There is a peculiar paradox in African agriculture: despite decades of investment in improving farm yields and connecting farmers to premium markets, the continent continues to struggle with food security, post-harvest losses that can reach 40%, and a persistent inability to capture value at any point in the chain. The conventional diagnosis focuses on two problems: low productivity at the farm level and poor market access. The conventional prescription follows accordingly: better seeds, more training and digital marketplaces to connect farmers directly to buyers.

This analysis, while not wrong, misses the actual bottleneck entirely.

The Invisible Coordination Problem

To understand why, it's helpful to start with first principles about how agricultural value chains actually work. There are three distinct economic actors:

1. Farmers - fragmented producers with perishable inventory, no storage capacity and no price discovery mechanism

2. Buyers - processors, millers, and industrial users who require consistent volume, standardized quality and predictable delivery

3. Aggregators - the informal intermediaries who bridge the gap between these two worlds

The critical insight is this: farmers and buyers cannot transact directly at scale. The transaction costs are simply too high. A processor needs 50 tons of maize per week at consistent moisture levels; a smallholder farmer has 200kg of variable-quality produce that must be sold within days of harvest. The mathematics don't work.

This is where aggregators become essential. They perform three critical functions that create economic value:

• Pooling supply from dozens or hundreds of farmers to reach minimum viable volumes for industrial buyers

• Sorting and grading to standardize quality and reduce information asymmetry

• Managing logistics and storage to smooth out temporal mismatches between harvest and demand

In other words, aggregators are not parasitic middlemen extracting rents; they are solving a genuine coordination problem. The question is not whether we need aggregators; we do. The question is why the aggregation layer itself is so catastrophically broken.

The Four Symptoms of System Failure

The dysfunction of Africa's first-mile aggregation manifests in four specific, measurable ways:

One: Price Opacity and Farmer Value Capture

Farmers face what economists call a bilateral monopoly problem. With no storage capacity and perishable inventory, they must sell immediately. With no market information and high search costs, they typically have access to only one or two buyers. The result is not a market price but a negotiated price that reflects bargaining power, not value. The aggregator with the truck and the cash sets the terms.

Two: Supply Uncertainty for Buyers

From the buyer's perspective, the aggregation layer is a black box. A miller cannot forecast next month's maize supply with any confidence because she has no visibility into aggregator inventory, farmer planting patterns, or regional harvest timing. This uncertainty has real costs: factories run at suboptimal capacity, procurement teams make expensive spot-market purchases, and quality control becomes a game of Russian roulette.

Three: Post-Harvest Loss as Deadweight Loss

The 30-40% post-harvest loss figure that appears in every development report is not just food waste—it's a sign of missing infrastructure in the aggregation layer. Without proper storage, cooling, or efficient logistics at the first point of collection, physical losses are inevitable. This represents pure economic deadweight loss: value that could have been captured but instead evaporates. In sub-Saharan Africa alone, these losses exceed $4 billion annually.

Four: The Data Desert

Perhaps most structurally important: the first mile generates no data. Transactions happen in cash, recorded in notebooks or not at all. There is no digital trail, no transaction history, no inventory records. This lack of data has cascading effects throughout the system, but the most important is that it makes the entire layer unbankable.

The Capital Allocation Problem

Here we arrive at the core issue: the first mile is a capital black hole.

Traditional financial institutions such as banks, development finance institutions, impact investors, systematically avoid the aggregation layer. This is not irrational prejudice; it's a rational response to risk. Without data, there is no way to underwrite lending. Without formal business structures, there is no collateral to secure. Without visibility into operations, there is no way to monitor performance.

The result is a textbook market failure. Aggregators are undercapitalized not because they are unprofitable; many are quite profitable, but because they cannot access the formal capital markets that would allow them to scale. They operate on thin equity, razor-thin margins, and constant cash flow constraints.

This creates a self-reinforcing cycle:

• Undercapitalization → inability to invest in storage, quality systems, or working capital

• Inability to invest → continued informality and operational inefficiency

• Continued inefficiency → perception as high-risk and unbankable

• Unbankable status → undercapitalization

The cycle persists because no single actor can break it unilaterally. Farmers can't store their own produce. Buyers can't reach down to the farm gate. Aggregators can't professionalize without capital. And capital won't flow without professionalization.

