The value of domesticating the Consumer Price Index and other imports

The fundamental role of agriculture and SMEs in many developing countries should by now have seen local economists inventing better ways of capturing and expressing economic conditions and inflation. It is clear that imported concepts like Consumer Price Index and Producer Price Index developed in the North cannot adequately represent economic dynamics in agriculture-driven low income countries.

charles dhewa

For instance, it is no longer debatable that African agriculture requires a dynamic pricing index which takes into account different production zones, seasonality, diverse transportation methods and many other factors. Farmers in different production zones cannot have the same prices for maize and other commodities. For example, farmers producing soya bean and maize in sandy soils use more inputs like fertilizer than those in heavy clay soils. It means these farmers have different costs of production. On the flip side, farmers in sandy soils may use less diesel than those in heavier soils. Distances to market should also be factored in so that farmers in particular areas can know the type and size of transport they can hire cost-effectively. Such information is also critical for transporters, processors and financiers.

Market dynamics

Like most industries, every informal mass market in developing countries has an invisible cartel of price experts who set prices of commodities based on historical trends (not codified) and commodity supplies into the market which give signals of the volumes in farming areas. However, cartels in mass markets do not often know or care about the cost of production enough to consider such costs in setting prices.

Circumstances under which farmers need real-time pricing intelligence vary and include cases where a buyer suddenly shows up on-farm ready to buy the commodity. In such cases the farmer wants to verify some prices with eMKambo and other institutions in big urban markets like Mbare in Harare before making a decision to accept a price being offered by the buyer. In some cases, a farmer may have quietly brought his/her commodities to the city using public transport or his/her own transport and now has to verify market pricesbefore taking the commodity to the market or entertaining buyers. All these circumstances need accurate real-time information.  Historical information is not helpful.  That is why eMKambo has advanced in setting up a dynamic pricing index taking into account production costs and market dynamics.

Beneficiaries from a dynamic price index

Besides traders, beneficiaries of price information include consumers and vendors who need to leave their homes with enough money.  If customers and vendors understand the price, they are able to budget correctly and buy more to the benefit of traders. Commodities also move fast in the market when customers and buyers come prepared.  Negotiation time in the market is reduced as the marketing process becomes very fast. Traders from other markets who often come to buy from markets in capital cities become aware of how much money to bring for hoarding commodities as well as the size of transport to be used.  If a buyer from Masvingo hears that the price of cabbage has gone down from $3 to $2/head he will adjust his budget to accommodate other commodities needed by customers.

Ultimately, transparent price information benefits every value chain actor. Farmers deserve to know how much the trader is going to make on their sweat and how much is taken by other costs like transport, loading, packaging and others. Price transparency through a price index reduces abnormal profiteering by traders at the expense of the farmer. If vendors get tomatoes from Mbare at $17/crate, how much do they charge their consumers in high density areas?

Why this is important

In spite of accounting for more than 70% of the food, economists in developing countries have totally ignored inflation in the mass market, preferring to focus on inflation in relation to basic commodity food basket. Yet it is important to figure out the percentage increase in the price of inputs and transport to the market so that farmers can know if market prices have changes in correspondence to input costs.  Many farmers incur losses because this issue has not been clearly articulated. Using figures, farmers can see how lack of resonance between input costs and market prices is leading them to incur 30% losses.

It is critical to track inflation around the agricultural commodity basket different from the CPI for basic staples like cooking oil and sugar.  Formal companies are recording and doing their costing and are using such details to collude in fixing prices of basic commodities. But there is no such thing for farmers who should be assisted in mastering market-related budgeting.  Farmers are mostly affected by external factors beyond their control and these include cost of inputs, labor, fuel, water, equipment and many others.

Beyond improving quality and economies of scale as well as benefitting from shortages in the market, farmers do not have control over most external factors. In the market, farmers are given a price even if their costs of production and transporting have gone up by 20%.  They are pushed within a certain price range. The price index will give farmers bargaining power and can be able to see that is the production price is going up by 5%, prices offered by the market should be adjusted upwards weekly. Farmers can also know how increases in the price of petrol contributes to increases in commodity prices in the market.

A system should be put in place to reveal some of these issues and impact on the market or consumers.  Inflation around food markets is very important because it assist farmers to plan and make projections. A farmer who harvests crops when inflation is going up by 20% and earns $100, the following month the farmer will earn less than $90. To remain with $100 the farmer has to charge $110. If the farmer sees the price of inputs going up by 5% monthly and expect to buy inputs in three months, the inflation will be 15% and the farmer will not be able to afford inputs.

How consumers are affected by absence of a Price Index

Prices in the mass market are rarely not cost-driven or cost-based but depend on arbitrary decisions.  People just decide how to sell without a clear basis in ways that anchor future increase or decrease of prices based on supply.  For instance, the cost of producing a cabbage head is 60c – 70c of which the bigger component (15c-20c) is the cost of seedlings.  A farmer who decides to price at $1.50 – $2/head on-farm is doing so on what basis?  How did s/he arrive at the price?  Why should a producer increase prices by a 200% mark up?  What is the standard used for setting mark-ups in the agricultural industry?  When a trader gets cabbages @ $2 and sells @ $3 – $3.50, this drives inflation.  Everyone makes a decision on the highest prices. The farmer is not making decisions on costs and the trader is also marking up arbitrarily. They are all guessing and that means the consumer is not charged fairly. Such decision-making is an inflation driver in the whole country.

Supply and demand is over-shadowing costing principles as determinants of arriving at costs.  How can we use costing as the main determinant? Disorganized supply and demand causes all these challenges.  Traders and farmers should know the base price irrespective of supply.  That is why for tomatoes it is important to play with the number of fruits and not sell using kilograms. All parties should control the extent to which prices can fall before everybody begins to incur losses. This important process and analysis should be conducted at food systems level as opposed to isolated individual farmer level.  Banks and other financial institutions can use the price index to track and manage Non-Performing Loans.

