Agriculture Business Development

To what extent does the market inform production decisions?

African market

In the course of working with African mass markets, eMKambo continues to notice several nuances that inform the production of different agricultural commodities, among other patterns. A recent study focused on figuring out the extent to which the market informs production decisions among African smallholder farmers.

There are strong indications that most production decisions are supply-driven not demand-driven. For instance, most farmers interviewed said what they grow and how they grow is determined by government extension officers. The second group said their decisions are informed by NGOs who bring ideas and technologies into their communities. That is why most of the commodities supported this way end with the phasing out of NGO projects. The third group is informed by commercial companies through contracts. For instance, if there were no contracting companies, most farmers producing tobacco in Hurungwe district of Zimbabwe would not be growing the crop.  The fourth group comprises horticulture farmers whose decisions are informed largely by the mass market. 
Towards needs-based interventions
Gathering the above information assists in making sure agricultural interventions are needs-based. It is important to know what influences daily decisions of millions of farmers.  The inquiry was extended to finding out communication channels used by farmers in different production zones. At production level, major communication channels mentioned include meetings, farmer to farmer interactions, radio, extension services from government extension services and NGOs, field days and demonstration plots.  Channels for accessing market-related information include calling market traders and relatives in towns, word of mouth from peers coming from the market, extension officers, NGO officers and radio. Information collected this way pertains to potential markets, prices, specific buyers, packaging, quality standards, varieties and transportation.
What drives units of measurement?
 The study also sought to find out how farmers make sense of units of measurements in African mass food markets.  It turns out farmers do not have control over units of measurements. For instance, in Mbare market of Harare units of measurement for commodities like sweet potatoes are moving from 50-60kg bags to five litre tins. This is driven by the nature of selling – direct to vendors and consumers in ways that supports breaking of bulk.  Some vendors are do semi-wholesaling and find it convenient to sell sweet potatoes as heaps in residential market stalls. Consumers have also become comfortable with a five litre tin as a measurement because it is fairly affordable.
Saga-based packaging: Mbare sells huge volumes of different sizes of sacks that go to many parts of the country.  Like most packaging, decisions and choices for using a saseka or semia bag were informed by vendors who specialize in butternuts and cucumber. When these vendors tried to break bulk from 50kg bags into heaps they discovered that the 50kg bag contained less commodities and as they looked around they stumbled on the 62kg saseka which landed itself very well to breaking bulk, heaping and other forms of repackaging that happen in smaller residential markets.
The other influence came from transportation where it was discovered that given that transporters charge per bag and not per entire load, the 50kg was expensive to transport while it contained fewer commodities.  Having looked at all the sacks in the market, consensus zeroed on the saseka which, when carrying butternuts and cucumber weighs 62kg.  After the number of fruits or tubers were counted, the saseka matched expectations of many actors.  It also matched the number of sacks that can be loaded on the truck. Interestingly, the saseka and semia came from Malawi into Zimbabwe through companies that imported wheat bran, before the bag found its way into Mbare market for multiple uses.
Wooden crates: The idea to use wooden crates was driven by communal tomato production but the crates are gradually being replaced by plastic sandaks.  The 8kg wooden box also fulfills the needs of low income consumers who cannot afford large packages.  As most communal farmers engage with traders who are bringing 30kg plastic crates to the farm as standard measurement, the wooden box is slowly being pushed out. It means the nature of product exchange at the farm is replacing the role of the wooden box.
20 litre tins: These take care of volume that cannot be counted.  After the 5l tin the next level is 20l which traders derive from the number of 5l that can get into the 20l, simplifying calculations.  However, the 20l tin is highly controversial because it is not the same everywhere.  Most 20l containers have commodities weighing 18kg. Some have collars while other have lower brims. The 20l tin is not ideal for selling Matemba because they do not have enough weight to fill up gaps. It is meant to please the seller not the buyer.  Matemba are better sold through kilograms like what happens in formal markets. Matemba in Mbare tend to be over-priced because they use 20 l tins as measurements.
Why not use scales? 
Some commodities like sweet potatoes cannot be satisfactorily sold through weighing scales but through quantity. Potatoes are sold in 5l tins to ensure affordability by many consumers.  However, heaping is now a more common way of selling. The increase in heaping speaks to affordable measurements by consumers most of whom cannot afford large volumes as they live from hand to mouth. According to vendors, there is also some proof that when you buy heaped potatoes you get more than buying a single 15kg pocket of potatoes. Eight to nine heaps can give you more than 15kg pocket.
 Behind each measurement are units of measurement. To address the inconvenience of having to weigh commodities each time someone wants to buy, mass market actors have simply agreed on rules of thumb. As long as a saseka is full everyone is satisfied.  There is no need to spend time weighing commodities all the time. If that was to happen, there would be long queues as buyers waited to have their consignments weighed. The market has merely converged around some consistency guaranteed through common measurements.  As long as market actors know the measurements there is agreement.

About the author

Byron Adonis Mutingwende