Would a Virtual Market for Farmers be the end for Middlemen?

Africa has seen a revolution on many fronts including health, agriculture, education, energy and water management driven by a surge in smartphone. Internet access is on levels that were unprecedented driven by stiff competition among industry leaders that have lowered data costs.

More than half a billion people across Africa are subscribed to mobile services. Unfortunately, other millions of rural small scale farmers struggle for access to local and national markets that could lift them out of hunger and poverty. Digital innovations and digital communications is expected to increase market access and improve livelihoods for smallholder farmers for good.

Success stories such as that of Airbnb, Uber and Alibaba is enough motivation to seeing this happen in the agricultural sector.

A Virtual Market Platform for Farmers

Farmers need to keep on top of order processing, sales records, inventory, and customer communications. Virtual markets are designed for this task.

The world is making good use of technology in solving most of her problems. Farmers too must look at that direction. The challenges of marketing and unpredictable market prices are not uncommon in developing countries.

How can they Integrate Technology in Agriculture?

An online platform for farmers would be ideal in creating a sustainable and fair marketplace, increasing small scale farmers’ bargaining power and profits by providing them with real-time information about what their crops are worth on different markets.

Under this, purchase and sale of produce is initiated and closed electronically.

It also enables cooperation and knowledge sharing and boosts farmers’ productivity by ensuring their market access.

By allowing buyers of different market areas of any area to participate in the trading process at a local level, these virtual markets enhance competition in the markets, offering better prices to farmers, a transparent supply chain, minimal wastages due to delayed sale, and a unified market for all.

The model promotes flexibility and empowers farmers, traders and grassroots entrepreneurs in ways that could lift vulnerable communities out of hunger and poverty - for good.

Leading the Way, the Maano- Virtual Farmers’ Market (VFM)

In July 2016 funding was provided to pilot a prototype with farmers from rural areas in three districts in Zambia. The initial reports indicates the app is progressing well, with some 70 national and international buyers showing an interest in purchasing crops through the app, The Maano – Virtual Famer’s Market (VFM). 

The Maano- Virtual Farmers’ Market (VFM) which is an app-based e-commerce platform designed with farmers needs in mind. This app is the product of World Food Programme’s Innovation Accelerator, an initiative to support potential innovative solutions to solve hunger.

How Virtual Markets Work

Farmers will first have to register at a virtual market portal by submitting an identity verification form - their name, email address, mobile number and password of their choice - upon which they will then receive a unique ID number, which will facilitate online trading.

A virtual portal for farmers will eliminate middlemen and increase interaction between produce sellers and buyers | Image Courtesy/

Once logged in sellers can then upload a photo of their produce, the price and location to prospective buyers. On the platform, the buyers can also search for any item the need by clicking the search button and typing the item and adding it to their cart. The buyers then select one of the available delivery areas and pickup locations.

There are officers who man the portal, assisting with portal related services. The officers feed the details of the farmers’ produce in the portal lot-wise. Assessing of the produce will be done by the designated government and private labs and a certificate of approval will be uploaded.

Each item in the Market will include information about the Vendor and contact info so you can interact with them, just like you would at a farmers' market.

Meanwhile, interested buyers can log on to the portal and quote their price for the product, either as a bid or for direct purchase.

Before finalizing a deal, farmers can check the prices of their produce other connected markets. Once the deal is done an e-invoice will be generated automatically. The invoice will count the lot for the winning buyer, which will include a market fee, labour charges among others as may be thought right. Other taxes by the state would be levied, if any, as per the country’s laws.

Challenges

1.       Price determination - Trading is not the only factor determining the prices in the market. Transportation, domestic crop failure, and international prices are among the other key factors that determine the prices of agriculture commodities. This makes it hard for there to be a fair pricing criterion for all.

2.       Infrastructure – A virtual space where farmers would just deposit their goods at a price that is determined by them and is not the only way to achieve a unified market. Bigger investments need to be put in place as not all farmers may see the internet as a good market place for them.

3.       Transactions harmonization – Besides pricing, a fair transaction process must be there to be trusted by the stakeholders. Amounts received form a buyer to a seller must be deposited to the sellers account. Connecting famers to a bank is altogether a bigger challenge. However with mobile banking technology growing deeper roots worldwide, there is hope.

4.       Additional charges - For free flow of agriculture products, stakeholders must agree on the movement of products without additional charges. Before thinking of inter-state trading, states first need to regulate and integrate markets at their level.

Advantages

1.       Virtual markets bring together farmers, buyers and other stakeholders into one playing ground where they trade, dealing directly with each other.

2.       The website enables users to interact with one another and exchange ideas on upcoming technologies and markets.

3.       The virtual markets provide a transparent, open and trustworthy space for smallholder farmers and buyers to negotiate fair prices and deals. Everyone is provided a better platform to interact with traders and other buyers.