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Agriculture, Food Security & Rural Development, Areas of Expertise, Information and Communication Technology for Development, Mobile Money, Originally posted on the GBI Portal

Can this be an Opportunity for Mobile Banking in Ethiopia?

Photo Credit: The Economist

I participated in a very informative event this week in Washington DC where a researcher was sharing his experience on “Weather-Index based Crop Insurance for Smallholder Farmers in Ethiopia”. As I listened to the discussion as an agricultural information specialist, my concern was what is the role of mobile technologies in this?

According to the researcher, Dr. Shukri Ahmed a Senior Economist, Food and Agriculture Organization (FAO), the concept of crop insurance has a long history from Asia with the leadership of India. However, due to the challenges associated with insurance in general and access to credit to smallholder farmers, the idea somehow waned. But according to Index Insurance Innovation Initiative (I4), there is overwhelming evidence that uninsured risk can drive people into poverty and destitution, especially those in low-wealth agricultural and pastoralist households. There is therefore a re-emergence of insurance for smallholder farmers across the globe.

The speaker gave a detailed background to the study in Ethiopia and the importance of partnership in the design and implementation of the study. The difference, however, with this new approach to crop insurance for smallholder farmers is the use of index (indices) to support the insurance service, and intervention against emergency situation. But at the same time the study is targeting farmers that are relatively better off and who are already engaged in the market but are not investing in insurance due to the anticipated risks. The outcome of the pilot study is expected to help protect the livelihoods of smallholder farmers, who are vulnerable to severe and catastrophic weather risks particularly drought, enhance their access to agricultural inputs, and enable the development of ex-ante market based risk management mechanism which can be scalable in Ethiopia.

Dr. Shukri Ahmed, Senior Economist at the United Nations Food and Agriculture Organization (FAO)

Unbanked or Branchless Services

Adding another concept to an already very complex issue that tries to combine weather, insurance, credit/finance, and smallholder farming, should be carefully considered. But the key question is whether mobile technologies can play a catalytic role in this entire complex system?

Among the reasons for choosing a given area for the pilot study, include availability of Nyala Bank branches, the vulnerability of yields to drought, the availability of nearby weather stations, and the willingness of cooperatives in the area to purchase the new product. As the pilot study progresses, the possibility of scaling the project across the country is high. But what will be the implications for the absence of banks in the rural farming communities in a country that has an approximately one bank loan per 1000 adults? Can Mobile Banking help understand why smallholder farmers under-investment in agriculture?

A success story of mobile banking by the Dutch-Bangla Bank Limited (DBBL) in Bangladesh was recently highlighted by the GSMA Mobile Money for the Unbanked. Interestingly, the story pointed out how DBBL learnt from Kenya’s famous mobile money program M-PESA. Kilimo Salama (KS) is an innovative index-based insurance product that insures farmers’ inputs (seeds, fertilizer, pesticides), and outputs (crop harvests), in the event of drought or excessive rainfall. It uses weather stations to collect data and implements SMS-based mobile technologies to administer and distribute the payouts. Mobile technologies will not only help with the financial transactions such as seen in Kilimo Salama’s case but also in support of the weather stations for timely and accurate decision making for pay-outs.

My conversation with Dr Shukri about the possibility of integrating mobile money into the project to address the challenge of absence of banks in rural Ethiopia, revealed the huge untapped market for Mobile Banking in that country. However, the success of such services depends on a convincing business case for both the banks and Mobile Network Operators (MNOs). Most importantly, however, is the state of telecommunication infrastructure and regulation in the country. These need to be in place for services and applications to thrive. With this huge investment

Outside Ethiopia, I believe it is time for African countries to take advantage of the increasing mobile phone penetrations in the continent beyond social networking to general development applications such as for agriculture, health, education, and rural development.

To listen to the audio recording of the event, visit Center for Strategic and International Studies (CSIS).

August 25, 2012/by actualize

Agriculture, Mobile, Originally posted on the GBI Portal

Mobile Agriculture to feature at the Mobile World Congress 2012

A panel on “Mobile Agriculture: The Market Opportunity” will be one of the highlights at the upcoming Mobile World Congress 2012 scheduled for Barcelona, Spain at the end of this month.

This intensive panel session will cover issues on the immediate opportunities for the mobile industry to launch commercially driven services for farmers, and the emerging best practices and insights from existing service providers on overcoming challenges and launching Agricultural Value Added Services (Agri VAS). It will showcase the market opportunity for Agri VAS in emerging markets, and expected to be patronized by mobile network operators (MNOs), VAS providers, content providers, agricultural organizations, NGOs, development practitioners and academics interested in the opportunity to develop innovative new services.

The panel will include experts and thought leaders from the mobile agriculture industry. Below is the event information.

Event: Mobile Agriculture: The Market Opportunity

Date: Tuesday 28th February 2012

Time: 17.30- 18.30 CET

Venue: GSMA Seminar Theatre, Hall 2.1, Fira Montjuïc, Barcelona, Spain

Mobile technologies are enhancing access to information across the world and impacting lives in remote rural communities. There are nearly six billion mobile subscriptions in the world today. Four out of five new connections are happening in the developing world. Yet these markets suffer from numerous challenges in the agricultural sector, from low yield amongst smallholder farmers to supply chain inefficiencies.

