Module 3: Mobile Devices and Their Impact

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Table of Contents:

Overview

In July 2010, the number of mobile phone subscriptions surpassed the five billion mark (figure 3.1), further establishing mobile phones as the most popular form of global connectivity.¹In their various designs and capabilities, mobile phones can be found in the pockets of the wealthy and poor alike. Even in rural areas, mobiles are growing in number and sophistication. Recent figures suggest that although only 81 million Indians (7 percent of the population) regularly use the Internet, price wars mean that 507 million own mobile phones. Calls cost as little as US$ 0.006 per minute, and Indian operators are said to sign up 20 million new subscribers per month (“The Next Billion Geeks,” The Economist 2010).

Figures for access to mobiles are higher than ownership figures. A survey in Uganda found that 86 percent of those asked claimed to have access to a mobile phone, although only one-quarter of farmers said they actually owned one (Ferris, Engoru, and Kaganzi 2008).

This module highlights the impact of mobile phones on agriculture and rural development by outlining current knowledge and describing innovative practices. The discussion complements information in Module 2 on technical aspects of increasing mobile phone use in rural areas and agriculture. It also serves as a preface to numerous other descriptions of mobile phone applications throughout this sourcebook.

The rise of the mobile phone has been one of the most stunning changes in the developing world over the past decade. The increasing ubiquity of mobiles in developing countries presents both opportunities and challenges, especially for critical sectors such as agriculture. Like other technologies before it, the mobile phone is likely to be the subject of inflated expectations and hopes. To caution against the hype, this module also explores barriers to using mobile phones to benefit agriculture and provides recommendations for practitioners seeking to use the mobile platform to improve farmers’ livelihoods.

Figure 3.1: Global Mobile Cellular Subscriptions, Total and per 100 Inhabitants, 2000–10

Why Mobile Phones?

Mobile phones are but one form of ICT. Personal computers, laptops, the Internet, television, radio, and traditional newspapers are all used to promote improved rural development. So why focus on mobile phones?

The most obvious answer is the sheer scale of adoption. In the ten years before 2009, mobile phone penetration rose from 12 percent of the global population to nearly 76 percent. A series of innovations drove this adoption, especially in developing countries, which had 73 percent of the world’s mobile phones in 2010.²Like other digital technologies, mobile phones benefit from Moore’s law, which states that computational power doubles approximately every two years. The newest smartphones are far more sophisticated than the more affordable models populating poor regions, but those simple phones are still leaps and bounds ahead of devices that were cutting edge a decade ago—and they are entirely relevant to agriculture.

An additional reason for focusing on mobile phones is that regulatory design has improved in recent decades, boosting competition among telecommunications companies. Competition has spurred significant innovation in business models. For example, in most of the developing world, in contrast to practices in some wealthy countries, only the person making the phone call pays. Moreover, mobile phone airtime is available in prepaid bundles, allowing poor customers to avoid lengthy contracts and manage their expenditure in a discrete, granular manner. For those at the bottom of the pyramid, where income is indeterminate and managing finances is very important, this model is a key driver of access and use. (For additional discussion and examples of regulation and business models as key enablers of mobile telecommunications, see Module 2.)

These supply-side improvements have met strong demand from customers around the globe. Like all networked technologies, mobile phones exhibit network effects, making them more valuable as more devices are in use. Also, in contrast to landlines, the mobility and personal nature of this technology have a strong appeal to users. Being connected means being reachable (Ling and Donner 2009). The mobile phone adds a layer of security, allowing someone to reach loved ones or assistance following an accident. It also allows for microcoordination of activities, limiting the need for planning and the cost of changing plans on the fly (Ling 2004). Finally, as anyone who has made a phone call while waiting for the bus or checked his or her BlackBerry during a meeting knows, mobile phones allow for multitasking.

What this proliferation means is that while mobiles may be a substitute or complement for landlines in rich countries, they are more frequently the first form of telephony for many of the world’s poor. Through allowing communication at a distance, mobile phones allow users to overcome limits of time and space.

Why Agriculture?

In many countries, agriculture accounts for the overwhelming majority of rural employment. The manifold benefits that accompany improvements in agricultural productivity are well known: Farmers’ incomes rise, food prices fall, and labor is freed for additional employment. In some instances productivity improvements have proven elusive, as climate change and uncertain commodity prices have worsened agrarian conditions for many rural communities. Development practitioners have rightly focused on the difficult situations of many farmers, especially smallholders, who have little room for error and even less protection from social safety nets. Technical innovation, most prominently demonstrated in the Green Revolution, has been key to improving agricultural markets in the developing world. Mobile phones, despite their recent entry into agrarian communities, are already helping those communities improve their agricultural activities.

The Virtuous Circle of Mobiles and Agriculture

Advances throughout the mobile phone ecosystem tend to act as a positive feedback loop. This “virtuous circle” of innovation enables a number of benefits, even for smallholder farmers:

• Access. Mobile wireless networks are expanding as technical and financial innovations widen coverage to more areas.
• Affordability. Prepaid connectivity and inexpensive devices, often available second hand, make mobile phones far cheaper than alternatives.
• Appliances. Mobile phones are constantly increasing in sophistication and ease of use. Innovations arrive through traditional trickle-down effects from expensive models but have also been directed at the bottom of the pyramid.
• Applications. Applications and services using mobile phones range from simple text messaging services to increasingly advanced software applications that provide both livelihood improvements and real-time public services (box 3.1).

