The power of clear role definition in African food systems

COVID-19 has revealed the importance of understanding roles of different actors in Africa’s food systems. When roles and responsibilities are unclear, smallholder farmers are exposed to conmen.  For instance, in Zimbabwe farmers are losing produce to unregistered buyers. The situation would be better if all buyers were registered and the trading of all agricultural commodities was properly regulated.

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Due to lack of coordination, there is so much overlap and duplication of roles.  Farmers need value added services and these can come from knowledge brokers. There should be an institution whose core business is knowledge brokering and consolidating knowledge in ways that show overlaps in service provision.

 

Role of the Reserve Bank: Farmers and other value chain actors think the reserve bank and ministry of finance in each African country should have a budget for information or knowledge gathering and processing if it is to really unlock the potential of agriculture and food systems.

Farmer unions: While their role seems clear, it is still confusing when considered in the same breath with other service providers.  Since unions are membership-driven, they should become a local hub for information dissemination to their members.  This can be their main value added service and they can be a conduit between their members and other service providers and markets.

Agricultural marketing authorities: These should regulate brokers and service providers in the market.

Agritex extension services:  Their role should shift to monitoring farmer activity at grassroots and providing generic information, mainly for new farmers or those getting into a particular commodity for the first time. For learning purposes, extension officers can ensure knowledge barriers are  lowered so that a farmer can obtain the basics before becoming an expert.  Most farmers, particularly those new into a particular commodity, may not know what they need to know.  Self-learning works where farmers have acquired enough basic knowledge to know what they need to know.

Associations: Ideally information should travel from the farmers/associations to brokers to buyers/processors/end-users.  Associations can provide vital information required by markets. Ideally commodity associations can be built in the framework of farmer unions.

Knowledge brokers: As a way of controlling costs that farmers may end up incurring, knowledge should facilitate information movement between informal markets and processors who often find it difficult to consolidate information in terms of what volumes, quality and types of commodities in the market.  Markets also find it costly to get information from the production side, especially for specific commodities. The broker can consolidate all this information and share it with all actors including marketing authorities who can use it for policy review and crafting responses to COVID-19.

Chambers of commerce:  These should have sectoral representations from farmers unions/associations, manufacturing, input suppliers, equipment manufacturers, etc.

NGOs: These should focus mainly on social enterprise so that vulnerable groups are not left out of socio- economic activities and interventions.

Responding to a dynamic environment

All the above categories of institutions are targeting the farmer. However, if a farmer is to belong to an association, farmer union or chamber, what services does a farmer get from an association which s/he cannot get from a chamber of commerce?  There should be levels of membership and service access.  An association should provide well defined services different from what can be obtained from a chamber or marketing authority. If these roles are not neatly defined, farmers will continue losing through membership fees.

Given than the benefits of belonging to one category are not clear, farmers end up trying to belong to all and thus ending up belonging fully to none. Farmers who used to produce major staples like maize had no reason to worry about market information because prices were set by the government for the entire season. In addition to new farming dynamics associated with horticulture and other high value commodities, farmers have to keep monitoring prices and other changes.  This is where ICTs like mobile phones have potential to provide solutions beyond just calling, short message service and Whatsapp groups, some of which are leading to information overload due to lack of fresh content.

 

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

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

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

Reimagining a new socio-economic fabric for African informal economies

Lockdowns as a major method for containing COVID-19 has undoubtedly destroyed social fabrics that sustain most low income economies. While governments have tried to soften the pandemic’s blow by providing cushioning allowances and other social safety nets to vulnerable members of society including vendors,  Mukando or Stokvel and other forms of voluntary and savings clubs will no longer be the same. Vendors and other low income earners who live from hand to mouth are wondering how they are going to repay loans they had taken before the pandemic arrived.

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Social safety nets will not be able to cover ordinary people’s coping mechanisms. Where economies were functioning normally, many farmers, traders and other entrepreneurs were busy servicing loans taken from banks and Micro Finance Institutions. What is going to happen?

Importance of careful business profiling

The biggest challenge for policy makers is navigating difficult trade-offs between promoting public health and stimulating socio-economic revival while competing for limited resources. Widespread informality and information asymmetry in most African countries makes it easier for government to mistakenly subside what is in abundance and miss sectors that need critical help.  For instance food distribution remains an unsustainable option when it is better to provide resources to communities so that they can produce their own food in gardens, wetlands and production zones.