The rural sector represents the largest customer base in emerging markets and is a significant growth area for the mobile industry. In response to this opportunity, the GSMA launched the mFarmer Initiative in 2011 to support mobile operators and agricultural organizations in launching commercially viable mobile information services for farmers. The GSMA mAgri Program identifies opportunities where mobile can have the most impact to mitigate these problems.

Mobile World Congress 2012 will celebrate the current state of mobile and offer a glimpse into where mobile has the potential to go next. For more information and to register for Mobile World Congress 2012, please click here. To reserve your place at the Mobile Agriculture panel event please contact the GSMA mAgri program at mAgri@gsm.org.

For more information on the GSMA mAgri Program, please visit: http://www.gsma.com/magri/

February 6, 2012/by actualize

Agriculture, Extension Service, Food Security, Mobile, Originally posted on the GBI Portal

Reflections on mAg. Services: Mistakes and Pitfalls of MNOs/NGOs

Photo Credit: HD Guru

NB: This is my personal analysis of contributions to question six from the forum. This post is the final in series of six, analyzing each of the six forum questions that were discussed.

Question 6: What are some of the common mistakes or pitfalls mobile operators or NGOs run into when developing these services?

Below is a quick summary of the contributions from the forum.

Building “FOR” Users: The first post to the question raised an interesting point by arguing that when the MNOs and NGOs have the goal to develop the service “for” the user without understanding the needs of the users and involving them, usually leads to a failure. Citing Richard Heeks, the post explained that in order to avoid these pitfalls, MNOs/NGOs first need to i) identify the development objective of the project/service; ii) identify the new and/or re-engineered information requirements needed to meet those objectives; and iii) identify the role that ICTs and other information-handling technologies have to play in meeting those information requirements.

A related post from a software developer agreed with the point and argued that ICT software or application development should be a user-centric approach, whereby developers collaborate and work closely with users or some categories of stakeholders.

Putting All Bets on Mobile Phones: A second mistake pointed out was, when NGOs and other development/commercial projects put all their bets on mobile phones. Like any other technology, mobile phones are “effect multiplier” and it only works when there is an underlying robust system (either an agro-advisory or private extension) which in effects get multiplied. If there is no underlying system or process and mobile phones are just introduced, as a magic bullet, it seldom works.

Lack of Understanding the Complexities with Content: Most often MNOs especially underestimate the complexities associated with sourcing and aggregating content, and designing the content management system that can meet farmer’s localized content needs but at the same time scalable.

Failure to Design Services for Scale: Another pitfall that is linked to scale is ensuring that services are designed from the start to enable scale – such as using efficient technologies, working with partners who have existing assets such as marketing and distributing capabilities so you can reach a large number of farmers cost-effectively.

Ignoring the Trust Factor: Utility VAS needs high degree of “trust factor” in the user’s mind in order to make the user stick-on to the service even if it does not bring in any instant benefit to them. A case in point is IKSL service in India, which is backed up with the goodwill of IFFCO, the largest and most preferred fertilizer supplier in India.

MNOs Using Traditional Marketing Channels for Farmers: The marketing channels of mobile agricultural services need to be different from a conventional entertainment VAS. Conventional promotions like push SMS or Out Bound Diallers (OBD) not necessarily convince a farmer to subscribe to a mobile agro-advisory. Alternative channels, like affiliation to farmers groups, bundling with agri-inputs, customization to contract farming etc. are some of the innovative approaches which have been tried in India.

Focusing only on Information Service: MNOs and NGOs also need to design their services keeping in mind that information alone does not solve all problems of farmers. An information-service which links various service delivery agents like, agri-input marketers, warehouses, laboratories etc. will have better attractiveness for farmers in comparison to simple information push.

Problem of Distinguishing between Demand Analysis and Needs Assessment: One problem that NGOs have that MNOs usually don’t have is distinguishing between a demand analysis and needs assessment. NGOs often conduct needs assessment which documents what farmers say they need but it does not have the discipline needed in a business analysis. If NGOs are to provide such services, they need to prioritize features that they will provide and sort out which are valuable enough for someone to pay for.

Sources of Funding for NGOs: NGOs are often funded by donors on a project basis. This can easily drive them to a project orientation, especially when donors call for “success stories” and do not have the incentive nor the process to follow up after a project to see if a service they have supported is continuing and scaling.

NGOs for Development versus MNOs for Business

There was a concern about why the question under discussion had grouped MNOs and NGOs together since their perspectives and the pitfalls they face may be quite different. Interestingly, there was a contribution that separated these two areas and then grouped NGOs together with the development sector and MNOs together with business/private sector. While some of the responses also grouped the mistakes and pitfalls accordingly, others combined them.

NGOs Taking One-Sided Stand: A contributor sharing his experience pointed out that mostly people in development sector (NGOs) take a one-sided stand, when it comes to developing services for people. While it is very important to design services that would deliver certain benefits to the community from pure development point of view, it is also very important to see how the same benefits will continue to reach the community even after the development intervention has stopped. This call for a business case for development work and many NGO-s and development agencies do not consider this as a key factor while designing mobile services.

MNOs Taking One-Sided Stand: Mobile Network Operators also make mistake by considering agro-advisory services to operate on the same principles of other value added services (mVAS) like entertainment or news. While the target customer segments for both may be same, the decision factors for subscribing to such services are completely different.

