This document proposes a virtual marketplace system using mobile phones to reduce transaction costs for smallholder farmers in South Africa. It would allow farmers to list excess produce on a centralized database via basic mobile phones. Market agents could then use a GPS-enabled phone to find the shortest routes to collect listed products and bring them to local agro-processing hubs. This could potentially provide jobs, improve food security, and help smallholders transition to commercial farming by giving them access to markets. The system aims to bridge the digital divide between farmers and technology developers to improve livelihoods and food security in Africa.
Donor support to youth agribusiness: Right assumptions?ICARDA
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A Study on Cost of Intermediation in Agricultural Produce Market Committee (A...paperpublications3
Abstract: In India, buying and selling of agricultural commodities is regulated under APMC Act of respective State Government. APMC performs a crucial function of organizing agriculture trade, providing a meeting point for buyers and sellers. Thus, by creating regulated markets, the price paid to farmers by licensed middlemen for their produce could be monitored and thereby ensuring that they were not exploited (Aditya Singh). But over the years it grew into a monster, gaining layer upon layer of intermediaries, none of whom added any value to the commodities they traded, even as they added on their own margins mainly due to the non-transparent price setting in the market where seller and buyer are often cheated (Pradeep Kumar Mishra and Anjani Sinha). This makes the chain inefficient, resulting into costlier food products to the consumers. Therefore there exists the need for the commodity exchanges which can lead to development of structured mechanism of agricultural produce through which non-transparency in price setting can be overcome and could help in making available up-to-date market information through various means including internet at the exchange. In this regard, the present study has been undertaken to study the pricing patterns of APMC and Regional commodity exchange and to know the Cost of intermediation involved when they trade through APMC and exchange to suggest measures to improve the efficiency of the agricultural marketing system. Soya bean (commodity) has been chosen for the study.
Does use of ict based market information services (mis) improve welfare of sm...ACORN-REDECOM
The need to provide agricultural information to farmers has led to emergence of numerous ICT-based MIS projects in
developing country. These projects aim at promoting commercialization of smallholder agriculture and subsequently their
welfare. This study examines the welfare effects one such project in western Kenya. It uses household food security and
access to medical health services as proxies of welfare. The study finds that farmers that use ICT-based market information
are more food secure and have better access to medical health services than their counterpart. It discusses policy implications
of these findings.
Sharing gains of the potato in Kenya: A case of thin governanceSharing gains ...Premier Publishers
The potato offers a good alternative for diversification from maize, the staple food in Kenya. This article presents the results of a study on the potato marketing system, the factors affecting prices and the predominant governance system impacting on the market. Survey data were collected from 402 farmers in the three potato growing regions and addition information on monthly prices in major markets was provided the Ministry of Agriculture. There were also semi-structured interviews with the major actors in the potato sector.
Potato marketing exhibits the captive governance structure with traders collaboratively acting as the lead firm. An analysis of the split in selling price between the various players indicates that margins were concentrated at the coordination of marketing activities as opposed to the production activities. Coordination activities took about 40% of the consumer price. Besides the market channel used, the production region, the size of the land cultivated and the yields obtained determined the price obtained by the farmers. Given the distribution of the value added in the chain and the current dominance of traders, we argue in favour of upgrading the value chain and giving more power to the farmers and their organizations.
Donor support to youth agribusiness: Right assumptions?ICARDA
25 June 2019. Cairo, Egypt. Food Technology in Supporting Entrepreneurs of Food Manufacturing Sectors through the Lens of Egypt Vision 2030. Organised by the National Research Center (NRC) Cairo-Dokki
A Study on Cost of Intermediation in Agricultural Produce Market Committee (A...paperpublications3
Abstract: In India, buying and selling of agricultural commodities is regulated under APMC Act of respective State Government. APMC performs a crucial function of organizing agriculture trade, providing a meeting point for buyers and sellers. Thus, by creating regulated markets, the price paid to farmers by licensed middlemen for their produce could be monitored and thereby ensuring that they were not exploited (Aditya Singh). But over the years it grew into a monster, gaining layer upon layer of intermediaries, none of whom added any value to the commodities they traded, even as they added on their own margins mainly due to the non-transparent price setting in the market where seller and buyer are often cheated (Pradeep Kumar Mishra and Anjani Sinha). This makes the chain inefficient, resulting into costlier food products to the consumers. Therefore there exists the need for the commodity exchanges which can lead to development of structured mechanism of agricultural produce through which non-transparency in price setting can be overcome and could help in making available up-to-date market information through various means including internet at the exchange. In this regard, the present study has been undertaken to study the pricing patterns of APMC and Regional commodity exchange and to know the Cost of intermediation involved when they trade through APMC and exchange to suggest measures to improve the efficiency of the agricultural marketing system. Soya bean (commodity) has been chosen for the study.
