Blinkers associated with basing projections on hectares of land

While economists have been schooled into projecting agricultural income starting from the size of the land, such an approach is now found wanting in the knowledge economy. There is no doubt that land is important but valuating natural resources for investment purposes should go beyond hectares of land to the quality of soil and water, among other key elements that are often ignored. The fact that Masvingo, Mazowe, Gokwe and Muzarabani have different climatic conditions and soil types means their mize yields will also be contextual. That is why you cannot have the same hectares as projections of yields.

Human capacity as a more important part of the assessment criteria

There is an emerging realization that human capacity is a critical consideration over and above natural resources. Two farmers in the same area, given the same inputs and planting at the same time will produce different yields due to intrinsic human factors and talents. So if you do not assess human capacity in terms of knowledge within farmers at different levels you will miss fundamental factors that influence agricultural performance. Unless there is solid criteria on which farmers can be assessed, it will remain difficult to find a pathway for upgrading farmers from one level to the other.

When the right assessment criteria are used, within farming areas farmers can be found more than five different categories of farmers with diverse capacities and needs. That is why mapping knowledge pathways is increasingly becoming more important.  For instance, how much knowledge do two new neighboring farmers have?  How much knowledge are they sharing or they are just living side by side as two silos? It may take years for new farmers to build relationships that stimulate knowledge sharing. Where relationships are weak, knowledge sharing pathways are also weak. 

The power of appropriate farmer classification

During Zimbabwe’s land reform, land allocation processes were not based on resources or knowledge within farmers. That is why farmers from different backgrounds and with different resource endowment levels can be found in the same neighborhood. An Ambassador can been seen sharing a boundary with a peasant farmer. This could have its own social advantages but there is no knowledge sharing ecosystem due to different classes. Such anomalies are rendering the agriculture sector more fragile because commercial farmers cannot plan with A1 farmers who have different needs. Villagers in the same communal area can easily work together because they share the same characteristics and social fabric. 

Before land reform, it was easy to coordinate production among large scale commercial farmers because they had a well-developed knowledge sharing culture around clubs where they met to discuss business while playing golf. This is where monopolistic strategies were stitched. On the other hand, new farmers may have come onto the land through politics, government positions, nepotism, company executive positions linked to government or they are war veterans.  All these diverse backgrounds have turned new farming areas into a melting pot of cultures that are taking long to fuse positively.

Sense of belonging among communal farmers

Communal farmers are more bonded because having been together for decades, they have developed strong relationships enabling them to share resources.  Their classes are not different – they meet subsistence and surplus requirements. There is also a certain level to which rural communities value their sense of belonging. For instance they do not import labor but local people can easily provide labor in exchange for food or getting their land ploughed for cropping.

The notion of kuronzera/ukulagisa is a perfect example of situations where some communal families use their grazing ability to own cattle and enjoy related benefits like milk by herding cattle on behalf of the owners while they also use to grow crops.  Nhimbe is another way of sharing resources and knowledge. You just brew some mahewu or beer and neighbors bring spans of oxen to plough and plant for you. Another powerful resource which was used for different purposes including exchanging crops, seed and livestock breeds was the extended family system.  Although it still exists it has been weakened by partisan politics and imported religion.

How the benefits of proper classification extend to the market

African informal mass markets like Mbare also survive hardships because they are public institutions where knowledge travels freely through networks and relationships.  Actors like traders creatively bring their knowledge together in order to be more competitive, for example to fight imports as a group. Conversely the private sector is too competitive to the extent of not sharing knowledge or information critical for the survival of the entire industry. Farmer unions, chambers of commerce and churches also tend to cherry pick members from robust social ecosystems and put them in silos like political parties and denominations through a membership drive. This blocks knowledge sharing by dividing communities and families.  There should be a mechanism for new farmers to be brought together in ways that build strong relationships. This is more on the social side but can form the glue for economic empowerment and rebuilding social capital currently being under-utilized. 

Paying lip service to proper classification explains why farmers are not protected from dubious service providers such as those who provide borehole drilling services or veterinary products. Ideally this is where farmer unions should come in and develop capacity to design terms of reference as well as contracts for different service providers including those claiming to do artificial insemination or soil as well as water testing. It is not enough to ask for quotations from service providers but there should be  contracts with clear terms of reference and payment terms.  This will ensure recourse in the case of service providers failing to deliver.