Other common mistakes that MNOs/ NGOs make are:

Not profiling the customers
Not properly identifying the information needs of customers
Wrong customer acquisition – customer not having interest in the service
Extending services where network is not strong
Content not having relevance to the local conditions
Not being fully aware of the telecom regulation policies of their geographic area.

NB: This is the final in series of six post on the subject “Reflections on Mobile Agricultural Services”. The earlier posts can be located through the links below:

1: Reflections on mAg Services: Partnerships Between MNOs and APs

2: Reflections on mAg. Services: Barriers to Scale

3: Reflections on mAg Services: Is there a Business Case for Serving Farmers?

4: Reflections on mAg Services: Financial Sustainability

5: Reflections on mAg Services: Content Sourcing, Quality Assurance & Dissemination

January 5, 2012/by actualize

Agriculture, Agriculture Markets, Extension Service, Food Security, Mobile, Originally posted on the GBI Portal

Reflections on mAg. Services: Financial Sustainability

Photo Credit: Book Blog

NB: This is my personal analysis of contributions to question four from the forum. This post is the fourth in series of six, analyzing each of the six forum questions that were discussed.

The fourth question for the forum was about financial sustainability. With a thorough discussion on partnership models in question 1, the focus of this section was therefore on financial sustainability of such partnerships. Also with the business case laid out nicely in the previous discussion, partners have no choice than to look into the future of such partnerships through sustainable approaches.

Ensuring financial sustainability requires looking at the sources of revenue for the service. In this context, I believe the main source of revenue is from the users – the rural poor agricultural farmers supplemented by other users. So thinking of a long-term sustainability will call for actions beyond the roll-out funding to ensure that services being provided meet the needs of the users to continue paying for them.

Question 4: How can a partnership model between a Mobile Network Operator (MNO) and Agricultural Partner (AP) increase the financial sustainability of the service?

As stated above, the question assumes that without a partnership (i.e. either MNO or AP alone) delivering agricultural service to rural farmers should have some financial sustainability. So a partnership between MNO and AP should increase this financial sustainability due to the unique value proposition that each brings into the partnership.

Background

A nice background to financial sustainability of services to rural people was presented by one of the experts. It brought out the fact that in most developing countries, the bottom of the pyramid offers an excellent opportunity to the Mobile Network Operators (MNOs) for increasing the rural penetration and achieving a large customer base. At the same time, the targeted segment is price-sensitive, making it necessary to develop affordable products or schemes.

With specific example from India, the contributor stated that falling mobile tariff over the last decade has been a major enabler for increased rural penetration providing increased business volume to the MNOs and an enabling environment to the APs for extending the advisory services to the rural base. Another contributor recalled that, in Africa between 50% to 80% of the workforce depends on agriculture and in most cases it also represents its GDP. So considering the transaction that goes on in the agricultural industry, it will worth it for MNOs to take a look at this industry, when investing in mobile agricultural services.

Financial Sustainability through AP-MNO Partnerships

Discussants pointed out that a partnership between MNO and AP can increase the financial sustainability of mobile agricultural services to rural farmers because of the complementary value propositions that each partner brings into the partnership.

While MNOs are in the business of collecting small amounts of revenue from millions of customers and also have the business systems to support this, the APs have the value added service that the users need for generating this revenue.
The MNOs are also skilled at marketing and getting feedback from customers but again, for these services to meet the demands of the users, APs are the right partners to develop the necessary rapport with the farmers.
The MNOs have many business skills, systems and discipline that complement the know-how that APs bring to a partnership.
The MNOs also have a strong profit incentive to keep focused on what is financially sustainable.
MNO-AP partnership could allow the MNO to understand and learn from the AP how farmers conduct their business and over a period of time, they can build products that will help farmers enhance their yield and in turn increase the profitability of the partnership.

From a different perspective, another contributor classified the strategy of ensuring financial sustainability of MNO-AP partnerships into 3 main dimensions. These are:

1) Short term: In the short term, the MNO may have to pass on part of the benefit of acquiring a new customer as an investment for their future annuity that can accrue from customer loyalty. They may also have to share a part of the future revenue based on the increase in average revenue per user (ARPU), and incentivize the service through the talk time sales to the users. This arrangement provides the initial impetus for extending a high quality advisory service to the users.

2. Medium term: In the medium term, there is the possibility of monetizing the services by the MNO. There are existing models, which are subscription based in which a farmer who is getting value for money would be willing to pay for the services.

3. Long term: In the long term, it requires continuous engagement with the customers which may provide an opportunity to extend other value added services related to financial including education, livelihood, health, etc. In each of these, the subscribers can be provided services through mobile phones on subscription basis or usage basis.

Presented from the MNOs’ side, another discussant also looked at how MNOs are able to benefit indirectly as a result of MNO-AP partnership. These are:

Increase in Average Revenue Per User (ARPU) of existing user base. The ARPU of the regular rural user versus ARPU of rural users of Agri VAS on the same network, multiply the difference by the number of Agri VAS subscribers.
Increase in market share. Increase in number of rural customers attributed to Agri VAS is a source of additional ARPU every month. ARPU from new Agri VAS customers could be equal to regular rural ARPU.
Increase in loyalty and decreased churn. Churn rate in a regular sample versus churn rate in a sample of Agri VAS users. This % difference multiplied by number of Agri VAS multiplied by rural ARPU is the saved revenue of MNO due to decreased churn.
Reduction in acquisition cost. The acquisition cost per customer of a MNO multiplied by number of new network subscribers attributed to Agri VAS is the saved acquisition costs for the MNO.

