March 2021 agricultural “platforms” in a digital era

particular kinds of frictions. In a highly fragmented 
market with relatively dispersed farmers, a Platform 
can focus on organizing farmers to reduce the 
frictions associated with transactions. In a market 
in which farmers have access to inputs, but do 
not have enough information to determine the 
type or quality of inputs needed (for instance, 
due to counterfeit inputs being sold), curating the 
types of businesses and products sold through the 
Platform can add considerable value. 
2. In what value chains and geographies 
will the marketplace operate?
Different value chains and geographies have their 
own nuances and requirements that marketplaces 
must consider. For instance, loose value chains 
and perishable crops tend to be more fragmented 
at both the farmer and buyer levels with multiple 
levels of intermediation, creating strong potential 
for produce marketplaces. But they also tend to 
be more volatile, have lower transaction sizes, and 
be primarily cultivated by more vulnerable, less 
digitally savvy farmers, creating important cost 
and scale challenges.
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In choosing where to operate, marketplaces 
should also consider the enabling infrastructure. 
For instance, marketplaces are more likely to 
emerge in geographic locations and supply 
chains that have good access to transport links, 
aggregation points, and storage facilities—
particularly if they focus on perishable crops. 
Finally, agricultural marketplaces must be aware 
of regulations. The potential of Platforms to 
help the market clear will be limited in markets 
and value chains with heavily regulated prices, 
government-subsidized product or services, larger 
presence of public actors competing with private 
enterprise, or regulatory barriers to entry.
Many of the existing product and service 
marketplaces operate across multiple value chains 
in order to balance seasonality and maintain 
trading volumes. But many of these same Platforms 
started in one value chain or a single service/user 
type before expanding to others. For instance, 
Farmster began as a service for farmers to share 
and receive information before expanding to 
integrate buyers, allowing farmers to market their 
produce on the Platform. Likewise, WeFarm is a 
communications Platform and social network for 
farmers, but is now marketing itself to businesses 
looking to reach those farmers already active 
on the Platform. Selecting where to focus first is