Department of Agricultural, Food, and Resource Economics Innovation Lab for Food Security Policy, Research, Capacity and Influence

Key Messages

• In three out of the four Eastern African countries (Ghana, Kenya, Mozambique and Zambia), grain assemblers
  have proved to be the most important market channel utilized by farmers, regardless of their relative degree of market access (Sitko and Jayne, 2014). The country with some variation in marketing behaviors relative to those in other countries was Zambia, were the study found that assembly traders where the most frequently utilized market channel for farmers in more remote villages and the second most important channel for those in more accessible villages.
• Roughly 70 per cent of farmers' maize sales transactions with private traders occurred within 1km of households' premises, indicating the extent to which private assembly traders are operating in areas typically categorized as isolated (Chapoto and Jayne, 2016).
• Long distances traveled by about five per cent of farms generally represent a deliberate marketing strategy by those with large volumes who chose to sell directly to industrial buyers in towns (Chapoto and Jayne, 2016)
• Most households selling maize chose to sell to private traders. In Zambia for example, private traders account for over 60% of all maize transactions with farmers.
• Direct participation of governments in the market through food reserve agencies and marketing boards undermine the development of the assembly trading sector causing private sector players to exit the market and further exacerbating market inefficiencies and in fact, promoting market failure.
• Multinational firms are playing an increasingly prominent role in African grain and oilseed markets. In the 2011/2012 crop marketing season in Zambia, large-scale grain trading firms directly handled approximately 500,000 metric tons of maize, Soyabeans and wheat. This amounted to 25 percent of the total marketed surplus for these three crops. By 2015 these firms were handling 621,000 metric tons of grain, with a significantly expanded presence in the smallholder market.