How agric markets reveal hidden characters

agriculture VENDOR 2Charles Dhewa —
Efforts to characterise Zimbabwean agriculture continue to be informed by natural farming regions and land size. For instance, we continue to hear terms like communal, A1, A2, resettlement and large scale commercial farmers.

Since such classifications can also be found in dry regions like Masvingo and Matebeleland South, they do not say much about agricultural systems in particular areas where investors may feel compelled to invest.

From an agribusiness perspective, meaningful characterisation should speak to types of commodities, volumes, different qualities and production patterns. That is where formal and informal agriculture markets become very important.

Going beyond privatisation of  information and knowledge
While formal agribusinesses may prefer to keep information about their commodity requirements and processing capacity private, in a world where niches are becoming highly competitive, it pays to share information and knowledge with your competitors.

Informal markets are very good at sharing information and knowledge in ways that reveal the hidden features of an agricultural ecosystem.

Once produced, commodities from farming Region One start competing with those from Region Three, irrigation schemes, peri-urban production zones and other areas.

These patterns can only be gleaned from the market. Informal markets, which currently take more than 70 percent of agricultural commodities, are good at surfacing the viability and visibility of commodities from a wide range of farming systems.

It is from markets such as Mbare where commodity supply trends can reveal where fruits are coming from, how frequent, who are the specific suppliers and who are the buyers? Granular details like variety, taste and quality are also picked from the market.

Since commodity characteristics are defined in the market, it influences the characterisation of the whole agriculture sector. Competitive edge in the market defines the power of a commodity.

Farmers from different farming systems used to produce for the GMB and other parastatals where certain standards and specifications were almost cast in stone.

With the demise of the GMB and formal markets, these markets have established their own standards and specifications — a combination of formal and informal standards. Unfortunately, the majority of farmers have been left behind by this transformation in the market. That is why most of them are failing to break-even.

Either they compete to supply more than the market can take or they expect higher prices than the market can afford. Besides basic facts like supply and demand, many other factors give informal markets a superior capacity to characterise the agriculture sector.

The market takes into account a wide range of specifications such as different versions of quality, ripeness, variety, size, etc.

From the producer to the commodity
Informal agriculture markets have a way of shifting focus from the farmer to the commodity. That contributes immensely to the character of the agricultural sector.

The market also defines who becomes a market actor in line with commodities being supplied. For instance, different sizes of transporters come into the market depending on commodities and distances to the market.

What size of trucks are needed to move bananas from Honde Valley to Harare, cabbages, tomatoes, green mealies from Mutoko to Masvingo, etc.?

High value and low volume commodities like fine beans need specific types of transport. Therefore, the market informs the mode of transport and size.

Small trucks can be used for high value, low volume commodities while bulky but low value commodities like cabbages will need different types of transport depending on distance to market.

In most cases, farmers do not have sufficient information about their customers. When the commodity gets to the market, the market does customer segmentation, clustering and sorting of commodities according to targeted customers.

There are commodities for high income earners, low income earners, restaurants, wholesalers, processors and vendors who sell to household consumers. The market also segments market actors into: runners; new entrants with low capital; high volume pushers; opportunists and many others.

Reinforcing the big picture
If we collate and convert commodity volumes from local, district, provincial, national and export markets, less household consumption, we should be able to get the size and value of our agriculture sector.

Assuming each household in Chimanimani constitutes less than 10 percent of total agricultural production, it means more than 90 percent of agricultural value can be deduced by tracking transactions and commodities from Chimanimani to the markets.

We can go further and match production size to resources (water, seed, soil, equipment, labour, etc,) used to produce diverse commodities. Ultimately, we can be able to see the extent to which we are using agricultural resources efficiently. It is that level of detail that will determine agricultural-driven success.

Talking about the big picture, the market is already showing how far climate change is impacting the agriculture sector. Commodities being affected by climate change can be seen in the market where their texture and colour can show the extent to which they have been denied water towards the ripening period.

Varieties that also need more water can show their character in the market. There are specific times when groundnuts from wetlands start flowing into the market. If that period changes you can automatically see how wetlands are being affected by a changing climate.

In response to climate change information obtained from the market, there is now an increase in the number of farmers practising market-oriented production where the market dictates what needs to be grown, when and for who?