Box 3.1: What is a Mobile Application? A mobile application is a piece of software on a portable device (such as a mobile phone handset, personal digital assistant, or tablet computer) that enables a user to carry out one or more specific tasks that are not directly related to the operation of the device itself. Examples include the ability to access specific information (for instance, via a website); make payments and other transactions; play games; send messages; and so on. The application (app) might come preinstalled but more usually is downloaded (for free or for payment) from a wireless network from an online store and may require a live connection to function effectively. Simpleapps may make use of the built-in low-speed data communication facilities of digital mobile phones, such as short message service (SMS) or unstructured supplementary service data (USSD). On many low-cost phones, applications are available through Java software. More complex apps use the Internet protocol-based data communication facilities of higher-speed networks on third- or fourth-generation mobile phone networks. The broad range of applications available includes: Stand-alone software apps downloaded onto a device, such as an iPhone app. As of April 2010, third-party developers provided 185,000 apps, and more than 4 billion had been downloaded since the iPhone was launched in July 2008, based on Apple’s presentation at the iPhone OS 4 media preview event. Applications that require an elaborate ecosystem to support them, such as Safaricom’s M-PESA application for mobile payments in Kenya. M-PESA (which operates in a number of countries) has some 15,000 agents and over 9 million users. Applications built upon a specific platform that is itself an application. For instance, the MXit instant messaging platform, which began in South Africa, now supports 250 million messages per day. It provides tools for users to develop their own applications running on the platform. Source: Author.

 
Through this expansion process, formerly costly technologies quickly become everyday tools for the bottom of the pyramid. Additional opportunities for more frequent and reliable information sharing will open as technological advances lead to additional convergence between mobile phones and the Internet, GPS, laptops, software, and other ICTs.

The topic notes that follow review numerous ways that private industry, government bodies, and nonprofit organizations are using mobile phones in agriculture. Many of these programs are relatively new, and conclusive results are difficult to ascertain. Most show promise, but there are reasons for caution and the barriers to surmount. Topic Note 3.1 focuses on what is known so far about the benefits, challenges, and enablers related to using mobile phones to improve agriculture and rural welfare. Topic Note 3.2 describes two typologies that can help practitioners understand the various roles and rationales surrounding the use of mobile phones as agricultural development technologies and help them determine whether and how to incorporate them in the design of new initiatives. The Topic Notes are followed by Innovative Practices Summaries that highlight approaches taken so far.

Topic Note 3.1: Key Benefits and Challenges Related to Mobile Phones and Agricultural Livelihoods

Trends and Issues

The proliferation of mobile phones across the globe has impinged on agriculture in various ways. Mobiles are being used to help raise farmers’ incomes, making agricultural marketing more efficient, lowering information costs, reducing transport costs, and providing a platform to deliver services and innovate. Whether the potential of these trends can be realized more widely, especially in rural areas and in an equitable way, is uncertain. Every aspect of the technology is changing rapidly; the public sector, private sector, and private citizens are constantly experimenting with new applications for it; and governments are grappling with any number of strategies to ease the digital divide. This note summarizes what is known so far about the benefits, challenges and enabling factors associated with mobile phones in relation to several aspects of agricultural livelihoods.

Helping Farmers Raise Their Incomes

In some instances, access to mobile phones has been associated with increased agricultural income. A World Bank study conducted in the Philippines found strong evidence that purchasing a mobile phone is associated with higher growth rates of incomes, in the range of 11–17 percent, as measured through consumption behavior (Labonne and Chase 2009). One reason for this finding is that farmers equipped with information have a stronger bargaining position within existing trade relationships, in addition to being able to seek out other markets. A study of farmers who purchased mobile phones in Morocco found that average income increased by nearly 21 percent (Ilahiane 2007).

Mobile phones seem to influence the commercialization of farm products. Subsistence farming is notoriously tenuous, but smallholder farmers, lacking a social safety net, are often highly risk averse and therefore not very market oriented. A study from Uganda found that market participation rose with mobile phone access (Muto and Yamano 2009). Although better market access can be a powerful means of alleviating poverty, the study found that market participation still depended on what producers had to sell: Perishable bananas were more likely to be sold commercially than less-perishable maize.

Mobile phones can serve as the backbone for early warning systems to mitigate agricultural risks and safeguard agricultural incomes. In Turkey, local weather forecasts transmitted through SMS provided very timely warnings of impending frosts or conditions that favored pests.

Mobile platforms may also have potential for enabling rural people to find employment. In Uganda, Grameen AppLab partners with government and NGOs to employ farmers to collect information (for more on Grameen, see Module 3). This method, which relies on local people to transmit data to more centrally located research and extension staff, is much less costly and can provide much more timely information than traditional disease surveys.

Txteagle provides employment for relatively educated users (see “Txteagle Taps a Vast Underused Workforce” in Module 2), and even the very poor in rural areas could eventually benefit from access to a mobile job board. Farmers could advertise when they need additional labor for harvesting or other high-intensity tasks via mobile phone, creating a simple advertising portal. Workers could find jobs without wasting time and money traveling. A group called BabaJob is developing such a service in India, where recruiters and workers submit listings by SMS, but it remains in the developmental stage.

Making Agricultural Marketing More Efficient

At a fundamental level, markets are about distributing information. They do so through prices, which serve as a unifying signal to participants to allow for the coordination of dispersed producers and consumers. Underlying this powerful mechanism, though, is the assumption that everyone knows the market prices for commodities, which is not the case in much of the developing world. Farmers have little information about market prices in urban areas of their own countries, let alone internationally. The result of this information asymmetry is price dispersion—the same goods sell for widely different prices in markets merely a few kilometers apart.

