Traditional Informal Markets DataWholesale Aggregators; Winners or Losers?

Strategic Pillar 1:Value Chain Analysis & Market Monitoring

Strategic Pillar 2: Market Information Platform, Capacity

Building & e-Training

Strategic Pillar 6: Action Research,

Measurement, Impact Data & Learning

Strategic Pillar 7: Value Chain-wide

Advertising & Consumer Messaging

Strategic Pillar 5:Commercial Village Model:

Farmer Aggregation & Market Access

Strategic Pillar 3:Private Sector Partnerships

& Demand Expansion

Strategic Pillar 4: Traditional Informal Markets Digitization

& E�ciency

FCI Informal Markets Data

Informal Brokers? Middlemen? Agents? Traders? Wholesalers? Dealers? Village Broker? Market Brokers? Intermediaries? Mediators? Market Cartels? Street Retailers? .......................Unknown actors…Who are all these players and which are these very informal disorganized markets? How do they actually end up accounting for 90% of farm-gate sales? Actually these are extremely complex and highly organized marketing systems that have evolved over several years across Africa and account for 90% of farm-gate trade but have remained traditional and informal though doing business worth billions of dollars across Africa. They are tough, rough and hard- hitting systems that have surprisingly stabilized with minimal infrastructure, amidst weak policy and limited technical support. We all owe respect to these traditional self-driven systems; they are survivor markets and have weathered several economic shocks. Informal value chain actors are victims of inefficiencies and emerging data reveals high cost of doing business in these markets resulting into farmgate prices dropping to cover for inefficiencies, since someone got to take up this cost.

Data limitation and clarity on how these traditional informal markets work has led to an unknown cluster and a broad group called Informal Sector. This new FCI Informal Markets series brings to you experiential evidence in the form of data gathered by FCI for 12 years that will inform partners on how to factor informal markets in designing market access programmes targeting Africa. FCI is digitizing these informal markets for building efficiency, market linkages and strengthening partnerships with formal companies.

Tanzania Agri-Investment Buyer Data-Incentivized Forum unveils the key role played by Traditional Informal Wholesale Aggregators.Farm Concern International, FCI under the Regional Seed-Farmer-Market-Consumer Integrated Value Chain Development Programme referred to as the SeFaMaCo Programme, supported by the Bill & Melinda Gates Foundation in Tanzania, Uganda and Ethiopia organized a one day buyer consultative forum on 8th March 2017 at the FCI Dar Es Salaam Office that brought together Traditional Informal Market Wholesale Aggregators, Processors and Commercial Village & Farmer Organization representatives to share their experiences in working along the banana, rice, maize, beans, cassava and sweet potato value chains.

The SeFaMaCo Consortium Team shared statistical evidence based on mid-term data that has been gathered through an on-going action research embedded into the implementation for 1,193 Commercial Villages covering 186,831 Farming Households with 373,662 Smallholder Farmers and recorded USD 104 Million trade to date for two anchor value chains only; banana & sweet potato. Tanzania SeFaMaCo multi-value chain diversification is focusing on Maize, Rice, Cassava and Beans.Read more: http://bit.ly/2mH85vX

Transport is chocking Wholesaler Aggregators Business turning them into Value Chain losersTransport fee remains the highest banana cost driver for informal wholesaler aggregators accounting for 52% of the total cost. This can be attributed to the poor road infrastructure especially within Commercial Villages and the fact that most buyers don’t own transport means thus hire vehicles which are charged at relatively high prices since most service providers know they are desperate for their services. Transport cost is followed by brokerage commission at almost half-24% which is as a result of the scattered sourcing especially where buyers source from individual farmers where there is no collective action hence farmers do not sell their produce in Groups. The least cost driver is market cess-1% followed closely by administration cost at 3% of the total cost.Read more: http://bit.ly/2mnlgj4

Is getting brokers out of the value chain really addressing the real problems? According to a potato cost driver analysis in Tanzania by Farm Concern International Under the Regional Seed-Farmer-Market-Consumer Integrated Value Chain Development Programme referred to as the SeFaMaCo Programme, supported by the Bill & Melinda Gates Foundation in Tanzania, Uganda and Ethiopia, brokerage fee accounts for 1% of the total cost incurred by wholesaler aggregators. Brokers are agents who act on behalf of the wholesalers and can easily be confused for wholesalers since they are more active in negotiations along value chains. Brokers have for a long time been blamed by smallholder farmers as the biggest beneficiaries from proceeds accrued from their commodities. However, the study revealed that Brokers are victims of the inefficiencies of the trading systems.Read more: http://bit.ly/2mnlgj4

Tanzania Wholesaler Aggregators & Informal Buyers Forum

Informal Wholesaler Aggregators Cost Drivers

Potato Cost Drivers for Informal Wholesalers

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FCI is an African organization and a leading strategic implementing partner across Africa. Our profile to date: 325 Market & Value Chain Analysis; 98 market access programmes in 8 countries; markets technical support for 132 implementing partners and capacity building in 24 Countries. Commercial Villages Model is an innovative multi-value chain smallholder market access approach. FCI market partnerships: 12,025 informal wholesale buyers and 515 companies while 24,028 buyers mapped via market studies in Africa. 17 Million Beneficiaries: Smallholder Farmers and Agro-Pastoralists