Does use of ict based market information services (mis) improve welfare of sm...ACORN-REDECOM
The need to provide agricultural information to farmers has led to emergence of numerous ICT-based MIS projects in
developing country. These projects aim at promoting commercialization of smallholder agriculture and subsequently their
welfare. This study examines the welfare effects one such project in western Kenya. It uses household food security and
access to medical health services as proxies of welfare. The study finds that farmers that use ICT-based market information
are more food secure and have better access to medical health services than their counterpart. It discusses policy implications
of these findings.
Sharing gains of the potato in Kenya: A case of thin governanceSharing gains ...Premier Publishers
The potato offers a good alternative for diversification from maize, the staple food in Kenya. This article presents the results of a study on the potato marketing system, the factors affecting prices and the predominant governance system impacting on the market. Survey data were collected from 402 farmers in the three potato growing regions and addition information on monthly prices in major markets was provided the Ministry of Agriculture. There were also semi-structured interviews with the major actors in the potato sector.
Potato marketing exhibits the captive governance structure with traders collaboratively acting as the lead firm. An analysis of the split in selling price between the various players indicates that margins were concentrated at the coordination of marketing activities as opposed to the production activities. Coordination activities took about 40% of the consumer price. Besides the market channel used, the production region, the size of the land cultivated and the yields obtained determined the price obtained by the farmers. Given the distribution of the value added in the chain and the current dominance of traders, we argue in favour of upgrading the value chain and giving more power to the farmers and their organizations.
Future of agriculture agriculture - technology is a necessity in 2020 and beyondMamoon Ismail Khalid
The pace of change is accelerating with technological advances, innovative business models, and changing consumer preferences. Many of the world’s leading industries are grinding to a halt as governments across the globe attempt to thwart the further spread of Covid-19. Industries that involve bringing large numbers of people together physically are bearing the brunt, including sporting events, restaurants, education, and tourism.
But there are a few that have been deemed essential to everyday life, including healthcare, emergency services, food manufacturing, and farming.
Impact of Digital Technology on Livestock Farming by Adeshile, Adedeji RichardDeji Richard Adeshile
This project is submitted as end-of-course requirement (Digital Dividends: Strengthening the analog foundation of the digital revolution).
Key target audience are the Governments, development partners, private investors and the general public.
The message is that, ICT driven agric-economy is a win-win catalyst for commercial returns to Farmers and other Private investors as well as social returns to Governments.
Governments must act now to mitigate inherent threat to Food Security and humanity due to degenerating impacts of climate change and Community unrest. The threat also gives negative outlook on Governments efforts to making Agriculture a key alternative to non-oil revenue generation.
Smallholder Farmers’ Market Participation: Concepts and Methodological Approa...Olutosin Ademola Otekunrin
This paper reviews the empirical evidence on smallholder farmers’ market participation focusing on cash/food crops and livestock in Sub-Saharan Africa (SSA) with special attention on the methodological approaches employed in this region in an attempt to x-ray these methods, identifying their advantages and limitations and possible means smallholder farmers would be able to transit from subsistence to commercialised agriculture capable of lifting them out of poverty trap that seems to have engulfed many rural SSA. This paper recommends interventions geared towards improving smallholder farmers’ organisation, producers’ association and ensuring appreciable reduction in transaction costs and also improving farmers’ access to productive assets and improved technologies capable of stimulating profitable smallholders’ market participation.
Value Chain Bankrolling: Strategy towards enhancing growth in Agriculture sec...IJMER
Value chain has been an important concept in management offering improvement over the
traditional supply or distribution chain, with an aim to optimize the chain and reduce it to limited links
with each one performing an activity to enhance the value of the product and not merely the cost. Further,
management of such value chain network should focus on cohesively taking the stake-holders along and
sharing / spreading the benefits among them, such that the network becomes symbiotic and sustainable,
and the process of value-addition & delivery gets ethical. The main objective of this research paper is to
highlight the key value chain activities in context to agricultural products and suggests the importance of
value chain financing which requires due attention from National and Regional level financing
corporations.
