Towards evidence based early warning instinct

ADEFINING characteristic of Zimbabwe’s agro-based economy is the fact that business models and ideas are becoming highly perishable. This suggests a dire need for an early warning system for the entire economy.

Evidence gathered by eMKambo over the past six years shows that a national early warning system should not just focus on weather, outbreak of pests, diseases and floods.

In a hybrid economy where the formal and informal economies are co-existing, the market can be a continuous early warning system built around comparative trends of different agricultural commodities and their respective parameters.

Alerts and warnings can be informed by trends surrounding each commodity on the market.

To that end, as an institution, the market can support preparedness and mitigation measures. For instance, when trends on soya bean production and supply are well-coordinated, it becomes possible to figure out when we are likely to run out of cooking oil.

Without fluid evidence gathering systems, financial institutions can duplicate each other in funding the same value chains. That is why data and evidence are crucial in developing economic and monetary policies, informed by a continuous early warning system.

The market as a knowledge institution

As a knowledge institution, the market can characterise knowledge nodes and provide warnings in terms of which knowledge is becoming irrelevant.

The market can also give warnings around premature adoption of technologies like plastic money.

Falling trends of commodity supplies can signal the impact of climate change, for instance in terms of volumes and quantities coming from different sources or regions.

We can also see how much is coming from wetlands and irrigation schemes.

Seasonality can also be signalled from the market. Short supplies in wild fruits can show how seasons are changing together with reduced volumes of those commodities.

This can be a continuous warning system whose influence on production zones can inform policy and planning.

All these elements should be part of an agricultural financing credit scoring system.

Monetary policy implications

Monetary policies such as the introduction of plastic money can be informed by the market.

The market can answer questions like: How effective are existing financial technologies? How effective are existing financing models and contract farming models? Resistance against mobile money is a warning that the system may take long to be adopted or may fail completely. That is why some people are hoarding cash and building a closed cash economy which closes out technology as actors suspect technology is being used to siphon cash from the market. Through alerts and feedback, the market provides warnings and advice on farming systems through characterising farmers and their participation in markets. It can help us answer questions like to what extent are we getting a good return on investment (ROI) from our natural resources?

The power of price trends

The market can also signal whether our markets are becoming smaller, our commodities are becoming less competitive on the global market due to our high costs of production and perhaps the demand side is shrinking due to a decreasing income base among consumers. This has implications on employment creation in the agricultural sector and related industries. If prices fail to cover production costs, it is a warning that the market is failing to pay for the real value of commodities. It means the capacity of our producers to continue producing will continue to be eroded. Price trends also provide warnings about the sustainability of financial models. Suppressed prices mean high default rates as farmers will struggle to repay. An over-supply of commodities means reduced income for farmers and reduced capacity to repay loans. If a bank finances soya bean production and there is an over-supply, producers are most likely to struggle in repaying loans.

With data and evidence, we can also track food and nutritional security at national level and by region. The market tells us the extent to which each production region is participating in the market. If one region is too quiet and not visible on the market, that could be a signal of something being wrong, especially if the region has high potential. That is why we sometimes see the market redistributing food to regions that are not coming to the market. It’s a big warning that something has to be done.

The power of the market to build career pipelines

Besides climate change and environmental degradation, a major challenge facing many African rural communities is migration of skills and talent to urban centres.

There is no price for guessing who wins in the competition for talent between rural and urban communities.

Building rural agricultural markets is one way of converting agricultural commodities and value chains into sustainable career pipelines for the young generation.

Such a vision can be fuelled by rapid urbanisation and the expansion of ICTs into formerly marginalised areas. A continuous early warning system can support all these efforts.

Raising the banner of working together

The new era of big data and machine learning is inspiring a new culture of gathering evidence that can help in redistributing agricultural talent from urban to rural communities.

Through informal agricultural markets, value chain actors are being compelled to collaborate on a new scale and to work more closely with consumers. It no longer pays for private companies to jealously guard their secrets, for fear of being beaten in the market.

Gone are the days it made sense for academic researchers to act like sole proprietors obsessed with individual achievements.

Some of the best ideas and innovations can come from rural areas if the right conditions and incentives are availed. Policy makers and development agencies cannot expect to achieve rural development when technological knowledge and progressive ideas are locked in urban areas.

The role of data in nurturing trust and shifting incentives

Creating an early warning system, career pipelines and economic growth opportunities in rural farming areas may not happen without a culture of collecting data and turning it into reliable insights. While data can provide the much needed reality check on a continuous basis, such data cannot be found in a single organisation or institution. There is need for new methods, talent, capabilities and infrastructure for translating data into useful evidence.

Without investment in talent and important capabilities, only a few people, mostly based in urban centres, will be able to manipulate data in ways that satisfy their own career persuasions.

People as the main knowledge assets

In addition to data, the fluid expertise of traders, consumers, retired farmers and other professionals is critical in ensuring rural communities become part of knowledge societies and contribute to continuous early warning systems.

However, experiences from working with diverse farming communities over the past few years have confirmed to eMKambo that value chain actors have different motivations for sharing or withholding knowledge.

While there is a long-held assumption that field days are the best way through which farmers can share knowledge, many farmers are interested in what knowledge means to their own contexts and competitiveness as opposed to what it means to everyone. Many value chain actors share knowledge when sharing is the best thing to do.

On the other hand, a small proportion of farmers and traders share knowledge because sharing is part of their nature and so they can share proactively.

There is another second group of farmers, traders and consumers who share knowledge when asked to share.

Full article on www.herald.co.zw