Key elements of market – informed agribusiness Models

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


Confusing a business plan with a business model

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

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

Some of the fundamental considerations in agribusiness models

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

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

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

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


Failure to gauge readiness levels

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

Toward knowledge readiness indices

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

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

Filtering community knowledge into engagement

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

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

Farmers and communities are not mere recipients of information

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

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

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

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Domestic animals as sources of Knowledge and Social Intelligence

In African agrarian communities where livestock are part of people’s livelihoods, farmers have forged symbiotic relationships with their cattle, goats, sheep, camels, pigs and poultry, among others.  While the world is elevating the role of ICTs in mediating knowledge, domestic animals have, for generations, distinguished themselves in mediating knowledge between people, the environment and the animal world. If knowledge is the route to the truth, animals are certainly part of that route in many African countries where knowledge is complex and multilayered.


For starters, the African traditional knowledge system has always treasured an elaborate way of linking the behavior of animals to their owners. Cattle, goats, dogs, donkeys, camels, sheep and chickens behave differently when with their owners compared to how they behave in the presence of strangers. How livestock owners communicate with their animals reveals shared instincts between the owner and the animal. There are situations where, once the owner arrives, oxen that were misbehaving start behaving well. Some cattle may be respectful to women but disrespect children.  Other cattle react differently to change of ownership. For instance, an oxen sold 20 km away may return back, depending on reception in the new home. If it compares conditions between the old home and new home and realizes that both homes are unfriendly, it can choose to hide somewhere in the middle or disappear completely.  Such animal behaviors can teach human beings a great deal about compassion, love and other soft values.

Knowledge principles inspired by animals

People can glean fresh principles of knowledge from animal behavior and instincts. Within a herd of cattle, a curious farmer can notice diverse relationships between animals.  There are cows and heifers that want to graze with bulls. Bullocks can be seen grazing with big bulls as a way of acquiring leadership skills from seniors. Some calves do not want to leave their mothers until they grow into big steers.  This demonstrates slow learning, a phenomenon which can be found in human beings as in animals. All these factors influence farmers’ socio-economic decision-making. From eMKambo’s interactions with farming communities in Southern Africa, there is a proven transfer of instincts and relationships between people and livestock. Norms and socio-cultural values that are accorded cattle result in those animals behaving in ways that fulfil people’s expectations. For instance, in the Zimbabwean context, Mombe yeUmai / Inkomo kaMama (mother’s cow) often demonstrates motherly instincts in the herd.  If a cow is given a name like MaSibanda, it certainly reflects that totem and how most Masibandas conduct themselves.

Livestock as custodians of memory

A farmer can name his bull Mashava, in memory of his first job in Mashava town which enabled him to buy the bull. Such memories also represent the wealth creation journey. Young children learn from how their parents started with one cow from which a big herd was built.  They begin to appreciate that wealth creation is a process not a short-cut.  It is difficult for them to associate cars with the same connection and instinct. However, livestock-inspired wealth creation and distribution pathways should be monitored in such a way that a heifer can be tracked from its original home, to the new owner, its off springs, how some of its off springs go on to be used as payment for bride price and how many calves are produced along the way as well as many other factors.  This would demonstrate how a single cow creates value in many communities more than can be achieved by putting money in a bank.  Tracking back should make it possible to see where the cow started and how value has been extended to many people.

Livestock communities have a lot of knowledge to contribute to the modern world, not just in producing meat, milk, hides, wool and other benefits. Many livestock farmers are good at characterizing their livestock according to factors like ease of milking, drought power performance and leadership. Unfortunately, much of such knowledge remains hidden within invisible communication between people and livestock.  On the other hand, animal science studies in African universities continue focusing on technical issues like breeds, growth patterns, meat yield, milk yield and other technical issues at the exclusion of behavioral and relationship issues that have enormous socio-economic influence. Rather than studying and learning from animal behavior, the young generation is also being exposed to digital technology and other forms of knowledge that do not adequately sharpen their contextual curiosity.