Future of agriculture agriculture - technology is a necessity in 2020 and beyondMamoon Ismail Khalid
The pace of change is accelerating with technological advances, innovative business models, and changing consumer preferences. Many of the world’s leading industries are grinding to a halt as governments across the globe attempt to thwart the further spread of Covid-19. Industries that involve bringing large numbers of people together physically are bearing the brunt, including sporting events, restaurants, education, and tourism.
But there are a few that have been deemed essential to everyday life, including healthcare, emergency services, food manufacturing, and farming.
Impact of Digital Technology on Livestock Farming by Adeshile, Adedeji RichardDeji Richard Adeshile
This project is submitted as end-of-course requirement (Digital Dividends: Strengthening the analog foundation of the digital revolution).
Key target audience are the Governments, development partners, private investors and the general public.
The message is that, ICT driven agric-economy is a win-win catalyst for commercial returns to Farmers and other Private investors as well as social returns to Governments.
Governments must act now to mitigate inherent threat to Food Security and humanity due to degenerating impacts of climate change and Community unrest. The threat also gives negative outlook on Governments efforts to making Agriculture a key alternative to non-oil revenue generation.
Smallholder Farmers’ Market Participation: Concepts and Methodological Approa...Olutosin Ademola Otekunrin
This paper reviews the empirical evidence on smallholder farmers’ market participation focusing on cash/food crops and livestock in Sub-Saharan Africa (SSA) with special attention on the methodological approaches employed in this region in an attempt to x-ray these methods, identifying their advantages and limitations and possible means smallholder farmers would be able to transit from subsistence to commercialised agriculture capable of lifting them out of poverty trap that seems to have engulfed many rural SSA. This paper recommends interventions geared towards improving smallholder farmers’ organisation, producers’ association and ensuring appreciable reduction in transaction costs and also improving farmers’ access to productive assets and improved technologies capable of stimulating profitable smallholders’ market participation.
Value Chain Bankrolling: Strategy towards enhancing growth in Agriculture sec...IJMER
Value chain has been an important concept in management offering improvement over the
traditional supply or distribution chain, with an aim to optimize the chain and reduce it to limited links
with each one performing an activity to enhance the value of the product and not merely the cost. Further,
management of such value chain network should focus on cohesively taking the stake-holders along and
sharing / spreading the benefits among them, such that the network becomes symbiotic and sustainable,
and the process of value-addition & delivery gets ethical. The main objective of this research paper is to
highlight the key value chain activities in context to agricultural products and suggests the importance of
value chain financing which requires due attention from National and Regional level financing
corporations.
ICT access needs and challenges for agricultural stakeholdersICT access needs and challenges for agricultural stakeholders by Stella Kamuyu Wanjau - EAFF
Personal Brand Statement:
As an Army veteran dedicated to lifelong learning, I bring a disciplined, strategic mindset to my pursuits. I am constantly expanding my knowledge to innovate and lead effectively. My journey is driven by a commitment to excellence, and to make a meaningful impact in the world.
Improving profitability for small businessBen Wann
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A Memorandum of Association (MOA) is a legal document that outlines the fundamental principles and objectives upon which a company operates. It serves as the company's charter or constitution and defines the scope of its activities. Here's a detailed note on the MOA:
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Importance of Memorandum of Association:
Legal Requirement: The MOA is a legal requirement for the formation of a company. It must be filed with the Registrar of Companies during the incorporation process.
Constitutional Document: It serves as the company's constitutional document, defining its scope, powers, and limitations.
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External Communication: It provides clarity to external parties, such as investors, creditors, and regulatory authorities, regarding the company's objectives and powers.
https://seribangash.com/difference-public-and-private-company-law/
Binding Authority: The company and its members are bound by the provisions of the MOA. Any action taken beyond its scope may be considered ultra vires (beyond the powers) of the company and therefore void.
Amendment of MOA:
While the MOA lays down the company's fundamental principles, it is not entirely immutable. It can be amended, but only under specific circumstances and in compliance with legal procedures. Amendments typically require shareholder
VAT Registration Outlined In UAE: Benefits and Requirementsuae taxgpt
Vat Registration is a legal obligation for businesses meeting the threshold requirement, helping companies avoid fines and ramifications. Contact now!
