In our report, “Africa’s Critical Agricultural Intermediaries,” we describe the crucial role farmer-allied intermediaries play in the full development of African economies and food systems. Sourcing from commercially oriented smallholder farmers, these intermediaries help farmers improve production and increase their incomes.
But a whole range of factors can affect the commercial viability of any individual farmer-allied intermediary itself. One of the structural factors that determines whether it can make money and how much is where in the value chain the intermediary participates. The crop in question is critically important as well. Every crop is different, and the interplay between a crop’s biological and economic characteristics determines its margin potential, with some, such as coffee and cashews, greatly increasing in value as they are processed and others, such as staple grains, offering more modest possible margin expansion.
Enterprises that ally with smallholder farmers are key to unlocking Africa’s food production and economic potential. How farmer-allied intermediaries can act as the linchpin firms for building more resilient food systems in Africa.