agriculture markets and trade

Tag Archive for: agriculture markets and trade

ICTs for “Marketing” Component of the Ag Value Chain

Photo Credit: Wikipedia

Markets for agricultural products is another critical component of the value chain – i.e from the time the produce is ready for harvest till it reaches the final consumer. A number of activities take place within this period from storage, processing, transportation, retail, and wholesale that add value to the produce. These value adding processes are greatly affected by factors such as inefficiencies in trade policies – both local and international, poor post-harvest handling techniques, challenges with storage and processing, limited infrastructure for transportation of produce, and lack of access to credit by farmers at the lean season to help them extend shelf life of their produce.

In the context of communication, the World Bank’s eSourcebook defined marketing in terms of “finding out” what customers want and “supplying it” to them. ICT solutions that target markets for farmers’ produce may have features that connect producers to traders, provide market alerts and status of prices to both producers and traders at various markets, facilitate easy and smooth transactions and price negotiations, ensure easy flow of goods across regions/states, aid market research, and improve storage and processing challenges for value chain actors. Effective deployment of these tools will increase food availability, increase income of producers and traders, minimize post-harvest losses, and help stabilize food prices.

Potential applications of ICTs for retail activities

Smallholder farmers are producers and at the same time retailers. Commodities produced beyond household consumption go to the market for retail. Farmers sell at the farm gate, in their homes, local markets and regional markets to get cash to meet other social and economic needs at home. But due to poor market information at the time of harvest (even at the time of cultivation), farmers are exploited by middlemen or market women who determine the price, and most of the times, the farm produce are left to rot at the farm or the market due to glut in market at the time of harvest. ICTs are helping to reduce this challenge in most developing countries to increase market information for producers. These ICT solutions may support activities of smallholder farmers, traders and consumers with market information and other transaction processes to help deliver produce to the consumers.

Examples include the use of Agriculture Price Alert, an iPhone mobile application that send push notification to users (farmers, traders, consumers) when prices reach the limit they set; M-Farm, a mobile application that helps users to get up to date crop price information, connect farmers together to jointly sell their produce, and help group-buying of farm utilities together; and CellBazaar that uses a suite of applications including SMS, the web and voice to bring ‘the market’ to the handset of its users.

Potential applications of ICTs for wholesale activities

Photo Credit: ICTUpdate

Farm produce also travels from the farm gate to wholesale markets and supermarkets. The produce undergoes value-adding processes such as sorting, storage, processing, grading, packaging, labeling and certification, which may be undertaken by the farmer or the wholesaler. The entire process involves logistics and communication to be able to deliver the right product to the right market. There are specific ICT solutions that support activities of commercial farmers, traders, processors, graders and consumers with market information and transaction processes to ensure quality products in the market. Some of these activities cut across national and regional boundaries for international markets.

Examples include Virtual City AgriManagr, which allows traders to manage the weighing, grading and receipting of their produce collected from each farmer at the collection point and pay suppliers using cashless transactions, Regional Agriculture Trade Intelligence Network (RATIN) which supplies traders with improved early warning marketing and trade information leading to more efficient and competitive transactions in food trade between surplus and deficit regions in East Africa, and the Africa Commodities and Futures Exchange (ACFEX), a Pan-African multi-asset derivatives exchange that provides a continent wide price discovery mechanism, transparency, risk management in a number of areas including agriculture.

In conclusion, a range of ICT solutions are within this “marketing” category of the value chain. Solutions providing market information to farmers prior to cultivation for decision on what crop to cultivate and how much to farm; those that give price alerts from different market locations for farmers to decide on who to sell their produce to; others that connect farmers and traders together to negotiate and exchange their commodities; those that facilitate transactions and payments; and other solutions that ensure storage/warehousing to help add value to the produce and increase farmers’ income.

March 4, 2012/by actualize

Agriculture, GBI Highlights, Originally posted on the GBI Portal

Tech Talk: Mapping ICTs Along the Ag Value Chain

New ICT solutions for agricultural development are being developed at break-neck speed, and its hard to keep track of what’s out there, what works, and how it best fits into your project. At this month’s Tech Talk, GBI will demonstrate how ICT applications can complement a value chain approach to agricultural development, and we will bring in users and developers of these apps to explain their tools and how they are implemented. We’ll also unveil a new and useful interactive tool “Ag Apps Along the Value Chain,” that maps a collected inventory of over 120 apps and ICT solutions along the agricultural value chain.