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Unveiling the Secrets How Does Generative AI Work.pdfSam H
At its core, generative artificial intelligence relies on the concept of generative models, which serve as engines that churn out entirely new data resembling their training data. It is like a sculptor who has studied so many forms found in nature and then uses this knowledge to create sculptures from his imagination that have never been seen before anywhere else. If taken to cyberspace, gans work almost the same way.
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1. The Potential of Virtual mMarkets for Reducing Transactions Costs
and Bridging the Economic Divide in Dualistic Agriculture
Jack Armour1
Operations Manager
Free State Agriculture
Bloemfontein, South Africa
Email: jack@vslandbou.co.za
ABSTRACT
Key words / concepts: Transactions cost theory, agribusiness clusters / agricultural hubs, duel economies, rural
revitalisation, integrated systems approach, Geographic Information Systems (GIS).
This paper is a presentation of a sound business concept based on economic marketing theory,
which has the potential to bridge the economic divide between substance and commercial farmers.
In the South African context this means providing a market based incentive for the 2.7 million
subsistence and backyard home gardeners (DAFF 2011) to market their excess produce at virtually
no transactions costs. This could potentially provide 1 million additional jobs, dramatically improve
local food security, revitalise backward rural economies and facilitate the graduation from small-
scale to commercial farming, adding to the much needed pool of suitably experienced potential
beneficiaries for land reform projects in SA.
The holistic integrated systems approach applied to the concept in short:
1. THE I.C.T. PLATFORM: Using a basic mobile phone, a producer of any quantity of produce,
no matter how small, can place a geo-referenced log of the produce, on a centralised
database platform listing various product attributes
2. THE AGENT – PRIMARY FUNCTION: Entrepreneurial market agents, using a GIS enabled
smart phone, can either
a. calculate the shortest route to fill their e.g. 1ton pickup or
1
Author Contact: R. Jack Armour Free State Agriculture, # 4 Nobel Street, Bloemfontein, 9300, South Africa. E-mail:
jack@vslandbou.co.za tel: (+27) 051 444 4609 mobile: (+27) 071 672 0271 fax: (+27) 086 512 6656
Biographical Note: Jack Armour (PhD, Agricultural and Natural Resource Economics, University of the Free State, 2007)
currently works as operations manager for Free State Agriculture, a provincial affiliate of AgriSA, serving the commercial
farmers of South Africa. The main portfolio he manages is agricultural transformation, land reform and black economic
empowerment, necessitating innovative ideas to transform the post apartheid white dominated agricultural sector whilst
protecting the constitutional rights of the commercial farming sector and at the same time maintaining food security. The
aim of presenting at this forum is to present a concept that will hopefully guide applications development to make the
concept a reality to improve livelihoods and food security in Africa.
1.
2. b. scan within an x radius of how far they are prepared to travel, what is available or
c. calculate what is the shortest route to complete an order for xyz product/s
3. THE LOCAL AGROPROCESSING HUB: Agents have facilities at the local small town
agricultural hub / agribusiness cluster to further process the raw produce into the form
required by the formal agricultural markets and retailers, thereby stimulating rural
revitalisation, job creation and place of origin branding
4. THE AGENT – EXTENDED FUNCTIONS: Agents effectively become extension officers;
suppliers of market information, suppliers of inputs and micro finance to the small growers,
catalysing the formation of small cooperatives, and facilitating the transition from
subsistence to commercial market orientated agriculture.
5. THE POTENTIAL NICHE / BRAND: The database platform can also be used by the marketing
agents to bypass the traditional oligopolistic fresh produce marketing system in SA and sell
directly to the retail sector under a niche market brand that stands for inter alia, Fair Trade,
minimal travel costs, efficient resource use, etc. etc.
Following introductory chapters consisting of a literature review and the history of the development
of the concept, the chapters of this paper expound on each of these points above.
Most of the ICT components required for the above already exist as individual applications, but an
integrated seamless connection of these does not, as far as the author is aware. For example, Google
Trader, Google Maps and M-PESA exist on their own, but no dedicated database to capture all the
valuable market information for analysis and research, no application that works out the shortest
route from my current position to the geo-tagged trades advertised on Google Trader, no application
to book the trades and request mBanking details for payment on delivery, and no platform to
evaluate the concluded trade rating both the seller and the agent, and so building up a track record
as in E-Bay for example.
