Connecting smallholders with dynamic markets: a market information service in Zambia

Abstract

Commodity markets have changed significantly in the past two decades, with smallholders increasingly requiring robust market intelligence to understand and secure benefit from the new environment. This article explores the approach to, and lessons stemming from, an IFAD-financed market information service in Zambia. It finds that by locating the service within a pre-existing institution with legitimacy and credibility, the service has secured the interest of a wide range of actors, and has better enabled smallholders and traders to access and utilise relevant, up-to-date, and actionable information to shape decision-making. The article concludes by discussing the key considerations that shaped the institutional analysis, and the issues that will influence the financial sustainability of the service.

Relier les petits exploitants à des marchés dynamiques : un service d'information sur les marchés en Zambie

Les marchés des produits de base ont considérablement changé au cours des vingt dernières années, les petits exploitants demandant de plus en plus des renseignements robustes sur les marchés afin de comprendre et de profiter du nouvel environnement. Cet article se penche sur l'approche d'un service d'information sur les marchés financé par le FIDA en Zambie et sur les enseignements en découlant. Il constate qu'en situant le service au sein d'une institution existante dotée de légitimité et de crédibilité, on a fait que le service suscite l'intérêt d'une large gamme d'acteurs et permette mieux aux petits exploitants et aux négociants d'accéder et d'utiliser des informations pertinentes, actualisées et utilisables au moment de prendre des décisions. L'article conclut par une discussion des considérations clés qui ont influé sur l'analyse institutionnelle, et des questions qui influeront sur la durabilité financière du service.

Fazendo a ligação do pequeno produtor com mercados dinâmicos: um serviço de informação de mercado na Zâmbia

Os mercados de commodities têm mudado significativamente nas últimas duas décadas, com os pequenos produtores necessitando cada vez mais de inteligência de mercado profunda para compreender e assegurar benefícios do novo ambiente. Este artigo explora a abordagem de um serviço de informações de mercado financiado pelo IFAD na Zâmbia e as lições aprendidas com ele. Ele constata que ao se estabelecer o serviço dentro de uma instituição pré-existente com legitimidade e credibilidade, o serviço tem assegurado o interesse de uma ampla série de agentes e tem permitido mais que os pequenos produtores e comerciantes tenham acesso e utilizem informações relevantes, atualizadas e em relação às quais se pode agir para influenciar as tomadas de decisões. O artigo conclui discutindo as considerações-chave que influenciaram a análise institucional e as questões que influenciarão a sustentabilidade financeira do serviço.

Vinculando a pequeños productores con mercados dinámicos: el servicio de información de mercados de Zambia

Los mercados de productos básicos han cambiado mucho en los últimos 20 años y por ello los pequeños productores precisan de información detallada de los mercados para entender y generar ganancias en un entorno cambiante. Este ensayo analiza los mecanismos del servicio de información de mercados de Zambia, financiado por IFAD, y examina los aprendizajes obtenidos. Los autores afirman que si el servicio se ofrece en una institución ya existente que goza de legitimidad y credibilidad, termina generando interés entre una amplia gama de personas y permite que los pequeños productores y comerciantes tengan acceso y aprovechen la información relevante, actual y pertinente para la toma de decisiones. El ensayo concluye examinando las principales factores que influyen en el análisis institucional y los temas que tienen que ver en la sustentabilidad financiera del servicio.

Keywords:

• Environment
• Labour and livelihoods
• Sub-Saharan Africa

Acknowledgements

The authors would like to thank the International Fund for Agricultural Development (IFAD), the Zambia National Farmers Union, and the Ministry of Agriculture and Cooperatives, Zambia, for their support in the production of this article. They also are grateful to Mat Pritchard, Carla Ferreira, Kananyo Nwanze, Chitra Deshpande, Julius Shawa, and Craig Castro for their comments on earlier drafts. The views expressed are those of the authors and do not necessarily reflect those of IFAD, the Government of the Republic of Zambia, the Zambia National Farmers Union, or GRM International Ltd.

Notes

‘A market information system (MIS) is a service that involves the collection on a regular basis of information on prices and, in some cases, quantities of widely traded agricultural products from rural assembly markets, wholesale and retail markets, as appropriate, and dissemination of this information on a timely and regular basis through various media to farmers, traders, government officials, policy makers and others, including consumers’ (Shepherd 1998; cf. Ferris et al. 2006b: iii). As the case study will illuminate, the MIS adopted in Zambia is a little different and, based on the needs of its clients, it directly enables farmers and traders to engage in transactions.

The membership of the ZNFU consists of small-scale farmers’ associations, large-scale farmers, corporate members, specialised associations, and the agribusiness chamber. The union has a secretariat with a staffing level of about 60, including district staff. SHEMP was funded by an IFAD loan and was implemented from 2000 to 2008. It sought to stimulate commercialisation of the smallholder sector and enable smallholders to operate profitably. The Agribusiness Development Component (January 2006 – June 2008), which supported the design and implementation of ZNFU 4455, was implemented by a consortium led by a company called GRM International Ltd (http://www.grminternational.com).

http://www.farmprices.co.zm

The survey, conducted by the ZNFU 4455 Administrator and a SHEMP ADC Business Development Facilitator, entailed speaking with owners of 100 cell-phone numbers chosen at random from the database of service users. The majority of those interviewed in the random sample were smallholder farmers. The study was undertaken to provide indicative findings and as a basis for discussion with stakeholders. It was not intended to be scientifically robust, and the findings should be considered against this.

This does not imply that donor financing should not be time-bound. Rather, it suggests that it is often difficult to provide reliable estimates of the time taken for the private sector to see the benefits of such a service. Moreover, the cost-benefit will be more evident in time and as the number of users increase, and therefore full or partial donor financing will likely be required until this tipping point is reached. As such, some elasticity may be required from donors.

This includes a transport MIS, which would enable freight companies to make improved used of backloads.

Additional information

Notes on contributors

Simon Milligan

Simon Milligan is a social scientist with a background in livelihoods analysis. He has been a long-term consultant in Liberia (EC) and Nigeria (DFID), and has conducted short-term assignments for DFID, IFAD, SDC, and the EC. He currently works for GRM International and is based at their Southern Africa office in Pretoria. <[email protected]>

Alex Price

Alex Price is an agribusiness marketing specialist with more than 30 years of experience working for multi-national companies, donor agencies, co-operatives, SMEs, and farmer unions in Europe, Asia, and Africa. He was the Agricultural Marketing Consultant on the IFAD-funded SHEMP Agribusiness Development Programme. He currently works on connectivity assignments in Africa. <[email protected]> <[email protected]>

Eric Sommeling

Eric Sommeling is an IT systems specialist based in Zambia. He provided support to SHEMP ADC and the Zambia National Farmers Union in the design and implementation of ZNFU 4455, and has conducted similar assignments in South-East Asia. <[email protected]>

Gerrit Struyf

Gerrit Struyf is an agricultural engineer with more than 25 years of practical development and agricultural business experience in Africa. He was the team leader of the IFAD-funded SHEMP Agribusiness Development Programme. He is currently based in Botswana and is a freelance consultant. <[email protected]>