However there is a limit to what farmers can do

eMKambo is not suggesting that farmer classification will address all challenges faced by farmers. Given the complexities and technical knowledges involved, issues related to water siting and borehole drilling should be done by government agencies like the Zimbabwe National Water Authority (ZINWA). These should map key natural resources like underground water, showing all information and maps about water availability or yield in different farms or production zones. This could be another income generating route for ZINWA.  The same way critical resources like roads and dams are planned should be extended to underground water and minerals.  We cannot have every Jack and Jill doing what they want.

Due to limited resources, farmers end up at the mercy of dubious service providers. With new technology we should be able to easily estimate underground water availability the same way mining companies can know that underground minerals will last for more than 40 years and start building houses and other infrastructure before actual mining begins. The same applies to soils. Communal farmers have been tilling the same soil for more than 100 years. It should be the role of government to map soils and conduct testing so that farmers do not continue expecting better yields from exhausted soils. We cannot expect every farmer to take his own soil samples when the land belongs to the government.

Unfortunately African policy makers have been blinded by imported knowledge, thinking that fertilizers like Ammonium Nitrate and Compound D can be solutions to our soils. To what extent are these fertilizers really adding value?  What if some soils now need totally new types of fertilizers? The livestock sector also need fresh experts who can examine the kinds of grasses and pastures since original pastures have disappeared, giving way to grasses that are no longer suitable for livestock production. 

How much can be left in private hands?

African policy makers should realize that there are sectors or areas that should not be left to the private sector. If governments ensure institutions like the Standard Association of Zimbabwe (SAZ) get involved in certifying food standards, why not do the same for underground water, soils, minerals, pastures and other resources?  Borehole drillers should be certified. Currently anyone able to buy drilling machines can easily masquerade as a borehole driller or water diviner and take advantage of unsuspecting farmers.

Agriculture is not being taken as a serious profession or trade yet people have to be certified to practice as medical doctors or lawyers, among other fields. African traditional healers have remained on the periphery due to absence of proper certification. Absence of policy support creates a room for poor service delivery and proliferation of bogus practitioners. In many African systems, patenting of knowledge has been done through relationships built over decades and expressed through informal markets. How ca we support these pathways to become strong foundations for socio-economic growth?

Charles@knowledgetransafrica.com  / charles@emkambo.co.zw / info@knowledgetransafrica.com

Website: www.emkambo.co.zw / www.knowledgetransafrica.com

Mobile: 0772 137 717/ 0774 430 309/ 0712 737 430

The high cost of paying lip service to market research

African smallholder farmers are not the only ones famous for producing commodities before conducting market research. Corporates are not immune to such a disease. Instead of investing in market research, most African corporate companies prefer monopolizing the air waves, bill boards along urban roads and mainstream print media with advertisements. The consequences of such actions recently caught up with one of Zimbabwe’s big corporates which declared huge annual losses from a business portfolio comprising digital communication, banking and other business units. 

Rather than bringing into perspective customers’ historical experiences with agricultural corporates and financial institutions in Zimbabwe, the corporate mentioned above continues to develop products from the top using imported knowledge. Like some financial institutions, the thinking has been that an effective way of correcting or addressing customers’ negative historical experiences is through advertising and launching new products. Yet you can’t remove or heal people’s bad experiences with financial institutions through advertising or introducing new products. Neither can customers’ negative experiences be erased by creating more banks, introducing mobile money as a guise  of bringing banks closer to the people, advertisements, introducing zero deposits to new bank clients or even reducing transaction costs.

New approaches to rebuilding confidence

There is definite for corporates to come up with a totally new model of rebuilding confidence. For instance, the banking division of the corporate referred to above incurred losses due to operational costs. It embraced the agent banking model before conducting thorough market research, leading to operational costs. Youths and staff members who were engaged to promote the bank through reaching out to everyone and opening bank accounts in the streets were paid on the basis of the number of accounts opened not what the bank would get after accounts were opened. The majority of potential new clients opened bank accounts just for convenience and emergency not because they wanted to save money.

What is now clear is that there is a sound business model no longer exists between clients and banks in Zimbabwe. Customers are resorting to as a last option while some are forced by institutional arrangements where salaries have to come through banks. As if that is not bad enough, banks are not investing much in rebuilding the confidence of customers towards generating revenue and re-investing it through loan products. Ideally, more than 90% of bank revenue should be earned through loans but banks are not developing alternative loan products.

Failure to build business models around business ecosystems

The financial inclusion model being touted across Africa does not have a very strong component of revenue generation. One of the reasons is that financial institutions have failed to identify ecosystems around which sound business models can be built. For instance, what business model can be built with traders in informal markets like Mbare in Harare or Soweto market in Lusaka?  Banks have become more carried away with opening bank accounts through road shows and advertising. Their assumption has been that handing over more bank accounts to more people is equivalent to addressing historical and current challenges faced by clients. Yet as long as financial services are good, customers can travel long distances to open bank accounts using their own resources. Simplifying opening of bank account is not a solution.