Furthermore the human resources (agents) and physical infrastructure (3G coverage and network of
local agro processing and logistics hubs) on the ground required to make the system successful are
also crucial components that are discussed in the paper.
This paper is a plea to bridge the digital divide between farmers, agricultural researchers, extension
officers, government officials and practitioners on the ground dealing with the physical aspects of
growing food, who know and experience the real problems on the ground and the often very distant
ICT programmers and developers. Working together as an integrated team / with the correct
structures and systems in place, we could do far more toward achieving Improved Livelihoods and
Food Security in Africa.
The challenge is thus to bring the locally applicable supply of ICT applications and demand for these
together at grassroots organisations level, and not just at international research and development /
NGO level.
1. INTRODUCTION
The following current dynamics in the agri-food sector are the major game-changers that will have
major implications for smallholder integration into formal markets in South Africa in the near future:
Massmart/WalMart has recent announced a R100 million supplier development fund, with a
30% smallholder procurement commitment. They have bought FruitSpot, a major fruit and
vegetable wholesale and Logistics Company and ‘poached’ Woolworths’ ‘Farming for the Future’
manager, Kobus Pienaar. This has the potential to shake up the existing very concentrated food
retail sector and open the playing fields for smallholder procurement. As such also to stimulate
innovations around efficient organisation of and procurement from smallholders.
2.
3. New Broad-Based Black Economic Empowerment (BBBEE) regulations with preferential
procurement policies, forcing large retailers to procure from AgriBEE accredited suppliers and
value adders, who in turn will have to procure from small-holder farmers
Increasing competition from the rest of Africa as, with the help of mainly the Chinese,
infrastructure is developed and markets opening up, and so-called ‘land grabs’ bringing in
foreign investment and technology, including the Alliance for a Green Revolution in Africa with
the backing of inter alia, seed giant Monsanto, the Bill and Melinda Gates Foundation, etc.
Vodafone and Accenture released a research report in October 2011 showing that mobile
phones had the potential to add US$138 billion additionally to the turnover of small-scale
farmers in Africa.
The much publicised recent global trio of climate change (requiring a new energy economy), the
global food crisis (leading to a rethink of concepts such as food sovereignty, and national and
local food security), and the global economic meltdown (forcing a rethink on capitalistic greed
and financial markets and systems). All of these point to corporate responsibility and long-term
sustainability.
The big “What if?”: What if the price of Brent Crude should double? Clem Sunter did a similar
exercise for Anglo American in the mid 1990s, a decade before fuel shot up from $40 to
$80/barrel (Visser & Sunter, 2002) . Would current value chains exist as they are today, or would
they look considerably different with brent crude at $200 / barrel?
The Arab spring and eastern uprisings at the end of 2011 show what potential social-media on
mobile phones can have.
All of the above depict the environment in which smallholders, as well as the value chains they
provide, will need to compete and survive in. Conventional wisdom (mainstream economic and
agricultural economic teaching) dictates that creating economies of scale is the means of reducing
transactions costs to remain competitive. This theory may be sound with perfect markets, free trade,
transparent and open information exchange and unlimited resources, but bearing in mind the above,
we need to be very careful of the systems and structures we propose for integrating smallholders
into value chains.
Dame Barbara Stocking, Chief Executive Officer of Oxfam is quoted in the media release of the
Vodafone and Accenture (2011) report saying:
“With more than 1.5 billion people worldwide dependent on smallholder agriculture - a group that
includes half the world’s undernourished people - mobile telephony could have significant potential
to help the poorest farmers towards food and income security. We particularly welcome the focus
that this research places on how core business, rather than corporate philanthropy, can operate to
have a positive developmental impact.”
The problem:
Background of smallholder agriculture in South Africa:
The author was involved in the BATAT (Broadening Access to Agricultural Trade) Marketing Drive as
reported by Van Reenen (1997) as a programme aimed to improve market access of small scale
farmers in previously disadvantaged communities of newly post-apartheid South Africa. The
importance of marketing in rural development cannot be overemphasised. It is the profit incentive
which encourages farmers to produce commercially. An overview of the present production and
marketing activities of small scale farmers was obtained and the marketing constraints experienced
by small scale farmers were identified. Constraints include a lack of transport services, a lack of road
infrastructure, communication infrastructure and storage facilities. Farmers also needed training and
a regular source of market information. Provincial Departments of Agriculture were suggested to
3.
