Once farmers begin participating in the market, they no longer remain the same.
By interacting with other farmers and learning from experiences across the country, they stop being passive price-takers and become active participants in shaping the marketing process.
Through mass markets, farmers find their voices by exchanging phone numbers and sharing vital information without relying on middlemen.
This is how mass markets and mobile technologies are changing farmers' behaviour and attitudes in ways policymakers and financial institutions may not fully appreciate.
Farmers quickly share their bad experiences with contract farming. Banks, contract farming companies and parastatals often wonder why few farmers embrace contract farming. In reality, farmers quietly blacklist dishonest contractors while recommending those they trust.
Using data to anchor farmer characterisation and commodity mapping
By engaging with mass markets, policymakers and financial institutions can gather critical market intelligence to improve farmer profiling.
Such insights also help make sense of commodity demand and supply patterns.
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The way farmers are using digital technology to understand markets shows that digital platforms are no longer just about providing information. They are increasingly ensuring that agricultural commodities reach areas where they are needed, with some supply chains bypassing both formal and informal markets.
Regular collection and analysis of data from agricultural markets are becoming the foundation for building reliable food demand and supply models while promoting an evidence-based culture.
For instance, several knowledge-sharing pathways have emerged: farmer to farmer, farmer to trader, trader to farmer, trader to trader, farmer to transporter, transporter to farmer, trader to transporter, consumer to farmer, consumer to trader, trader to financier, and many others.
Relationships, trust and growing virtual markets
Relationships and trust are increasingly supporting the movement of food before payment is made.
Value chain actors have realised that unless trust allows commodities to move through much of the supply chain before payment, transactions will remain cash-based, limiting value creation in agriculture.
These new practices are challenging conventional brick-and-mortar models that rely on constructing expensive markets. Instead, investment may be better directed towards commodity ripening and storage facilities, such as movable containers.
Virtual markets are also expanding, driven by big data and social media.
Bulk commodities such as maize, sweet potatoes and sugar beans can now be traded through virtual platforms.
Big data is also helping integrate fragmented landholdings, making it easier to determine what should be produced, where and in what quantities. By analysing market data that shows where commodities originate, stakeholders can identify which land, water and other resources are being used most productively in specific districts.
The value of aggregation and market data
When farmers fail to aggregate their produce, they miss opportunities to secure better prices.
Markets should help identify production corridors that consistently generate surplus produce.
Strengthening local markets also reduces pressure on major mass markets, which are becoming increasingly congested.
These e-commerce platforms build on existing relationships through which food already moves between regions without passing through formal or informal markets, thereby reducing double handling that can erode value.
Production figures alone can be misleading. Some communities consume up to 80% of what they produce, leaving little surplus for the market, particularly where staple crops are concerned.
Without reliable data, financiers may not know the extent to which farmers are holding unsold commodities. Financing new production while farmers still have unsold stock simply encourages the misuse of loans, as farmers use borrowed money to compensate for market failure.
Paying closer attention to data and knowledge can also reduce production costs by improving record-keeping, budgeting and cost management.
Farmers who keep digital records can model different pricing scenarios. For example, if sweet potatoes sell for US$3 per bucket, they can calculate production costs, projected returns and profitability before planting.
They can also determine how much land to allocate to each crop to maximise returns.
Economies of scale are equally important in transportation. A single trip with a seven-tonne truck over 100 kilometres is far more cost-effective than three trips with a one-tonne truck covering the same distance.
The same principle applies to information gathering. Instead of individually searching for market information through phone calls, farmers can reduce communication costs through collective marketing and shared information networks.
By keeping accurate records and following market-oriented production calendars, farmers can also minimise losses caused by poor timing and low prices while producing for identified markets.
