The COVID19 pandemic continues to invite developing countries to consider both hard and soft data when making decisions. Hard data refers to numbers and facts in addition to concrete statements that can be proven. Soft data refers to people’s feelings and emotions including how people feel about the lockdown. While numbers explain what is happening, for instance number of cases in each country, they do not sufficiently account for why things are happening or how people feel about that is happening.
For how long are middlemen going to be part of trading agricultural commodities?
Farmers who had made progress in increasing their interaction with the market before COVID19 are beginning to see middlemen strengthening their stranglehold in value chains as lockdowns block farmers from accessing consumers and markets. Many farming communities lamenting why middlemen have always been part of both formal and informal markets for decades. The dominance of middlemen has prevented the old generation from passing market knowledge to the young generation directly. Young people have always had to start from scratch in understanding the market. To a large extent, COVID19 is reversing some of the major gains that had been scored in strengthening relationships between farmers and markets.
Limitations of depending on middlemen
While big farmers may want to continue dealing with middlemen because they do not have time to visit mass markets, small farmers see more benefits from engaging directly with the market and consumers. Relying on middlemen has several limitations including the following:
- Middlemen become custodians of market trends as farmers are just told to produce.
- Middlemen end up bringing inputs to the farmers as if it is a favour yet that weakens farmers’ bargaining power.
- The middlemen also end up understanding varieties demanded in the market better than farmers.
- Big farmers become blinded by depending on one middleman who comes to collect commodities from the farm, impeding farmers from knowing different markets or customers who want their products. Ideally farmers should know the extent to which they are feeding the country by meeting the needs of different niche markets. That cannot happen if the middlemen always comes to collect commodities from the farm.
What are the benefits of forcing school children to write exams during COVID19?
Forcing children to sit for examinations during the pandemic fully demonstrates the extent to which African education curricula is exam-oriented rather than problem solving-oriented. If African countries had a fluid educational curricula college students would be applying their knowledge to challenges presented by COVID-19. Those studying law, finance, medicine, veterinary science, economics, risk management and other disciplines would be able to apply their knowledge in a COVID-19 world.
The ordinary person in the African street now understands the economy during COVID19 much better than academics. If street vendors have more financial literacy than academics and college students it means developing countries do not have future leaders. In countries like Malawi, Zambia and Zimbabwe, informal traders are now more informed than the economists. Meanwhile, students are grappling with the wrong syllabus and waiting for COVID19 to end so that they resume studies yet knowledge is passing them by through opportunities presented by COVID19. What does the lockdown mean for those studying engineering, law, medicine, veterinary science, finance, insurance and many other disciplines? Developing countries should not continue to be proud of an examination-oriented education system where students learn to churn out answers without understanding the subject matter.
Can lessons from COVID19 facilitate returning farmers and traders to profitability?
COVID19 has surfaced a couple of tensions that had been simmering underneath African agriculture-driven economies for decades. For instance, the pandemic is revealing the importance of understanding needs and realities on the ground before designing financial models. After being exposed to simplistic notions of financial inclusion which have apparently been challenged by COVID19, many African farmers and agricultural value chain actors are becoming more skeptical of losing their knowledge and access to land through badly designed financial models.
The pandemic is beginning to inspire new ways of financing agriculture, seeking answers to questions like:
- If smallholder farmers and rural communities are not investment ready, whose role is it to make them ready?
- How do we avoid over-investment? A crisis in micro finance should not extend to agriculture.
- How do we use the supply chain to clarify opportunities in the agriculture sector? Pipeline challenges have existed for too long – some businesses can be good at production but still not meet the criteria for funders.
- How do we localize critical capital so that it satisfies local needs?
Answering the above questions prevents an elitist view of investment in agriculture and ensure funding addresses grassroots issues. The pandemic is already showing that what is being negatively referred to as the informal sector is the critical light industry. The distinction between agriculture and manufacturing is sometimes very artificial. Monetary policies have to change in order to build resilient enterprises from the grassroots. SMEs will have to be empowered so that post-COVID19 they inspire the state to play a different role not just formalize them for the purposes of taxing them.
Mobile: 0772 137 717/ 0774 430 309/ 0712 737 430