It is also observed that, MNO-AP partnership could increase the credibility of the whole venture thereby enabling them to explore other sources of revenue generation such as through m-governance services (which are being actively promoted by governments) and m-commerce activities.

Multiple MNOs in a given Partnership

The issue of multiple MNOs partnering with APs came up again in relation to the financial sustainability of the partnership. The questioner was interested in the trade-offs from taking a multi-MNO approach versus an exclusive approach in countries where there are two or more MNOs sharing the market more or less equally. In other words, would the strengths of having one exclusive MNO as a partner be so diminished by a multi-MNO approach, that a multi-MNO approach would rarely be seen as a likely path to financial sustainability?

There were mix responses to this concern including the fact that MNOs, especially in countries where market share is relatively balanced, will all try to develop their own proprietary mobile agricultural platforms with similar content and business models, which will result in a race to the bottom. Some others believe that multi-MNO approach is possible but:

a) Agriculture partners need to retain ownership of the data, thereby allowing them to use it on multiple platforms but, add value to each MNO by supporting them with the development of differentiation strategies.

b) Agriculture partners can work exclusively with an MNO but, as part of that effort, work with the telecom company to establish a fair and transparent pricing model to enable out-of-network users to access the information.

Apart from these ideas, there was no specific examples of multi-MNO partnerships from the forum. But another interesting view from India was that, because there is already a substantial struggle to ‘sell’ agricultural content, the issue of exclusivity is debatable. However if the agricultural content is customized and filtered enough (customized as per local needs) placing the same in a shopping cart is relatively easy.

So how can a partnership between MNO and AP increase financial sustainability of such association? Each partner has some unique skills and abilities that they use in their business as shared above to financially sustain their activities. Bringing these unique qualities together is expected to increase the individual potentials of the partners at the same time ensuring higher quality service to the users.

NB: The Next in the series (5th) is “Reflections on mAg Services: Content Sourcing, Quality Assurance & Dissemination” (Available on 01/03/2012)

The first, second and third posts are:

1. “Reflections on mAg. Services: Partnerships Between MNOs and APs”

2. “Reflections on mAg. Services: Barriers to Scale“

3. “Reflections on mAg Services: Is there a Business Case for Serving Farmers?“

December 31, 2011/by actualize

Agriculture, Extension Service, Mobile, Originally posted on the GBI Portal

Reflections on mAg. Services: Is there a Business Case for Serving Farmers?

Photo Credit: David Fletcher

NB: This is my personal analysis of contributions to question three from the forum. This post is the third in series of six, analyzing each of the six forum questions that were discussed.

Following the first two discussions on partnerships and scale, the third discussion was based on justifying a business case for investing in mobile agricultural services for rural poor farmers and the motivations for the service providers.

Question 3: Is there a business case for serving poor rural smallholders and what are the motivations for the Mobile Network Operators (MNOs) and Agricultural Partners (APs)?

Understanding the term “Business Case” for the Discussion!

As the discussion begun, a question was asked to clarify the term “business case.” In response, the facilitators pointed out that “Business Case” for the purpose of the discussion refers to “service models that meet specific needs (that of the customer/user) and are ultimately financially viable.”

Justifying a business case for serving poor rural smallholders with mobile agricultural services that meet their needs and at the same time financially viable, may involve identifying factors that currently contribute to their information deficit or information gap. It also involves proving that investment of capital and other resources are justifiable over time such that the benefits, costs and risks balance out to create this commercially viable service for both users (farmers), and service providers (MNOs and APs).

A Business Case for Serving Poor Rural Smallholders with Mobile Agricultural Services

The first contribution to the question from one of the experts used the case of Indian smallholder farmers as a typical example in the developing world, which shows the current deplorable state of smallholder agriculture. Some of the reasons due to low agricultural productivity include dearth of physical infrastructure, deficiency in the availability of agricultural inputs and lack of, or uneven access to information. Small and marginal farmers are often unable to gain access to reliable information that could help them increase their farm yield and get better price for their crops.

In earning their livelihood, small farmers face innumerable hurdles such as small acreages with low yields and low profit margins; less access to irrigation; susceptible to problems like crop diseases; scattered geographically; difficulty in pulling resources to accessing the latest information on growing techniques and the market; lacking access to credit to buy inputs; borrowing at exorbitant interest rates; forced to buy inputs at high costs and of poor quality from the money lenders’ shops; exposed to high risk; not being aware of agricultural insurance; facing shortage and high cost of labor; lacking facilities to store their crops; disorganized market; lack of efficient procurement system for their crops; and being compelled to sell their crops to brokers.

This array of problems and challenges facing smallholder farmers in the developing world, justifies serving them with mobile agricultural services. Access to mobile agricultural services is expected to increase the farmers access to credit, information on farming techniques, procurement of inputs as well as marketing their goods directly to customers or commodity exchanges.