Mobile phones, in addition to other ICTs, can overcome this problem by informing both producers and consumers of the prices offered for agricultural products in various locations. A number of studies have shown that when mobiles are introduced to farming communities that previously lacked any form of connectivity, prices unify as farmers learn where they can sell for a better price. (See Module 9 for more information on marketing through ICTs.)

A striking example comes from the Indian state of Kerala (box 3.2). As mobile networks were rolled out in coastal regions, fishers who were previously ignorant of daily prices in different markets were able to contact various ports to find the best offer for their catch. The result was demonstrable welfare gains for fishers because fish were sold where they were more highly valued. Waste decreased and prices equalized throughout the regional ports; there were even small gains in consumer welfare (Jensen 2007).

 

Box 3.2: Mobile Phones Enable Kerala Fishers to Identify Better Markets As mobile phone coverage increased in Kerala, fishermen bought phones and started phoning along the coast to look for beach auctions where supplies were lower and prices higher than at their home beach. Fishermen rapidly learned to calculate whether the additional fuel costs of sailing to the high-priced auction were justified. The figure below tells a vivid visual story of how phones affected prices (reduced volatility) and wastage (significantly reduced). Price dispersion was dramatically reduced, declining from 60–70 percent to 15 percent or less. There was no net change in fishermen’s average catch, but more of the catch was sold because wastage, which previously averaged 5–8 percent of the daily catch, was effectively eliminated. The rapid adoption of mobile phones improved fishermen’s profits by 8 percent and was coupled with a 4 percent decline in consumer prices. By 2001, over 60 percent of fishing boats and most wholesale and retail traders were using mobile phones to coordinate sales. The phones were widely used for fish marketing. Fishermen with phones generally carry lists with numbers of potential buyers. They typically call several buyers in different markets before deciding where to sell their catch. Boats using mobile phones on average increased profits by Rs 184 per day, compared to Rs 97 for nonusers who tended to follow the mobile phone users. Boats with mobile phones gained more (nearly twice as much) in part because they were on average larger boats and thus caught more fish and because they were more likely to be able to profitably exploit the small remaining arbitrage opportunities. Phones appear to be a worthwhile investment: The net increase of Rs 184 per day in profits for phone users would more than cover the costs of the phone in less than two months (assuming that there are 24 days of fishing per month, and given that the handset costs approximately Rs 5,000 and monthly costs are Rs 500). Fishermen are still using phones for marketing purposes to date. Click here to view Box 3.2 continued. Source: Jensen 2007.

 

Other studies have confirmed this effect. Despite having the lowest mobile phone penetration in sub-Saharan Africa, Niger has seen important effects on agricultural markets from mobile phone diffusion. As mobile networks have expanded, grain price differences have decreased by 20 percent, traders’ search costs have decreased by 50 percent, scarce resources have been better allocated, and consumers paid, on average, 3.5 percent less for grain, which is equivalent to 5–10 days of grain consumption annually (Aker 2010a). A small study in Morocco found that farmers with mobile phones increasingly dealt directly with wholesalers or larger-scale intermediaries than smaller intermediaries (Ilahiane 2007). These studies, in conjunction with a host of anecdotal and theoretical evidence, point to the promise of mobile phones in making markets more efficient.

Lowering the Costs of Information

The most obvious and cross-cutting way that mobile phones can improve agriculture is by improving access to information and making it less costly to obtain. In many rural areas, the arrival of mobile coverage is a radical change in the nature of the information ecosystem. Although simply having more information is not sufficient to make advantageous decisions (other resources may be needed to implement them), it is a necessary step toward access to knowledge.

Transaction costs are present throughout agricultural value chains, from initial decisions about whether and what to plant, to all of the operations during the growing cycle, harvesting, postharvest and processing operations, and selling (to intermediaries, consumers, processors, exporters). These costs can account for a large share of the cost of a farm enterprise.

In a study that compared transaction costs throughout an extended period, 15.2 percent of the total cost of farming was transactional, and of that, 70 percent was informational (as opposed to, say, the cost of transporting crops to market). Undertaken in Sri Lanka, where an inconsistent subsidy on fertilizer introduces considerable uncertainty, the study found that 53 percent of the informational transaction costs were incurred during the growing season, when farmers were attempting to ascertain fertilizer costs. As shown in figure 3.2, another 24 percent were incurred during the initial decision to plant or not, while only 9 percent of the costs related to information were incurred during the selling stage, where studies typically focus (De Silva and Ratnadiwakara 2008). It is easy to understand how mobile phones could reduce farmers’ informational transaction costs at critical points in the production cycle.

Figure 3.2: Information Search Cost by Stage of Farming

Source: Adapted from De Silva and Ratnadiwakara 2008.

Reducing Transport Costs

Mobile phones may help users to substitute phone calls for travel. Where safety standards are minimal, roads are in disrepair, and distances are great, substituting phone calls for travel reduces farmers’ time and cost burdens. Time savings are important for agricultural households, because many crops have extremely time-sensitive and labor-intensive production cycles. Farmers who use mobiles can also save on transport costs (Overa 2006)—an effect that is stronger the more rural the area (Muto and Yamano 2009).

Transportation cannot be avoided entirely: Crops need to get to customers. Although mobiles can inform farmers where they should travel to market their crops, evidence suggests that the wealthy maintain an advantage in their ability to make use of this information (Fafchamps and Hill 2004). In combination with improved rural roads, ICT will encourage larger truck-traders to visit harder-to-reach areas, connecting rural and urban regions.

As noted in Module 9, the onion wholesalers known as “Market Queens” increasingly use mobile phones to coordinate supply among themselves and to improve profits by facilitating reductions in their transportation and opportunity costs (Overa 2006). These costs are particularly high in commodity chains that are geographically extensive and organizationally complex, such as the onion trade in Ghana.