Teasing out all these issues requires careful profiling of people, communities and available resources. A biggest headache for countries like Kenya and Zimbabwe where the informal economy employs more than 80% of the population is how this economy can be re-opening during the lockdown and post-COVID19. The importance of careful profiling of economic actors in the informal economy cannot be over-emphasized. The following is how a detailed and meaningful profile will look like for each actor:

Profile element Justification (why it is important)
Personal details  
Name and sex Name is about identity. Who are we dealing with?  In the final analysis, sex reveals the extent to which the informal sector is dominated by women, for instance.
Age This has economic implication for business. What has been the impact of closing businesses on youth in response to COVID-19? What is the impact on the elderly pensioners?  How many young people have become unemployed due to the lockdown?
Marital Status COVID-19 has had a different impact on the married, unemployed single mothers and widows.
Household Size Household size has an influence on the pace at which small enterprises can recover from the pandemic. For most SMEs, more than 90% of the business income is more of a salary for the household.
Level of Education This has a bearing on the introduction of financial literacy and provision of technical skills.  How many graduates and school drop outs are in the informal sector?
Home Address (Location) Where do informal traders and SMEs stay? If staying in Epworth, why do they prefer selling to Mbare? What are the business factors for staying in Epworth and doing business in Mbare? This is a description of the ecosystem.  While policy makers may want to be directed by availability of land and by-laws in allocating work spaces, traders and SMEs know what should be considered in setting up a business.  They know the behavior of their customers and target market.
Mobile Number This is becoming a key unique identifier.
Business Information
Business Name and Location Where is the business operating from?  This assists in mapping and revealing the concentration of SMEs.
Is the premise a. rented from i. private property ii. Council property. owned c. home This will assist in assessing risks. If one is renting at a private property, does the by-laws allow or property owners are just taking advantage of desperate SMEs. In most countries private property owners have become more of tax collectors. What plans can be put in place to bring commodities closer to consumers and de-congest Mbare? How can some premises be combined into industrial parks that accommodate street vendors and those operating from home? If you chase street vendors you are saying where they bought is also illegal.
Year business started This provides landscape in terms of experience as shown by years.  Are SMEs growing? What is dominating in terms of years?  What is the age of the business? How old is the SMEs?  If an SME has been running for 20 years but policy makers still do not recognize it, there is something wrong with government policy not with the SME. One cannot continue to be called informal merely because s/he has not been given works space or there is no supportive legislation. For instance what company registration is needed for brick molding? Youth enterprises should not be called projects but enterprises.
Average monthly sales How much is a SME contributing to the economy? Such information will provide a basis for clustering. It will also lays the foundation for creating a growth path. If someone has been in business for 20 years but sales are going down, it could signal lack of adaptation or existing knowledge has reached a limit.
Number of employees: a. full time b. part time This is a key component of economic growth.  By closing SMEs, how many families have been affected?  Any support required may not just be for the business but enhancing employment creation.  Job losses need to be accounted for as SMEs may not be able to sustain full-time employees post-COVID19.
List of assets and estimated value This shows production capacity and contribution of the SMEs to national economic growth.
Do you have any running loan? If yes state amount and lender? What is going to happen to enterprises that had acquired loans pre-COVID?  Their reputation with financiers is likely to get sour?  If more than 60% had loans, how are they going to be repaid?
What kind of support does your business currently need? Provide details This is critical. Most countries do not have fluid needs assessment management systems for the SMEs sector. In most cases there is an assumption that SMEs need loans when they probably need knowledge and skills.  Some have their own knowledge and should not be locked in five day training courses. Others are always learning from each other and can produce items without having gone to college.
Equipment As technical people, SMEs know what equipment is lacking.  In clustering SMEs, policy should be informed by existing type of equipment or come up with special grants that can enable SMEs to import appropriate equipment. A supply chain for equipment can anchor rural industrialization with no need for every aspiring entrepreneur to visit the capital city for everything.

Clustering as a success factor
The above profile is critical for clustering business according to services and products. The SME sector should work hard to classify commodities towards clustering. Profiling is important for systematic formalization. The informal sector is already in motion and most SMEs in urban centers are now very dynamic. If government policy says passports can be applied online from today, everybody will apply. Likewise, SMEs should be able to take advantage of ICTs by filling in their profiles online and send completed forms digitally without travelling to towns and cities for such simple processes.

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

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

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

Rediscovering the value of indigenous knowledge through COVID-19

By restricting movement between rural and urban areas, there is no doubt that lockdowns in African countries have weakened domestic trade and social fabrics that sustain most low income economies. Contrary to views from policy makers, African economies are not sustained by international trade but domestic commerce and social capital. COVID19-induced lockdowns have made it difficult for urban dwellers to get bags of Nzungu, Nyimo and Mumhare from parents in rural areas as long distance buses have been stopped from operating. Neither can they taste favorite indigenous fruits like tsvubvu or herbs like Zumbani and others famous for fighting flue which is common in winter.  However, that is where the bad news ends.