____________________________________________________________________________
Benjamin Addom is a knowledge management specialist with training and experience in the use of ICTs for development. He has over 9 years of experience in the field of agriculture, food security, ICT4D, teaching, training, capacity building, monitoring and evaluation. He holds a PhD in Information Science and Technology from Syracuse University School of Information Studies, masters in International Agriculture and Rural Development from Cornell University, and a bachelors in General Agriculture from the University of Cape Coast, Ghana.

With special presentations by

Stephen Sellers, CEO, Co-Founder SourceTrace
Jacob N. Maaga, CEO, Africa Commodities & Futures Exchange
Or Dashevsky, Solution Architect, Catholic Relief Services

Online event registration for Mapping ICTs Along the Agriculture Value Chain powered by Eventbrite

Make sure to check out our archives of previous GBI Tech Talks.

February 29, 2012/by actualize

Economic Growth & Trade, Enterprise Development, MicroEnterprise Development, Originally posted on the GBI Portal

The Future of BPO: “Cherry Blossoming,” “Gold Farming,” and “Microwork”?

Usually our discussions of ICT and economic growth follow a familiar narrative: how can we use ICTs to more efficiently perform economic tasks? We take this line of discussion because we know that efficiency is productivity, and productivity improvements lead to economic growth.

But a recent book published by the World Bank, called “Knowledge Map of the Virtual Economy,” suggests that this line of thought is boxing us in. Instead, it argues, we should ask “what completely new markets have been created by ICT growth, and how can poor people lead the way in these new industries?” If this sounds fanciful consider the following: last year a man in California paid $500 in an online auction for a “virtual” castle. We are not talking about a crumbling, stone-and-mortar, historical relic here; but rather a few lines of code that generate a castle that the buyer can use as a base for his virtual armies in an online video game. He bought this castle from a company in China that creates (and speculates in) these types of virtual products. This Chinese company employs young people, mostly male, from lower class or working class backgrounds. The workers have a decent education but little opportunity, and they are making a healthy living in a completely new industry that offers returns too low to seriously interest anyone in the developed world. But for them it’s a gold mine.

Or rather it’s a “gold farm,” which is the term that has come into use to describe these types of companies (the industry as a whole is known as “gold farming”). Gold farming was a $3 billion industry globally in 2010, and generated jobs for 100,000 full time equivalent workers. But, of the new opportunities identified by the report it is the most demanding of its workers. Other new industries can employ people with less-advanced skill sets.

One of these is called “Cherry Blossoming.” Derived from a Japanese-language slang expression (“Sakura” in Japanese means both “cherry blossom” and “paid spectator”) the name refers to an industry that sells social media “status” to companies looking to use these tools as part of their marketing strategy. For example, a company that has just started a Twitter feed may not want to go through a growth period where they have only a few followers, for fear that this low number will reflect poorly on their product or business. So “cherry blossoming” firms offer these companies the opportunity to buy Twitter followers, by the thousands. Similarly, they sell “Facebook likes.”

This business involves a large number of extremely small tasks that each generate a very low return for the company. A worker will sit at a terminal and, using a host of different profiles and accounts, “like” or “follow” their client companies. Each “like” may only take a few moments, and earn the company only a few cents. For example, a quick Google search will reveal that it is possible to buy 1000 Twitter followers for $20. This type of repetitive, low-margin work does not interest developed world companies, but in the developing world it can offer reliable income to poorly educated people who don’t have any other opportunities.

Though Cherry Blossoming is controversial, it is representative of the emerging field of “microwork,” which on the whole is not. Microwork is usually defined as a task that takes under 30 seconds to complete. Companies throughout the world have lots of this work to do, and it is now possible to parse tasks out and have them done by the very poor in the developing world.