A Platform for Service Delivery and Innovation

The numerous capabilities of mobile phones (box 3.3) provide ample opportunities to deliver traditional and innovative services. Traditional agricultural extension agents are increasingly being outfitted with mobile phones through programs to increase their effectiveness by networking them to knowledge banks. Extension can reach more clients through mobile-based learning platforms—textual or richer platforms, such as video—that provide tips to farmers to improve agricultural skills and knowledge. (See the detailed discussion of advisory services and ICTs in Module 6.)

Box 3.3: One Device, Many Channels Mobile phones are multifunctional devices. From smartphones to models available secondhand in rural markets, mobiles do much more than simply place voice calls. In designing a mobile intervention or project, it is important to keep in mind the various channels through which populations can be reached. In much of the world, voice is still king, owing to widespread illiteracy, but other considerations such as cost, ease of use, and trust influence users’ choices. In Africa, the high cost of calls has made 160-character text messages (SMS) very popular. As networks and devices acquire more capabilities, richer uses of phones are unfolding, and information channels are converging. Camera phones send images, data transfer brings the mobile Internet to the bottom of the pyramid, downloaded software applications provide advanced functionality, and GPS sensors provide mapping functionality. Emerging market consumers are more likely to have their first contact with the Internet through a mobile device, and many are mobile-only users.a Cisco estimates that by 2015 there will be 788 million mobile-only Internet users, and though rural areas will lag behind, the highest rates of growth will be in the Middle East, Africa, Latin America, and Eastern and Central Europe.b In Kenya, Safaricom recently unveiled a service that converts e-mails to SMS messages and an interactive voice response (IVR) service, in which a computer responds to voice inquiries. Combining mobile phones with other technologies, such as radio or telecenters, can enhance their capabilities. This potential is important to understand. It shows how adaptable the technology is and how it can be used in areas where smartphones are likely to remain inaccessible to many in the near future. Each form of mobile communication has its strengths and weaknesses. For example, SMS requires some form of literacy and is limited to 160 characters (although some mobile information interfaces are striving to become more visually intuitive). Data transfer is inexpensive but not available on most phones. The table summarizes types of mobile technologies and their availability. Click here to view Box 3.3. continued. Source: Crisscrossed; (a) http://www.slideshare.net/ondevice/the-mobile-only-Internet-generation; (b) Cisco (2010).

 

Significantly, mobiles are also a platform for user innovation. Mobile money services, now so prominent in countries such as Kenya and the Philippines, originally began as informal mechanisms between family and friends. Software engineers in developing countries are creating locally appropriate applications to be deployed inexpensively. This form of innovation is possible due to the functionality of mobile phones, but capacity needs to be grown and technological barriers, such as incompatible networks, need to be addressed (see the discussion in Module 2).

Finally, the popularity of mobile phones means that previously excluded populations can have considerably more political voice, raising the level of interaction between policy makers and their constituents. Mobile phones can be used to direct bottom-up insights towards the appropriate recipients, informing and improving governance (See Module 13).

Lessons Learned

As mobile phones come into more widespread use and phone applications for agriculture increase, it is clear that they have the potential to confer significant benefits. To summarize, they may help to increase income, improve the efficiency of markets, reduce waste, and improve welfare. They can reduce agriculture’s significant transaction costs, displace costly and time-intensive travel, and facilitate innovative interventions, especially in service delivery.

Yet as many examples in this sourcebook indicate, mobiles and ICTs more generally may serve agricultural development best when accompanied by complementary investments and reforms. For example, shoddy roads—or no roads—limit farmers’ ability to sell their grain in prime markets. Poor access to education can prevent many rural people from taking advantage of mobile phone services that depend on being able to read.

A lack of financial services can undermine the new options that mobile phones allow. As discussed, Kerala’s fishers saw their welfare increase through the use of mobile phones, but they ran into another financial barrier. Without access to capital, the fishers cannot own their boats. The phones eliminated some intermediaries, but boat owners may still force the fish to be sold in a less-than-optimal port. Small-scale producers and fishers can gain better access to services if they organize (see Module 8), but in many settings, increasing the bargaining power and political clout of small-scale producers remains an issue (Reuben 2007).

Image 3.1: Mobile Phones Can Help Fishermen Sell Their Catch

Source: Curt Carnemark, World Bank

To succeed, mobile services and applications also need to provide compelling value, especially for the poor. Access to devices and networks is insufficient; the technology also must be affordable and have useful applications and content. For example, in Sri Lanka, where researchers found significant potential cost savings from the use of mobile phones, farmers rarely used their phones to obtain market data because they could not obtain accurate and timely information. Instead, farmers made frequent and costly trips to distant markets to determine prices (Ratnadiwakara, De Silva, and Soysa 2008). But when mobiles were used for timely interventions through SMS, up to 40 percent of wastage could be prevented, a service for which farmers were willing to pay (De Silva and Ratnadiwakara 2008).

Because mobile phones may be purchased as a status symbol, and because their uses are not necessarily economically valuable (entertainment and other social uses are popular), some mobile phone owners may decide to substitute their use for important expenditures such as school fees or food. Given this possibility, it is even more important that development practitioners promote policies and programs that improve livelihoods (Heeks 2008).

An additional caution is that without specific attention to equity issues, mobile phones may reinforce inequitable social structures. Larger traders are more likely to own mobiles than small-scale traders (Overa 2006). Compared to men, women are less likely to have access to mobile phones³(box 3.4 provides additional insight into the role of mobiles in relation to gender equity). To avoid exacerbating such inequalities, agricultural programs using mobiles should be designed with equity in mind from the start.