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Going back to the roots

Failure to transport perishable commodities to cities is beginning to inspire a new sense of self-reliance among farmers and rural people. So important has become traditional ways of preserving food that most farmers are wondering why they were always rushing to sell their valuable commodities for a song when they can wait and add more value. On the other hand, urban consumers who have previously over-depended on imported food systems to the point of associating mufushwa with poverty are beginning to look for it to fill gaps created by absence of fresh vegetables from rural areas. Those in the fresh meat and fish industries are dusting their knowledge on drying beef into chimukuyu which after all is said to be superior because it does not cause gout. Pre-COVID-19, the promotion of indigenous food was labelled informal food vending – of Mutakura, Mahewu, road runners and Mazondo.

Drawing lessons from COVID-19, if African policy makers had promoted a very strong culture of food preservation, the impact of the pandemic would be softened.  More than 90% of our major staples in Africa are rain-fed which means they are seasonal. The same applies to indigenous vegetables like nyevhe as well as fruits like mawuyu, nyii, tsvubvu and masawu which come in abundance leading communities to suffer economic losses.

Unfortunately policy makers’ notion of preservation is just about storage and warehousing yet food should be warehoused when already preserved. African grandmothers made different kinds of mumhare and mufushwa to last until the next harvest. Sweet potatoes were preserved in pfimbi and ripening of fruits through kupfimbika remains a very common practice today in Zimbabwe, for instance. All that knowledge is now due for assessment and improvement although preservation technology is yet to fully embrace indigenous knowledge systems.

No need for preservatives

A major attraction for indigenously preserved food is that it does not have preservatives which are said to be causing different kinds of cancers that are claiming the lives of many eminent Africans. There is a strong emerging view that if properly done, preserved indigenous food can go through the retail supply chain involving agro-dealers who are an integral part of processed food distribution chain.  Farmers have observed that the growth of the modern food chain like fast foods is not contributing much to the growth of smallholder farmers. Recipes and spices used by fast food outlets are meant to promote producers from source countries. For instance, recipes and spices that go into pizzas and niche restaurants are not produced locally as a way of preserving global supply chain from which fast food chains originate.

Upgrading and simplifying indigenous value addition knowledge

Developing countries have not looked at appropriate technology that can simplify value addition knowledge especially traditional knowledge such as on drying mufushwa and brewing mahewu. Consequently there has not been much preservation and quality improvement of mufushwa and other indigenous foods into ready to eat products for better domestic nutrition and export. At national or regional level there has not been meaningful efforts to add value to traditional knowledge on preservation methods.

There is still overwhelming preference for imported knowledge like canning beef and beans as well as tomato sauce which process requires hitech. Africans who grew up in an agrarian society remember producing their own baobab yoghurt through mixing with cow milk while herding cattle.  It is possible that such indigenous knowledge was poached and commercialized.  Now it is not clear who is coping who in producing yoghurt. Mahewu was brewed using chimera but now some companies are producing mahewu but have kept the original sources of knowledge invisible.

For how long are African food systems going to remain locked in specific areas or regions?

This is another fundamental questions triggered in people’s minds as they grapple with the consequences of COVID – 19 on their food systems. Suddenly they realize how their food systems are still locked in specific rural areas and production zones and why they need to develop supply chains through which different production zones can enrich each other. Another telling observation is that more than 50% of the urban population lack rural knowledge. Little knowledge of what urban people are aware of is obtained through informal markets like Mbare in Harare and many others across African cities. However, Zumbani and Mufandichimuka cannot be found in supermarkets where the majority urban dwellers shop.

A lot of knowledge gaps exist between the young generation and local food systems. By not cultivating such knowledge, Africans are killing future demand for indigenous food. The young only know about pizza and Ice cream but very little about sources of food. In terms of demand it is not about young people knowing the plant but developing taste and appreciating home-grown food and associated advantages. Another mistake being corrected is packaging food in modern measurement like calories, kilograms and alcohol content, among others. “Our own knowledge systems should empower us to desist from expressing our food through medicinal properties because the food end up being associated with diseases or illnesses. We should elevate the nutritional side associated with wellness although we are aware of medicinal properties in the food”, one farmer from Mutoko district of Zimbabwe told eMKambo.

 Combination of medicine and nutrition

Farmers added that nutrition and medicinal properties are closely linked in the African sense and knowledge systems. However, many lamented the fact that when food is expressed as medicine through modern science it is taken like a drug although it has preventive elements. On the other hand traditional foods like small grains are mostly promoted from a nutritional perspective while their medicinal angle is not elevated. When food is a combination of nutrition and medicine it is consumed as a package as opposed to imported practices where Vitamin A tablets can be consumed separately.

These are some of the discussions happening between farmers and traders trying to continue trading during and after COVID-19. While the majority of African mass markets may have been closed physically, trading of knowledge and real commodities is continuing underneath as part of economic self-reliance and keeping indigenous food trading vibrant.

