Connected Farmer Alliance: Insights from mAgri Field Visit

GSMA mAgri hosted a Field Focus Session in Nairobi in April. The week-long event included workshop activities with our six Mobile Network Operator grantees, keynote speakers and panel discussions with wider industry practitioners, including Kenyan banks, MFIs and mAgri start-ups, and insightful field visits to Thika (rural area outside Nairobi) to see and hear from users of mobile agriculture deployments. In this blog post, I will share our learnings from interacting with key stakeholders of Vodafone’s Connected Farmer Alliance, an enterprise platform for agricultural value chains available in Kenya, Tanzania and Mozambique that helps agribusinesses work more efficiently with smallholder famers, in turn increasing their productivity and income. The platform leverages both the Agri VAS channels and Vodafone’s M-Pesa mobile money to facilitate communication between agribusinesses and their smallholder suppliers in addition to enabling payments to farmers by agribusinesses. Usage of the platform is free and device-agnostic for farmers, although they have to be on a Vodafone-owned mobile network (Safaricom in Kenya, Vodacom in Tanzania and Mozambique) to fully benefit from the transaction feature of the service. Vodafone charges its agribusiness clients a licence fee for using the platform.

For our field visit, we had the pleasure of having all key stakeholders of the CFA ecosystem present:

1. Mobile operator: Safaricom

2. Mobile business solution developer: Mezzanine

3. Agribusiness: Kenya Nuts

4. Farmers

Before kicking off the discussions, Safaricom and Mezzanine gave the group an overview of the platform that encompasses three main features:

1. Farmer Database Management: Provides access to a portal that enables entry of key information on farmers – such as registration, profiling, location, crop in production – for field agents to log in their interactions with their smallholder suppliers;

2. Communication: Establishes a direct communication line between agribusinesses and farmers for agribusiness to keep track of the farmers’ production cycle and answer/ask potential queries that arise; and

3. Transaction Management: Facilitates the issuance of e-receipts (sent via SMS) to farmers selling their produce to the agribusiness and enables payments to farmers via M-Pesa.


Farmers

We spoke with a small group of farmers who were part of Kenya Nuts suppliers’ network. Overall, inefficiency of cash transactions are a major concern for smallholders. Before CFA was implemented, farmers selling their yields were paid in cash which made them easy targets for theft. Additionally, farmers didn’t have full visibility into the amount of production sold and having it recorded improves visibility on the amount of production sold which in turn, helps farmers’ manage their cash flows.

For farmers, the main benefit offered by the CFA platform is having their production paid via M-Pesa which overall translates into:

  • Better prices for trade on their crops due to a better monitoring of quality assurance;
  • Timeliness of payments with no need to travel to agribusiness site to receive payment;
  • Security: no theft of cash and production at trade points or on their way to and from their farms; and
  • Eventually, the possibility of using the transaction records to apply for credit ratings and access to loans and credit.

 

Kenya Nuts

Kenya Nuts is the first agribusiness on-boarded onto the CFA platform under the partnership with Safaricom. The agribusiness pays a monthly fee for using the service in addition to providing the necessary devices (e.g. mobile phones) for agents/field officers to have access to the platform on the field. For Kenya Nuts, the decision to ‘go digital’ was driven by the fact that the field is the only part of the value chain where data ‘analytics’ was not captured – meaning that the whole process of quality control and transparency remained questionable. CFA resolved this transparency gap as the business is now able to track and trace the production and relationship agents maintain with farmers throughout the production cycle. The main benefits are:

  • Building analytics for supplier networks on farmers’ production – aggregate information about crop, location, gender, harvest data into dashboards and reports making it possible to get estimation on upcoming yields;
  • Establishing a direct line communication with farmers, saving time in dislocations to farms; and
  • Facilitating payment processes which is overall less risky, more efficient and transparent.

 

Interview with Kenya Nuts

Figure 1 Interview with Kenya Nuts

 

Safaricom

CFA’s commercialization efforts are led by the Enterprise Business Unit within the operator. The benefits perceived by Safaricom are:

  • Transformational impact within the agriculture ecosystem;
  • Driving the cashless agenda in the Kenyan economy;
  • Ability to provide tailor-made solution for the agriculture segment by riding on some of our existing infrastructure; and

 

Safaricom is already offering this solution to other agribusinesses in different sectors and has established a dedicated sales team to provide for growing market demand.


Mezzanine

A Vodacom SA owned company with the mandate to build mobile driven agriculture solutions for Vodafone and its affiliated OpCos in Africa. Mezzanine has the agility to build customised market-driven solutions like the CFA platform to meet the needs of African-based agribusinesses.

 

At the end of the day, the group gathered for a debrief session to share learnings about the opportunity for replication of a CFA-like solution in their markets:

1. Incentives, incentives, incentives: One thing that was clear throughout our interaction with the multiple actors is that all stakeholders in the chain have clear incentives in using CFA. The MNO is expanding its enterprise business while driving adoption of mobile money in rural areas, the agribusiness is streamlining its operations for farmers, collecting data making its management more efficient while farmers benefit from the ease of mobile payments that promote security, timeliness and income management.

2. Identify best suited entry points in value chains: The most suited entry points are not necessarily to be found in the largest and most established value chains (e.g maize, tea etc.) but rather in those that are more formal and better suited to digital channels. These are often cash driven crops (not necessarily subsistence) that have high frequency of trade and low value of transactions which makes them more prone to mobile money usage.

3. Appetite for ‘Marketability’: Vodafone’s decision to commercialise this solution via their enterprise vertical with a dedicated sales and distribution team pushes the service to go to market and be adopted by agribusiness clientele.

4. Customisation of the platform: Mezzanine’s ability to customise the CFA platform allows flexibility to adjust the solution to the needs of different agribusinesses. This helps support scalability of the overall offering.

5. Extend value proposition of the service by adding agronomic information pushed to farmers: At the moment, this information is shared with the farmers through booklets distributed by agents and officers that come to visit farms every so often. There is a real opportunity to disseminate this information via the mobile channel (SMS) with the network of farmers so it accompanies their cycle of production and ensures they have all the knowledge to maximize their yield returns. An example would be FarmForce – a similar farming management web and mobile platform solution for agribusinesses and smallholder farmers that in addition of track and trace and mobile payment component, offers real time information to farmers.

What’s next for CFA?

Vodafone and its related OpCos look forward to rolling out this product across its African market with successes already realised in Horticulture, Dairy, Tea and Rice value chains in Kenya and Tanzania and growing. Safaricom will also be formally launching the product in July 2016 in Nairobi.

Do you see a demand for this kind of services in your markets? And what do you think are other factors required for implementing them? Let us know your views by leaving a comment below.

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