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How far can imperfect knowledge go in generating solutions?

Opinion & Analysis
Farming and agribusinesses cannot be profitable when decisions and resource allocations are based on imperfect information and knowledge.

WHAT has been overlooked for many decades in African countries is how the quality of decisions by farmers and other value chain actors is determined by the quality of information, knowledge and networking.

Farming and agribusinesses cannot be profitable when decisions and resource allocations are based on imperfect information and knowledge.

Investing in infrastructure like dams, roads, processing plants and irrigation systems is meaningless if not accompanied with investment in soft intangible assets like knowledge, information and fluid networks. These influence the use of physical assets like water and irrigation systems communities.

Tapping into community wisdom

Community wisdom that is often ignored is a deep source of valuable information and knowledge that can guide sustainable development. Humility to engage communities can reveal how building resilience is different from strengthening community resilience. Emphasis on building rather than strengthening assumes the intervention is starting from scratch as if nothing has been happening in communities.

If development agencies move away from their generic modelling, which speaks in terms of beneficiaries, they will realise that many investments have been done in communities and what is only needed is knitting those investments together into a consolidated development framework. 

Comprehensive information and knowledge can show the limitations of projects that are implemented in siloes. That assists in moving away from project approaches to community approaches that value community experiences, information, knowledge and wisdom.

Terms like “poor” may not be applicable in most communities because someone regarded as poor might lack material things but be very rich with knowledge and wisdom comparable to one with material riches.

Instead of using the beneficiary model which is often demeaning, it might be critical to use indigenous theories based on the richness of community relationships.

Such approaches can effectively answer questions like what constitutes leadership in a community where people have diverse knowledge and skills. How do you define skills and cultural practices in a community?

These are often left out in programming together with community beliefs and perceptions. Beneficiary models often exclude these critical questions which are an integral part of the socio-economic landscape.

The power of baselining

When local people are properly understood, the next step should be examining how they interact with their natural resources given existing levels of education, in-born traits, natural gifts, academic and non-academic knowledge.

This fundamental approach to understanding communities has remained undocumented for many years. Yet when fully understood this should inform the whole community approach to development.

A baseline should guide project proposals, resource allocation and resource utilisation as well as positioning of different actors to avoid duplication of efforts which tends to waste resources. For instance, in many projects positioning starts and ends with beneficiaries.

However, this creates problems at exit stage as development agencies realise they should not have left out key stakeholders who should have been active participants. Several agriculture projects focus on production and forget to position markets, traders and consumers.

Using information and knowledge to correct wrong assumptions

In communities where value addition has been introduced from outside without sufficient information and knowledge about the local context, one key wrong assumption has been thinking that value addition is all about processing. Yet food processing is the last stage of supply chain intervention because processing produces another form of product.

Communities or individuals can add more value by lengthening the shelf life of natural products without processing which adds some additives.

Where farmers have been pushed to work with processing companies as suppliers of raw commodities, what has been ignored is the fact that farmers need technology that they can control and from which they can benefit directly as opposed to being used as sources of raw materials.

Farmers tend to be very suspicious of processing enterprises from which they are excluded in value added products.

African mass markets or territorial markets have become more popular because   farmers participate directly in setting prices, negotiating packaging as well as exchanging knowledge. This does not happen in other markets like processing companies where farmers are mere suppliers with no influence on quality, pricing and trading terms.

Imperfect information and knowledge hide community-driven business models

If contract models were really idle for African communities, they would have changed lives positively. A contract model is different from a partnership model such as mass markets where farmers benefit from price adjustments. This is the challenge with formal companies which exist in isolation from producers. African mass markets are giving birth to the need to rethink existing business models. These markets are another form of community-based enterprises that are not really about owning shares in an entity but being involved and participating in determining sustainability of such enterprises including benefit sharing models. 

In addition to aggregation strengthening the bargaining power of farmers to other markets, some of the benefits are not be monetary but in the form of reducing transport costs to other markets. When communities are involved in developing community-based enterprises, their evolution will inform different stages of value addition – for instance, what should start value addition or processing? Individual farmers have been participating in other markets for many years, establishing strong bonds and networks other actors mass markets.

As reflected by what happens in mass markets, the African indigenous definition of ownership is about empowering communities to collectively inform the establishment of an entity that addresses challenges which affect many people. Achieving food security may be easy for communities but the difficult component is generating sources of livelihoods and income. This starts with information and knowledge to answer questions like what are sources of livelihood and income in the community?  Which specific value chains are produced in excess or have potential to generate income to meet health, education and other needs not just food security? In building such models, what are the priority issues? Is it transport, distance to markets, lack of market information, perishability against distance to market or stiff competition in diverse market?

Information and knowledge can show what type of entity can help address these challenges in ways that increase return on investment?  Models like aggregation can enable communities to bulk and supply the market through enjoying economies of scale. Preservation technologies can manage supplies to the market, maintain quality and manage perishability. A purely profit oriented enterprise will not be able to facilitate such community enterprise models. Government will not be able to do it either because it is mainly for enabling environment and not setting up businesses. If governments were gurus in business, most parastatals would be viable and participating in major export markets. The fact that this is not happening indicates that business is not a terrain for governments. Development agencies are mostly interested in uplifting vulnerable people as opposed to supporting genuine entrepreneurs.

African mass markets as social enterprises

It appears setting up community business enterprises requires a social investor who is passionate about addressing social challenges faced by farmers while running a business entity for sustainability. Such an institution which is more like an indigenous social enterprise does not exist in African formal systems at the moment. Mass markets are a perfect example of this institution in which farmers get services like self-organized aggregation, preservation and market information through active participation in the market. As famers get their challenges addressed, they also actively participate in the market. This is different from cooperatives which assume that farmers are at the same level by introducing the same contributions when in real practice farmers own individual businesses.

In cooperatives, farmers expect dividends while in a social enterprise like a mass market they do not expect dividends because they are already benefiting through fair prices and active participation in the market. Fair pricing is much more valuable than dividends. Farmers do not need a cooperative but an entity that addresses their different needs quickly. As indigenous ecosystems, African markets do not have one definition. You can find elements of supermarkets, elements of wholesale, elements of retail, elements of logistics and elements of hotel.  All in one. These unique ecosystems are defining their own growth following indigenous pathways and social principles embedded in trust and relationships. This is a totally different institution from colonial systems.

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