 

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

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

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

COVID-19 shows symbiotic relationships between formal and informal economies

Among other revelations, COVID-19 has shown the extent to which formal and informal African economies do not work in isolation but are more like Siamese twins. African economies are structured in such a way that there are no distinct supply chains that can be locked down without affecting entire ecosystems. For instance, agriculture is tightly interwoven with the non-food informal sector which consume more than 70% of the food, constituting the key demand side for agricultural commodities.

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Given that less than 10% of the demand for food comes from the formal sector, opening that sector without opening the informal sector does not improve agricultural incomes.  One of the most important decisions in opening economic sector while others remain closed in order to contain the spread of COVID-19 should focus on stimulating the buying power. Suppressed buying power affects smallholder farmers more because there will be few buyers for the commodities, leading to enormous losses. That is why it is important to link the safety net system with food markets so that farmers earn income that will enable them to go back and grow more food.

The power of data and evidence

While mass African markets generate a lot of fluid data about the movement of food, African countries do not have institutions responsible for collecting and interpreting such data to inform policy decisions during pandemics like COVID-19 and other disasters. If such an institution existed it would show how much food is consumed by the transport sector, health sector and other non-food sectors. Careful analysis would reveal the implications of opening up one economic sector while keeping others closed. It would also show how opening the formal sector without opening the informal sector compromises demand because it cripples the buying power of the pro-poor majority, mostly those who depend on the informal sector that apparently drives the economy. Evidence would also show how social safety nets are not the solution on their own unless cash meant for social safety nets is plugged into the food supply chain so that poor people do not spend their little money looking for food.

Technology should be playing a more meaningful role

Most African countries still lack technologies that can help them to collect or process information and data. By now, digital technologies should be producing maps for diseases like Malaria, Cholera, Food and Mouth Disease, Fall Army worm and many other diseases that have made Africa their home. Such maps would provide wider sets of fluid data, demonstrating linkages between disasters or particular diseases with food systems. Unfortunately, African ministries of finance do not set aside specific budgets for gathering such important fluid data which remains fragmented in different government departments, local communities and development organizations.

Technology-driven data and evidence can demonstrate why progressive farmers and traders should be interested in mastering trends that contribute to their growth pathways.  If you are a potato trader, it is not enough to know only about that particular commodity and competitors. Understanding the entire ecosystem is more fundamental because fruits like oranges and Nyii can have an indirect but very serious impact on potatoes. Appreciating the role of data and understanding one’s business performance is critical. Banks are realizing that a bank statement is no longer a sufficient instrument for evaluating a business’s performance especially given that companies that have not been operating for months due to COVID-19 have not been banking or generating income but virtually in limbo.

Importance of post-harvest policies

COVID-19 has also revealed the extent to which African countries need post-harvest policies as opposed to too much focus on inputs provision, mechanization and irrigation issues at the expense of post-harvest issues. For a very long time, farmers and traders have been finding their own way around post-harvest challenges, developing their own economy with no policy guidance. Information and knowledge has remained in silos, for instance between farmers and traders who build a close relationship among themselves.

Information asymmetry, barriers to market participation and negligence of market infrastructure has remained the order of the day for decades. Policy makers have never questioned how food finds its way to urban markets from diverse farming areas.  Likewise, few people have been curious enough to find out how urban consumers get potatoes, carrots and other commodities. Very few policy makers know that to operate on full throttle, formal businesses depend on the informal economy for much-needed oxygen without which the whole formal economy cannot breathe. Most food and beverage formal companies would not be getting cash if they did not work closely with the informal sector in the form of tuck-shops and street vending of food. For instance, in Zimbabwe a big sausage making cottage industry is an extension of the informal sector on which many people are depending for food and income.

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

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

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

Reflections on costing of agricultural commodities – thanks to COVID19

In addition to disrupting food supply chains, COVID-19 has presented a pricing headache for smallholder farmers in African countries. If government directs supermarkets to revert back to pre-COVID19 prices they can easily do so because they have a tradition of keeping records on stocks and prices.  On the other hand, mass markets will not be able to do the same because there is no institution responsible for keeping records and tracking prices. Neither can local authorities like municipalities provide such records because their main mandate is collecting revenue through providing trading space without bothering to collect commodity prices.

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Worsening an already bad situation

PreCOVID-19, fluid interaction between supply and demand in mass food markets at scale assisted farmers and all value chain players in setting prices.  For instance the demand side was made up of specific urban populations which guaranteed uptake for huge volumes of commodities from smallholder farmers. In fact there was a neat match between demand and supply.  However, following lockdown induced by COVID-19 commodities from farmers started flowing to cities through middlemen since the majority of farmers have been restricted from coming to the market in huge numbers.

