Understanding the art of demand and supply in agriculture is very important, perhaps a little more important in fresh farm produce than other sectors. If you have been in the agricultural business or are intending to get into this business then you will find this article to be of great value -think of this as a little crash course in agribusiness. Have you ever wondered why a crate of tomatoes is selling at $18 when just a few weeks ago it was selling for 4 times less that amount?Well, the power of demand and supply has a lot to do with it.
The demand for cabbages, tomatoes,onions and other produce is to a great extent constant, but however the instability in supply tends to push the prices up or down. The causes of these fluctuations in Zimbabwe is largely due to changes in season as some crops do best in winter e,g Onions whilst some crops do well in summer. Supply to the market tends to be high when many farmers are harvesting their crop as well hence the knowledge to know when to strategically plant ,harvest and sell is key to running a successful enterprise as producing quality crop in the field is just half the battle, the other half is being able to sell the produce profitably.
What can the farmer do to enjoy better prices?
Those of you who are already in the business have at some point taken their produce very high quality produce be it tomatoes, cabbages etc to Mbare Musika vegetable market and found the market flooded with the same crop and the prices so low you almost collapse. Well the key to this is if you have the capacity to plant off-season you should do so. This will shift the reliance on rain-fed cropping and create better market prospects for the farmer, as an innovative farmer you may consider investing in that green house , or drip irrigation kit to protect your crop from the elements and produce quality crop.
Second, farmers can try holding on to their produce for much longer. This would involve postponing harvesting for several more weeks as one awaits the prices to stabilise. This is an option only if the crop has good keeping qualities such as butternut however for crops such as cabbages and tomatoes this method is not advisable as the losses can be tremendous.
Contract farming as an option.
Farmers can adopt contract farming. In contract farming, the farmer agrees to sell their produce upon maturity to a specific buyer at a specific price. The advantage to contract farming is that the farmer is assured of a specific price. However, he/she might get a ‘raw deal’ if the free market price will be higher than the price agreed in the contract it’s a risk worth taking though. Contracts to supply can be between markets such as schools, prisons, churches, hotels, etc those.
Bypass the middle man
Farmers can also try to bypass the middlemen ’makoronyera’ as they are affectionately known at MbareMusika and take their produce directly to the market. Some of the middle man have actually done very well or are doing well more than the farmer who is producing the crop. These guys know very well the dynamics of the market especially the issues of demand and supply. Depending on the amount of produce that you deliver to the market it might be worthy to carry out market investigations before sending your produce to the market so that you know the prevailing prices and conditions, but it is worth trying all the same.
Value addition
Adding value to your produce is one of the options that help improve your profit. I remember receiving input at a recent workshop on mushroom production whereby the farmer was producing and selling their mushroom to a certain supermarket in Harare at 2 USD/Kg whilst the supermarket would sell the same mushrooms cleaned and packaged nicely at 4.50 USD/Kg. When we sat down and did the calculations the packaging only cost 35c/pack so the shop made more than 100% profit all because of 35c packaging sounds crazy right? Well that’s how business is made out there, so next time before you sell your produce how about thinking of value addition for maximum profits.
Emmanuel D.N Dube is the senior agronomist at Agro Aid Trust and Chief Agronomist at ZBIN. If you have any questions you can email him agroaidtrustzimbabwe@gmail.com /+263783 495 396
