March 2021 agricultural “platforms” in a digital era

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Figure 8: The agricultural Platform market opportunity and business challenge
While the characteristics discussed above hold for the 
majority of smallholder agricultural markets, it is important 
to acknowledge key differences in both particular markets 
and in Platform types—as well as how these differences 
might affect why and when Platforms emerge.
Platforms tend to emerge and thrive in fragmented 
industries where they are able to aggregate disconnected 
players and remove expensive gatekeepers. While this 
describes most smallholder markets, there are some that 
are able to clear more effectively and thus may be less ripe 
for disruption. For example, highly organized cash crop 
markets like coffee are anchored by large, export-oriented 
buyers with close existing connections to farmer groups or 
cooperatives. Where there is a high concentration of players 
on one side of the market, the need for Platform models 
is less obvious. In some ways, the emergence of Platforms 
might even pose a threat to dominant incumbents. The 
same applies to crops where trade and consumption 
happens very close to the farm-gate and buyers and sellers 
are more likely to create natural connections without the 
need for digital facilitation.
Relatedly, certain types of Platforms are impacted by 
market characteristics differently than others. For instance, 
the presence of enabling physical market infrastructure 
is fundamental for product and service marketplaces, 
which often involve physical exchange. However, this 
infrastructure is not critical for social networks and 
communications Platforms, which can operate over digital 
infrastructure.
ACKNOWLEDGING MARKET NUANCES
Notes: Analysis presented is a generalization of many smallholder-related agricultural markets. It is important to understand differences 
in I) some highly organized cash crops that are anchored by large, export-oriented buyers; II) some agricultural supplies markets that 
are controlled by large input companies; III) some highly-localized commodity markets where market participants are geographically 
concentrated
Source: ISF Advisors and RAF Learning Lab analysis