March 2021 agricultural “platforms” in a digital era

Figure 17: Platforms within food systems
Source: 1) IDH Farmfit, Private Sector Development Strategies: Leveraging the Private Sector for Market Transformation in Smallholder 
Agriculture, forthcoming
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In this section, we explore the extent to which 
smallholder agriculture Platforms can impact 
markets on a systemic level, drawing on insights 
from other sectors. We consider both the positive 
and negative potential impacts, and reflect on 
implications for donors and policymakers.
Considering potential positive impacts 
Platforms, by their very nature, change how 
markets operate. From global experience, we 
know that they can play an active role in providing 
governance to the ecosystems they create and 
impact. This power is often positive; Platforms 
can not only reshape or redistribute the pie, they 
can increase the overall size of the pie by enabling 
interactions that otherwise would not happen 
or by increasing the value of interactions that 
already were happening. 
Good Platform governance can lead to a number 
of positive outcomes. For instance, a well-
designed market makes it easier or more likely 
for high-quality interactions to occur. Platforms 
can provide better data for decision making by 
their users through improved transparency. They 
can also actively curate user participation in the 
Platform—for instance, by selecting users with 
good creditworthiness or high-quality goods 
and services. Some Platforms actively support 
matchmaking between users, making it easier for 
them to find one another and thus reducing search 
costs. Also, through their ability to create a set of 
incentives that govern user behavior—rewarding 
desired behavior and discouraging negative 
behavior—Platforms can reduce undesired 
activities and outcomes. For all of these reasons, 
well-designed Platforms have the potential to 
reshape markets in ways that move toward the 
emerging vision of a food system that is more 
inclusive, sustainable, and commercially viable.