Chasing too many hares and riding on development organizations

What also contributed to losses for the corporate mentioned above is not allowing new products to complete business cycles: early stage – growth – maturity – decline. Ideally this takes five to 10 years but the corporate disrupted these growth patterns by constantly bombarding the markets with advertisements of other new products. Some of the products have relied too much on other actors like development programmes to provide life support. For instance an agricultural mobile platform intended for farmers was largely driven by business models of development organizations. Phasing out of such programmes saw the platform failing to stand on its own feet and thus collapsing irrespective of mass advertisements.

Lack of investment in authentic market research has resulted in the corporate referred to above failing to develop products based on customer needs and new clusters. Its products have remained too general and lacking niche markets which are very critical in sustaining business models.  The corporate has ignored the 20/80 rule where a business should ensure to have 20% local customers and 80% on – off customers. 

Most of the said corporate’s products do not have strong roots from where products can be developed for the new tree trunk, when using the tree analogy. For instance a product meant for providing mobile transport services in the city of Harare and the digital platform intended for farmers do not have a core cohesive foundation where the products can be controlled. They are all over the place and more opportunistic based on assumptions. The assumption is that the main challenge in Harare is lack of transport yet the real challenge is congestion.

Who says farmers need technical information?

The digital mobile platform intended for farmers was introduced on the assumption that farmers want more technical information yet farmers already get the information from government extension services  department which has years of experience in providing technical advice to farmers. Some seed companies and NGOs are also already providing technical advice to farmers in their contracts. Since farmers have more options to switch from one service to the other, the agricultural digital platform has become unviable and redundant as it does not offer unique services but a cost to farmers.

There is also no clear value proposition in sharing weather information with farmers through the mobile digital platform, a service already provided by the Meteorological Services Department. Assuming such information is provided to farmers, what action will they take if they are told that tomorrow temperatures will be 40 degrees Celsius hot?  Such information does not add much value because ordinary people and farmers cannot make meaningful decisions about the weather which is an external factor. 

Given that most products of the corporate mentioned above are not inter-related, they cannot reap advantages in mixing resources towards strengthening business models or shaping the growth path of the whole institution.  The corporate has not been able to direct resources to a growing part of the business or prune or refine old business models the way trees are pruned to increase fruit yield, leading to losses.

Lack of valuable content

More importantly, the mentioned corporate’s products lack content that brings value. A bank remains a bank, a bank account remains a bank account. What does an account bring to the customer?  What benefits accrue to someone who banks his/her money to his business or life?  The mobile money is an account but it doesn’t have a business model. It is basically a last option when one cannot hand over money to the bus conductor going to his rural home for handing over to his mother who can easily walk a few kilometres to the bus stop or business centre. The mobile money notion was developed without a business model around it.  People do not rush to use mobile money merely because it is a platform tied to wide network coverage by a mobile network operator. They do so if it offers a valuable service.

Informal markets like Mbare have proved that they don’t need mobile money but a simple model where a farmer brings something of value and the trader brings along the demand side so that trading happens without the need for a middle actor like a mobile money agent.  The corporate also introduced a platform for tractor tillage services on the assumption that tillage services are a major challenge for farmers in Zimbabwe yet that is not backed by facts on the ground. Had the corporate conducted market research and asked farmers to rank their challenges it would have discovered that farmers rank the high cost of inputs higher than tillage. Inputs may be available but the main challenge is affordability. The second ranked challenge would be absence of viable markets. Tillage would be ranked the last challenge because production is no longer a good starting point for farmers and African agriculture but markets. If the market is available and viable it can provide most of the services including tillage services. Traders can pay for tillage services just as they have traditionally financed farmers to produce specific crops.  Providing tillage services in isolation is not a viable business model at all.
It is unfortunate that several African businesses are now more into counting of numbers. For instance, of the 92% mobile penetration by big mobile network providers no one knows how much is being utilized. There is a difference between penetration and utilization. Utilization is the source of income and growth not penetration. A viable business depends on 90% local trading. Informal markets survive shocks because more than 90% of their trading business is through local currency. 

Charles@knowledgetransafrica.com  / charles@emkambo.co.zw / info@knowledgetransafrica.com

Website: www.emkambo.co.zw / www.knowledgetransafrica.com

Mobile: 0772 137 717/ 0774 430 309/ 0712 737 430