Samasource, a non-profit organization focused on generating employment opportunities in Kenya, is one organziation that does this. They contract with large firms, in this case Silicon Valley tech firms, and perform microtask after microtask out of large telecenters the organization sets up in Africa. The group’s first contract involved digitizing text. This is often difficult for a computer to do, and near impossible if the document to be digitized is handwritten. So Samasource workers will look at scanned copies of the document and manually type in words that the software cannot comprehend. This does not even require the worker to be literate – they just need to be able to recognize all the letters by shape and match them to the keyboard. Samasource has expanded into other small tasks as well, such as vetting sites for inappropriate images and video, and verifying business listings for crowd-sourced yellow-pages sites.

Performing these micro-tasks gives “dignified digital work” to poor people, as Samasource puts it. They have even managed to set up and operate a successful business that employs many people in a refugee camp in Dadaab, on the Kenya-Somalia border.

The next iteration of micro-task work is to find a way to do it on mobile phones. The industry isn’t quite there yet, but once it is there will be no geographic limit to who can easily make a living out of the digital economy. This is the next generation of business process outsourcing, and it holds the potential to employ many poor and at-risk youth in the developing world.

If this discussion gives you any ideas, you may want to try to develop them. The World Bank is considering holding a “Mobile Micro-work Challenge,” where they would fund promising start-ups in the field.

April 8, 2011/by actualize

Agriculture, GBI Highlights, Originally posted on the GBI Portal

GBI Presents “Rural ICT Solutions for Feed the Future”

Eric White, of the GBI team, gave a presentation to a gathering of USAID infrastructure specialists from missions around the world about the importance of investing in ICT infrastructure. He specifically highlighted the importance of wireless voice and broadband connectivity in meeting the US Government’s goals under the new “Feed the Future” program.

Food Security, Mr. White explained, can come either through improving domestic agricultural output and distribution or through improved cross-border trade facilitation. He highlighted ways that ICT infrastructure improves both. After pointing out that agricultural development is the flip side of rural economic growth Mr. White explained how numerous studies, at both the macro and micro level, have found a 10-1 relationship between expanding ICT coverage and GDP growth. A 10% increase in ICT penetration is generally associated with a 1% increase in GDP growth rates.

Mr. White then explained how it is possible to work with private sector firms to expand ICT access to rural people in developing countries. He pointed out the remarkable willingness-to-pay of even the very poor when it comes to communication. Even people living on only a few dollars a day are willing to pay up to 10% of their income for access to communication. Given that relatively large willingness-to-pay and a relatively low cost of capital it is in fact possible to reach every developing country resident with wireless technology through the smart use of targeted subsidies and investment in emerging low-cost technologies.

Eric White ftf presentation

View more presentations from Integra LLC.

February 26, 2011/by actualize

Agriculture, Originally posted on the GBI Portal

Facebook for Farmers: Technology empowers China’s rural workers

Mr Qing, ploughing in the fields, relies on China Mobile's farming service

The BBC recently reported on Nongxintong, a network created by China Mobile to deliver news and information directly to rural farmers via their cell phones.

The farmers, who generally don’t have access to the internet, receive text or audio messages with market prices, job opportunities, warnings, advice, buyers and sellers. There is also a mobile phone hotline aimed at those with rural businesses.

Click here to read the original article.

January 19, 2011/by actualize

Agriculture, Business Enabling Environment, Economic Growth & Trade, Originally posted on the GBI Portal, Workforce Development

ITC’s E-Choupal: Improving the Lives of India’s Rural Farmers

The agriculture industry is imperative in India. The country ranks second worldwide in its farming output, agriculture allotted 16.6% of the country’s GDP in 2007 and employed 52% of the total workforce. Yet most Indian farmers remained impoverished. The origins of this problem stem from the archaic government regulation called the Agriculture Produce Marketing Committee (APMC) Act. Created in the 1960s, the APMC Act founded that agri-companies, like ITC, could only buy agricultural produce through designated markets called mandis where they would have to buy from registered commission agents. Once the crop was harvested, farmers would take their produce to the mandis where their produce would be auctioned by commissioned agents. Since the agent was the only channel between the farmer and the processor, agents would typically auction off multiple lots before taking it to the processor. Thereby ensuring no price or quality transparency in this farm-to-factory cycle. Since the mandis were a formidable distance from the fields, farmers would have to accept the price offered them at auctions on the day that they bring their harvest to the mandi. As a result, traders are well positioned to exploit both farmers and buyers through practices that maintain system-wide inefficiencies and pocket additional differences in price.

