Understanding the role of network effects in digital platforms to unlock market access for smallholder farmers

Abstract

Food insecurity and high unemployment is a major concern in South Africa. Smallholder farmers in South Africa can contribute towards alleviating these issues if they are able to enter markets and contribute towards improving accessibility to food and job creation in rural South Africa. It is important for smallholder farmers to grow from subsistence farmers as smallholder farmers are the key into improving the economy. This study seeks to understand the role of digital platforms with network effects in assisting smallholder farmers gain access to formal markets. Existing literature does not cater for how digital platforms with network effects can assist smallholder farmers gain access to markets. There is literature that touches on market access, smallholder farmers and digital platforms with network effects, however the combination of the three is novel. A qualitative exploratory approach was conducted in this research. A total of 14 semi-structured interviews were conducted with 12 interviews being smallholder farmers who use digital platforms with network effects and two interviews were buyers of agricultural goods in formal markets, to triangulate the data. The findings show that smallholder farmers can gain access to formal markets depending on how digital platforms with network effects are used. However, there are still many constraints that cannot be overcome on digital platforms with network effects, such as the need for touch of agricultural goods and connectivity issues. The limitations of the research are that all smallholder farmers were looked at and all digital platforms were included, leaving nuances in the different types under investigated.