Smallholder farmers in developing countries: the final frontier of the digital revolution? ICTs first germinated in small technology-focussed cliques in developed countries, but they have spread their roots and branches far beyond, to every country, reaching more and more people. Whether it’s weather forecasts to their phone, online market platforms to get the best price for their produce or software to manage their farms: now even this group – farmers, many of them living in poverty, in remote corners of developing countries – are finding their lives and livelihoods transformed by a crop of digital innovations.
Agriculture is of unrivalled importance. In sub-Saharan Africa it accounts for one third of GDP and three-quarters of employment. Farming communities are also the site of much of the most extreme poverty. And this century will perhaps see even more serious challenges than before: feeding a growing world population will require a 70 percent increase in food production by 2050, and the effects of climate change – as yet unknown – will have to be reckoned with.
Mobile phone usage among rural populations has grown steadily in recent years: it’s inherently difficult to know the exact figures, but we know that 90% of the world’s population is served by mobile phone signal, and in the developing world there are two mobile phone subscriptions for every three people. Many have been quick to see the potential to offer them various kinds of (overwhelmingly phone-based) services to boost their livelihood. The “mAgri” sector is already well established and diverse. A few older larger companies are being joined by scores of young start-ups, and competition is becoming more heated.
- Information is power
In many cases just providing farmers with the right information at the right time to their mobile phones can be enormously valuable.
The classic example is information on market prices. Typically, a farmer in a rural area will sell her produce to a merchant, who will then take it to a city and sell it at the market. But she doesn’t know if she’s getting a fair price if she doesn’t know how much the merchant sells for at market. Among the first were Esoko (founded in 2005 in Ghana, today reaching an estimated 150,000 farmers in 10 countries across Africa) and Reuters Market Light in India (with an estimated 1.2 million users since its launch 2007). Today these big, often international players compete with younger, more localised start-ups like Habari Mazao for customers.
There are also more and more services offering “best practice” advice to farmers, after pilots showed these services can have a positive impact. A lot is known about the most efficient way to grow particular crops or raise livestock, but communicating this – which is much more complex than just a market price – is a challenge. Ghanaian start-up FarmerLine provides this information in the form of recorded voice messages in local languages (thereby overcoming the obstacle of illiteracy for SMS-based services), whilst Digital Green (see insight) does so with informational videos using portable projectors.
Reliable weather forecasts are obviously invaluable for farmers, especially as climate change makes things less predictable. To take one example of many, WeatherSafe (a start-up from the incubator at the European Space Agency in the UK) uses big data analysis on satellite data to give localised forecasts to coffee growers by SMS. Kilimo Salama has managed to.
- Give and Take
If the first generation of services for farmers treated them as passive recipients of information, later innovations opened up two-way exchange. Services became more responsive.
Cattle farmers using iCow in Kenya submit detailed information about their herds and then receive personalised updates and reminders about milking and immunization appointments
In Tanzania, coffee cooperatives use the digital bookkeeping tool Coffee Transparency by sending text messages with volumes bought and sold as well as operating costs. This not only makes their own processes more efficient, but provides useful information to credit institutions about who they should lend to.
Nano Ganesh and projects like it lets farmers operate irrigation pumps remotely using their mobile phones, meaning they have to spend less time and money on travelling and are better able to cope with patchy power supply.
- Bringing the marketplace to the farmer
Tools to help farmers be more productive or know current market prices are indirect ways of increasing their income, by helping them produce more and sell at a higher price. But some services are more direct in helping farmers to sell.
“It doesn’t help a farmer to know what the price is in the city markets if he’s unable to go there to sell,” says Edison Gbenga Ade, founder of AgriPro Hub, a start-up hoping to become an international online marketplace for producers and wholesalers. Established big player Farmforce already does something similar, allowing farmers to pool their produce and then divide the earnings proportionally once a buyer is found.
Ghanaian start-up Farmable runs primarily a micro-investment platform, applying a crowdfunding model to the question of credit for farmers; but besides this, their enterprise unit does marketing on the farmers’ behalf trying to access premium markets and get the best possible price. (The project also makes innovative use of Radio Frequency Identity Tags to allow online tracking of cattle and prevent theft.)
- “Broad and shallow”
A clear trend in services for smallholder farmers is towards “bundling”: not giving only market prices, for example, but also weather forecasts and a helpline for farming tips – becoming a “one stop shop”. Almost every example given so far offers not just one service but several.
This makes sense because with this market the biggest challenge is often reaching customers and building a relationship of trust – taking this existing network and adding on additional services is more straightforward than launching a product from scratch. Mark Davies, CEO of Esoko, told us that companies like his are being “pulled horizontally” with the product they are offering becoming “broad and shallow”.
- Working with – and for – associations
Few if any of these services deal directly with individual smallholder farmers. Instead, service providers tend to work with farmers’ associations. Because it is a base of pyramid market, business models rely on reaching very large numbers and charging relatively low prices – this makes the costs of trying to reach farmers individually too high.
Perhaps this was originally the only reason, but it has meant that over time providers have developed services for the associations themselves, not just their members. Esoko, for example, gives them an online platform which they can use to communicate with their members via their phones – this was recently used by an association in Burkina Faso to coordinate a response to a pest of flies threatening the mango crop.
In China, the SOUNONG search engine is targeted specifically at farmers’ cooperatives to aggregate information from the internet and present it in a meaningful and useable form.
In a mark of the “digital revolution” becoming truly global, use of mobile phones in poor rural communities has become fairly widespread and continues to increase. This has allowed a wide array of apps and services to be developed, targeted at their specific needs. Some improve their productivity, others help them with farm management and logistics, still more aim to get them the best price for their goods.
What’s more, providers are increasingly offering a “bundle” of different services in one place. Some of these needs will remain constant – many aspects of farming are inevitably rooted in unchanging biological processes. However there is also flux: Africa in particular is seeing a transition from smallholder-dominated agriculture to agribusiness, and the digital products available will no doubt evolve to reflect this.