This scenario has destroyed the previous playing field where demand and supply used to meet in ways that determined prices fairly. Where some farmers try to price their commodities when selling locally, it is difficult unless they are aware of prices in other areas they are competing with in producing the same commodity. Due to the lockdowns, food supply chains are being controlled by opportunists who are determining prices that can be given to farmers desperate to get rid of perishable commodities and prices that consumers desperate for food have to pay. Consequently, there is a big difference between the selling price and the buying price. While farmers are getting very little for their commodities, consumers are enduring very high prices.  Opportunists are the ones reaping abnormal profits. These challenges can be addressed if African countries build robust food supply chains in which every actor’s role is clearly defined.

A case for contextualizing costing in the agriculture sector

Agricultural extension methods in Africa are yet to design dynamic costing models taking into account all commodities produced by smallholder farmers in diverse production zones, especially for informal farming systems and their ecosystems like informal markets. Costing is still based on formal farming systems informed by inputs like fuel, chemical fertilizers, herbicides, cost of water as determined by ZINWA, gazetted labor costs based on representations by National Employment Councils and General Agricultural and Plantation Workers Union of Zimbabwe (GAPWUZ) or their equivalent in other countries.

There are still no formulas that take into account major production cost components for smallholder farmers and informal markets. For instance, the majority of smallholder farmers still depend on natural resources and their own resources for producing commodities. Such resources whose costs have not been calculated by extension agents include communal land, livestock manure, rainfall, family labor or Nhimbe, retained seed, draught power and many others.  Farmers still struggle to convert most of these inputs into monetary value for easier costing.

It is a huge anomaly for African economies not to have costing models for smallholder farmers and informal markets in which the majority trade.  That is why most smallholder farmers have remained price takers for decades.  Usually when farmers sell their commodities, their pricing is based on the gravity of challenges they wish to solve not how much has been invested in agriculture production. A typical question in the smallholder farmer’s mind is: “How many bags of groundnuts or maize can I sell to meet school fess worth $1000?”  In this case, selling commodities is not related to farming as a business but solving external needs like school fees, meeting basic needs like sugar, cooking oil or travelling a long distance to attend a funeral.  Any surplus income from trading commodities is by chance.

Closing a huge knowledge gap

Lack of statistics from the mass markets is a big knowledge gap that every African country should strive to close. By not collecting statistics from the expanding Micro, Small and Medium Enterprises sector of which mass markets are a key component, African countries are under-valuing their economies and piling pressure on the fiscus to provide social safety nets. The best brains in African economies have remained concentrated on the production side, for example agronomists, equipment engineers and economists, among others. Conversely the market and commodity handling side has been left to illiterate and semi-illiterate traders whose interest is mainly to maximize profit.

Such traders can only deal with food and markets to the extent their knowledge allows them to do so. Given the knowledge-intensive nature of food and markets, most traders cannot be expected to come up with solutions beyond their levels of knowledge and expertise. For instance, trader may not see anything wrong in selling all commodities using sacks, wooden crates and baskets yet that is a major avenue through which farmers lose income.

 

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

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

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

 

Tracking or tracing has never been so important – thanks to COVID19

Before COVID-19, the need for privacy was gaining momentum across the world particularly in the global North. People were beginning to frown at the intrusive nature of technology and digital gadgets are notorious for tracking people’s movements and whatever they are doing. In addition to social distancing, contact tracing is one of the phrases popularized by COVID-19 as a key method through which the spread of the pandemic can be kept in check. Post-COVID-19 many people will most likely agree to be tracked wherever they go, especially when given the choice between privacy and staying alive.

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If people can be tracked why not food and agricultural commodities?

The importance of tracking has always been promoted in the name of food safety.  However, very few players in the food industry have been taking it seriously particularly in Africa. Many traders and businesses have not been too keen to share information on the pretext that their information is private property. COVID-19 has pushed the boundaries of what can remain private information as previously secretive traders are opening up in order to cope with market disruptions.

eMKambo is leading innovations around tracking food supply chains as part of dealing with challenges brought by COVID-19 on African food systems. Tracking is the core of building resilient food supply chains as volumes of commodities from each farmer or production zone have to be known as well as numbers of traders and transporters. Additional benefits include:

  • Enforcing fair trading practices and pricing.
  • A market-driven or guided production system that minimizes gluts and waste of inputs. Gluts negatively affect GDP by making resources from production not realizable in sales.  Communities and countries end up under-valuing their agriculture and commodities.
  • Where all players are recorded, tracked and known, government is able to introduce tax collection along the supply chain. Everyone should be proud to pay tax. Farmers cannot complain about poor roads when they are not paying tax when they know that money for road rehabilitation comes from tax.
  • Tracking supply chains enables local authorities to manage cities, towns and growth points efficiently as they know accurate numbers of business people, traders and vendors. This enhances local planning in terms of vending sites, regulation and increasing revenue streams. Most African local authorities have been operating without a system for years.
  • Financial inclusion – The food supply chain system will act as a collateral system, enabling financial institutions, input suppliers and other service providers to feel confident to work with registered economic actors who can be tracked. This will address perennial headaches like side-marketing.
  • Food safety and traceability – The supply chain will simplify introduction of traceability systems which are key requirements for exports.
  • Devolution – The supply chain speaks directly to devolution by enhancing local investment in production zones.
  • Tracking the supply chain as an anti-corruption tool – The supply chain will address corrupt practices that have bedeviled the agriculture sector for decades at the expense of the farmer who has continued to surrender his/her commodities for a song.
  • Behavior change – The supply chain will introduce new behavior among value chain actors.