Finally, context matters. Technology cannot be airdropped into a situation and guarantee positive results, and mobile phones may not necessarily be directed at economically useful behavior.

Box 3.4: Mobile Phones, Agriculture and Gender The larger development community recognizes the importance of emphasizing equitable opportunities and benefits for both genders (for example, see the Gender and Agriculture Sourcebook)—a principle endorsed for the use of ICT in agriculture as well. Access to and use of ICTs are often unequal, with women suffering the consequences. In a number of cases, however, ICT has been used to benefit agriculture while empowering women. Kenya is a country of 5 million farmers, ranging from the smallest subsistence growers to large industrial agriculturalists. It is also increasingly a hotbed of technological innovations such as M-Farm, a mobile service that aims to improve Kenya’s agricultural sector by connecting farmers with one another, because peer-to-peer collaboration can improve market information and enhance learning opportunities. Based around farmers’ traditional needs, such as the need for market price and weather information, M-Farm is a relatively new subscription service that also works with larger institutions, such as NGOs and the government, to connect them with farmers. The idea was generated at IPO48, a weekend-long “boot camp” where technologists and entrepreneurs bring businesses from idea to initial product in only 48 hours. M-Farm, created by AkiraChix (an all-female team of developers who are now pursuing the project full time) won the 2010 IPO48 competition’s first-place prize of more than US$ 10,000. AkiraChix is also the recipient of an infoDev/World Bank grant to facilitate monthly networking events for mobile entrepreneurs and developers in Nairobi. Both networking and incentives such as IPO48 have proven essential to facilitate the rapid creation of sustainable businesses based on mobile devices and the empowerment of women. Though IPO48 and M-Farm are new and their impacts still limited, they are expected to generate widespread improvements in agricultural marketing, particularly for women. The Village Phone program of the International Finance Corporation may also benefit rural women. The program provides microloans to rural entrepreneurs who purchase a mobile phone, long-range antenna, solar charger, and airtime. The recipient earns a livelihood by operating a phone kiosk in areas underserved by mobile networks. As is typical in microfinance, the loan recipients tend to be women. Since the program’s inception, nearly 6,000 women have received loans and close to 10,000 have been trained in countries such as Madagascar, Malawi, and Nigeria. Source: Author.

 

 

 

INNOVATIVE PRACTICE SUMMARY
Weather Forecasting Reduces Agricultural Risk in Turkey

A project recently implemented by the Government of Turkey in collaboration with international donors is an exemplary model of local weather forecasting.⁴Rather than focusing on aggregate, national data, this project, implemented by the Agriculture Directorate of Kastamonu Province, focused on the microclimatic conditions essential for monitoring pests and diseases accurately and increasing productivity.

The Problem and the Technology

Most producers in Kastamonu maintain orchards, which are extremely susceptible to frost and local pests. Before the project commenced, producers had little time to react to weather that might harm their orchards, because national weather forecasts for the next day were broadcast in the evening (both FM radio and broadband Internet were unavailable). Given these constraints, mobile phones with SMS were the most applicable ICT for the project.

National aggregate weather forecasts are not particularly useful for pest management and frost prevention in rural locations. Local, specific conditions vary widely from farm to farm depending on such variables as humidity, precipitation, crop type, and soil fertility. In addition, rural weather is often a few degrees cooler than weather in urban areas where most forecast data are generated.

The provincial directorate established five mini meteorological stations in rural areas throughout the province. The stations collect data on variables such as temperature, precipitation, wind, leaf wetness, and soil moisture, most of which are not collected at the national level. In addition to these stations, the province maintains 14 reference farms where temperature is measured and pest cycles are monitored. Monitoring the life cycle of pests, along with collecting climate data, allows researchers to predict pest outbreaks more accurately, because pest maturation depends largely on environmental conditions.

With localized weather indicators disseminated daily through SMS, producers can apply pesticides when needed and in appropriate amounts. In the first two years of the project, producers’ costs fell dramatically. Pesticide applications dropped by 50 percent in one year, saving farmers around US$ 2 per tree. Considering the size of the orchards, overall production costs could be reduced by as much as US$ 1 million each year.

A similar design was used to avert frost damage. Climate change and shifting temperatures have increased spring frosts in Kastamonu Province. If the meteorological stations measure lower-than-normal temperatures, subscribers with personal digital assistants (PDAs) and mobile phones receive alerts at 4:00 p.m., giving them sufficient time to prepare for the cold snap.

Anecdotal Evidence of Impact

Though the project has not gone through rigorous assessment, anecdotal evidence clearly points to its success. The means chosen to disseminate information were essential to the project’s success, because mobile applications matched the technological capacity of the area. Other dissemination and awareness strategies raised the project’s visibility, including the mass media, village leaders, and other forms of human interaction and leadership. It is likely that the weather forecasts had the ripple effect common to other ICT projects, because those who received the service shared the information with family and neighbors who did not. Farmers who participated in the project were successful in planting and protecting their crops. Of 500 farmers reached through this information channel, not one experienced crop losses from frost, although farmers who did not receive the service did.

Scaling Up and Sustaining the Benefits

The project could be scaled up, but cost is a concern. For the first two years, project costs were fairly low. The five stations, telecoms, software, and system upkeep cost around US$ 40,000. Costs will climb over time, however, as donor financing ends and climate conditions change (which could make it important, for example, to change the system to include other variables).

Several strategies could reduce the cost to government once external funding ends. For example, the government could partner with the private sector. Firms interested in domestic or export markets for the area’s crops may have an incentive to fund some of the technologies or develop the content. Revenue could also be collected through small or tiered subscriber fees (daily forecasts in the Kastamonu Province are currently free).