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Youth

Agro-Pastoralists

Farmer OrganizationsSmallholder

Farmers

Co-operatives

Commercial Villages Wholesale BuyersAgri-Enterprises

FCI Target Clients for Commercialization, Entrepreneurship, Value Chain-Wide Employment and Market Access:

Private Sector

www.farmconcern.org | info.africa@farmconcern.org | For Strategic Partnerships: partnership@farmconcern.org

Farm Concern International FCI, is a highly specialized Africa-wide Agri-Market Development Agency and a leading African organization that has graduated into a strategic direct implementing partner in Africa with a focus on; profitable smallholder commercialization & aggregation, value chain analysis, market access, trade development and private sector alliances for sustainable rural economic growth. As a Hybrid Organization, FCI has a unique multi-dimensional institutional framework based on a blend of selected best practices from the private sector and screened best- practices from development organizations; this mix forms the fundamental architectural pillars of the FCI’s hybrid identity.

About Farm Concern International, FCISee: Our Coverage

Commercial Villages Model is a multi value chain approach and FCI has experience in over 50 commodities

Download the Abridged FCI Profile: http://bit.ly/2ktPsfN

March 2017: Commercial Villages Seasonality Action Planning

March 2017: Commercial Villages Seasonality Action Planning Smallholder Farmers are developing action plans and strategies for the season. Farm Concern International is also gathering data for forward marketing with buyers. For instance, Namwai Commercial Village in Tanzania produces banana, round potatoes, beans, and maize which is largely rain-fed with limited irrigation. The Commercial Village is expected to harvest 4,005 MT annually of round potatoes only from 267 smallholder farmers. With efficient market access, this is a future farm gate value estimated at USD 3,571 per 0.5 hectare producing 15MT per year translating into USD 953,571.4 annually for the entire Commercial Village.

Seed-Farmer-Market-Consumer Regional Partnerships Forum; June 2017 at the FCI Uganda Offices in Kampala.

Buyer Trade Forums are scheduled for June 2017 in Uganda for seasonality action planning. Uganda Wholesale Aggregators Network, established by FCI is running multiple trade planning meetings for banana, maize, sweet potato, cassava and beans with a unique focus on the major Traditional Wholesale Markets. Value Chain Analysis reveals that at least 85% of the staples are traded through traditional informal wholesale markets before onward distribution to formal markets. FCI commenced market developed in Uganda in 2004 and has been digitizing informal wholesale markets and trade routes for major commodities.

Upcoming Ongoing

Did You Know ?

600 million Hectares in Africa is uncultivated arable land

Source: Farm Concern International 2016

Source: Farm Concern International 2016

Mr. Garron Hansen (on right), Program Officer, The Gates Foundation making remarks during the Tanzania Wholesaler Aggregators & Informal Buyers Forum as Mr. Harold Mate, FCI Senior Technical Specialist, Agri-Value Chains & Markets interprets

FCI is an African Organization and a leading direct implementor organization highly specialized in the strategic pillars below with experienced staff dedicated to consortiums, contractors, International Agencies and programmes for

quick roll out, fast-tracked learning curve & local knowledge for high impact.

The Informal Markets critical questions

FCI is building evidence-based answers to Informal Markets critical questions through data being gathered consistently since data reveals these markets account for 90% of farmgate sales: • Why are informal markets successful in mass

marketing and high volumes?• Role of wholesale aggregation markets in

interphasing supply chain for formal markets • What are the Volumes and Values traded by

informal markets?• Where are the Informal wholesale trading

hotspots that supply to formal markets?• Why do formal markets prefer wholesale

aggregators to smallholder farmers? • Why formal companies are still accounting

for less that 10% of the farm-gate sales even after efforts to link farmers?

• Why do consumers prefer informal markets?• What’s the role of informal wholesale

aggregators in the future of driving impact for market access programmes?

Market Access Redefined!

Traditional Informal Markets- the Engine of Agri-trade in Africa

Traditional Informal Wholesale Markets account for 80-90% of farm gate sales and are the main interphase between informal supply chains and formal companies. At least 90% of formal sector agricultural commodities sourcing is conducted via these informal wholesalers.

Watch: http://bit.ly/2kstmtW

News

Link to the previous issue: http://bit.ly/2njgiZ5

For the last 12 years, Farm Concern International, FCI has been in the heart of the building efficiency in the traditional informal markets. Wholesale Aggregators is defined as the informal actors who invest own cash into the value chain and take ownership of commodities while brokers/middlemen /agents trade with information as too of trade and neither invest cash nor take ownerships of good. Wholesalers Aggregators run massive distribution systems and they are the category that FCI is partnering with since a single wholesalers supports several formal companies and institutional markets.