 

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

 

How can the predatory nature of development efforts be tamed?

Many rural communities in low income countries are fed up with the predatory nature of external development initiatives. According to the WordWeb dictionary, a predatory animal is one that lives by catching and preying on other animals. Predatory tendencies also include living by or victimizing others for personal gain. When development agencies move into rural areas, local communities often have no reason to suspect that such agencies have a predatory agenda. Suspicions start rising when development agencies continue to recycle the same ideas under different names when rural people who continue to wallow in poverty in spite of millions spent in their name by development agencies.

emkambo

Any development agency that has spent more than three years in one community has become a predator by becoming part of the local community furniture. A simple comparison between rural communities that have been working with NGOs for years and those that have not been working with NGOs reveals marked differences in terms of autonomy and self-determination. Very few communities have transformed from subsistence to commercial agriculture through development interventions. Instead, it is communities that rely on their own resources such as remittances that have a sustained presence in agricultural markets. Those supported by NGOs often stop producing surplus commodities for the market as soon as a development project comes to an end. To the extent development agencies use rural communities to get money and not fully develop those communities, such predatory tendencies are worse than money laundering. Unknown to development agencies is that rural people desire the good houses, health and nutrition associated with cities.

Predatory rural finance

Predatory patterns are more prevalent in rural finance initiatives. While it is said funding targeted at improving rural finance has increase, the majority of rural people remain outside formal financial ecosystems.  In fact, the majority of rural dwellers associate banks and other financial institutions with exclusion rather than inclusion. Many smallholder farmers, traders and rural entrepreneurs have nasty experiences with financial institutions. Some of the financial inclusion models have been introduced as contract farming arrangements where farmers receive inputs and other support services instead of real money.

Innocence and decency has proven fatal for most borrowers as they soon realize that private companies contractors working in cahoots with financial institutions and development agencies will have calculated their gains using tools whose underlying parameters are not made visible to farmers.  “When you think you have done what is needed, you are asked to provide more information. After signing off every document, most promises are not met and you are compelled to supplement agricultural activities with your other income sources.” The above lamentation is now common across Africa.

In several conferences and workshops, commitments to avail finance that can catalyze other sources of finance at the local level have been announced and documented for decades. There are even dozens of books and university courses on rural finance but on the ground the situation has remained the same. Local innovations like village savings and lending associations are not adequately used to anchor and stimulate local economies. Instead, such bedrocks of self-reliance and resilience are being cannibalized into mobile money through ICTs. This does not improve financial circulation in the local economy as  most of the money is drawn away to big cities, leaving the local economy resorting to traditional barter systems.

Harnessing multiple sources of evidence

If development agencies and financial institutions shunned predatory tendencies, they would be able to assist local communities in generating more income and better lives from local resources. They would realize that there is a difference between charity and transforming local communities through agriculture. They would also not waste money on policy making because they would know that policies can only go so far because they are tied to political regimes. No matter how brilliant a policy document is, a new political regime would dumb it and creates its own policies. They would learn from experiences in Mozambique where a development agency that thought mobile money was the solution was surprised. A local mobile network operator in Mozambique had even distributed 5000 mobile phones for free to a local community hoping people would automatically embrace mobile technology for financial inclusion. It soon became clear that local people preferred visiting the market and chatting to each other than just communicating through short message service, Whatsapp or calling over the phone.  Many people also changed sim cards frequently such that they could not be reachable.

Evidence should come from different scenarios and not be aligned with decision-makers’ needs. For instance, while millions of dollars have gone towards addressing post-harvest losses in Africa, food losses are said to be as high as 20% in developed countries, mainly in the form of food that is thrown away into bins and not eaten. This means all people, whether in developed or developing countries need a new attitude towards food. Perhaps the whole world does not have a food production problem but a food handling challenge. Solutions may not just be about policies but changing the way everyone looks at food through institutions, financial means and other positive practices. Post-harvest technologies are never enough because new challenges keep emerging.  Every action must be sustainable.

By treating smallholder farmers and rural people as victims or beneficiaries, most development interventions miss local people’s roles as active economic actors in their own right. Rural people are not just waiting for donations but busy analyzing their options, managing risks and making their own decisions even in the face of information asymmetries and unfavorable policies. When ordinary people finally realize that they have been preyed upon by government departments, financial institutions and development agencies, it becomes difficult to get new ideas accepted. There are limits to living by preying on unsuspecting farmers and rural people.

 

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

Of premature technology and information overload

Hundreds of mobile applications and technology platforms are launched in Africa almost every day, thanks to the promise of digital-fueled progress. Unfortunately most of the platforms (including those owned by famous mobile network providers) are trotted onto the market prematurely before sufficient pre-testing. There is also confusion between a platform, a portal, a Whatsapp group and a mere website. Instead of generating new insights badly needed for socio-economic development in many African countries, the proliferation of platforms is leading to unbearable information overload.

emkambo

Long road to digital maturity

In spite of the hype surrounding platforms, technology hubs and hackathons, these are not yet able to deliver the kind of world-class digital transformation that can fuel productivity and economic growth in developing countries. For instance, digital technology is far from addressing the aspirations, concerns and fears of farmers and entrepreneurs in remote areas. Farmers in marginal communities can only imagine how digital technology can test their soils and water without them taking samples to the capital city where laboratories are concentrated. The same applies to livestock farmers who are still travelling long distances to district or provincial towns in order to get livestock movement permits in the event of selling or buying cattle. Unless digitization addresses some of these practical pain points, it doesn’t matter how many mobile network boosters are set up in rural areas or how many farmers are using mobile phones.

