Question 3: Market information - sustainability
For market information services to be sustainable (as profitable businesses), do they need to focus on larger, more commercial farmers? Is there an opportunity for these services to be sustainable (profitable) and also serve the needs of farmers who are unable to pay for these services?
The price of mobile hand sets continues to drop but still can be out of reach for poor rural farmers. One solution being tried in Tanzania (by TIGO) and Madagascar (with Airtel and the IFC) is a cloud phone from Movirtu ( http://www.movirtu.com/ ). This allows phone users to use one hand set but have their own phone numbers -- via a software solution not a multiple SIM approach. It will be interesting to see the impact this has on the use of mobile phone services by poor farmers.
Judy
Judy,
I believe Movirtu has a very interesting approach for rural farmers to access mobile phone services in Africa. What I find intriguing is the possibility of combining cloud phone with cloud SMS services to provide prompt/response content via SMS (or voice) via a Movirtu like platform.
Brian Puckett
Next2.us
Yes, Brian, it makes sense to try to combine cloud phones with a cloud approach. Given the lack of reliability of cell phone networks in many countries in sub-Saharan Africa, keeping the communications to SMS makes sense. I also think that any cloud service approaches should incorporate options to work off-line or at least accommodate for delays. I've heard this referred to as a "partly cloudy" approach.
Judy
Hi Judy, lol, "partly cloudy" is a new one to me and good one! Yes SMS can be unreliable, more so when you think about the multiple steps to integrate cloud solution with a MNO shortcode. One of the things to address this we built into Next2 is when we receive any SMS from user we automatically send a confirmation reply back by SMS. This way the sender knows that a) we have received their message and b) confirms the system understood their request or it prompts them to try again.
Per Michael Riggs good suggestions I have been reading through previous discussions with much interest. A couple things we have done to try to address the language and complexity of using SMS is;
a) We have the ability per country to provide our SMS command in both English and at least one other language. In Kenya we are working on providing our SMS command and SMS help instructions in Swahili.
b) We have also built a mobile app that works with Nokia Symbian feature phones that only have SMS. This helps the farmer to format and send SMS via easy-to-use menus. Likewise we have ability to provide help file as part of the install. We can provide the install on microdisk that can be distributed in the field.
c) The Next2 mobile app also has the ability to build in click to call IVR requests. This is something we are looking at right now.
d) We plan on providing additonal apps that if data connection is available can use internet for messaging and also automatically updating the app.
We feel our feature phone mobile app can shield user from complexity of using SMS as well as help format data input from farmers for better processing on our backend.
Not sure how one addresses 'offline" capabilites in some dynamic way (other then building static files (such as we do with our help file) into the app that can only be updated by reinstalling the app).
Another point I'd like to make is we see Next2 working closely with local radio stations. They can use our shortcode and their Next2 identity and our keyword auto-messaging software to push content to listeners. Further they can use their Next2 identity as a text message address to solicit input from listeners. We see them as key conduit to building awareness of our services in rural communities.
Brian Puckett
Next2.us
I am replying to the general informational post on market information systems which makes some good points based, at least partially, on a study a couple of years ago sponsored by the IFC (Kumar, n.d.). From this work and other sources, we know that farmers need better market information; they want diverse types of information as well (i.e., not just prices but advice on farming practices and weather); and it is difficult to figure out a business model that will enable such services to be scaled well without on-going donor support.
USAID projects (I'm most familiar with the ones in sub-Saharan Africa) regularly try to tackle these multiple challenges by working with farm associations to sponsor the funding and even the provision of such services for their members; helping to fund the up-front costs of setting up such services; or other approaches. One approach that appears to be working relatively well was tried in Malawi recently in conjunction with a regional project (called Market Linkages Initiative). The project was facilitating a network of bulk warehouses associated with a network of agrodealers. The agrodealers were also an information source for farmers. The MLI project faclitated a competitive selection process to choose a private service provider of market information services to these agrodealers. The project then provided some up-front funds to help the service start up and for farmers to try it out. The selected service provider had a strong business incentive to make it work and, so far, it seems to be working. Still the jury is still out on this and other services.
I'd be interested in any others' perspectives on sustainable business models for such services.
Judy
In an earlier forum, the question was asked:
Is there a business case for serving poor smallholders?
Inputs from indivduals in many sectors provide some great insight on how such a service might be sustainable. This included:
Read more here: http://www.e-agriculture.org/forumtopics/question-3-there-business-case-serving-poor-rural-smallholders
Going back to the top question, I wanted to share a couple of thoughts. First, for sustainability, I do not think a service needs to focus on larger, more commercial farmers (which was one of the questions posed at the beginning of this thread). In fact, those larger, commercial farmers have their own means of receiving the market information they need. From a development perspective, USAID focuses on finding ways to provide such services on a sustainable basis to poor smallholder farmers. Tapping the information services large farmers need and support is one option for increasing the likelihood of sustainability. Esoko (www.esoko.com ) is a private market information service operating in some 15 sub-Saharan African countries using a variety of business models or variations on them. One approach it has used is to add complementary services for large buyers (or large farmers that also are buyers). This adds a new revenue source and can leverage the links Esoko has established (directly or more often via farmer groups) with 1000s of smallhold farmers.
Judy
Dear All,
This is still a thorny issue here in LDCs. The majority of farmers are small-scale and are resource constrained. Given the liberalization and privatization, they need to compete in new ways for markets and its critical that they need to access market information especially price. Also, experience shows that these farmers are interested in increasing their incomes. Therefore, any MIS should aime to target these farmers.
The issue of sustainability given the large number of smallholders is quite an interesting one to pursue. There are opportunities for these services to build a stream of revenues.Whether these are enough to meet the costs of running the services is certainly the issue. In the short run this is not possible. Some have argued that even in the long run its not possible. However, I sort of see an opportunity to increase revenue but also reduce the costs of operation. Where this stops will also depend on the economic growth, the business acumen of the people running the service, and the partnerships involved.
There are many things that I believe have not been very well explored and yet can provide an insight into this subject. The biggest challenge trying to build a sustainable MIS is in collection of reliable and accurate data consistently. This is crucial in winning over users. As I said earlier on dissemination would not be a big problem as there can be many models built around this eg subscriptions, alerts, etc.
Also, data could be sold to other stakeholders that include banks, trade unions, students, etc. For students, it would be interesting to look beyond national boundries and target universities in the developed countries. I believe here there can be a big market in terms of students studying agriculture.
The above point also introduces an interesting issue - that of partnerships between foreign companies and local ones or even smart individuals who can market the services to users and at the same time work on the costs and collection/management efficiency.
Another model or approach that can reduce costs is decentralization. This basically would involve individuals operating on a small area that they know well by collecting information which they exchange with information from the outside world. They sell the information from outside to their areas and in turn collect and send information about their areas to partners.
MIS services are still not really attractive to the private sector when you look at current business environment. There is still need for public investment. However, there can be some opportunities for the private sector. The mobile phone is spreading fast in LDCs. On the other hand, the competition between mobile phone companies is stiff and they are currently looking for value added services. In here lies some opportunity if a partnership can be built with mobile companies. The trick would be that you would have to work with all mobile phone companies.
In short, there is need to conduct further research on this subject by first putting up a minimal MIS, identify strategic private and public partnerships, understand the costs of operation and then make a business plan to scale out the service. This has not been done in the past and I think needs to be done urgently.