Incorporated in 1910, ITC is one of India’s leading private sector companies with a market capitalization of nearly US$18 billion, an annual turnover of US$4.75 billion. Rated one of the “World’s Best Big Companies” and “World’s most reputable companies” by Forbes magazine, ITC has business interests in tobacco, hotels, agri-business, retail, information technology, and others. The company founded its first E-Choupal site in June 2000, where they created Internet kiosks in rural farming villages to create an “improved supply chain”, directly connecting themselves and the farmers. The e-Choupals serve as both a social gathering place, choupal means gathering place in Hindi, to exchange information and an e-commerce hub. What began as an effort to re-engineer the system of processing and acquiring soybean meal, rice food grains, wheat, lentils, and coffee in rural India also created a highly profitable distribution and product design channel for the company. An e-commerce platform that is also a low-cost, mutually beneficial system focused on the needs of rural India.

In addition to the farmers only using the e-Choupal there is also a host farmer, called a sanchalak, who acquires some operating costs and is obligated to serve the entire community; the sanchalak benefits from increased esteem in the community and a commission paid him for all e-Choupal transactions. The farmers can use the Internet kiosks for daily access to closing prices on local mandis, as well as to track global price trends or find information about the weather and new farming techniques.

The rural farmers can also use the e-Choupal to order seed, fertilizer, and other farming products such as consumer goods from ITC or its partners, at prices lower than those available from village traders. When it is time to harvest the crops, ITC offers to buy the crop directly from any farmer at the previous day’s closing price and then the farmer transports his crop to an ITC processing center known as Choupal Saagars. Choupal Saagars are alternatives to the traditional mandis, catering to about 40 e-Choupals and are all within tractor driving distances. The crop is then weighed electronically and assessed for quality, and the farmer is paid for the crop along with a transport fee. Through this new process, farmers benefit from a more accurate weighing, quicker processing, and immediate payment. Further, the access to a wide range of information, including precise market price knowledge and market trends, assists them in deciding when, where, and at what price to sell.

Though the e-Choupal system serves as a catalyst for rural transformation, alleviating rural seclusion, cultivating transparency for farmers, and enhancing their productivity and incomes, there were still some core problems like education, health care, and insurances, which still eluded the farmer. Governmental system inefficiencies have long kept farmers in an economic hiatus, and companies in the agrarian society struggled to find a balance between their social and shareholder obligations. However, with the e-Choupal system, ITC had a model that created a unification of their seemingly oppositional needs.

The e-Choupal program converged with ITC’s corporate social responsibility initiative to act upon objectives to help the community they were working in. Through their e-Choupals, ITC created Supplementary Learning Centers to help with rural India’s primary education, empowered women to become part of the global marketplace, and developed a three-tier Choupal Health Care model to cultivate the installation and delivery of both preventative and curative healthcare services. In addition, they also generated a full scale retail marketplace in the Choupal Saagars to the rural population and created financial product marketing for the farmers and their families where ITC offers to sell credit through their network. The Kisan Credit Card, third party loans, and channel credit allowed farmers to establish a better established infrastructure which drove down certain aspects of cost and improved the quality of their crops. Weather insurance, life insurance, along with pension and disability incomes were also established for farmers to have for themselves and their families just in case disaster struck.

One of the retail Choupal Saagars

The e-Choupal system lets farmers be more lenient with their choices, gives them a higher profit margin on their crops, and access to information that improves their productivity. By providing a more transparent process and empowering local people as key nodes in the system, ITC heightens trust and fairness. Critical factors in the success of the venture are ITC’s extensive knowledge of agriculture, the effort ITC has made to retain many original aspects of the existing production system, including maintaining relationships with local partners, ITC’s continued commitment to transparency, and the treating the farmers and local partners with respect and equality.

Sources: CIA World Factbook- India

January 11, 2011/by actualize

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