Fragmented value chains

Some of the main reasons for low levels of digitization in African agriculture revolve around the fragmentation of diverse value chains as demonstrated by how individual farmers, traders and other actors focus on discrete commodities. Additional enduring challenges include the long cycles of agricultural experimentation, poor connectivity in rural areas as well as complex ecosystems affected by weather—genetics, nutrition, water availability, soil composition and seasonality, among others. Digital technology development is yet to crack these intricate issues and as a result, the majority of marginalized people are yet to find advantages associated with digital technology. In fact, they remain consumers of external information than producers of local content.

ICTs and power imbalances

Those promoting ICTs are doing do so without considering power imbalances that underpin different socio-cultural contexts and could be increased through ICTs. If farmers and traders become digitally connected, it doesn’t mean knowledge gaps are closed because knowledge is influenced by deeper issues than cannot be addressed by ICTs. For instance, converting information and knowledge depends on people’s capacity to understand, interpret and absorb information that is flowing to them through social media and related processes. Information receivers must possess some cognitive filtering and structuring mechanism to sort out relevant information from irrelevant information. To the extent most farmers and rural people have a deficit in these skills, they accept whatever is sent to them through WhatsApp groups that are mushrooming everywhere.  That is why fake news is now an epidemic.

Need for nuanced reflection on what ICTs can and cannot do

While African governments and development agencies have embraced ICTs and digitization as a catalyst for development, there is need for a more nuanced reflection on the possibility that a focus on ICTs could be preventing broader discussions on authentic local challenges which cannot be solved through ICTs. The increasing faith in ICTs like mobile phones, mobile applications and the internet is an extension of the historical tendency by development agencies to privilege technology transfer as a solution to poverty. Yet in reality, developing countries have several social, political, economic and cultural barriers that cannot be solved by digitization and ICTs. In fact, there is evidence showing that ICTs are exacerbating inequalities in some communities, towns and countries as well between rural and urban areas.

Importance of defining a national digital vision and strategy

It is possible that if deployed properly, digitization can improve the quality of life for citizens by fostering greater civic participation, providing access to information, and offering new tools for health and education. Software entrepreneurs can also present solutions to complex public-policy problems, such as the creation of drought alerts through push notifications on mobile phones. However, successful national digital transformation depends on having a clear vision and defined goals, and then setting priorities. For governments, this means intimately linking digital to public-policy objectives and viewing it as a lever for achieving them. To establish a clear link between its digital vision and public value, each government should consider revisiting the country’s ICT Strategy and aligning it with the country’s current and future needs and priorities. If that is not done, the majority of people will not see the value of ICTs.

 

https://oxfamblogs.org/fp2p/why-we-finally-need-to-face-up-to-information-fatigue-in-2019-and-3-ways-to-do-it/

 

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

Why linking farmers to the market is not enough

In spite of millions of dollars that have gone into market linkage initiatives in developing countries over the past few years, farmers still struggle to sell their commodities profitably. Post-harvest losses have not gone down, gluts continue to alternate with shortages and relationships between farmers and processors have not improved. This suggests market linkages is half the story unless the entire agricultural ecosystem including financial liquidity in different markets is fully understood.

emkambo

The ‘myth’ surrounding farm gate price

One of the critical issues that has not been solved through market linkages is the difference between farm gate price and market price. This is not only vexing smallholder farmers but some of the most sophisticated commercial farmers often struggle to determine their farm gate price in ways that ensure profitability. The notion of farm gate price does not seem to exist in most smallholder farming communities because each farmer may have a different price depending on distance to the main road and local markets, among other factors. Many farmers who call eMKambo asking for prices of different commodities use feedback from such enquiries to try and set their own prices.  This implies farm gate prices are not readily available but externally-determined in ways that expose farmers to manipulation.

Profit-oriented budgeting as instrument of negotiation

Disputes surrounding contracts between farmers and contract companies stem from the fact that contractors have most of the information for accurate decisions making. For instance, they know their profit margins while farmers are not privy to most of these details.  Ideally, market linkage interventions should ensure farmers have their own negotiation instruments which they pull out when negotiating contracts with private companies. Since most farmers do not have information on up-markets and the entire agricultural ecosystem, this fuels their suspicion that whoever comes to buy from them is going to make a killing through abnormal profits.

In an unregulated market, middlemen cannot resist the temptation to take advantage of uniformed farmers. There is need for a partnership model in which profit-sharing models are embedded, clarifying information about formal and informal markets. The open market tends to be more transparent than other markets because everyone can see what is going on. If the price is unviable farmers cannot force a trader to take more than 20 crates of tomatoes.

All contracts should have enough flexibility that takes into account market variations. The time lag between signing a contract and marketing should be carefully factored in. This issue can be legislated to accommodate price variations. For instance, it can be set at between 10 – 30% such that if the market goes down, farmers can receive 10% bonus and if it goes up, farmers can receive 30% bonus. This arrangement should also consider other external factors like inflation, costs of inputs during production and other variable costs. For instance, the cost of labor can suddenly increase and affect the original contract.

Benefits of fluid budgets that accommodate the changing economy

At the moment, it is not known how much a farmer should put in to make a profit in potato production from different production zones.  Budgets should not be generic but tied to specific niche markets like processors, food chain stores or informal markets. Some buyers end up offering low prices due to costs incurred along the value chain.  All elements of production should be put together and scenarios provided, taking into account different elements. For instance, farmers should look at options in case they see viability in providing their own transport, packaging and different sources of labor.

In almost all African countries, crop budgets are set per hectare without looking at other elements that are sources of differentiation. Budgets should be fluid to accommodate the changing economy.  For instance, fuel and electricity costs keep changing and this should be factored in. On the other hand, farmers who do not use electricity to irrigate have different costs from those who do and that translates to different profit levels.

