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AfricAgric

Level 2 · Part 2

Who does what, and who earns what

Each actor does work and carries risk. Understanding this prevents wrong conclusions.

Every actor in the chain does something the next one needs: growing, collecting, storing, moving, processing, selling. Each also carries risk, such as spoilage, theft, late payment or price falls.

Roles, work and risks in a typical chain
ActorWork doneTypical risks
Input supplierProvides seed, fertiliser, toolsCustomers cannot pay, product quality questioned
FarmerGrows and harvestsWeather, pests, price falls, losses after harvest
Aggregator or local traderCollects small amounts, grades, arranges transportSpoilage, theft, price changes, unpaid credit
TransporterMoves goods between placesBad roads, delays, breakdowns, damage
ProcessorChanges the product (drying, milling, packing)Unreliable supply, equipment cost, safety rules
Wholesaler and retailerStore, sell and offer choice to customersUnsold stock, spoilage, changing demand

Do not assume someone is cheating

It is common to think that 'middlemen take everything'. Sometimes there are unfair practices. Often, though, the trader is paying for transport, storage, credit and risk that the farmer would otherwise carry. Look at what each actor really does and carries before deciding where a better arrangement is possible.

Who earns more, and why? In general, an actor earns more where the work is harder to replace, where it takes more skill or capital, or where they carry more risk. Actors with more information and more choice of buyers usually have more bargaining power.

Exercise 2.2 · Roles and rewards

  1. For each actor in your chain, write one thing they do and one risk they carry.
  2. Write which actor you think has the most bargaining power and why.
  3. Write one question you would like to ask an actor you have not talked to before.

Background reading for this part:

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