Business Case for Service Providers

Looking at the specific needs of the rural poor farmers (users) who are at the bottom of the pyramid in the developing world, providing affordable and financially viable mobile services could be challenging. So the issue was whether it was the duty of the private sector or the national governments to meet these needs.

An interesting argument from one of the discussants was that serving rural poor and rural smallholders often is the duty of national governments to come up with certain schemes and programs. However, governments have limited resources and priorities, and it is a challenge to address the information needs, when other basic social needs are yet to be fulfilled. Sharing experiences from Bangladesh, the contributor stated that governments today are looking at alternate models like Build, Own Operate (BOO), Build, Own, Operate, Transfer (BOOT), Private Public Partnership (PPP), and outsourcing of non sovereign functions.

The partnership eco-system is also another dimension that needs to be looked into and nurtured and this is where government and MNOs can work together to deliver value to customers in rural areas. The bottom line is that there is a compelling business case today for MNOs and governments to work together to jump start the process and explore alternative business models that are sustainable in the long run.

Motivations for MNOs to Serve Rural Poor Farmers

The general view from the discussion also shows that, making a business case for MNOs is about whether the service is serving the rural poor to increase market share and revenues in the short or longer run. The MNOs, according to the discussion also may have two distinctly different views on how serving the rural poor will increase their market share. These are:

i) Provision of mobile agricultural services as a stand-alone business that should generate revenue for the company through direct revenue from charging per customer,

ii) Provision of services intended to boost revenue in the company’s core business or through indirect revenue benefits from acquiring and/or keeping customers loyal and active on their network such as selling SIM cards, air time, ring tones or launching mobile money services, etc.

If MNO looks primarily from a financial viability alone, there would not be any business case in providing services to rural areas. But when the business case is looked from a holistic view, then the whole paradigm of business case changes. In this case the Mobile Network Operators (MNOs) are motivated to take up a number of m-services via mobile networks such as financial services like mobile payment and banking, financial literacy; health services including health education clinical care, health worker training; mobile-based learning and education; market information services including farmer information services and help-lines, market pricing information and transportation.

Another view is that, scale is critical for MNOs to reach commercial viability and currently there is a business case for only a few mobile solutions serving farmers as it is not easy to reach the right income-costs balance and achieve service self-sustainability. It was noted that the private service provider will not venture into rural areas, which do not have economy of scale.

Commercial Services Versus Social Enterprise

There was also another concern about the service provision in terms of commercial services (services targeted at making profit) and services developed by social enterprises or social entrepreneurs (where the focus is improving people lives in a way that does not rely on donor funding). The questioner believed that this is often the tension between APs focusing usually on the social impact, and the MNOs, focusing on the commercial aspect.

Motivation for AP’s (Social Enterprise)

Providing mobile agricultural services from social enterprise perspective was seen as complicated because it usually includes some measure of the public good. But this approach depends on the willingness of donors to help out with up-front investments. Defining and honing these investments is critical, said by an expert. The mFarmer Initiative is focusing on doing this with its Challenge Fund as well as its learning component and technical assistance.

Another concern with the social enterprise approach is the long-term financial sustainability of the service after a potential start-up funding runs out.

In summary, the discussion brought out the proof for a business case for MNOs and APs to partner and invest in mobile agricultural services that could serve rural poor farmers and increase their access to agricultural information. Such investments will invariably improve lives in these rural communities but it was also necessary to ensure the financial viability of such services for the MNOs and APs. It was noted that the commercial viability and social impact of such a service are often closely related. Ensuring that the farmer use the service and act on the information received, is a long-term driver of repeated usage.

NB: The Next in the series (4th) is “Reflections on mAg Services: Financial Sustainability” (Available on 12/31/2011)

The first and second posts are:

1. “Reflections on mAg. Services: Partnerships Between MNOs and APs”

2. “Reflections on mAg. Services: Barriers to Scale“

December 29, 2011/by actualize

Agriculture, Agriculture Markets, Extension Service, Mobile, Originally posted on the GBI Portal

Reflections on mAg. Services: Barriers to Scale

Photo Credit: Spore

NB: This is my personal analysis of contributions to question two from the forum. This post is the second in series of six, analyzing each of the six forum questions that were discussed.

One of the objectives of the mFarmer Initiative is to drive scalable, replicable and commercially successful mobile agricultural solutions that bridge the information gap and increase the productivity and income of rural smallholders. With this mind, the second forum question was about barriers to scaling mobile agricultural services as stated below:

Question 2: What are the barriers to reaching scale with mobile agriculture information services and how can partnering with a mobile network operator (MNO) reduce these?

To really answer this second question, discussants needed to first understand what a successful ‘scaled’ mobile agricultural service is; identify the barriers to scale; and then look at the unique value propositions that each partner brings and their roles in the partnership.

Successful Scaled Mobile Agricultural Service?

The challenges associated with scaling ICT projects in general and mobile services in specific came up several times during the discussion. Scale by default may be seen in terms of wide-reaching impact of the service through adoption by a large number of individuals, communities, regions, etc. It is about moving projects from being islands of excellence to serve and empower a larger audience. Others also look at quality benefits of the service to more people over a wider geographical area, more equitably, more quickly, and more lastingly. So what are the barriers to taking mobile agricultural services from small-scale level to a larger scale and at the same time maintaining the quality and ensuring sustainability?