A system of managing, tracking and updating production budgets for different contexts is important. The return on investment (ROI) in each production zone should be clear. Currently, there are no elements or mechanisms for price negotiation or control in horticulture, taking into account issues like distance, road networks and other factors. In Zimbabwe, a budget for Mazowe and that for Nyanga cannot be the same if the commodity end up sold in one market like Mbare in Harare.  However, Nyanga may have superior climate like good soil and technology for potatoes compared to Mazowe, such that even if Mazowe can be closer to the market, Nyanga farmers can still compete and be profitable.  Nyanga may require different inputs from Mazowe in ways that make both places profitable in different ways.

Farmers should be empowered to evaluate information and knowledge for correct decision making. The breadth and depth of existing knowledge networks from production areas to diverse markets should provide a stronger social safety net for farmers. Different markets can provide dependable information nodes and networks where it is possible to know demand patterns of various commodities. Consumers, farmers, transporters, small scale processors, caterers and other actors would not be flocking to informal open markets if these markets were not dependable.

The significance of understanding different transaction modes

Beyond market linkages, classifying niche markets can enable farmers to make sense of different  transaction modes. While the open market tends to prefer cash, different transaction modes have their advantages and disadvantages. A buyer who pays farmers after 30 days gives consumers time to buy. It takes 30 days for traders and retailers to pull income from different consumers and put a little mark-up. The time lag between selling and consumption has to be understood by farmers, most of whom want to be paid immediately and pass on all risks associated with the slow movement of commodities to traders.  The trader ends up waiting for consumers to buy before returning to farmers for repeat purchases.

Why should financial institutions understand these market dynamics?

Financial institutions need to understand these dynamics if they are to remain relevant in agile agricultural ecosystems. For instance, they need to know that aggregators or traders who buy agricultural commodities from diverse farmers and supply in bulk also require long-term finance so that they can sustainably satisfy different niche markets. Such long-term financing should have a component of exploration. A trader should be able to use that money for market research like visiting regional and international markets to find out gaps and needs. Unfortunately, at the moment, most financial packages in Africa do not have a component of exploration and capacity building. The assumption is that the borrower has already done research using his or her own resources yet circumstances are rapidly changing such that continuous evidence gathering will benefit every actor.

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

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

Mobile numbers: 0772 137 717/ 0774 430309/ 0771 859000-5/ 0716 331140-5 / 0739 866 343-6

The seasonal appetite for knowledge demand and use in developing countries

It is not only revenue streams that tend to be seasonal for farmers in developing countries. The demand and use of knowledge also follow seasonal patterns. From leaking market sheds in Mbare market of Harare and makeshift stalls in Mitundu market of Lilongwe to landslides in the land of a thousand hills (Rwanda), Africa is an entirely different continent in the rainy season compared to winter. Just-in-time knowledge is critical in dealing with these situations as opposed to just-in-case knowledge.

emkambo

During the rainy season, most African rural areas are completely inaccessible due to poor road networks and broken bridges. Some roads are turned into rivers as terrains fail to deal with sudden downpours. All these issues negatively affect the demand and supply of food. When farmers and traders are not able to bring food to the market on time, nutrition and incomes among poor consumers are compromised.

 

One engineer per 10 000 people

While some of the common expressions in development include one medical doctor per 1000 patients and one extension officer per 2000 farmers, engineering is one important profession that is not talked about in the same way. This is in spite of the fact that natural resources management at local level is definitely a mix of art and engineering. There have not been noticeable efforts to domesticate engineering into home-grown solutions. Rather than waiting for engineers to come and build bridges, roads and water sources, engineering knowledge should be distilled in such a way that local people can do some of the basic tasks  like diverting water for later use and averting soil degradation. Water harvesting is not enough without the associated engineering knowledge.

 

How do communities know what they know?

People can see the value of engineering and other forms of knowledge if they see it having tangible value in local settings and situations like muddy roads and water-logged fields. This is often when people call up knowledge they could have been filing away during winter. They do not know what they know until desperate situations like flooding in markets and fields demands deep and probing answers. Rainy seasons in much of Africa demand different types of knowledge and other resources. Vehicle break downs are common and some rivers are full for days, cutting entire villages from other parts of the country.

 

Desperate situations induced by the rainy season compel communities not to wait for knowledge or lessons to be volunteered by engineers local people have to go out and seek knowledge. Ideas and lessons compiled into manuals during winter may be found wanting during the rainy seasons, forcing communities to improvise and depend on their previous experiences.

 

The power of scheduling knowledge generation

Food losses tend to be high in summer compared to winter in many African countries due to challenges related to dealing with excessive rainfall. Instead of waiting until the rainfall season presents enormous problems, governments and development agencies should consider empowering communities to proactively seek and identify relevant knowledge on a continuous basis. When knowledge identification and sharing is scheduled, success and failure become components of every activity in ways that avoid big mistakes. Knowledge generation and sharing becomes a clear expectation for the entire community, forcing the community to monitor if the collective expectation is being met. This process also uncovers the knowledge that nobody knows they know, until they start discussing and solving real problems like poor water drainage and land degradation.

 

Ultimately, communities can begin to discover what they know, do not know and half-baked knowledge through answering questions like:

 

  • What are our major local challenges during the rainy season?
  • What are our local “hot issues” in summer compared to winter?
  • What knowledge would help us respond to conditions during different seasons?