4. play the role of providing information and training. Infrastructure, however, was identified as a
function of other government departments and in some cases private companies. The establishment
of rural processing facilities was to be encouraged, and it was also suggested that farmers could also
seize marketing opportunities by working together in their production and marketing activities.
In a paper by Groenewald (2003) entitled “Conditions for Successful Land Reform in Africa”,
conditions 3 and 4 out of the 6 related to markets:
(3) Potentially successful farmers must be selected and given special support, including extension and
adult education. Existing extension services are generally not adequate, particularly in the fields of
finance and marketing.
(4) Complementary services and infrastructure are needed in the form of improved access to financial
services, markets and inputs and also improved transport, health, communications and other
infrastructure.
Van Renen (1997) further summarised the marketing situation of small farmers as:
i. Substantial amounts of production are either used for home consumption or sold to local
communities.
ii. The use of channels available varies among individuals and also among provinces, being
mainly influenced by the availability of market information and infrastructure.
iii. Although cooperatives do play a role in grain marketing, the role of cooperatives is rather
limited and in some provinces, small farmers complain about discrimination against them by
traditionally commercial farmer-owned cooperatives.
iv. Very little value-adding was done by the small-scale farmers.
v. Transport services and infrastructure varied from satisfactory to very poor, depending on
location.
vi. Cool storage facilities were generally not available and in grain producing areas, silo’s often
not favourably located for small-scale farmers.
vii. Small scale farmers generally did not have satisfactory access to market information.
Groenewald (2003) further stressed that “for their development, new farmers depend on revenues
obtained by selling products at prices which render it profitable to produce; marketing, or rather
access to profitable markets, is vitally important for the success of any farmer.”
Access to markets (the transaction costs problem): ample research clearly states that a link between
smallholders and markets is missing. A form of collective organisation is usually suggested to
transcend the transactions costs problem. The Government in South Africa is currently promoting
the formation of co-operatives. However, empowering local entrepreneurial agents (National Rural
Youth Services Corps – NARYSEC youth) with ICT technology to access virtual markets may be a more
effective strategy, also creating more jobs.
Marketing: The potential for Fair Trade-type labelling/branding to distinguish small holder farmers
exists, but do smallholders have the collective organisational capabilities to utilise this form of
branding.
The development of a community brand name for a niche market product / or range of products
may also create an agri-tourism spinnoff in a community, attracting tourists to visit the community
and .
4.
5. The proposed solution:
Pinstrup-Andersen and Pandya-Lorch (2001) devote a concluding chapter, reported by Uday Mohan,
in their IFPRI series book looking at the 2020 Vission or Food, Agriculture and the Environment to
“Bridgeing the Digital Divide”. Here the use of the GrameenPhone mobile phones by Grameen Bank,
a little more than three years old then, had already put mobile phones in the hands of women in
more than 1 200 Bangladeshi villages.
The use of mobile phone technology as the core of a business model has the potential to bridge the
economic divide between substance and commercial farmers. In the South African context this
means providing a market-based incentive for the 2.7 million subsistence and backyard home
gardeners (DAFF 2011) to market their excess produce at virtually no transaction cost. This could
potentially provide 1 million additional jobs, dramatically improve local food security, revitalise
backward rural economies and facilitate the graduation from small-scale to commercial farming,
adding to the much needed pool of suitably experienced potential beneficiaries for land reform
projects in SA.
The report by Vodafone and Accenture (2011) provides the following breakdown of the principal
benefits of mobile telecommunications applications:
Mobile information services could lift incomes by $51bn and require 174 million mobile
connections.
Mobile financial services could increase incomes by $50bn based on a required 240 million
mobile connections.
Mobile agricultural trading services could generate $35bn, assuming 133 million mobile
connections were established.
Supply chain and data services could save over 2 mega tonnes of CO2 emissions and reduce
food waste.
Assuming in South Africa, the 2.7 million subsistence and backyard home gardeners (DAFF 2011) use
the potential technology described in the Vodafone and Accenture (2011), and have access to a
mobile connection, Mobile agricultural trading services could generate an additional $.7bn
(133mil/100 x 2 = 2.66 mil, so 35bil / 100 x 2 = .7bil) to the rural economies desperately needing this
king of capital injection.