It takes a pandemic or national disaster for people to stop doing certain things they have become used to.  However, those who do not adapt during a crisis become irrelevant. COVID-19 has presented opportunities for developing countries to value proper transportation, storage, processing and utilization of food. All that cannot happen without systems and infrastructure for tracking who is doing what, where, why and how?

 

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

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

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

COVID19 – an opportunity for decision makers to know how African food markets function

African countries are called less industrialized economies for genuine reasons. If the majority of people in a country depend on more than 80 agricultural commodities and less than 10 can be turned into processed products, such a country is obviously less industrialized. For instance in Zimbabwe only maize meal, flour, sugar, wheat flour, magarine, tomato sauce, baked beans, milk and beer are some of the few processed products. It just shows agriculture and food cannot be considered an industry and commerce thing but a food systems domain under the ministry of agriculture especially during uncertain times characterized by pandemics like Corona virus.

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Besides absence of processing and value addition technology in most African countries, the nature of most African foods makes industrial processing a non-starter.  What processed products can an African country produce from okra, magaka eminzwa, beetroot, tsvubvu, nyii, nzimbe, nzungu nyoro, nyimo nyoro, madhumbe, sweet potato, mazhanje and many other diverse commodities that are part of seasonal African food systems?  Such food have to be consumed or nutritionally used in a fresh and raw state.

Using mass markets to ensure food supply during uncertain times

During times of crisis like the current Corona virus that has spread across the world like wildfire, securing food systems should take a granular view of local reality and recognize the fact that mass markets are still the backbone of African food supply chains and systems. To that end, countries that decide to declare a 21 day lockdown should carefully think about food supply and demand pathways during and after the lockdown.

While manufacturing has an important role, it is not yet the backbone of most African food systems. Relationships and trust are the bedrock of African mass markets and have enormous influence on food availability as well as price setting. It is not just about forces of supply and demand but sometimes food travels through kinship-based relationships, among other avenues. That is why it is important that as part of understanding the supply chain, decision makers become aware of different contractual arrangements through which food moves from farm to fork.

Contracts between mass markets and smallholder farmers

The following are major types of contracts in African mass markets like Mbare in Harare and others:

  1. The farmer just comes to the market after producing commodities using his/her own resources. Although the farmer relies on information from other farmers who visit the market, this is an ad hoc approach which, for some reason, is most popular and constitutes 40% of the trading systems.
  2. The farmer gets into a marketing contract with a trader who comes to collect commodities when ready at the farm and remit the farmer’s payment after selling the commodity. This is the second popular arrangement (20%)
  3. The farmer agrees with the trader who comes to pay for the commodities at farm gate, guided by prevailing market prices. In most cases the trader will have agreed with the farmer to ring-fence the commodity through paying a deposit (Hallo).  This accounts for 10% of the entire contracts in the market.
  4. The farmer produces through sponsorship or partial-sponsorship from the trader in the form of inputs like seed, chemicals and fertilizer (15%).
  5. The farmer produces commodities with guidance and knowledge from the trader in terms of shortage periods for particular commodities and other critical factors. When s/he brings commodities to the market, the farmer does not get into the market but gives commodities to the trader who pays the farmer promptly. The trader goes on to sell using his/her networks while the farmer goes back to do what s/he is good at   and the relationship continues.  This accounts for 15% of the contract arrangements and overlaps with others like

Major commodities produced under the above contractual arrangements include tomatoes, butternuts, cucumber, green beans, carrots, onions and, water melons especially from dry regions.

Large scale commercial scale contracts between farmers and mass markets

  1. The farmer produces using his/her own resources and traders come to fetch from the farm. Commodities that are traded under this marketing contract arrangement include potatoes, cabbage, tomatoes, green mealies, onion, butternut, cucumber and sweet potatoes.
  2. The farmer produces and the trader secures the commodity with a bit of money to ring-fence against other buyers. The trader can put some inputs and get paid after selling.
  3. In addition to assisting the farmer to produce through market-driven guidance, the trader sponsors the farmer through inputs and pays for commodities at the farm gate. This arrangement builds strong relationships between the farmer and the trader.
  4. The farmer produces and gives commodities to the trader who has a market stall in the market. The trader pays the farmer as commodities are sold.