Many farmers are now asking for crop calendars from the market as opposed to depending on natural farming regions.

While some farmers still wait for rain-fed farming, those with access to water have a completely different cropping calendar based on insights from the market. The market also shows the extent to which natural farming regions are shifting.

For instance, Harare and Masvingo markets are now receiving tomatoes from Mvuma and other areas that were previously not known for horticulture. To that end, the market is re-defining farming regions and micro climates that used to be invisible.

Markets as knowledge hubs for agricultural characterisation and sustainability
To the extent that informal markets have become knowledge hubs for agricultural characterisation and sustainability, they quietly create contractual arrangements between farmers and traders.

Each informal market has dozens of contractual relationships and verbal agreements between farmers and traders to ensure constant supply of certain commodities.

Unfortunately, farmers and other value chain actors who are not aware of these dynamics, always blame buyers yet there is an invisible hand influencing patterns and relationships. The agricultural sector has several hidden forces of supply and demand which require evidence-based efforts to make sense of.

In many situations, supply and demand is not the only defining feature but other commodities in the market, competing for the same consumer budget. That is why, even for the same quantities of tomatoes in the market at a given time, prices can fall.

It means tomatoes are competing with other commodities like mangoes which can suddenly show up on the market unannounced. If mangoes suddenly come to the market after a long absence, a vendor who brings $20 to the market intending to buy a box of tomatoes and another box of bananas can decide to accommodate mangoes in her budget.

That means she will buy less tomatoes and less bananas to accommodate mangoes and that affects the amount of tomatoes and bananas bought in the market. It means mangoes are now competing with tomatoes and bananas for the same amount of money in circulation.

It is therefore very important for farmers to understand seasons and the cycle of other commodities which compete with what they are producing.

Many value chain actors may not be aware that seed companies and breeders are also enriching their decisions by visiting informal agriculture markets where they get information about consumer tastes, preferences and specifications.

It does not help to breed the biggest pumpkin whose taste is disliked by the market. Decisions to improve the taste of tomato varieties such as Tengeru and Rodate have been influenced by the market, leading to seed breeders revisiting their breeding practices.

Hazera onion variety used to produce over-sized onions which were not preferred by many households. After consulting the market, breeders have gone back to produce medium-sized varieties that are acceptable to the majority of households with small families.

In addition to acting like a remote rain gauge by using commodity supply to show which areas have received sufficient rainfall, the market also reveals commodity exchanges between provinces and production zones. We have seen madora from Beitbridge being consumed in Chinhoyi and other districts of Mashonaland West.

Madhumbe from Chipinge are also finding their way to Victoria Falls, thanks to the distributive power of agricultural markets. However, the correct characterisation of the agriculture sector is being affected by lack of consistency in supply.

If we were able to store some seasonal commodities in warehouses, we would be able to stabilise prices and render agricultural performance predictable. Inconsistent supply, uncoordinated production and seasonal production remains a big challenge in measuring the true size of our agriculture sector.

The role of institutions and data
Local institutions such as universities can improve the economy’s understanding of market dynamics. They should gather intelligence like the diversity of commodities in Manicaland, for instance; number of market actors as well as factors that determine supply and demand.

Such insights are critical for decision-making. You don’t have to be a technical crop expert to be in agribusiness. Understanding the market can make you very relevant as you can provide advice to extension officers and policy makers.

Based on such information, universities and local institutions can assist in developing production corridors along commodities which can be tracked from production all the way to consumption.

A fluid mechanism of data capturing and interpretation is now possible, thanks to ICTs. The modern economy cannot be fuelled by data gathered through sampling a few areas and commodities. With ICTs, it is now possible to seamlessly integrate all available data.

We should be able to track the volume and value of all commodities from all districts to the market as well as each commodity’s contribution to GDP.

Charles Dhewa is a proactive knowledge management specialist and chief executive officer of Knowledge Transfer Africa (Pvt) (www.knowledgetransafrica.com) whose flagship eMKambo (www.emkambo.co.zw) has a presence in more than 20 agricultural markets in Zimbabwe. He can be contacted on: [email protected] ; Mobile: +263 774 430 309 / 772 137 717/ 712 737 430

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