Below is my summary of barriers to scale of mobile agricultural services from the forum:

Infrastructure strength – weak presence in terms of infrastructure of MNOs could be a challenge to scaling
Reliability of message delivery – less reliability in delivery of messages to the customers may prevent future expansion
Cost of delivery mechanism – high cost of the delivery mechanism could also be a challenge to the MNO
Average Revenue Per User (ARPU) – low ARPU of customers shows how unprofitable the MNO will be and a barrier to scale
Language – high diversity of local languages within a given country/region of service deployment could affect smooth scaling
Literacy – low illiteracy rate in a country or region may affect successful scaling of mobile agriculture service
Technology – highly complex mobile handsets, difficult-to-use interface and medium of delivery could be a barrier
Government Policies – since most of these mobile agricultural services are private sector driven, without sound government information and agricultural policies and regulations, it will be difficult to scale
Accessibility – to MNO for smooth and easy enrolment process and Point of Presence for post-sales service
Affordability – expensive services to the user will prevent wide-scale adoption
Local needs of users – lack of understanding of local needs and demands of the users

“If right products in which the targeted beneficiaries find value are created, scaling should happen by itself.”

Part B: How can partnering with a mobile network operator (MNO) reduce barriers to scaling mobile agricultural services?

The first post in response to the main question seemed to address this second part of the question that focus more on “intermediaries.” The post argued that barriers to scale of market information systems are more about the ‘architecture’ of the system than the kind/type of partnerships formed between and among the service providers and MNOs. In other words, partnership with MNOs is not a magic wand for scaling mobile agricultural services.

So does it worth it for agricultural value added service provider to partner with MNO for scaling?

This interesting post critiqued the role of intermediaries in delivering market information to users within the agricultural value chain. The contributor argued that the cost involved in identifying potential intermediaries, training and maintaining them to access agricultural information through SMS or helpline services and then delivering it to the farmers is a huge challenge to scaling and sustainability.

Based on the contributions from the forum, I have identified two types of intermediaries namely ‘human intermediaries’ and ‘technological intermediaries’ in the context of mobile agricultural service delivery.

Human Intermediaries

This includes intermediaries working directly with farmers such as the agricultural extension agents and also the Grameen Foundations Community Knowledge Workers (CKWs). The challenges associated with the human intermediaries have led to the enormous utilization of the technological intermediaries.

Technological Intermediaries

The technological intermediaries are the communication technologies that ensure direct-to-farmer services, and in this case mobile services such as SMS, data, voice, etc. that are all critical channels for delivering targeted, relevant and actionable information to as many farmers as possible. But the need to use the right technology at the right stage of the value chain for effective content delivery was deliberated upon.

a) SMS services: The ability of SMS services like Esoko and Reuters Market Light (RML) to timely deliver market information to farmers has been well documented but the actual impact of these services on the production of the farmers and their living conditions is yet to be documented. Meanwhile, the social and technological challenges associated with SMS in these rural areas have been mentioned as a barrier. While the cost of providing SMS service may be cheap, due to the low literacy rates in these areas and the complexity with some of the user interface, some discussants do not see the future of SMS in providing mobile agricultural services to farmers.

Some other contributions pointed out the challenge with illiteracy and SMS use but cited examples where farmers are overcoming this by engaging other family members to read and translate the SMS messages for them, especially with Mobile Money services. With agricultural information, farmer groups/cooperatives are the target rather than individual farmers so that within each group, at least one literate member can play the intermediary role by reading and translating text messages to other group members.

The idea of using volunteers or exploring national service or youth service schemes in some parts of Africa to provide agricultural information through the technological intermediaries to smoothly transition into more sustainable economic models was also brought up.

b) Voice-based services: When it comes to voice-based services, discussants were concerned with their economic sustainability. They argued that interactive voice response (IVR) that allows computers to interact with humans, and call centers are the most costly information delivery mechanisms. And since farmers’ willingness to pay for agronomic information tends to be low, any business model that depends on IVR or call centers may need some other funding alternatives for sustenance. So the key question to ask is, if there are any indications that farmers’ willingness-to-pay will increase to the point of equilibrium with the cost of these services?

Another view is to go automatically with IVR without any real time human input, which can empower farmers directly to search and find information they need, or feed the system with information they have through voice technology. Some examples of systems currently exploring this system includes Voice Browsing Acceptance and Trust (VBAT), Web Alliance for Re-greening in Africa (W4RA), and Voice-based Community-Centric Mobile Services (VOICES).

And so What?

The need to take some of the existing mobile agricultural services from one level to another has been acknowledged. Even though partnering with a MNO is not a magic wand to scaling of these projects, the potentials for such a partnership as noted in the discussion of question one, and the barriers outlined above may necessitate collaboration for scaling.

The issues of intermediaries that dominated the second part of the discussion is a good example for experts (both from MNOs and agricultural partners) to understand all the complexities with mobile agricultural services. It is more than technology. It is about using the right technology at the right time to deliver content in the right format for users. It is about combining social and technological processes to deliver user-centered content.