Scalability is also difficult because of the nature of this particular project. Site-specific climate information is more expensive to obtain than aggregate temperature predictions. Moreover, other areas will produce crops vulnerable to a different spectrum of biological and climate stress, making each target group fairly small. One way to reduce these costs and broaden the scope of a similar program might be to focus first on crops or livestock that represent the most widely pursued or highest-value enterprises.

Transferring this kind of early warning system to Central Asian countries as planned by the World Bank may pose particular challenges. Turkey’s national meteorological system is more advanced than the system of most of its neighbors. High-resolution images and national capacity for weather forecasting are necessary to achieve local efforts. Because global satellites provide basic climate information free of charge, they may fill the technological gap in some countries, but their resolution is low. Alternative strategies like climate modeling have succeeded in Latin America and Africa, but they have not been empirically tested for their effectiveness in forecasting weather.

Anecdotal evidence also shows that technological capacity is not the only factor influencing success. Institutional capacity is equally important. The local government’s high level of commitment to the project and consistent implementation were crucial to building client trust and ensuring that the technologies were used appropriately.

INNOVATIVE PRACTICE SUMMARY
Mobiles are at the Heart of Esoko's Virtual Marketplace

Esoko (http://www.esoko.com/) (which began as TradeNet in 2005) is a market information service that provides price information and a virtual marketplace for buyers and sellers of agricultural commodities to connect through mobile phones and the Internet.⁵ Mark Davies, a successful British technology entrepreneur who also manages Ghana’s largest ICT center, BusyLab, set up Esoko.⁶ Since then, it has become one of Africa’s most successful agricultural services using ICTs. Esoko’s technology is used in nine African countries and is expanding quickly. Mobiles are at the center of the system.

Services

Esoko provides four key services:

• Live market feeds. Real-time SMS alerts on market prices and offers are delivered automatically to subscribers. Users can submit offers directly into the system using SMS.
• Direct SMS marketing and extension. This service targets specific user groups or sends extension messages, which reduces travel and communication costs.
• Scout polling. It is possible to set up automatic SMS polling for field activities to track inventories and crop activities (among other things) and monitor and report on crop cycles and yields.
• Online profiling and marketing. All users can have a customizable web space to advertise their goods and services. This space can be updated using Esoko’s mobile2web content management service.

Participants throughout agricultural value chains can exchange real-time market information. Farmers receive current demands, prices of crops, and the location of seed and fertilizer outlets directly on their mobile phones. Businesses can track how their products are used and market themselves to new customers. Associations and governments can share critical information with thousands using a simple feature for bulk text messaging.

Anyone in the world can visit esoko.com and register for a free account. There, in addition to 800,000 prices from hundreds of markets, users will find a library of resources and thousands of members offering to buy and sell agricultural products. Prices and transactions are also available via the universal SMS channel, and for slightly more sophisticated phones, a downloadable application offers additional functionality. Users can even receive automated SMS alerts for certain commodities in a given market (box 3.5). Because anyone with a mobile phone may post offers to the website through SMS, smallholder farmers are able to reach a far wider audience than they typically would. Esoko users also are in a better position to negotiate with buyers owing to their enhanced knowledge of prices in other markets.

Box 3.5: An Esoko Transaction Here’s how it works: A farmer in northern Ghana is selling 20 tonnes of millet. The farmer texts in SELL MILO 20MT to TradeNet’s international number, and that information is processed by the software and immediately published on the website. The same details are also redistributed to every other user that has signed up to receive alerts on millet sales in Ghana. Source: Quoted from Bartlett 2008.

Esoko offers training and strategy sessions on how to use the platform and can provide customer services for farmer groups. The firm also publishes the first commodities indexes in Africa. These powerful tools ensure that farmers are fairly compensated for their crops, as formal commodity exchanges are very rare on the continent. The company is initially publishing two indexes that provide prices for 12 agricultural commodities in 7 markets in Ghana.

Impact

The impact of this information on traders, exporters, transporters, procurers, and others in the agricultural value chain is still to be determined. The service is believed to have the potential to reduce inefficiencies in the value chain. For example, an exporter took 60 days and needed 5 people in the value chain to procure a natural plant product, but with Esoko’s technology, the procurement process required 31 days and 3 people, improving both the major traders’ and producers’ share of the export price. Free field trials for farmers elicited self-reported evidence of a 20–40 percent improvement in revenue. Sixty-eight percent of farmers said that they would pay for the service; every farmer who received information would forward it to an additional 10 farmers.

Building and Sustaining a Business Model

The idea driving the model is that most businesses in the agricultural value chain collect and deliver their own data; Esoko will provide tools and a platform and co-opt businesses to generate content for the platform. Esoko pays on an incentive basis to acquire information, using targets and bonuses. Their revenue-generation model is based on levels of subscriptions (bronze, silver, gold, platinum), each with a different pricing structure and its own mix of content and tools.

For a US$ 1 per month subscription (beginning in 2011), farmers automatically receive information on commodities, markets, and other topics of interest. In developing a model for selling information to farmers, Esoko encountered a few challenges. Farmers are widely dispersed in the field and hard to reach. It is also difficult to quantify the exact value that the service generates for farmers.

Esoko provides additional functionality for other users, including organizations that would like to customize the technology for their needs. For example, paying subscribers can access Esoko’s supply chain tools, which allow harvest activities to be tracked. Mark Davies (quoted in Magada 2009) believes this holistic approach, as opposed to simply providing price information, is key: “While running TradeNet, we realised that there was a need for a platform to integrate the whole supply chain, not to just provide prices. . . .We’re missing the point if we don’t integrate the whole industry.”