According to the Vodafone and Accenture (2011) report, “mobile telecommunications can connect
farmers to markets, finance and education, making it possible to monitor resources and track
products. This unlocks productivity potential while helping to manage the impacts of increased
production, such as increased water use and greenhouse gas emissions.” These all very topical issues,
especially since recently concluding the COP17 Climate Change negotiations here in Durban, South
Africa.
The Vodafone and Accenture (2011) study focused on 12 opportunities that deliver broad socio-
economic and environmental benefits, grouped in four categories identified through stakeholder
consultations as the most important:
5.
6. Improving access to financial services
1) Mobile payment system
2) Micro-insurance system
3) Micro-lending platform
Increasing access and affordability of financial services tailored for agricultural purposes
Provision of agricultural information
4) Mobile information platform
5) Farmer helpline
Delivering information relevant to farmers, such as agricultural techniques, commodity prices and
weather forecasts, where traditional methods of communication are limited
Improving data visibility for supply chain efficiency
6) Smart logistics
7) Traceability and tracking system
8) Mobile management of supplier networks
9) Mobile management of distribution networks
Optimising supply chain management across the sector, and delivering efficiency improvements for
transportation logistics
Enhancing access to markets
10) Agricultural trading platform
11) Agricultural tendering platform
12) Agricultural bartering platform
Enhancing the link between commodity exchanges, traders, buyers and sellers of agricultural
produce
As the Vodafone and Accenture (2011) report concludes: “The systems required to deliver these
opportunities are both complex and fragmented and, as such, need the collective support of key
stakeholders across the agricultural supply chain.” This supports the basic premise of this paper,
namely that a holistic integrated systems approach is required to integrate all the separate
fragments in an easy to use and seamless (“farmer friendly”) mobile application, together with the
physical infrastructure required and the trained agents to do the jobs and spread the word.
In the study by Urbach & Sacks (2009) four simple technologies that have major benefits for
smallholder farmers are profiled; Hybrid and genetically modified seeds, greenhouses, irrigation, and
plug seedlings, all of which increase farm outputs and allow farmers to harvest multiple crops a year.
However, though these technologies have the potential to be very successful, there are several
barriers that prevent their greater use, namely, lack of credit, poor infrastructure, high transaction
costs, and educational and cultural barriers.
In Baiphethi et al (2011) the adoption of rainwater harvesting technology for increased crop
production among resource poor smallholder farmers in Thaba Nchu in the Free State Province was
initially good and substantial yield increases were achieved, but when the farmers realised it was
difficult to sell the increased production, there was no longer the incentive to use the productivity
enhancing technology. Virtual mMarkets could be just the tool required for the revitalisation of rural
smallholder agriculture.
6.
7. The subsequent sections deal with the potential integration of the various ICT identified with the
existing marketing chains and government programmes.
2. THE I.C.T. PLATFORM:
Using a basic mobile phone, a producer of any quantity of produce, no matter how small, can place a
geo-referenced log of the produce, on a centralised database platform listing various product
attributes
Figure 1: Schematic of the proposed virtual agricultural market database populated and accessed
by mobile phones
In the initial research proposal (Armour 2007) transactions cost were cut to a minimal with the use
of a 7 digit code using a “please Call me” free SMS on any basic mobile phone in South Africa. More
comprehensive research has recently been published on the use of the “Please Call Me” function by
Bidwell et al 2011a&b.
An exciting development to partially counter the problem of poor rural mobile phone coverage is the
launch of affordable mobile satellite phone systems by inter alia SAAB-Grintek and Vox-Oreon.
3. THE AGENT – PRIMARY FUNCTION:
Entrepreneurial market agents (including the Department of Land Reform’s National Rural Youth
Services Corps - NARYSEC student to be trained to access the database), using a GIS enabled smart
phone, can either:
a. calculate the shortest route to fill their e.g. 1ton pickup or
b. scan within an x radius of how far they are prepared to travel, what is available or
c. calculate what is the shortest route to complete an order for xyz product/s
7.
8. 4. THE LOCAL AGROPROCESSING HUB:
Agents have facilities at the local small town agricultural hub / agribusiness cluster to further process
the raw produce into the form required by the formal agricultural markets and retailers, thereby
stimulating rural revitalisation, job creation and place of origin branding.
Market forces dictate best where these should be located – as soon as there is political interference
you could create a “white elephant”. Careful spatial analysis and community participation is required
if government agenises are building the agro-processing hubs.