 

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

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

Mobile numbers: 0772 137 717/ 0774 430309/ 0771 859000-5/ 0716 331140-5 / 0739 866 343-6

Reducing the gap between formal and informal economies

Narrowing the gap between formal and informal economies remains a big challenge for many African countries. Instead of increasing interdependence between the two economies, in countries like Zimbabwe, the gap between the two economies seems to be widening. As if that is not enough, academia, politics and financial institutions remain detached from society and the informal economy.  For instance, while more than 70 percent of active economic actors are now in the informal economy, this economy lacks finance and enabling policies. The shrinking formal economy continues to be controlled by colonial systems and constraints yet it still gets most of the resources from government and financial institutions.

emkambo

Dominant characteristics of the formal and informal economies

The two economies can be defined by the type of actors who dominate in each of them as shown below:

 

Formal economy Informal economy
Financial institutions – banks.

Contracting companies.

Manufacturing and processing companies.

Food chain stores – supermarkets.

Government institutions like hospitals.

International NGOs on the development side.

 

Micro Finance Institutions

SMEs.

Smallholder farmers.

Informal market traders.

Local transporters.

Community- Based Organizations (CBOs).

 

The above classification clearly defines two economies. While the informal sector constitutes the bigger part of the economy, there are proper pathways for supporting it. Whoever is trying to assist the informal economy faces the same challenges faced by informal actors.

Challenges emanating from colonial systems

As long as developing countries continue to hold onto colonial systems and forms of business, closing the gap between the formal and informal economy towards a hybrid economy will take many years. The following are some of the colonial systems that have to be revisited and contextualized:

  1. Formality continues to be defined by registration with government institutions such as the registrar of companies or with an appropriate department if one wants to operate a Private Voluntary Organization, a Micro Finance Institution or a bank. In a dynamic world economy, formality should not be defined by prohibitive and tedious registration processes. If registration was everything, shelf companies would be doing productive work.
  1. Emphasis on referrals should be re-examined – For instance, asking a loan applicant to get a letter from a previous client or employer is a very old fashioned requirement in a dynamic and fluid economy. It does not make sense to ask someone to get a letter from a former employer because where the employee was doing very well, the employer will certainly not be keen to endorse loss of talent to competitors in the form of knowledge and expertise.
  1. Collateral – It is now evident that although they lack colonial forms of collateral, actors in the informal economy continue to drive the new economy. The knowledge economy demands new forms of collateral. Insisting on traditional forms of collateral is meant to favor actors in the formal economy who have run out of ideas but continue to receive financial support.
  1. Long application and approval processes – There is often no guarantee that loan applicants who go through time-consuming loan application and approval processes will get the funds. The application form is used as the only tool with no consideration for building relationships and trust as part of laying the business foundation upon which funding can then be extended. Everyone is given the same application tools irrespective of different business cycles, knowledge, ambition levels and vision for the future.
  1. Selective quality and standards – Everyone now knows that quality is important in a competitive world. However, where you get a high quality product there are definitely second and third grades. Unfortunately, formal contractors tend to ignore the other grades in preference for first grade as if it is possible for a farmer or SME to produce first grade only. When formal buyers do not provide alternative markets for lower grades, smallholder farmers end up refusing to work with formal buyers but creating their own market (informal) where all grades have a market.
  1. Prohibitive measurements – By stating that they start buying from 30 tons of groundnuts upwards, formal buyers create barriers to entry for smallholder farmers who cannot manage to supply such volumes individually. This requirement creates barriers to internal trade to the advantage of big formal actors who can easily get money from the bank to the disadvantage of small actors who remain marginalized.
  1. Payment modes – Sellers to formal companies are not given choices like payment in part cash. In what is tantamount to a take it or leave it scenario, formal companies insist on bank transfer as part of their policy.
  1. Payment terms – The payment terms are determined by formal buyers whose policy can stipulate that payment is done after 14 days. Even if your commodity is bought by consumers before you leave the supermarket or processing company, you will receive your payment after 14 days.

From business proposals to business cases

In the formal economy, there is still emphasis on proposals, business plans and financial projections irrespective of the fluid and dynamic nature of the modern economy. Unfortunately, by the time you present financials for funding the situation will have completely changed and that means financials for the previous two years may be meaningless is such an environment. It makes more sense to focus on business cases and adapt as things unfold than try to present a proposal complete with cash projections when what’s written on paper changes before the ink has dried.  Creating new legislation and laws which do not exist at the moment will go a long way in increasing overlaps between formal and informal economies.

Easy of doing business

Before considering creating an easy of doing business environment for external investors, it is critical for policy makers in developing countries to enable easy of doing business for internal actors. Bureaucratic systems that are part of the formal colonial economy will not be able catch up with fast and fluid economic fundamentals. That is why formal economic actors are having to rely on prohibitive government policy in order to compete with the informal actors.

 

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

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

Mobile numbers: 0772 137 717/ 0774 430309/ 0771 859000-5/ 0716 331140-5 / 0739 866

Differentiating specialization from monocultural knowledge pathways

While monoculture is mostly understood as the cultivation of a single crop on a farm, area or country, the other half of its definition is the dominance of a single culture, worldview, mindset, set of tools as well as one way of gathering and sharing knowledge. Farmers who think success comes from producing one commodity all the time are addicted to monoculture. The same applies to academies who think formal education is the only source of truth. Fortunately, digital technology is not just disrupting monoculture but increasing ways through which knowledge can be generated, shared and made sensible.

emkambo

There is nothing wrong with farmers and knowledge workers specializing as long as they know who else is specializing. Unfortunately, due to information asymmetry, many African farmers and academics specialize blindly and end up losing potential income and relevance. They are not aware that each market for commodities and knowledge has a dedicated demand for a particular commodity and knowledge asset in terms of how the consumer budget is shared among different commodities. That is why it is important for farmers and traders to know other market players as well as the market’s absorptive capacity.

