock feed for elite livestock producers who can afford such feed, the majority of rural farmers feed their cattle on natural grass and crop by-products. That is why it is important to promote the use of by-products from urban agricultural activities for producing stock feed.  Bringing cheap stock feed from urban agriculture will minimize cattle diseases while increasing productivity as cattle will be fed closer home unlike travelling long distances for pastures.

Once centers where stock feed is produced are known, people will bring mashanga just like some people are taking paper, bottles and other materials to recycling centers. This is also how feed for goats and sheep that are often kept in stressful urban conditions in cities without feed by traders while waiting for buyers. Some youth can end up planting crops and grasses that are good for preserving wetlands.  By-products from the shelling of groundnuts and maize roasting will be aggregated and taken to drop centers where they will be picked and taken to stock feed manufacturing sites.

Eventually, knowledge gained from making stock feed can be transferred to farming areas where farmers will learn how to make feed while youths scout for markets in dry regions.  In most cases, regions where crops do well due to high rainfall lack cattle and that means there is always abundant plant by-products like mashanga which are badly needed in dry regions where livestock do better.  Local authorities can also be assisted to build business models around stock feed manufacturing since they own most of the land on which urban agriculture happens.  / /

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Using agriculture and natural resources to decolonize parliamentary debates

Using agriculture and natural resources to decolonize parliamentary debates

Except in Burkina Faso and Uganda, parliamentary debates in the majority of agro-based African economies are completely disconnected from issues that affect ordinary people daily. Ideally, Members of Parliament (MPs) from production zones should be conversant with issues in their constituencies to be able to articulate the situation convincingly. Unfortunately, that is not the case. 

Strengthening the role of Members of Parliament

Members of Parliament are key policy makers whose offices should be the hub for generating, processing and consolidating socio-economic knowledge and information in order to contribute to policy development or review.  In most African countries, the participation of MPs in parliament is not guided systematically so that they are able to package their presentations into policy. The kind of knowledge and information they should bring to parliament is not clear.   

If there is an organized way of gathering, processing and packaging knowledge and information, the speaker of parliament would facilitate thematic areas to be dedicated to specific sessions.  For instance, MPs would be requested to go and look at how to handle a bumper harvest in their constituencies and gather information that would be turned into powerful parliamentary discussions.  Since MPs come from different regions, information from diverse constituencies would easily be harmonized at national level into strategies that inform policy. Lessons would be drawn from short-term and medium-term strategies that will ultimately feed into a 3-5- year policy.

MPs are the bridge between parliament and the grassroots and that makes them true knowledge brokers.  As they gather, process and package information from the grassroots, they can present this to parliament portfolio committees, for instance, on issues related to agriculture and food security.  The office of the MP should not be too political to the point of excluding knowledge from alternative sources that should contribute to local development. Most MP offices are incapacitated with only a secretary when they should have experts in economic, social and development issues. These officers can also become watch dogs for government departments like agriculture and can also contribute their insights into the national budget processes.

Turning parliament into knowledge cafes

To enrich the process, there is need to capacitate political structures so that they are able to broker political, economic and social knowledge and information. The speaker of parliament should chair and facilitate dialogue from different themes unlike the current situation where most motions raised are more of witch-hunting as if seeking clarity when some have already shared incriminating information behind the scenes. A thematic area will guide conversations better unlike cases where most parliamentary debates focus on fault-finding and finger-pointing.

Due to lack of proper knowledge-based systems, most MPs only feature when campaigning, during which time they are not basing their campaign messages on the contribution to policy formulation but making false promises which are difficult to fulfill individually.  Some end up using their own resources to buy votes.  On the other hand, due to lack of knowledge, most voters end up voting for MPs with businesses although they know nothing about developing enabling policies that empower self-determination.  Some MPs end up claiming that they are bringing food aid to communities.  It should not be the role of MPs to look for donors who can provide food aid to communities that should be capacitated to produce their own food. MPs must strive to make policies that awaken people to existing opportunities and add value to abundant resources.

Need to let go of colonial institutions and systems

A major challenge is that most African countries that went through the colonial experience ended up adopting colonial systems at Independence. They did not examine how they could integrate pre-colonial structures into the modern African contexts without losing the past.  The role of leadership is to respond to followers and their contexts. Currently, the majority of the population do not understand the roles and meanings of adopted structures.  They know the role of a chief and a local village head but if you ask them about the roles of the Councillor, Member of Parliament, District Administrator and CEO of a Rural District Council, they are not sure. Ordinary people know more about government departments that provide them direct services. These include agricultural extension services, local clinics and offices where they get national identification documents. 

