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Wednesday, April 17, 2013

Connected: Unleashing Ugandan Farmers' Potential Through Mobile Phones

By Kyla Yeoman

Achon Bernard, a farmer in northern Uganda, is happy about the possibility of using his mobile phone to order and pay for inputs like seeds and fertilizer, as well as get paid for his produce. (Image credit: Kyla Yeoman/Mercy Corps)

A powerful, new mobile platform designed for smallholder farmers that combines agriculture information and financial services to help them harvest bigger profits is going live in Uganda. 

Modeled on the cloud-based AgriLife, the new platform will be accessible via mobile phone and provide two key, interconnected services: data collection and analysis about farmers’ production capability and history; and, an integration point for financial institutions, mobile network operators, produce buyers and their agents to more efficiently provide much-needed services to distant, rural farmers.

The data analysis will drive the growth of services and products that benefit smallholder farmers based on a better understanding of their production capability. The more high-quality, comprehensive data that can be collected, the more valuable an asset it becomes as service providers can better understand farmers’ needs and tailor their offerings. These include crop insurance, input payments and savings accounts. For the first time, transaction data will enable each smallholder farmer to build a credit history that will be used by other value chain actors to provide credit and access to other ‘easier access’ purchases, such as seeds, fertilizers, and pest control chemicals.

Farmers Centre (U) Ltd. (FACE), a farmer-centric agribusiness enterprise based in the Lira District in northern Uganda, is an AgriLife early adopter. FACE is already uploading information about their 10,000 farmer clients, who travel long distances to purchase inputs and aggregate their produce at FACE warehouses for processing and sale. Previously, FACE collected this information by paper and stored the data on a computer that recently crashed, highlighting the need for a USSD farmer registration process via mobile and cloud-based storage system.

“AgriLife will reduce the transaction time with our farmers because it’s all done online quickly and there’s less of a need to travel,” said Dr. Otim Bernard, CEO of the Farmers Centre. “In the end, this will reduce our costs.”

The AgriLife platform was developed by Kenyan-based IT company MobiPay Kenya Ltd. Mercy Corps has supported the expansion of AgriLife to Uganda, while building relationships with other service providers that can be integrated into the platform so they can better reach rural clients - a new market segment for many companies. Mobipay expects to provide services to 10,000 farmers through the partnership with FACE, with a target of 100,000 by the end of 2013.

“If we can track our clients’ acreage and their output, we can help them plan what to plant and get the inputs they need,” Bernard continued. “Then we can link up with buyers and let them know more accurately that we have X farmers who can produce a certain amount of maize, and we currently have X tons aggregated at our warehouse for sale.”

During a farmer group meeting in March 2013, in a small village about 65 kilometers from Lira’s town center, group members acknowledged using a “wait and see” strategy. They have been observing the group president’s use of his mobile phone and plan to determine whether the benefits he’ll derive from the mobile connection to the Farmers Centre (via AgriLife) are enough to convince them to purchase their own phone and register individually. Farmers are more interested in group loans due to the need for collateral, which is usually land. In northern Uganda, land is often owned communally by clans so individuals can't use it as collateral. MobiPay is tailoring the AgriLife platform for this region so that group credit scores are possible, and is engaging financial institution partners that can provide group lending based on these scores.

Trust is typically a major obstacle in introducing new products to rural farmers. Working with local partners like FACE means farmers see AgriLife as just one more service provided by a well-known enterprise that has consistently provided quality services to them for many years, sharing and explaining all of the products available with their clients.

However, challenges remain: low network coverage and instability of the network in the most remote areas can mean lower adoption; the high cost of phones (~$20) and calls (~$0.20 per minute); and, difficulty in charging mobile phones constrain smallholder farmers from accessing services via mobile, getting on the platform and enjoying its associated economic benefits. 

There is hope, however. Based on a survey Mercy Corps conducted in October 2012, 65 percent of households in the region own mobile phones while 90 percent have access. Some are already using mobile money services to send remittances. Farmers have shown a gradual but steady uptake of mobile money services beyond remittances. Focus groups have revealed interest in using more mobile services. Currently, growth is limited largely because of farmers’ incomplete understanding of the products available and their associated economic benefits.

Mercy Corps is providing this support under a three-year Swiss Agency for Development and Cooperation (SDC) funded program called Agri-Fin Mobile, simultaneously being rolled out in Indonesia and Zimbabwe with a target of raising farmer incomes by 30 percent by bundling agriculture-related services and delivering them via mobile.

Mercy Corps expects that improved crop yields and increased income resulting from this holistic, mobile platform will have a significant impact on the food security of poor families, maximizing their production and profit potential.

This article was originally published on Global Envision, a blog focused on market solutions to poverty managed by Mercy Corps, a NextBillion Content Partner. 

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