Market Access for the Masses: How Mobile Technology Can Close the Information Gap

Originally published on September 3, 2015.

The following article originally appeared in the May/June 2015 issue of Africa Agribusiness Magazine.

Like many other young women innovators across the world, Jamila Mohammed had an idea that she hoped could make a difference in her country. Despite only being in her 20s, she had big plans: to improve the lives of smallholder farmers in Kenya by ensuring they could earn a fair price for quality produce. Without access to markets, smallholder farmers tend to sell their produce quickly at the farm gate to avoid spending time and money trying to reach the best value markets or to procure storage facilities to manage sales. Unscrupulous middlemen take advantage of this gap to offer prices that are way below the fair market value, since a farmer’s only alternative is to suffer huge postharvest losses from unsold produce.

Together with her peers Susan Oguya and Linda Kwamboka, Jamila formed M-Farm Ltd. – a software solution and agribusiness company – to help realize this dream. The plan was to develop a market and user-driven mobile phone platform for the collective sale of produce using M-Farm agents, who would be stationed at convenient locations. But, it was not long before trio began to face challenges similar to many female innovators and entrepreneurs: their struggles to access finance made it difficult to develop and test their innovation, while a lack of access to the relevant business and industry networks in the typically male-dominated innovation space made it difficult to grow the company. Securing a $40,000 grant from the U.S. Agency for International Development (USAID)-funded Kenya Feed the Future Innovation Engine as part of the program’s first cohort of awardees in 2014 made it possible for M-Farm to actively test and refine their innovative concept.

Implemented by Land O’Lakes International Development, the Innovation Engine is a five-year program working to accelerate poverty reduction and improve food security in Kenya. Similar to a venture capital fund, the Innovation Engine supports experimentation and rewards proven success by seeking projects that represent cutting- edge approaches that will benefit a significant number of households. The program awards seed funding and provides technical assistance to help turn their ideas into scalable innovations. Working over a period of 10 months, M-Farm partnered with over 300 smallholder farmers in Homa Bay and Machakos Counties to test how the idea would work in practice. The expectation was that farmers would harvest more produce of better quality for sale at higher prices in new – and even international – markets.

As the implementation period under the grant came to a close at the end of October 2014, Serah Mbugua, a farmer in Machakos County, could attest to the benefits gained from testing M-Farm’s innovation. For one, she was among over 100 farmers who planted French beans for sale to exporters AA Growers, Everest, and East Africa Growers (EAGA), with an incremental sales value of over 500% from 13 tons of produce traded. This, together with trainings on Global Good Agricultural Practices (GAP) requirements, helped her improve her crop husbandry practices and learn what chemicals to use at various stages of production. Serah, and other farmers in the county who had registered with M-Farm, also learned how to handle French beans before and after harvesting so as to improve their quality and quantity. They were also introduced to planting plans as a way of mitigating risks. Initially, farmers in this area would begin planting all their crops at the same time, meaning that harvesting was also carried out at once. This was risky because, by the time of harvest, the market might be saturated and result in low profits for farmers. Similarly, an outbreak of crop disease would affect the entire harvest and could result in huge losses for the growers. Through relay planting, introduced as part of the M-Farm project, farmers were able to plant a portion of their seeds based on market demand, thereby minimizing risk. Farmers in the county also benefited from contractual farming, which ensured a guaranteed market and assured them of a fixed income, thus helping to cushion them from market volatility. This was a major improvement from the previous approach of planting “blindly” and selling to brokers who would then dictate sales prices to farmers.

Through M-Farm’s innovation, farmers in both counties were also introduced to the use of ICT in agriculture. With the growing use of technology as a catalyst for modern farming, Machakos and Homa Bay County farmers who interacted with the innovation can now easily access vital information related to the price of their produce in different markets in Kenya, and share agricultural information amongst themselves. This will help them to make informed decisions for increased agricultural productivity, and hopefully revolutionize fresh produce trade between smallholder farmers and wholesalers, thereby helping to improve farming practices and ensure a transparent value chain.

The slow adoption rate of the innovation among farmers, especially in Homa Bay County, and limited available data on the impact on retail prices, complicated efforts to validate the potential of the innovation. The innovators also learned that establishing access to the export market will require addressing traceability and certification capacity, which are currently beyond the scope of the M-Farm solution.

Over and above the seed funding, the Innovation Engine undertook a needs assessment and provided tailor-made coaching and technical assistance to help ensure the viability of the innovation and the sustainability of the business. The Innovation Engine facilitated world-class expert support to improve M-Farm’s financial systems, redesign the IT platform, and strengthen their organizational development efforts and overarching business strategy.

Participation in the program has helped raise the visibility of the innovation among potential investors, development partners and peers through various stakeholder forums.

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