This post originally appeared on the Business Fights Poverty Blog.
Mobile Agriculture was on the agenda for the first time at Mobile World Congress 2012, the world’s largest event for the mobile industry where over 67,000 visitors attended from 205 countries. On Tuesday 28th February around 150 people from the mobile industry and the development sector attended the GSMA mAgri Programme’s seminar “Mobile Agriculture: The Market Opportunity” where a panel of leading practitioners shared emerging best practices and business rationale for developing Agricultural Value Added Services (Agri VAS) in emerging markets. This post provides a summary of the seminar with highlights from each of the panellists. Videos of the presentations and a webinar showing analysis and highlights are available to watch on the GSMA mAgri website.
Bringing valuable insight from the mobile network operator perspective, Marc Ricau, Vice-President of Country and Partnerships at Orange, provided a clear case for why Orange is developing Agri VAS in its emerging markets. With a presence in 18 African countries where between 60 and 70 per cent of their potential customer base live in rural areas and are involved in agriculture, Mr Ricau spoke of Orange’s need to shift the focus from urban to rural customers. This means extending rural coverage, a job that operators are equipped to do. However, to create successful information and advisory services for farmers, Orange recognized that forming partnerships with agricultural organizations is critical. Although the services Orange plan to launch will be commercially driven rather than CSR initiatives, Mr Ricau drew attention to the potential for mobile to boost agricultural productivity and cited that the agriculture sector contributes 15-20% of Africa’s GDP.
Although there was a consensus amongst the panellists regarding the market opportunity for Agri VAS, the GSMA mAgri Programme Director, Fiona Smith, highlighted that the industry is still in its early stages and faces a number of challenges. One challenge is designing sustainable business models when dealing with customers who are typically poor smallholder farmers whose ability and willingness to pay for such services needs careful consideration.
The challenge of designing sustainable business models and reaching scale with agricultural information services was addressed by three panellists from organisations whose services are the leading examples from the Agri VAS industry: IKSL, Nokia Life and Esoko. Mr Srinivasan, the CEO of IFFCO Kisan Sanchar Ltd. (IKSL) in India, explained that by entering into a joint venture with mobile network operator airtel, their agricultural information and advisory service has scaled to 3 million revenue-earning customers and 1 million active users across 18 states in India since 2007.
Nokia’s success in reaching significant scale (50 million users) with their SMS based, subscription information service “Nokia Life” is in part, due to the design of the service which makes it accessible to customers who have simple, low-end handsets. Mr Bhanu Potta, Global Product Leader of Knowledge & Learning Services explained that Nokia was responding to farmers’ need for actionable information that is locally relevant and storable for future reference. They have partnered with over 18 mobile network operators to expand the service from India to China, Indonesia and Nigeria and a new version of Nokia Life was released at Mobile World Congress 2012.
Mark Davies, CEO of Esoko, shared the reasons behind their success in rolling out a cloud based mobile, Market Information System (MIS) across eight African countries. Esoko has recognized the demand from players in the agricultural value chain for a platform that could be adapted to deliver different content and in response, designed a franchise model that has seen significant success. To meet the challenges of scaling up as a small private company, Esoko plans to partner with a mobile network operator in Ghana and enhance the service by adding a call centre. Partnering with a mobile operator would allow Esoko to leverage the existing infrastructure, distribution networks and marketing clout of the operator.
Steven Yurisich, Industry Specialist in Communication, Media and Technology at Accenture agreed that there is significant potential for the mobile industry to enhance the agricultural value chain in emerging markets. He shared the findings identified in a joint report, Connected Agriculture written by Vodafone, Accenture, and Oxfam. The report focused on 26 emerging markets. One of the key findings was that 80% of a potential $138 billion uplift in emerging market farmers’ incomes will be derived from the growth of mobile information services, helpline services and mobile money transfer systems.
In summary, three things were evident from the content of the seminar:
- Existing Agri VAS are reaching scale and sustainability due to responsive business models and partnerships with mobile operators;
- There is a real market opportunity for Agri VAS in emerging markets due to the huge potential customer base;
- Agri VAS are making a tangible difference to farmers’ lives, enhancing the agricultural value chain and providing a return on investment for customers.
In response to both the significant market opportunity and the existing challenges faced by the industry, the GSMA mAgri Programme launched the mFarmer Initiative in 2011 with the support of the Bill & Melinda Gates Foundation and USAID. The mFarmer Initiative provides support (financial and non-financial) to mobile service providers and agricultural organisations to facilitate the creation of scalable, replicable and commercially sustainable agricultural information services that bridge the information gap and improve poor farming households’ resilience and decision-making. We will be working directly with four or five Agri VAS deployments over the next two years and sharing lessons and best practice with the wider industry.
If you are interested in attending our knowledge sharing events and hearing our latest news please join the mAgri distribution list and for more information, tools and resources please visit www.gsma.com/magri.
*Agricultural Value Added Services (Agri VAS) form part of the Rural VAS portfolio for mobile network operators and VAS providers.