The success story of IKSL in India came up again to attest to the fact that, partnership can help in scaling mobile agricultural services. But the success of IKSL is linked to the partnership with IFFCO, a 40 year old co-operative that has a strong base with the users. The idea of working towards removing human intermediaries in mobile agricultural system can me catastrophic. The citing of Direct2Farm project of CABI which aims at enabling farmers to seek and source information, tailor-made to their individual need, at any time in any form/format sounds great. But a search on this Direct2Farm project does not give any further information.

We will have to wait to see how this works – either through the automatic IVR system or the CABI’s Direct2Farm project. But I believe the consensus at the end of the discussion is that the technological intermediaries are not to replace the human intermediaries but to be used in stages of the value chain where the human intermediaries are not needed. I agree with another contributor who stated that “The issue is to remove people where they are not critical, so that services can increase in quality, quantity, and efficiency.”

The next in series (3rd) is Reflections on mAg Services: Is there a Business Case for Serving Farmers? and available on 12/29/2011.

The first post is “Reflections on mAg Services: Partnerships Between MNOs and APs”

December 26, 2011/by actualize

Agriculture, Extension Service, Farmer to Farmer, Food Security, Mobile, Originally posted on the GBI Portal

Reflections on mAg. Services: Partnerships Between MNOs and APs

Photo Credit: GSMA

NB: This is my personal analysis of contributions to question one from the forum. This post is the first in series of six, analyzing each of the six forum questions that were discussed.

Partnership, being one of the key criteria for selecting mFarmer Fund beneficiaries, the introductory question (below) for the forum was about partnership.

Question 1: In a partnership between a mobile network operator and agricultural partners, what unique value proposition does each partner bring, how can they leverage of each others’ strengths and what roles should each play in delivering a service to farmers?

Quick Summary of Contributions to the Question

With regard to the unique value propositions that each partner brings to the partnership, most of the contributions centered around the fact that Mobile Network Operators (MNOs):

Are providers of the mobile technology platform for the delivery of agricultural services
Have crucial role in ensuring access to the telecom network (adequate)
Have the responsibility for developing products that are affordable for farmers
Are responsible for addressing coverage issues
Need to ensure that they provide credible and dependable service
Have the responsibility of charging users and share the generated income with external Value Added Service providers
Are to be in charge of marketing and communicating the services to users (branding).

On the other hand, the Agricultural Partners (APs):

May be considered as content providers
Be able to clearly identify who the target farmers are and what their real information needs are
Must have rich experience of quality content for the farmers
Must have clear distinct experience and expertise in the areas of understanding farmers need
Shall have the ability to solve farmers’ problems and ultimately help them with inputs and services to implement the solutions
Must have the skills of connecting with farming communities
Be able to understand which format is best suited for the collection and delivery of information
Be able to collect, analyze, refine and disseminate (or make available) relevant agricultural information to the target audience
Be able to market available information services in the field, including through networks of extension workers
Shall ensure that the MNO fully understands that there is a real business behind Value Added Service (VAS) targeting farmers, even if the information service may take a longer time to take off
Be responsible for formatting of the content, reformatting, sometimes translating to be delivered and understood by the end user
Be responsible for quality assurance of the content – including sources, processes and final advice delivered
Are most likely in the best position to make sure that the mobile “channel” is used well to augment other info delivery channels.

Part B & C: How can the partners leverage of each others’ strengths and what roles should each play in delivering a service to farmers?

Contributions from the forum emphasized the importance of utilizing the existing infrastructure and assets including the mobile channels such as call center, SMS and Interactive Voice Response (IVR) infrastructure, short-code, and billing and revenue collection facilities. The partners can also utilize their respective brand strength and marketing expertise. For example MNOs have some of the strongest brands and trust with the users which can be powerful agents for marketing and driving awareness and the APs can also through their Agriculture VAS, help the brand and increase the market share of the mobile operator. Also pointed out was the possibility of MNOs to provide Agri VAS access via basic Unstructured Supplementary Service Data (USSD) menu service which could drastically decrease the barriers for the rural users to access the service and increase the usability. Potentially MNOs have the capacity to blend Agri VAS with mobile money solution and compliment advisory with agricultural financial services, such as loans and crop insurance.

Reflections on the Discussion

My take on this first question is that the understanding of the “AP” and “MNO” has not been made clear at the start of the discussion leading to all kinds of interpretations, assumptions and labeling. A first look at the question makes it simple and obvious but a critical analysis reveals how complex it is especially with the key terms – MNOs and APs.

In my first post at the forum, I did call for the definitions of these terms that seem obvious to the e-agriculture community. Fro example with the APs, are we talking of any group or organization involve in agricultural development services such as NGOs with agricultural service provision; community-based organizations involved in agriculture; farmer-based organizations; national agricultural units such as extension services, or research institutes?

A key argument that ran through the discussion and confirmed my argument was the call for a third party organization for the partnership. The issue of third party partners such as software developers, technology developers, new start-ups, research institutes, international organizations, etc. partnering with MNOs and APs to ensure the success of good mobile services for users came up. The case of IKSL was mentioned where other agencies and institutions which generate actual content – like Agricultural Universities and Research Institutes, International agencies like CABI, Indian Meteorological Department (IMD), Agmarknet for market information were involved in the partnership as third parties.