Figure 2: Example of the planned Tweespruit Agribusiness Cluster as a form of facilitative
infrastructure for local market value-adding facilities
5. THE AGENT – EXTENDED FUNCTIONS:
Agents effectively become extension officers; suppliers of market information, suppliers of inputs
and micro finance to the small growers, catalysing the formation of small cooperatives, and
facilitating the transition from subsistence to commercial market orientated agriculture.
Agricultural extension officers will be tasked to educate smallholders about the virtual market and
how to use it, a “viral” spread if the virtual market via word of mouth and the social media would
also be hoped for! Thus agents may be anyone who uses the programmes and sees the potential.
NARYSEC youth could also be trained to complement their community participation and facilitation
skills they are expected to take back to the local communities from which they were selected.
6. THE POTENTIAL NICHE / BRAND:
The facilitation of market access by drastic reduction of transactions costs, provided by the virtual
mMarket may also lead to the proliferation of niche / speciality branded produce and eventual place
of origin branding.
8.
9. The database platform can also be used by the marketing agents to bypass the traditional
oligopolistic fresh produce marketing system in SA and sell directly to the retail sector under a niche
market brand that stands for inter alia, Fair Trade, minimal travel costs, efficient resource use, etc.
etc.
7. START OF A SPECIALITY CLUSTER AND SMALLHOLDER REVIVAL?
As the value adding hub become productive and other value adding activities cluster around these
hubs, a demand for the subdivision of neighbouring farm sizes will exist, spurring small-holder
farmer growth around the cluster. Where the cluster is close to an urban area offering executive
jobs, health care and good schools as some of the critical location requirements for a viable agri-
village, these agric-villages could potentially attract ageing white farmers from their extensive rural
farms to bring their agricultural institutional knowledge to the local village and cluster, thus freeing
up extensive land for much needed Land Reform in the South African context. We can come closer
to achieving the transformation objectives in South Africa, while simultaneously addressing the fears
of commercial white farmers by promoting and facilitating the transition of large-area market
related small turnover farming to small-area, intensive-farming with well-established value chain
linkages.
An example of a vibrant agri-village is Crossways Farm Village in the Eastern Cape Province, 20km
outside of Port Elizabeth (http://www.crosswaysfarmvillage.co.za/) developed by Architects Chris
Mulder and Associates ( www.cmia.co.za ) as a state of the art agricultural residential development.
8. SUMMARY AND CONCLUSIONS
Most of the ICT components required for the above already exist as individual applications, but an
integrated seamless connection of these does not, as far as the author is aware. For example, Google
Trader, Google Maps and M-PESA exist on their own, but no dedicated database to capture all the
valuable market information for analysis and research, no application that works out the shortest
route from my current position to the geo-tagged trades advertised on Google Trader, no application
to book the trades and request mBanking details for payment on delivery, and no platform to
evaluate the concluded trade rating both the seller and the agent, and so building up a track record
as in E-Bay for example.
Furthermore the human resources (agents) and physical infrastructure (3G coverage and network of
local agro processing and logistics hubs) on the ground required to make the system successful are
also crucial components that are discussed in the paper.
This paper is a plea to bridge the digital divide between farmers, agricultural researchers, extension
officers, government officials and practitioners on the ground dealing with the physical aspects of
growing food, who know and experience the real problems on the ground and the often very distant
ICT programmers and developers. Working together as an integrated team / with the correct
structures and systems in place, we could do far more toward achieving Improved Livelihoods and
Food Security in Africa.
The challenge is thus to bring the locally applicable supply of ICT applications and demand for these
together at grassroots organisations level, and not just at international research and development /
NGO level.
9.
10. For effective integration of smallholder farmers into traditional and new food value chains the
following is required:
To embrace new technology available; to access available information, to group and mobilise
effectively as necessary so as to transact effectively and efficiently;
To fully equip NRYSC learners with this new technology, teaching them the skills to identify
value-adding opportunities in the areas from where they come, and equipping and supporting
them fully with effective linkages at local government, agricultural extension, organised
agriculture, and through these to facilitate direct linkages with existing agricultural value chains
and enhance their ability to create new locally-specific and niche value chains.
For smallholders to organise into smaller sub-groupings of local agricultural associations create
efficient and effective win-win relationships, where experience farmers can provide mentorship
and basic assistance to the smallholders and in return improve AgriBEE ratings.
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