Knowing the market’s absorptive capacity enables farmers, traders and other actors to determine volumes that can ensure good Return on Investment (ROI) and clearly identify producers who can meet the ROI capacity. Farmers who specialize are usually passionate and have invested their time in producing the best cabbages, potatoes, tomatoes, cattle, milk, apples and other commodities. See-saw production and supply patterns, common in most open markets, is caused by price chasers and band-wagoners who just follow and imitate what the specializing farmers do.

Difference between specialization and monoculture

Specialization is where a farmer puts more resources in a commodity in order to produce and supply the market consistently. Other commodities act as a buffer in the event of uncertainties that can face a specialized commodity. The good thing is that for each farmer there is some element of specialization although the difference is in the degree of specialization. Critical questions include: To what extent does the producer dedicate resources to one or two crops? Some allocate 75% of their resources to one or two crops. Others dedicate 50% to specialized crops while the other 50% goes to complementary crops.

On the other hand, external factors like climatic conditions often force farmers and communities to specialize – translating to a community perspective on specialization. In this case, emphasis is not just on skills or knowledge in producing particular commodities or understanding market prices but adaptation of  particular commodities to particular areas. This is how one agro-ecological area become known for fruits while another becomes famous for small grains or livestock.

The merits of specialization and balancing act

Farmers who specialize tend to enjoy economies of scale and are able to capture a greater part of the market share as well as increase their bargaining power. Specialization is also critical for recognition in the market. Those who specialize create their own niche market that they will serve consistently.  It is not viable to be in the market for a short period and out of the market for longer periods. To address this challenge, farmers can specialize on one or two commodities for the purpose of participating in the market regularly and creating a market niche that can sustain their enterprises. However, in trying to balance different agricultural commodities, farmers have to ensure resources put in alternative commodities are enough to revive the specialized commodity by covering gaps like temporary gluts.

Alternative commodities should sustain the production of specialized commodities in the event of temporary gluts and price distortions. Alternative commodities should not be produced in high volumes to the point where if their prices fall on the market, much of the resources to cover them end up coming  from specialized commodities.  For instance, if you specialize in potato and onion production, you need a plot of cabbage as a fallback position. Any fall in cabbage prices on the market should not result in losses that will eat into a greater percentage of the profit that you should have earned in potato and onion production. Profit from cabbage should be big enough to cover losses that can be incurred by temporary price falls in potatoes and onions.

To maintain presence in the market, farmers should specialize on two or three commodities, definitely not more than four if they are to sustain participation in a dynamic market. Other commodities should support the main commodities that the farmer is known for in the market. The road for specialized commodities should be smooth. It is the role of alternative commodities to build bridges for specialized commodities and smoothen their flow against price fluctuations. This will also enable farmers to maintain presence in the market and generate income from specialization.

Building a case for specialization at community level

In developing countries, specialization should be done at community level as opposed to individual level due different levels of resource endowments at individual household level. For both communities and individuals, the percentage of resources allocated to specialized agricultural commodities can differ since one household may focus on subsistence while the other may want to embrace commercialization of particular commodities. Farmers with other sources of income like remittances may not prioritize subsistence production but try to go commercial.  For a poor family, the greater percentage (90% of $500) of resources can go towards specialized commodities to ensure a strong source of livelihood and food security.  On the other hand, those with alternative sources of income can devote 75% of a greater amount of resources (75% of $5000) towards commercialization of specialized commodities because they want to maintain market participation.

The more farmers produce as a community, the more bargaining power they acquire. Specialization also reveals a community’s knowledge such that gaps and surpluses can be known. After consolidating the knowledge, it becomes possible to arrange it in layers so that beginners can know where to start while experts do not have to waste time delving into what they already know. Without knowledge assessments and layering, development actors end up bringing knowledge that will not be absorbed or used.

At national level, developing countries should coordinate production and all value chain actors to ensure consistent supply and best ROI. Important questions include: What are the substitutes when potatoes flood the market? Which other commodities can be produced in line with available resources?  Which are the major drivers of nutrition?  Monoculture is very dangerous because farmers do not have anything to lean on in the event of market failure at global and regional levels. That is why many African farmers tend to be tied to unfavorable contracts which are more like debt traps. Most export crops like tobacco have reached their ceiling in terms of absorptive capacity and do not have a local market. If the international market collapses all the advantages are wiped off. In a competitive world, it is important for developing countries to focus on commodities for which they can develop market options.

Specializing on commodities equals specialized knowledge

Specializing on commodities is tantamount to specializing on knowledge.  A key advantage of specializing on knowledge is that it translates to high quality of commodities. Jumping from one commodity to another does not guarantee specialization of knowledge and low quality knowledge leads to low quality commodities. That is why clearly identifying and characterizing actors is very important. Farmers have to know each other and coordinate in order to avoid flooding of commodities.  In African informal markets, traders who have been specializing on specific commodities like tomatoes, green pepper and cucumber are known. Others are known for fruits, potatoes, cabbages, sugar beans, poultry, eggs, fish, small grains and many other commodities. In the same vein, farmers should try to be known for two to three commodities that can balance each other or share similarities.

Farmers who try to jump from pearl millet to cabbage end up stretching their knowledge because the two commodities are not closely related.  That is why data collection has to be fluid and not wait for crop and livestock assessments that happen once a year.  When a specialized commodity collapses on the international market, it leaves a knowledge vacuum and creates expectation challenges. Developing countries should avoid specializing on commodities whose market they do not control, for example coffee, cocoa, cotton, flowers and tobacco. On the minerals side, it is dangerous to specialize on gold or platinum whose prices are set and manipulated in western and global markets.