Both large scale commercial and smallholder contractual arrangements are not based on legal documents but trust and relationships built over time. Value chains built through these contracts support specialization.  Each farmer ends up doing what s/he is good at in order to satisfy demand and orders. The market and related contractual arrangements create pathways for generating and sharing knowledge. This avoids cases where one farmer comes to the market with no idea of who to talk to and how prices are set as well as sources of knowledge.  Unless policy makers understand some of these issues, it is easy to disrupt food systems in times of crisis like the COVID19 and expose the majority to malnutrition.

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

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

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

Clear benefits of containerization in African Agriculture

Post-harvest handling and storage of agriculture commodities remains the biggest challenge for the majority of African smallholders. Unfortunately most solutions being pushed are designed to get surplus commodities moving quickly from farming areas to the market and consumers. Solutions that enable farmers to hold onto their commodities and sell profitably rather than be pushed to sell by the condition of the commodity are largely missing. This is where containerization become a solution.

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There is a limit to the quantity of commodities a farmer can store at home and that determines production levels as each farmer ends up producing in line with storage capacity.  Even where conditions are suitable for doubling productivity, farmers hesitate to increase production because storage capacity cannot be equally doubled. On the other hand, most smallholder farmers keep their food and harvests in their kitchens, living rooms and bedrooms. The condition of such commodities can only be good for household consumption, not the market.  Commodities stored in houses and small granaries are obviously too little even for the local market.

Commodities than can benefit from containerization

Setting up containers at village level will help in aggregating commodities and provide a sense of the collective volume of commodities from one area. Commodities that can be stored in containers include the following:

Onions – Apart from drying, storage is one of the main challenges around onions.  That is why supply is so erratic in many Southern African countries including Zimbabwe.  Poor storage leads to rotting, loss of quality and reduced shelf life.

Butternuts – During gluts, butternuts can sell for 22c/kg and in periods of scarcity they go for 72c/kg.  This variation is not good for the consumer and the market although it may be good for a few farmers who may have butternuts during scarcity periods. Containerization and warehousing can solve a lot of these supply and demand mismatches.

High value commodities (red, yellow & green peppers) – Some of these may not be produced in winter and during off-season their price can go as high as $2/kg.  Containerization and storage will ensure an even flow of these commodities into the market, avoiding wild price variability.

 Carrots – These can also be stored for consistent supply.

Fruits (apples, oranges and peaches) – These tend to run out completely and can be stored when in season for release when out of season.

Dry crops (groundnuts, sugar beans and others) – These can also be stored for release as and when the market wants them, especially when better prices start prevailing. Prices of sugar beans tend to go up towards the rainy season as most people purchase them for seed.

Sweet potatoes –Given that most smallholder farmers store this crop in the field, storage facilities can quickly release land for other uses or for preparation processes like liming so that the next crop is planted on time.

Small grains – These can also be stored for both human and livestock consumption.  An increase in the production of indigenous chickens is driving the demand, hence production, of small grains.

Enabling market readiness

A critical look at storage will give African agriculture a different picture.  It should not be just about addressing insects and rushing commodities to the market. In most cases, commodities are produced when the market is not ready. Therefore containerization is a critical stage in enabling market readiness. The majority of farmers do not have storage facilities or sheds and do not have money to invest in such important infrastructure.

Volumes of commodities produced by smallholder farmers make it less cost effective to invest in storage or take the few commodities to the market individually. Unfortunately, most investments in post-harvest technologies by governments and development partners have focused on grain storage like metal silos, ignoring other foods such as horticulture that are a critical part of the food basket.  Investment in infrastructure will help producers, consumers and many other value chain actors.

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

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

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

Using infrastructure to unlock the value of African agriculture

African agriculture requires banks with a vision to invest in infrastructure which can be used by farmers to anchor production in ways that simplify loan repayment. For instance Vision 2030 should have financial products that speak to a 10 year horizon. Financing inputs is just like providing consumer loans which do not have a growth path. In the event of a drought inputs and all resources are wasted as farmers are not able to repay loans.

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There is no longer any doubt that African agriculture requires long-term finance focusing on infrastructure starting from the markets. A fundamental question is: What are the infrastructure needs of the market. In much of Africa, more than 90% of commodities from smallholder farmers go through informal markets. Consequently, infrastructure needs of smallholder farmers who are the majority of food producers in most African countries should be tracked and addressed.

The power of feeder roads

In as much as financial institutions and government programs can provides inputs to distant rural areas like Gokwe, Hurungwe, Muzarabani and Rusitu, among others, in the case of Zimbabwe, poor road networks in these areas have negative implications on loan repayment as commodities produced by farmers fail to reach the market in a good state. Financial institutions should invest in road infrastructure including aggregation facilities in production zones. That investment can eventually evolve into a strong financial model built on numbers. Given that many smallholder farmers do not qualify to get big loans as individuals, investment in good feeder roads can enable tracking of commodity volumes, supply corridors and their performance. This is critical in forging pathways for financing value chains.