But this scale requires significant investment; whereas Davis started the business with US$ 600,000 of personal money and US$ 200,000 from donors, he has suggested that nationwide rollouts require US$ 1 million in funding. The money goes toward new hardware and for staff to operate the hardware and work in the commodity markets collecting prices and news. To support this activity, in addition to the tiered subscriptions mentioned above, Esoko pursues public-private partnerships (Donner 2009). Partnerships are key, with governments, donors, and the Esoko Networks, a group of affiliated companies, using and building upon the platform. Esoko demonstrates that finding the right business model is not easy, but donors and government have a role in supporting new interventions.

Topic Note 3.2: Two Typologies and General Principles for Using Mobile Phones in Agricultural Projects

Trends and Issues

As governments, donors, NGOs, and private firms attempt to use this popular technology for development goals, researchers are developing frameworks to make sense of these initiatives and help design new ones. The section that follows reviews two such typologies. The first focuses on the services that operate through mobile phones to improve aspects of agricultural livelihoods. The second focuses on the various forms that mobile applications might take to develop the agricultural sector. Both of these approaches may be useful when considering programs to use mobile phones. This note also reviews principles for designing a program to use mobile phones in agriculture, based on what has been learned to date.

Typology 1: A Focus on Mobile Livelihood Services

Jonathan Donner, a researcher with the Technology for Emerging Markets Group at Microsoft Research India, has developed a framework that examines the various livelihood services available to mobile phone users in the developing world (Donner 2009) (table 3.1). His survey finds six types of “mobile livelihood” services (mediated agricultural extension, market information systems, virtual marketplaces, comprehensive services, financial services, and direct livelihood support) and five possible effects (improving internal activities, adding market information, adding market participants, bypassing middlemen, and starting businesses). Note that although many livelihood services are bound to have more than one effect—it is perfectly plausible that a service that provides market information will also draw new participants into the market and help farmers bypass intermediaries—table 3.1 emphasizes the main areas of impact. Click here for table 3.1.

Typology 2: A Focus on Mobile Applications for Agriculture

Alternatively, Kerry McNamara has suggested four categories for understanding the forms that mobile applications may take to help the agricultural sector (Hellstrom 2010) (Click here for table 3.2). Mobile agricultural applications, in this framework, may (1) educate and raise awareness, (2) distribute price information, (3) collect data, and (4) track pests and diseases.

Principles for Designing a Program Using Mobiles in Agriculture

The use of mobile phones in agriculture, though relatively new, has already witnessed failure as well as success. What separates the two outcomes may often be unpredictable and locally nuanced factors, but a survey of what has been learned indicates that a number of principles can improve the chances of sustainable impact.

Understand Users and the Technology

Time and again, interventions have failed to gain traction because users’ needs and practices were incompletely understood. In technological interventions, this risk is even more of a concern. Practitioners need to think carefully about whymobiles are the technology of choice and consider alternatives, from the cutting edge to the mundane. Farmers already have information sources and learning opportunities, so it is best to avoid reinventing the wheel if a mobile intervention will not significantly improve upon the experience.

Mobiles are far from unitary, as box 3.3 shows, and an understanding of the platform’s strengths and limitations is essential. For example, while it is ubiquitous, SMS is limited to 160 characters. Although mobile Internet is still limited in scale and often confusing to users, it can be sophisticated and is spreading; in fact, some research has even shown more impact from the Internet than mobile phones, so their convergence is an exciting opportunity (Goyal 2010). There is always a risk that new technologies serve to blind the development community to more tried and true methods, so considering how mobile phones fit with needs and existing practices is a key initial step.

Engage in Participatory, Iterative Project Design

Understanding local needs is a difficult task that can be made easier by directly involving communities in the design and implementation of interventions. In addition to surveys of global and regional activities (such as this sourcebook), on-the-ground analysis is needed. Partnerships with local organizations, extensive fieldwork, and interactive design sessions offer ways to understand the subtle differences between agricultural subsectors and regions. Trying to “do everything” has doomed projects, while initiatives that start small and focused (such as M-PESA, which began with peer-to-peer money transfers) can evolve into diverse offerings (purchases, credit, and savings). One example of a small, focused program comes from Chile, where a small cooperative receives critical information for production and marketing.

Development practitioners can also learn from software developers who practice the mantra, “release early and often,” meaning that “good enough” prototypes should be piloted and improved in a rapid feedback loop. The risk with this practice is that it may confuse communities that may not understand the process, but if the goal of the project is to reach considerable scale, using small pilot and focus groups to improve earlier versions is a worthy practice.

Bringing communities into the early stages of the project can also foster local ownership, a key component of sustainability. This principle is closely aligned with the need to “go beyond the technology” and focus on people. For example, a lack of cultural awareness almost caused Text to Change, a Dutch NGO working in Uganda, to derail an effort to provide HIV/AIDS information via SMS. Only on the morning of the program’s launch did the NGO realize that the SMS code assigned to them was 666—locally known as “the devil’s number”—and had to scramble to receive a new number to avoid upsetting Christian partners and users.⁷

Mobiles, like other technologies, are not silver bullets, but instead are tools that will be shaped by social conditions. Practitioners attempting to integrate mobiles with agricultural communities need to design their programs for equitable access.

Identify Partners with the Appropriate Knowledge, Collaborative Capacity, and Alignment of Goals

As the innovative practice summaries in this module indicate, it is unlikely that any one organization, whether an NGO, ministry, donor, or private firm, will have all of the expertise required to succeed in designing and implementing successful mobile phone interventions in agriculture. Partners should be chosen for their specialized knowledge, willingness to collaborate, and alignment of goals. Special care should be taken at the very beginning of project planning to ensure that the key stakeholders will work together positively.