Why Bypass Strategies Fail

The instinctive response to a broken intermediary layer is to try to eliminate it. Hence the proliferation of ‘farmer-to-buyer’ digital platforms, contract farming schemes, and direct-sourcing initiatives. These models share a common assumption: if we can just connect farmers directly to buyers via technology, we can cut out the inefficient middleman.

This assumption misunderstands the economics. The aggregation function itself is necessary: someone must pool supply, manage quality, and coordinate logistics. When you disintermediate the aggregator, you don't eliminate these functions; you just shift them either upstream to the buyer (who now must manage thousands of individual farmer relationships) or downstream to the farmer (who must somehow coordinate with other farmers to reach scale).

Both approaches have been tried extensively. Both fail for the same reason: transaction costs don't disappear just because you add an app.

The better model is not disintermediation but professionalization: building the infrastructure that allows aggregators to perform their necessary function efficiently.

The Infrastructure Gap: A Framework

What does infrastructure mean in this context? It's useful to think about three distinct but interconnected layers:

Physical Infrastructure: warehouses, cold storage, transportation and testing equipment; the tangible assets required to handle agricultural commodities properly

Financial Infrastructure: working capital, inventory financing, payment systems; the capital and tools required to operate at scale

Digital Infrastructure: inventory management systems, transaction records, quality tracking and farmer registries; the data layer that creates visibility and enables coordination

The critical insight is that these three types of infrastructure are complementary, not substitutable. You cannot fix the first mile by only building warehouses, or only providing loans, or only digitizing operations. All three must work together because each unlocks the others:

• Digital systems create the data that makes aggregators bankable

• Access to capital allows investment in physical infrastructure

• Physical infrastructure enables the operational efficiency that generates returns on capital

• Returns attract more capital, which funds more infrastructure

This is not a chicken-and-egg problem; it's a coordination problem. The solution requires a bundled approach.

The Super Aggregator Thesis

This analysis points toward a specific strategic opportunity: building what I call the Super Aggregator model.

A Super Aggregator is not simply a larger version of an informal trader. It is a fundamentally different business model that combines:

1. Operational scale across multiple commodities and geographies

2. Infrastructure ownership of storage, logistics, and quality systems

3. Digital operations that generate real-time data on every transaction

4. Capital access through formal structures that unlock institutional financing

The insight is that each of these elements reinforces the others. Scale justifies infrastructure investment. Infrastructure enables quality consistency. Digital operations create bankability. Capital enables more scale. This is a flywheel, not a linear path.

Critically, the Super Aggregator model does not bypass existing informal aggregators; it formalizes and empowers them. The informal trader with local knowledge and farmer relationships becomes a node in a larger network, gaining access to working capital, storage infrastructure and quality systems that amplify rather than replace their core function.

This is aggregation theory applied to agriculture: build a platform that makes the existing ecosystem more efficient rather than trying to replace it entirely.

What This Means

The implications of this framework extend beyond agricultural policy:

For Development Agencies: Stop funding farmer training programs and digital marketplaces in isolation. Fund the infrastructure that makes aggregation efficient: warehouses, working capital facilities and digital tools deployed as an integrated system.

For Impact Investors: The first mile is not a charity case; it's a mispriced asset class. The returns are there, evidenced by the profitability of informal aggregators operating with essentially no capital. The opportunity is to professionalize a layer that is already economically viable.

For Governments: Regulation should focus on creating standards and incentives for professionalization (quality grading systems, warehouse receipt programs, commodity exchanges) rather than price controls or market interventions that further distort an already dysfunctional market.

For Agricultural Buyers: Backward integration into aggregation is more strategic than direct farmer sourcing. Owning or partnering with professional aggregators gives you supply security and quality control without the impossibly high transaction costs of managing thousands of individual farmers.

The first mile is not peripheral to Africa's food security; it is the linchpin. Until we build the infrastructure that allows efficient aggregation at scale, we will continue to see the same symptoms: volatile prices, unpredictable supply, catastrophic losses and chronic underinvestment.

The good news is that this is a solvable problem. Unlike changing weather patterns or global commodity prices, the first-mile infrastructure gap is something we can actually fix. It requires capital, technology, and operational excellence; all of which are available.

What it requires most of all is recognizing the problem for what it actually is: not a failure of farmers or markets, but a missing layer of infrastructure that prevents an otherwise functional system from reaching its potential.

The question is not whether Super Aggregators will emerge in African agriculture. The question is who will build them, and how quickly.

Photo by Doug Bagg on Unsplash