March 2021 agricultural “platforms” in a digital era

Figure 18: Possible food system outcomes from Platforms
Source: Market transformation outcome categories based on IDH Farmfit, Private Sector Development Strategies: Leveraging the Private 
Sector for Market Transformation in Smallholder Agriculture, forthcoming
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Considering potential
negative impacts
While Platforms have the potential to positively 
transform food systems, they can also generate 
potential negative impacts. Outside of agriculture, 
in sectors where Platforms have existed for much 
longer, the dominant narrative in the business
literature has shifted from overwhelmingly 
positive enthusiasm for the potential and value
of Platforms to increased trepidation, if not 
outright hostility, toward Platforms’ power
and dominance. 
In considering the experiences of other sectors, 
it’s important to understand that successful 
Platforms inevitably acquire power. As Platforms 
scale, the ways in which that market-shaping 
power translates into outcomes for different 
stakeholders can be both positive and negative. 
This creates a need for good governance, either by 
the Platform operator itself or through enforcement 
by regulatory bodies. Good governance is essential 
to any well-functioning system—whether countries, 
multilateral bodies, or Platforms. While markets 
and market dynamics can generate many positive 
outcomes, absolutely free markets without rules 
or regulations cannot be relied upon to produce 
fair and satisfactory outcomes for everyone.
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This 
is particularly important in smallholder agricultural 
markets, where critical outcomes—such as food 
security, inclusion of marginalized population 
segments, and environmental impacts— 
require good governance to be safeguarded
and strengthened.
It’s clear that the accumulation of power by
Platforms can, in some cases, lead Platform 
operators’ own interests to diverge from those
of Platform users and from the broader market.
The challenge for Platforms is to compete aggres-
sively while staying within the bounds of what most 
societies consider not just legal, but fair and ethical. 
In agricultural markets, there are six potential 
negative impacts that could result from
Platform models:
1. EXCESSIVE MARKET DOMINANCE: