Power of end-to-end view of agricultural value chains

Very few actors in African agriculture can see the entire value chain and its nodes. As a result, production activities continue to be based on guesswork. In most cases, some traders who have been in the marketing game for a long time have more knowledge about the value chain than farmers.

By CHARLES DHEWA

Many traders often pre-finance production and end up more informed about particular commodities. In knowledge-intensive value chains, most farmers are not keen to understand the whole value chain, preferring to have traders come and buy from the farm.

While this practice has its own merits, a major shortcoming is that farmers are not able to get feedback directly from consumers.

Towards transparency in prices and volumes

In cases where traders assume the responsibility of relaying information between producers and consumers, producers may not get all the information needed for accurate decision-making.

That is why getting to the market and understanding the entire ecosystem is a worthwhile investment for producers. One big benefit from information communication technologies (ICTs) is reducing information asymmetry in ways that reinforce transparency in terms of volumes of commodities flowing into the market and changes in prices.

The following analysis is an example of decision-making information that is being collected and processed by eMKambo with the aid of ICTs in Zimbabwe’s informal food markets which handle more than 70% of locally-
produced food.

The analysis focuses on potato supply in Harare’s major informal markets like Mbare and Lusaka-Highfield from January to October 2017.

At peak periods, Mbare market alone handles more than 400 tonnes of potatoes a day. In Zimbabwe potatoes are consumed in different ways — fried, roasted, boiled and baked. Processing companies also use potatoes to make potato crisps, while most food outlets use potatoes to produce French fries. A total of 641 441 of 15kg pockets translating to 9 621,66t were supplied to Harare markets.

Supplies usually come in three different sizes — small, medium and large. Price per pocket also differs with the potato size, the large being the most expensive pocket. Traders in the wholesale market also sell seed potato whose unit of measurement is usually a 5-litre tin.

Chats/baby potatoes are also sold. Some traders specialise on selling potatoes with defects that would have been damaged during harvesting.

Production sources

Tracking sources of commodities like potatoes is one of the challenges for producers and financial institutions keen to invest in agriculture.

Evidence shows drastic increases in potato production in 2017 compared to other years. This has been due to good and prolonged rain season, among other factors.

An increase in the number of production areas also demonstrates the extent to which potato production is spreading around the country.

It also means production information is becoming standardised and easily available. The top five potato suppliers were Mazowe, Beatrice, Harare, Mhondoro and Acturus, as shown in the diagram above. Harare, as a produce source, includes some of the peri-urban farms around the outskirts of Harare.

While the average price has been $6 per pocket, the price range has been between $3 to $10 per 15kg pocket depending on quality, variety, size and source distance from the market and supply versus demand at a given period.

The total estimated revenue generated by potatoes from January to October 2017 in the mentioned markets was more than
$6 584 475,69. That is not a meaningless figure.

Instead of producing blindly, modern farmers should insist on getting an end to end view of the market including insights such as the collective monetary value from staples like potatoes and different commodities.

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