 Infrastructure as foundation

Building a firm foundation for transformative agriculture should see financial institutions investing in dam construction and borehole drilling at farmer level.  This can also be a pathway for weaning off farmers to be self-depended and release pressure from depending on loans or unfavourable contract farming arrangements.  Starting with inputs and operational costs when there is no foundation is not the correct way of investing in agriculture. Productivity is driven by infrastructure which enables farmers to utilize water, pastures and other resources.  A strong production sector is driven by sound infrastructure.

Institutional arrangements for financing the Bottom of the Pyramid

To the extent traditional forms of collateral have become a barrier to financial inclusion and unlocking the value of African agriculture, the Bottom of the Pyramid can only be financed through institutional arrangements or under an institutional umbrella like mass markets whose contribution to economic growth and nutrition security is now beyond question but are not being supported financially.

There is definite need for sustainable financing models to support informal markets as public institutions. Acting as a broker, such an institution can provide technical assistance to market operations along business lines as more of project managers. On the other hand, there is scope for strengthening relationships between local authorities like municipalities and banks.  While some local authorities could be accessing bank loans to buy water treatment chemicals, they are not getting loans for revamping food markets which are viable sources of revenue.

 

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

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

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

Which sources of information can transform African Agriculture

All over the world, information sources are no longer just important for journalists. African policy makers who really want to transform their agro-based economies cannot afford to remain silent about their sources of information. There is emerging consensus to the effect that information from academic institutions, private companies and development agencies is not enough for transforming agro-based African economies. The need for alternative sources of information has never been greater.

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How reliable is information from formal institutions?

In as much as it may be easy to get information from formal institutions there is no longer guarantee that such information sources provide their best ideas and strategies for transforming African agriculture. To the extent, the private sector is often reluctant to get some of its strategic information into the public domain, policy makers have to devise creative ways of accessing useful information from private actors.

On the other hand, the majority of African economies are not yet formally institutionalized but dominated by SMEs, informal markets and smallholder farming communities. It follows that if formal informants constitute about 25% of agricultural transformation information sources, 75% of the most useful information is within smallholder farmers, SMEs and other actors who are not part of formal institutions. While it may be easy to get information from commercial farmers as opposed to smallholder farmers who are not formally institutionalized, how can African policy makers tap into informal sources of information and enrich their policies with undocumented initiatives and experiences from different ecosystems?

For instance, it is important to know how financial inclusion is understood by informal markets and smallholder farmers. While banks may think financial inclusion is about opening branches in farming areas, farmers may understand financial inclusion as wealth creation through interest on savings in a bank.  A useful starting point is understanding existing relationships between financial institutions and farmers if financial institutions are to make a financial difference to ordinary lives.

The role of rapid assessments

Rapid assessments are some of the under-rated methods and pathways for collecting information from economies that are not formally institutionalized.  That is how we can get information on mechanisms through which SMEs, smallholder farmers and marginalized communities are surviving and coping with climate change as well as absence of reliable financial systems.  A rapid assessment opens avenues for accessing fluid information that can be used to develop local communities and continuously review strategies in a fluid manner than can be achieved through static documents.

Every new intervention is getting into communities where things are already happening. Rapid assessments pave pathways for continuous sharing of information and knowledge. Farmers who contribute information at the start of the intervention want to continue contributing to what makes sense in solving their challenges.  A product can only impact the market if it is informed by potential customers.  A cue can be taken from African informal mass food markets where packaging and measurement is informed by clients who indicate their preference for different types of measurements such as baskets, boxes, bundles, 20l tins and many different measurements and packaging material depending on commodity.

Much of the content from rapid assessments should constitute experiences of farmers and other value chain actors in different ecosystems. In some cases, government needs technical assistance in conducting rapid assessments because some of the information collected is private property that has to be converted into business models. Weaving business models is often a domain for private organizations and social entrepreneurs. For instance, early warnings from the market can only be generated by private actors like SMEs and processors.

Based on a competitive mind-set, some private companies may share knowledge selectively. However, public sources of information like mass markets can provide valuable information because they have a much broader exposure to many actors and their impacts.   While the public sector has more data than the private sector, such data is often in unusable and inconsistent formats.

It is through rapid assessments that policy makers can see that smallholder farmers cannot produce solely for value chains and manufacturing but other important linkages have to be understood.  Other enabling factors for smallholder farmers to thrive, not just value chain approaches being pushed by NGOs and the private sector become visible.  Policy makers will also begin to realize that it is not just about yields but the entire ecosystem. While development agencies may want to move smallholder farmers from agriculture to manufacturing, local markets demonstrate their relevance for social cohesion and local food security. Unless policy makers broaden and deepen their sources of information this evidence will remain invisible and unused.

 

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

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

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