 

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

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

Mobile numbers: 0772 137 717/ 0774 430309/ 0771 859000-5/ 0716 331140-5 / 0739 866 343-6

Asking and answering fundamental questions through informal markets

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

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

Solidifying the aggregation role of informal markets

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

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

Need for middle class markets

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

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

Need for careful characterization of markets 

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

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

Appeal to a broad section of the middle class

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

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

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

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

eMkambo Call Centre: 0771 859000-5/ 0716 331140-5 / 0739 866 343-6

People’s food markets as sources of multiple knowledges

One of the benefits of continuously observing and learning from informal African food markets is an opportunity to update knowledge and see inevitable trends before everyone sees them. In a recent interaction with informal markets in Zambia and Zimbabwe, eMKambo discovered that these markets do not just classify agricultural commodities into luxuries and necessities. There are more than 15 classifications including the following:

  1. Perishables: These are highly perishable commodities and have to be handled gently. Related knowledge is also perishable in ways that mimic the commodities. Examples include leafy vegetables, tomatoes, milk and beef. Unfortunately, informal markets lack appropriate infrastructure for handling perishables.

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  1. Non-perishables: These can stay longer before getting bad and examples include small grains.
  2. Fast movers: These are quickly sold in the market and examples include some of the perishables.
  3. Slow movers: As the name suggests, these stay a bit longer in the market due to various reasons including the fact that they might be considered luxuries from a household budget perspective.
  4. 5. Value-based commodities from an economic perspective: This category includes high value low volume commodities like peas which are sold in kilograms as compared to high volume commodities that are sold in other measurements like buckets, pockets, baskets and crates.
  5. 6. Value-based commodities from a nutritional perspective: Due to their nutritional benefits, commodities like garlic and ginger fall in this category.
  6. Volume-based commodities: This group includes potatoes where volume determines profitability.
  7. Multi-purpose commodities: These have several uses including value addition options. Examples include tomatoes that can be processed into tomato sauce, be used in burgers and fast foods.
  8. Mono-use commodities: These commodities are difficult to translate into several uses. Examples include wild fruits which are yet to be value added as well as sweet potatoes and some legumes like peas whose value addition options are still limited. Such commodities are often quickly out-competed in the market due to lack of multi-purpose uses. A tomato tends to dominate the market because it touches most forms of relish and can be processed into other products. On the other hand, while peas is a high value commodity from an economic and consumer class perspective, it does not present many value addition prospects. Same with butternuts which may have nutritional value but lack value addition opportunities.
  9. Micro climate-driven commodities: These are found in specific micro climates and are unique to that area. There are areas where avocados grow naturally and others like Taveta in Kenya where tropical fruits like mango are produced when other areas do not have such commodities.
  10. Religion-influenced commodities: Examples include pork or piggery. Some religious sects do not want to be associated with pigs while some communities associate pearl millet with witchcraft. This affects market penetration for these commodities unlike a tomato which is consumed by 99% of the people irrespective of religion. Some consumers insist on getting halal meat which means farmers have to fulfil those requirements for such customers.
  11. Social class-driven commodities: Examples are cauliflower, lettuce and baby marrow which are often associated with the high income, westernized consumers. Ordinary low income consumers cannot use cauliflower as vegetable relish as they consider it a luxury.
  12. Seasonal commodities – These can only be available in a particular season.

Seasonality of commodities and the human body

Farmers, traders and consumers also mentioned that the seasonal availability of most local foods is tied to the needs of the human body. Vegetables and fruits that grow in summer are linked to the human body’s nutritional requirements in summer. The human body also requires specific foods in Autumn, Winter and Spring. Chillies, sugarcane and fruits that do well in winter are consumed in winter to keep the human body warm.  The respondents concurred that, perhaps the main reason why some diseases like cancer, diabetes and others are becoming common in African communities is that local people’s bodies are revolting against a new tendency to feed them with food irrespective of seasons. When a food is provided during the time it is out of season, it becomes a poison to the body, according to one elderly farmer in Chimanimani district of Zimbabwe. While some diseases are being attributed to climate change, availing food out of season might be the reason for unexplained itching, fever and wounds which take long to heal.

Food security should not just be about availing nutrition in a pack or refrigerating food so that it is available throughout the year.  Every food has its season when it is supposed to save a purpose. The majority of African smallholder farmers and herbalists are still convinced that the best way of preserving local crops and herbs is preserving forests and ecosystems where they are naturally found. Trying to uproot and grow herbs everywhere ignores a lot of hidden natural factors that connect with roles of each food or herb in the human body.  In a rapidly changing climate, it is critical to explore different ways in which crop varieties and livestock breeds can be preserved.  It doesn’t help to improve crop varieties and livestock breeds for the market at the expense of seasonal connectedness and nutritional benefits.

How informal markets contribute to the preservation of biodiversity

By pulling commodities from diverse areas, informal markets provide a barometer on the agro biodiversity in different communities.  Building a community gene bank assumes all varieties can be kept in buildings yet some are better off in the wild. Through showing where particular crops, fish, herbs and livestock are coming from per season, informal markets signal environments that should be preserved if nutritional supply is to match demand in a sustainable manner per season.  Focusing on a few selected commodities like maize, tobacco, sugarcane, coffee, wheat, dairy and beef ignores the entire ecosystem that is fundamental for the future of food and bringing humanity back to nature.

While artificial structures like modern gene banks are getting all the resources and attention, informal markets that are fulfilling a much wider nutrition role are not being supported. Many local African commodities lose their value when stored in artificial environment like gene banks.  Natural environments are more ideal for most foods which provide natural remedies.  Crop and medicinal genebanks can store some crops and wild varieties but not all of them. Directing most of the resources to a few food security crops like maize is meaningless if a nutritional imbalance results in the majority of people frequenting hospitals due to ill-health that could be avoided by prioritizing different kinds of foods that form a local nutritional balance. Doing agriculture well will reduce the health bill for most developing countries.  When a country has a big budget for the ministry of health that is not a good sign as it means the majority of the people are not productive due to ill-health, which might be averted by smart and curious investment in a balanced food system.

