Formal and Informal Agricultural Markets in Sub-Saharan Africa

Abstract

Agricultural marketing determines the extent of smallholder farmer commercialization. However, this needs effective agricultural markets. Evaluating these markets and their interaction with small farmers is critical in harnessing the potential from the rural farming sector. The chapter aims to evaluate formal and informal agricultural markets, highlighting opportunities for smallholder agriculture. The findings reveal that smallholder producers' interaction with formal markets is limited by a lack of knowledge and resources, poor safety and quality standards, and inconsistency in supply. However, they can benefit from opportunities in the formal markets through effective collective action arrangements. Informal markets are critical to smallholders' access to markets, and with legislation that seeks to address infrastructure, safety, and quality standards, they can be a conduit for small producers' access to formal markets. Some informality still exists in the supply chain of formal markets. Thus, informal markets remain important in agriculture marketing in Africa.