 Environmental and socio-economic contribution to agricultural decisions

Cattle and other livestock connect with the environment in ways that benefit farming communities. When they are seen smelling some rain, farmers start preparing for the new farming season. In relation to   pastures, researchers have not taken time to track the nutritional status of grasses, shrubs and trees that are preferred by livestock. Although good rains result in the germination of many grasses and pastures, animals are the ones which can tell the difference between good and poor pastures. They also know which pastures are poisonous or medicinal.  That is how some farming communities and medical practitioners become aware of unique medicinal properties of different grasses, shrubs and trees.

While cattle are accused of transferring Anthrax, foot and mouth and other diseases to human beings, there is no knowledge on medicinal properties and cures that are transferred to people by goats, sheep and cattle through either milk or meat.  In most rural communities, farmers eat cattle which die on their own and nothing happens to the people because the animal was able to build up a collection of useful medicinal properties into its body when it was alive such that negative properties are outweighed by positive ones. When medicinal pastures consumed by cattle are transferred to consumers through meat and milk, the animal becomes the doctor. It is important to investigate which other diseases are potentially prevented from getting into consumers through choices made by animals as they graze.

All these issues are worthy becoming part of educational curricular. At the moment, if you compare an animal scientist from an African university and a livestock herder, who do you think has more knowledge about livestock? Most animal science students have no idea about how knowledge travels between animals and farmers. As part of generating relevant knowledge, African educational institutions should be thinking about producing Masters Degrees and PhDs in Animal Socio-Economic Science as opposed to ending with animal science only. There are numerous knowledge aspects waiting to be explored in African communities.

The Western world has become good at studying animals and simulating their thinking patterns. These have been creatively developed into educative digital cartoon strips from which our children are learning about animal behavior. On the other hand, Africans are doing nothing about the imaginative knowledge associated with their animals. Farmers say if you see a bullock stabbing anthills, it will be sharpening its horns. They also say some cows can deliberately hide milk from human beings and keep it for their calves. Such knowledge is a fertile ground for research and generation of contextual knowledge. Taming animals for drought power is also a powerful skill which many new agricultural graduates have not mastered, preferring to work with tractors which are lifeless and difficult to relate to emotionally.

Improving human behavior and widening circles of compassion

The African education system should explore sophisticated knowledge sharing between domestic animals, farmers and rural communities. Living with animals enables African communities to widen their circles of compassion towards learning by fostering psychological safety. Besides fueling community collaboration by increasing people’s willingness to work together, co-existing with animals builds the capacity of people to practice compassionate leadership. Curiosity builds the power of noticing the behavior of animals as they relate with human beings. Positive listening is also empowered through communicating with animals. A lot of useful habits become embedded in agricultural procedures like land preparation, fetching water, harvesting, milking and many others.

Working and living with animals also builds people’s observational skills, prolonged learning, relationship building and trust between human beings, animals and the environment. Through livestock, people cultivate unique literacies that cannot be acquired in a classroom.  That is why livestock farmers do not just value their cattle or goats by weight alone.  They consider many factors such as behavior, leadership and social status. These opportunity cost factors constitute more than 70% of the negotiating power in the livestock market. Farmers know that some cows produce two calves every second year and that means whoever is buying such beasts will own a big cattle herd in no time.

