70% of the food in Africa is produced by smallholder farmers, who despite their obvious impact are still grappling with challenges such as outdated farming practices, low market penetration, limited credit access etc. However, all is not lost, technological innovation has a great role to play in bridging this gap and the movement has already started; particularly with the Connected Farmers Alliance.
The Connected Farmers Alliance is a collaboration between Safaricom’s business unit, TechnoServe and Mezzanine Ware. At its core is the need to reduce the risk that businesses within the agriculture value chain face in working with small-scale farmers. While at the same time improving the capacity and profitability of farmers with the use of technology. The farmers (in groups or cooperatives) join the Connected Farmers Alliance by creating a profile: containing their location, crop grown, personal details, the age of crop (in case of tree crops), quantity produced and expected harvest time.
Companies that sign up for the Connected Farmers Alliance program receive all these details, and a direct communication channel with the farmer. Firms use this data to arrange collection of produce and provide tailor-made agronomic support through text messages, all for the farmers’ benefit. Additionally, farmers can also ask for support through the platform.
Changes to Smallholder Farmer’s Selling Process
Traditionally, the journey of a small-scale farmer would look similar to this; a dairy farmer getting forty litres of milk a day will take their milk to their cooperative’s collection point, where an officer will measure, check the quality and price it. The cooperative will then issue the farmer a paper invoice/receipt, which the farmer will use to collect payment at the end of the month. The farmer will then have to struggle to keep the daily paper invoices safe until end month. If luck is not on their side and they get a corrupt payment officer and part of their hard-earned cash will be taken as ‘chai’ (backdoor deductions) when they are collecting cash payment.
On the other hand, a farmer in the Connected Farmer Alliance program (let’s call him/her the connected farmer) will also take their forty litres to the collection centre, where as usual the amount, quality and buying price will be recorded. However, this time the recording will be on a mobile phone app used by a mobile field agent.
Immediately, the farmer will also get an SMS with all the recorded details and an electronic invoice in which the farmer will use as evidence to secure payment when it’s due. There is no paperwork, therefore, better transparency; the farmer gets to see how much his milk earned him/her plus, at the end of the month, payment is automatically sent to their M-Pesa mobile money account. If you had a choice which route would you pick?
Additionally, the Connected Farmers Alliance recognizes that a majority of smallholder farmers sorely depend on income from their farm produce for their day to day expenses. Thus, when the connected farmer has a shortage of fertilizer, pesticide or needs artificial insemination for their newly-bought high breed cow the data from their daily milk transactions is used to build a credit score and the farmer can access inputs from any agro-dealer working with their cooperative, even when their pockets are empty. As a result, small-scale farmers that have traditionally been isolated from financial services are now able to use their meager produce to access credit lines.
Access to quality information based on farmer profile
In today’s connected economy, data is king, and since data is captured throughout the production process in the Connected Farmers Alliance program; it can be used to improve productivity. Agro-industry firms within the program are able to provide tailor-made crop and animal extension information straight into the phones of the connected farmers. This is especially important for crops like cashew nuts whose productivity goes down with age, a feature that is hard to track without records. In such a case a contracting firm like Kenya Nuts can easily give timely recommendations for farmers to replace their cashew trees in time.
Access to markets
Limited market access by small-scale farmers has been a chronic problem in Africa, partly due to the small volumes produced and lack of traceability of their produce. However, for the farmers in the Connected Farmers Alliance it is different, the digital records kept ensure produce traceability and enhance the ability to predict future production volumes through data analytics. Additionally, increased efficiency in the supply chain makes it easier to move goods from farmers straight to the market.
Secure and Convenient Payment
Connected farmers enjoy their privacy and security when their payments are wired directly to M-Pesa without anyone noticing. A survey done by TechnoServe to measure the impact of Connected Farmers Alliance, found that up to 80% of respondents favoured mobile money to cash payments. Why? It is more secure than carrying cash and frees them from the pressure that comes with everyone knowing you were paid; especially family members and friends who would expect to be gifted. For those societies where women are not allowed to control finances; this is especially useful.
Mobile Payments for the Connected Farmer http://www.technoserve.org/blog/photo-of-the-week-emerging-opportunities-in-africa
Efficient record keeping
Record keeping is an issue that small-scale farmers, as well as micro, small and medium-sized enterprise owners, struggle with; especially with low literacy levels. Connected Farmers Alliance takes away this problem by automating this process and sending SMS alerts to farmers every time produce is supplied. Furthermore, record keeping allows companies like Kenya Nuts within the program, to better provide incentives such as the bonus program which rewards their best performing (in terms of quality and quantity) farmers. This motivates them to take better care of their crops and the competition increases the overall productivity.
Connected Farmers Alliance has just scratched the surface of what technology could do for small-scale farmers; as mobile penetration rates increase and network quality improves, more farmers stand to benefit from the program.
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