So a successful partnership for the mFarmer Fund may need more than MNO/AP partnership by reaching out to other institutions and organizations that have expertise in the Initiative’s Core Service. Alternatively, the APs and MNOs may be able to subcontract some of these services, but the positions of these different expertise need to be recognized.

The four points below could summarize the components of the partnership, whether two, three or more partners are involved:

Demand Articulations – partners that have skills and expertise of understanding the users (needs and potentials), understanding the content dynamics for users, etc. (e.g. NGO, CBO)
Network Formations – partners who are able to help connect other partners together and also connect users to product developers, ensure boundary spanning and information filtering (e.g. social media firms)
Process Management – partners that have the capacity to ensure infrastructure development, management and maintenance, generation of revenue for sustainability, quality assurance, formatting, etc. (e.g. MNOs, Software companies, IT firms, Universities, etc.)
Supply Activation – partners that have the skills to train and educate users on the products and services, who understand the language of the developers, able to communicate VAS, (e.g. extension services, NGOs, research institutes, etc.)

These are quotes from some of the experts at the forum:

“The Agricultural partner might not have an immediate capacity to do this in-house, as Agricultural Partner is usually an NGO or Ag. institution and not a VAS provider it its traditional sense.”

“For this, independent agronomists/ SMEs might be recruited if for example the agricultural partner has extensive experience on the ground but not so much access to the latest deep research around each individual crop/ animal.”

In otherwise, it has been acknowledged that partnership is necessary between AP (s) and MNO (s) but other views are that, the role of the MNOs, should be seen as roles being played by Internet Service Provider (ISP). That is providing the platform or network that could enable start-ups and VAS providers to utilize their services and innovations. VAS provision should remain independent of the MNOs.

Other Important Points and Questions Raised on this First Question!

The mobile channel is great for delivering certain types of information, but not all.
The profitability and success of the partnership is key
How would a model work that included two or more MNOs as the service delivery partners?
Sources of funding for the partnership – governments or on business models for profitability?
Would an MNO go into massive infrastructure investment just because of a partnership with AP for delivering agricultural services?
Where are the farmers in the partnership?

NB: The next in series is “Reflections on Mobile Ag. Services: Barriers to Scale“ and available on 12/26/2011.

December 22, 2011/by actualize

Agriculture, Agriculture Markets, Extension Service, Farmer to Farmer, Food Security, Originally posted on the GBI Portal, Sustainable Agriculture

Reflections on Mobile Agriculture Services: Blog Series

Photo Credit: e-Agriculture

The mFarmer Initiative, a partnership between GSMA, USAID and Bill & Melinda Gates Foundation (BMGF) in collaboration with e-Agriculture, initiated an online discussion late November to early December 2011.

The 2-week forum which was organized around six main questions, touched on critical issues from partnerships, barriers to scale, business cases/models, content, and mistakes committed by service providers in delivering these services.

As one of the participants in this forum, I have decided to reflect on the discussion which falls within my professional interest of using information and communication technologies (ICTs) to improve the living conditions of rural people in the developing nations, most of which are farmers by enhancing their access to resources.

There are six reflections in the series that are available through this portal for readers. Below is the list of titles, links, and dates of the posts:

1: Reflections on mAg Services: Partnerships Between MNOs and APs (Available on 12/22/2011)

2: Reflections on mAg. Services: Barriers to Scale (Available on 12/26/2011)

3: Reflections on mAg Services: Is there a Business Case for Serving Farmers? (Available on 12/29/2011)

4: Reflections on mAg Services: Financial Sustainability (Available on 12/31/2011)

5: Reflections on mAg Services: Content Sourcing, Quality Assurance & Dissemination (Available on 01/03/2012)

6: Reflections on mAg Services: Mistakes and Pitfalls of MNOs/NGOs (Available on 01/05/2012)

NB: These posts are summaries of the discussion and my personal reflections on some of the key points, and do not reflect the views of any of the sponsors, experts or contributors to the forum.

I hope we can continue the discussion.

December 22, 2011/by actualize

Connectivity, Originally posted on the GBI Portal

VAS Africa 2011: Gateway makes its presence felt

VAS Africa 2011 is currently underway

Gateway Communications, supplier of pan-African telecommunications services, is showcasing its range of value added services (VAS) for ISPs (internet service providers) and African mobile network operators (MNOs) at the VAS Africa 2011 currently underway at the Sandton Convention Centre, South Africa.

The Gateway Communications VAS products offer turnkey solutions, which can open up new revenue streams for MNOs and ISPs in Africa.

The company has vast voice and data transmission networks experience. Some of Gateway’s VAS products include Cibenix, an on-device service enabling MNOs to have a strategic presence on their customers’ handsets, ranging from smartphones to feature phones.

“Our presence in over 40 African countries, teamed with our rich heritage of successfully delivering critical services that mobile operators depend on to run their networks, makes Gateway Communications the right partner to deliver rapid growth.

Our ever expanding VAS solutions are tailored for the African market so we deliver new services that drive revenue for operators,” says Mike van den Bergh, CEO of Gateway Communications.

Gateway Communications is launching Data on Demand, a pre-paid data solution giving ISPs and MNOs the ability to buy capacity with no long-term commitments.

The VAS Africa event aims to serve the development needs of African operators to extend and expand their VAS offerings.

July 6, 2011/by actualize