This knowledge is an integral part of animal social science – animals and their ecosystem. Some cattle come home on their own after being left in distant pastures. Such faithful behavior has a bearing on farmer productivity as there is no need to pay someone to go and look for them or spend time herding.  Communal farmers collectively have more than a billion hours of experience in working with animals and sharing their compassion with the whole environment.  By working with animals, the young generation can embrace a growth mindset which recognizes that intelligence should come from hard work, perseverance, learning from the environment, animals and others in ways that fuel innovation and purposeful collaboration.  Unfortunately, animals remain unacknowledged sources of knowledge with many scientists preferring to reference publications.  As if that is not enough, academic studies on livestock and agriculture rarely influence implementation of activities in farming communities. They just become part of narratives in academic conferences, workshops and journals which are read by a few like-minded people.  / /

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How informal economies harness and institutionalize customer experience

While a supermarket chain can have a customer care department responsible for answering queries and harvesting feedback from diverse customers, informal agricultural markets in major African cities have different ways of gathering customer experience. They use their collective knowledge to maintain customer service for diverse commodities. Each market can have more than 100 years’ worth of collective knowledge held by vendors, traders and many other actors who have honed creative ways of improving customer experience.


The power of a shared purpose

African informal markets rely on diverse actors who share a common purpose which keeps everything hanging together. To that end, the customer journey experience is distributed among many traders. The customer base cuts across all classes, gender, age and income levels. Vendors and individuals who walk into the market tend to be some of the most critical customers. In fact, vendors provide fine-grained insights on the preferences of final end-users. Those who buy in bulk for on-selling to other markets also bring rich insights from their own immediate customers.  If a seed company wants to know whether housewives are satisfied with its new tomato variety, vendors have the most reliable answer.

However, due to the variability in data and activities, some service providers in informal markets face challenges in delivering a great experience. They cannot get oversight about the consistency of customer experience, because such experiences are distributed among traders and each informal market has its own rules. As a result, most decisions by policy makers and service providers tend to be based on incomplete agricultural customer journey experience.

Institutionalizing customer experience

There is enormous potential for innovative African youths to create knowledge hubs for identifying, capturing and sustaining customer experience. That is how business models with capacity to sustain agricultural economies can be developed. Harmonizing such experiences will improve the efficiency of markets and value chains as well as manage gluts and shortages. At the moment each trader understands his/her business so well to the extent of making adjustments in line with consumer demand in terms of what to buy and for whom. However, an undocumented, collective customer response practice sometimes leads to less demand compared to supply and vice versa.

Adjustments at individual consumer or trader level play out in the whole market.  Within a week, traders can predict the behavior of all commodities in the following week. To that extent, traders are always ahead of farmers and suppliers. Being on the trading side, traders have to decide ahead of time. However, strategies by traders are only communicated to individual clientele farmers to the exclusion of everyone else. What happens to the rest of the farmers who have not built relationships with the market?  A knowledge hub should consolidate customer experience for the benefit of all value actors. Based on trust, the knowledge hub can be informed by market actors comprising experienced traders, knowledgeable traders and specialists in various commodities who understand market niches, standards and requirements.

It is in everyone’s interest to smoothen information flow

In the absence of a knowledge hub, customer experience insights remain in the pockets of few Communities of Practice (CoPs) around one knowledgeable trader. Such CoPs cater for 30% of the farmers.  That means more than 70% of the farmers who do have mentors in the form of traders blindly take commodities to the market auction system. On the other hand, while traders and farmers in CoPs may have a productive vantage point, they are not immune to the effects of gluts caused by information asymmetry that affects 70% of the farmers. They cannot control the negative effects brought by those outside CoPs.  Therefore, it is in everyone’s interest to smoothen the flow of valuable information.

The informal market is a mix of experienced actors, novices, opportunists and many other clusters.  There is a growth path based on knowledge and experience. Traders have a way of managing gluts and shortages of particular commodities in the market by going out to fetch commodities in turns. That is why it is rare to find extended gluts of particular commodities such as potatoes in the market. When a knowledgeable farmer produces commodities without paying attention to the market, there is high risk of underpaying investment in knowledge. Concerted efforts to gather feedback directly from traders and consumers will enable farmers to build an accurate view of customer preference. When farmers focus too much on production excluding customer experience, they risk over-producing and surpassing the absorptive capacity of markets and consumers.  Even if the farmer musters how to produce dozens of commodities, that knowledge is useless if it cannot be translated into income and better livelihoods.  / /

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