Mobile phone solution for smoothing business transactions in agribusiness value chains.

Summary

mFarms is an integrated and customizable mobile and web-based platform that allows actors in the agribusiness value to work more efficiently, manage data on the flow of goods and services, establish markets and maintain business relationships. The platform has been piloted and used in over 19 countries across Africa by farmers, governments (of Ghana and Rwanda) and private companies.

Challenge/Problem

Agribusinesses provide inputs such as seed, fertilizers and tractor services to smallholder farmers on credit. In return, farmers provide agribusinesses with produce at harvest, the amount of which is agreed on in advance. These agreements and transactions are largely recorded on paper.

Maintaining these records is laborious and prone to errors. Inability to aggregate data makes it difficult for businesses to generate meaningful insights such as creditworthiness of farmers and the performance of inputs. Because smallholder farmers do not receive a record of the transactions, there are often disputes about the agreement and services rendered during harvest. In addition, agribusinesses are unable to access financing from banks and other financial institutions to meet their working capital needs, as these businesses seldom possess the required paperwork that these financial institutions trust.

Smallholder farmers find it difficult to plan and obtain inputs and services at the required times, meaning individual farmers often have to settle for higher costs.

Solution

The mFarms Access application is accessed through three interfaces, each designed with the needs of its particular audience in mind: agribusiness agents, farmers and agribusiness owners.

The first interface is a mobile application provided to agribusiness agents, who interact with smallholder farmers on a regular basis. The agents use the app to register farmers or their groups and map farms’ sizes and locations. The application further allows the agent to collect forecasts of the farmers’ requirements for better inventory management, as well as record transactions during input delivery and aggregation.

The mobile application collects data even in areas without Internet; the information is simply synced to the server later, once the mobile device is able to connect.  

The second interface is for the farmers. Since most farmers do not possess smartphones, they are provided a digital record of every transaction via SMS. The digital record empowers the farmer to check transaction details at a later date and thus prevent disputes with agribusinesses during harvest.

The third interface is a web-based platform for agribusiness owners. The platform enables agribusiness owners to view in real time a record of all farmer registrations and transactions recorded by the mobile application. The platform contains modules that allow the agribusiness to generate insights such as farmer creditworthiness, agent performance and inventory forecasting.

Further, agribusinesses can use the platform to facilitate applications for working capital and asset loans from financial institutions.  

Apart from the mobile application for agribusiness agents, mFarms also provides mXtension, an SMS and voice messaging system for smallholder farmers. In 2014, the Center for Biosciences International (CABI) Ghana collaborated with the Department of Agricultural Economics at the University of Ghana, the Ghana Agri-Input Dealers Association and Purdue University to develop the service, which provides agronomic tips and information on good farming practices. The farmers receive personalized phone calls from their individual trainers or extension agents.  

Results

As a result of the introduction of these technologies in 2014, mFarms’s developers have been able to collect input prices from about 12 countries across Africa to disseminate to farmers. In Ghana, about 70,000 smallholder farmers have received agro-tips and market information that helped increased their yield.

Introducing this solution has created jobs for people who offer commission-based services to farmers and agribusinesses, thus empowering them economically.             

By exchanging information, farmers have also been empowered to make timely decisions about their farming businesses. They also do not have to travel far to source inputs, as the mFarms solution links them directly to input dealers.

Lessons Learned/Potential for replication

It is important that rural Information and Communication Technologies (ICT) solutions target the real needs of beneficiaries, who should be involved in developing the solutions. Technology adoption takes time, and a software management team is needed to assist users and drive adoption.

For ICT solutions to sustain themselves, they will need to generate sufficient revenue. In addition, the ownership of the solution should be considered. Because farmers will not pay for information or other services intended for them, alternate ways of generating revenue for will need to be found.

Next Steps

The plan for the next few years is to aggressively focus on activating sales and driving adoption by publicizing the solution’s value. This will be achieved by recruiting more college graduates to work closely with existing and newly enrolled users. Progress will be measured by considering the adoption rate and number of paid users.

The sustainability, management and commercialization of ICT solutions must first of all be factored in the programmes’ conception and design phase. This will help anticipate potential risk and challenges and determine how to address them. Other important factors are a good technical backstopping, a regulatory framework to address issues of data privacy and legal agreement, and a proper pilot programme to incorporate users’ feedback and other lessons learned. It is easier to scale up such rural ICT solutions.