 

 

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

The hidden cost of the time lag between marketing and consumption of commodities

One of the most misunderstood aspects of agricultural value chains in most developing countries is the time lag between marketing and consumption of agricultural commodities. While for farmers, supplying commodities and getting paid immediately is the most important thing, a lot happens between marketing and consumption. The way middlemen are blamed as if they stand in the way of farmers accessing predictable profit pools shows how little is understood about the movement of commodities from farm to fork. People who do not want to invest in understanding agricultural markets at a granular level are often quick to convey the myth that middlemen control the movement of agricultural commodities to the disadvantage of farmers and consumers. This article will reveal some of the issues that farmers, consumers, development agencies and policy makers should strive to know and contribute in solving.

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Time lag between marketing and consumption

While the absence of mechanisms for linking farmers directly with consumers is seen as the main challenge in smallholder farming systems, the time lag between marketing and consumption is the real McCoy.  Some commodities need a week of marketing. Others need to reach consumers still fresh and some go to specific niches. Grading of different commodities in line with the needs of different buyers and niches is done by the market, mostly traders or middlemen who have taken time to understand consumers and the entire ecosystem.  Traders know what is needed by different classes of consumers and try to correct mistakes made by farmers and other actors on a continuous basis. Many consumers are not even sure about their needs until they see what is available in the market.

By blaming middlemen, farmers shield issues that should be addressed by policy makers and development agencies. If processing and manufacturing was a better solution, the majority of smallholder farmers would have stopped going to informal markets where they blame traders who are trying to provide a solution using their limited means. Nothing stops farmers from taking their commodities to food chain stores, restaurants and hotels expect that those are not sustainable and viable markets. Traders and middlemen do not prevent farmers from by-passing informal markets and selling their commodities door to door in residential areas. The main reason farmers do not take that root is because it’s more costly and time-consuming.  Consumers do not eat as fast and predictable as farmers would want them to.

Challenges surrounding aggregation

It has been proven that most smallholder farmers do not have capacity to aggregate. Although it is known that travelling 150km with a bucket of groundnuts or a crate of tomatoes is not profitable for a single farmer, such knowledge has not been translated into corrective action. Farmers continue to frequent agricultural markets in a haphazard fashion. Disorganized supply from farmers invites many traders and middlemen into the game as they try to pool resources together so that they are able to sweep commodities from scattered farmers. When traders pool their meagre resources to go and buy commodities from farming areas, each trader who will have contributed his/her money has ownership of the same consignment. If 15 traders aggregate their money to go and purchase a 30-toner truck of potatoes, it means the consignment is owned by 15 people who have to monitor marketing until the consignment is sold.  That is why we end up with many traders in the market. This can be reduced if development agencies and policy makers put in place a system for purchasing commodities in bulk from farmers and handing over the commodities to traders who should mostly be salespersons. When this happens, traders will not go out looking for commodities in farming areas. Consistent supply of diverse commodities in a nutrition-sensitive fashion will stem the proliferation of traders. Each commodity has a minimum number of traders that can be involved before farmers and everyone starts incurring losses.

Traders as aggregators of money from consumers

When agricultural commodities get into the market, traders are responsible for redistributing to end-users such as individuals and households scattered in many areas. As they sell to, traders aggregate money from consumers and end-users so that farmers get paid. The time lag, beginning with pooling money from consumers and then going to buy from farmers can take a least a week.  How many farmers have the patience and time to wait that long? Some traders also operate like contractors who extend inputs to farmers for production of specific commodities. Rather than condemn such a relationship, financial institutions and policy makers can learn from it and generate better models.

What has happened to the retailing of agricultural commodities?

In many African countries, the retail part of agricultural commodity trading has gone closer to the consumer’s door step, mainly in high density areas. Runners who used to take commodities from urban informal markets to high density markets are no longer active. The absence of runners is the main reason why vendors with baskets, mostly women, are now going to markets like Mbare in Harare every morning to buy commodities. There should be runners delivering complete food baskets to vendors in high density market stalls. Having built relationships over time, it is possible for traders in Mbare to know the requirements of vendors in high density areas. Vendors can stop coming to Mbare and wait for their supplies which can be confirmed via mobile technology. The same way bread is delivered to high density tuck shops should be the way fresh commodities are delivered to high density market stalls. It becomes possible to accurately and constantly inform producers about consumption patterns.

Giving grades and standards a new face

Local grades and standards for horticulture and other commodities are becoming too broad, reducing the majority of African consumers into a junk consumption population. For instance, tomatoes that fetch less than $1/crate should be left on-farm or given to livestock instead of incurring the costs of bringing them to the market. Potatoes should also not have more than three grades. The more the grades, the more losses because the same resources like water, labor, energy and time are spent in producing poor grades as in producing good grades. Using appropriate knowledge can reduce the diversity of grades and standards. Poor knowledge translates to high loses and increase costs for farmers.  If a farmer sales one grade for 50c a crate, another for 70c, another for $1 and another for $2, aggregating all those prices can translate to a huge loss.

An improvement in local grades and standards is a big step towards meeting export standards.  It does not help developing countries to focus on export standards when local grades are in disarray. Foreign consumers judge developing countries by the standards they set for themselves, not by how they satisfy foreign standards. Unfortunately, many African countries are importing standards which do not relate to what is available locally. For instance, most farmers are not aware about chemical and water residues in commodities, soil pH and other science-based parameters that are important in global markets.  They do not even know how much water is required to produce a particular commodity until maturity. In most irrigation schemes, emphasis is more on flood irrigation with no isolation of water usage by crop. Such knowledge is critical for decision making, especially in a changing climate.

 

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