Challenges, and Great Potential, for Mobile Technology in African Agriculture
There is increasing acknowledgment of the transformative role that mobile data services can play in developing the agricultural sector in Africa. But the deployment and business models haven't always been clear: who should build these new technologies, how should they be deployed, and how can they scale? A technology and services company in Accra, Ghana, Esoko has been learning along the way.
A number of factors have driven agriculture back to the top of the global agenda, including an expanding global population, food price volatility, climate change and persistent and chronic rural poverty. But despite growing concern and countless interventions, African agriculture remains mostly anemic. As many as 600 million hectares of suitable arable land lies underutilized Decent inputs, best practices, and reliable output markets remain out of reach for the majority of the 500 million people who rely on agriculture for their livelihood.
At the same time, mobile rates are rising rapidly across the continent – today 40% of Sub-Saharan Africans have a mobile phone, and 80% of the population is covered by a mobile signal. At the convergence of this mobile phone proliferation and the lackluster agricultural sector lies the enormous opportunity to use mobile phones as a sort of rural media channel, sharing critical data with hard to reach communities. Esoko is chasing that opportunity.
Understanding the market
Esoko was originally established in 2005 as a small software project, allowing smallholder farmers to receive market prices via SMS and improve their negotiating power, and we pushed for what we thought would be a simple consumer model. We imagined users would be comfortable and confident enough to take this different technology, use it, and share it with others. But we soon learned that such an entirely new service wouldn’t actually spread virally - not immediately at least. Just like many other new technologies, reaching critical mass can be a challenge.
This led us to a more ‘social network’ oriented approach, not only targeting individuals as clients but also targeting already established organizations who work with, and who are trusted by, those individuals. And as we really began to understand where the information gaps were in those organizations we became even more convinced of the need to create a toolset of mobile applications for them. What we saw is that as the demand for food increases and as food prices rise, businesses are increasingly looking to build their supply chains.
But in Africa, you can’t simply setup huge plantations as has happened in other parts of the world - we still have 90% smallholders and land rights can often be complicated. To accelerate food production, businesses are collaborating with local communities, creating inclusive business models that share revenues on outputs, and providing them with input credits, advice, monitoring and a guaranteed output market. This all requires management, and managing dispersed smallholders in rural communities is a fantastic opportunity for mobile. With these new mini-databases, you can inform, monitor and transact with rural populations.
Today Esoko plays the role of an information/media tool used by a wide range of clients in 16 countries. Individuals (farmers, traders, and researchers) can still subscribe to Esoko for prices, offers and advisories. But the business-to-business model has given us more clarity, and more users. Businesses (outgrower schemes, warehouse managers, agri-processors, and buyers) use Esoko for its toolset to be able to push out or pull information to and from the field. NGOs and organizations use Esoko to advise their beneficiaries of best practices, training reminders, preventative activities, crop compliance, or to track perceptions and activities in the field. Governments use Esoko to track data in the field and to advise citizens on specific data types like market prices, weather, or general extension services and advisories.
There are compelling stories beginning to emerge from Esoko users, and we’ve seen initial impacts for everyone from farmers to buyers to agribusinesses. Farmers are negotiating better prices, timing when to sell, and take their goods to new markets. Sara Maunda, in Malawi, recently shared her story of receiving an Esoko SMS telling her that the price for groundnuts in Lilongwe, less than 40 miles away, was more than 4 times the price a local vendor was offering. She travelled to Lilongwe and sold 150 kg earning about $130 dollars after costs – if she had sold to the vendor she would have made just $27 dollars.
Public and private sector working together
Financing and supporting these activities – technology production and testing, data collection, farmer training, marketing, monitoring and evaluation and more – requires an inventive mix of public and private investment and partnerships ranging from mobile operators to multilaterals, investment firms to research institutions. Success and profitability of truly innovative initiatives takes time, and only those with patience, secure capital and good internal assessments and monitoring can be successful. The public and private sectors can and should find new ways to partner together and help small, dedicated businesses like Esoko survive the first few challenging years.
Sarah Bartlett is the Communications and Research Director at Esoko
This article was published in Great Insights Volume 1, Issue 7 (September 2012)