When people who should benefit from policies do not understand roles of different policy drivers, that is a big knowledge gap because ordinary people are the implementers of policies.  As if that is not enough, most government structures overlap in ways that increase confusion among ordinary people.  For instance, pre-colonial African countries used to rely more on traditional structures like chiefs but now, although chiefs are still available, it is not clear what they are really supposed to do as well as where their roles begin and end. In most cases chiefs deal with agricultural issues, justice issues, health issues and many other domains.  However, within the same community, some justice issues go to the magistrate’s court.

The transition from traditional leadership to modern adopted colonial structures has been fraught with gaps and no smooth pathway.  Who has more power and how are their roles defined, for instance, between the Chief and MP?  These leaders need clear TORs.  More clarity is also needed between the councilor and the headman.  More confusion has been introduced through new boundaries of wards and constituencies on top of boundaries of each chiefdom. A constituency can straddle several wards and two or more chiefdoms.  / /

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Why each agricultural food commodity needs a solid profile in the market

Why each agricultural food commodity needs a solid profile in the market

The COVID19 pandemic has provided sufficient reasons why agro-based countries should not wait until there is a crisis to invest in data collection, analyses and sharing. Given the extent to which agriculture is a baseline for most African economies, the value of agricultural data is increasing daily. If organizations working in the agriculture and food sector do not come together to share and manage data, they will not be able to create meaningful value individually.

The power of commodity profiles

Almost every domesticated crop and livestock has an agronomic profile in terms of how it can be produced. However, beyond crop and livestock census and production factors, the most fundamental but undervalued details are market profiles for each agricultural commodity. This is important because agricultural commodities participate in a competitive environment and, like any other product, areas of improvement should be identified towards meeting customer expectations. It is important for farmers to know market profiles and performance of commodities that they produce. Unfortunately, most farmers focus on production and productivity but lack information on market-related profiles and performance.

Know thy competitor

Farmers also need to know competitors of their commodities (very close substitutes that compete with what they produce) because any change in the price of their commodities in the market result in significant change in demand of the same commodity as consumers move to or from substitutes. When farmers reduce a price for a commodity that does not have close substitutes, such an action has no influence on demand because consumers have no other option.  Conversely, in cases where a commodity has very close substitutes, when farmers reduce prices, they tend to attract more customers from the close substitutes. Examples of close substitutes are leafy vegetables like Covo, Rape and Tsunga as well as sweet potatoes and yams (madhumbe) which often compete for customers because they are very close substitutes.

Know thy companion

It is also important for farmers to be aware of complementary commodities that are demanded in combination with other commodities. For example, carrots, peas and green beans are complementary commodities which often move together. The same applies to cauliflower and broccoli.  Rather than just producing cauliflower, it becomes wise for farmers to produce broccoli together with cauliflower because these are demanded as a combination. Once you find a market for broccoli you have found a market for cauliflower.

Extending these issues to nutrition

Developing thorough market profiles lays the foundation for examining the extent to which agricultural food commodities that substitute or complement each other in the market have potential to do the same from a nutrition perspective. When that is known farmers will be persuaded to produce commodities that nutritionally complement or substitute each other throughout the year. After consolidating the finer details, next steps should include mapping major production zones in order to align production zones within supply chains. As supply chains are smoothened, market-related challenges are also addressed automatically in ways that take farmers to the next level like from mass to formal or export markets, acquiring new knowledge in the process.

The need for strong links between farmers and markets saved by middlemen cannot be over-emphasized.  Across many African countries, farmers see middlemen coming to buy goats and other livestock in bulk but they never ask where their goats are being taken to and what are they going to be used for? Several underground markets exist but there is no mechanism for farmers to access such markets. That is why indigenous small livestock animals are still being marketed through informal channels although demand is rising.

Unless data on these trends is collected, consolidated and shared, such information and knowledge will remain hidden. One of the issues is about diverse measurements used in rural areas where crops like maize are usually measured in scotch-carts which are then converted into tons by formal knowledge systems. On-farm yields are measured in number of scotch-carts not tons. Such details can eventually be the basis for comparative advantage trading between districts or communities as fluid data shows what is abundant or lacking in different communities or districts.  / /

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