Projects must seek to leverage trusted intermediaries. One example discussed in this module is Kilimo Salama, which relies on the trusted M-PESA money transfer service and agricultural input suppliers to offer weather insurance to farmers (box 3.6). Another is IFFCO Kisan Sanchar Limited. The partners behind this service (which provides market information and agricultural advisory services) are IFFCO, a well- known farmer’s cooperative organization that maintains a presence in 98 percent of India’s villages, and Bharti Airtel, a large mobile network operator (MNO) (for details, see IPS “Long Experience in Farm Communities Benefits IFFCO Kisan Sanchar Limited” in Topic Note 2.4 in Module 2).

Box 3.6: Kilimo Salama Demonstrates the Convergence of Mobile Phones and Sophisticated Mobile Services Kilimo Salama (“safe farming” in Kiswahili) is an innovative program operated by Safaricom (Kenya’s largest MNO), Syngenta Foundation (the foundation established by the Swiss agribusiness), and UAP Insurance. The initiative delivers crop insurance to smallholder farmers in rural Kenya through the use of mobile phones. Farmers insure their crops with Kilimo Salama when they purchase seed and fertilizer from registered vendors. The vendors are equipped with a camera phone loaded with special software. At the time of sale, the salesperson takes a picture of a special barcode on the products, and an SMS is sent to the farmer’s phone confirming the insurance policy. For their work, agents receive a commission. Pricing has changed, with the premium originally subsidized, but in mid-2011, farmers were paying a 10 percent insurance premium. The Kilimo Salama system relies on weather stations in each agricultural region to measure rainfall and other climate information. When conditions fall below historical benchmarks for farming (indicating that crops will be lost and inputs wasted), the service automatically pays insured customers in that region, using the M-PESA mobile money service. Kilimo Salama demonstrates the potential for mobile phones and services (such as mobile money) to deliver sophisticated financial products to smallholders, and it underlines the importance of distribution channels and product reliability. Affordability and trust remain obstacles, especially if farmers dispute the payouts from the system. Source: Author, based on IFC Advisory Services 2011.

 

By their very nature, most agricultural services using mobile phones partner with at least one MNO. For the network operator, the services are a way to boost rural subscribers (an important source of growth) and decrease customer turnover. This objective does not necessarily mean that the network operator has any interest in farmers’ livelihoods (although it may), and partners should be cognizant of potentially conflicting motivations. That said, operator buy-in can be a powerful benefit, especially through distribution and marketing. Zain Zap, the mobile international banking service, operates in rural areas where commercial banks have few or no physical branches and benefits from Zain’s vast international One Network (see IPS “Zain Zap Promotes Borderless Mobile Commerce,” in Topic Note 2.3 in Module 2). Partnering with private firms, including MNOs and input suppliers, is often required for mobiles-for-agriculture interventions to endure.

Ensure That the Technology Is Widely Accessible

Mobile phones represent a great opportunity for agricultural interventions because they are one of the most accessible information platforms available, although barriers do remain. They can take the form of illiteracy or prohibitive cost, or they can be technical or cultural. Given the tenuous nature of smallholders’ livelihoods and the lack of social safety nets, many smallholders are particularly risk averse. They are unlikely to participate in a new initiative without significant education, advertising, and local support. Even those who wish to use a mobile intervention may be frustrated if the program is not widely available. Nokia’s Life Tools application is intentionally designed to be widely available on its low-cost handsets and fill a gap in low-income communities with a large latent demand for information.

Image 3.2: Other Challenges, Like Inadequate Transport, Affects Mobile Phone Success

Source: Mano Strauch, World Bank

 

Projects that are exclusive to one MNO or a specific type of phone may face implicit barriers to adoption. Open technological standards and free and open-source software can be used to reach a wider audience and avoid lock-in. They can do much to enable unanticipated user innovation. For example, individuals around the world save money through “beeping” or intentionally missed calls that communicate predetermined messages without using expensive airtime. Elsewhere, users send money through unofficial routes using airtime transfers. Given flexibility and understanding, communities will provide innovative solutions to their needs.

Sustainability Based on a Viable Business Plan

Sustainable agricultural projects are key to long-term growth and livelihood improvements, but often projects fail to continue for an extended term. It is essential to develop a viable business plan from the very conception of a project to use mobiles in agriculture. Such a plan requires a clear understanding of who will pay—the government, end users, cooperatives, or a combination, for example—and how much they are willing to pay for a service. Farmers are willing to pay for timely and contextual information, but different strategies may be needed to encourage poorer farmers to use a service (such as payments per query rather than a long-term subscription). The Reuters Market Light service offers a range of price and service formats to accommodate a wide range of clients.

Innovation in technology is often less important than innovation in the business model; prepaid mobile airtime was arguably more important than low-cost devices in enabling mobile phones to spread. When Google introduced three mobile applications in Uganda for free, they gained significant traction, but when fees were introduced, usage dropped, indicating failure to accurately gauge the appeal of the service and willingness to pay (Kubzansky, Cooper, and Barbary 2011).

Market-based solutions can be more sustainable, but donors and governments often remain important as anchor buyers or subsidizers (see IPS “Mobiles Are the Heart of Esoko’s Virtual Marketplace” in Topic Note 3.1). When interventions are not undertaken for profit, they can benefit from approaches commonly used in the private sector, such as advertising to stimulate demand, rigorous benchmarking, market segmentation, and documenting failures as well as successes for internal and external learning.

Monitoring and Evaluation

Although mobile phones have had positive impacts on agriculture, a better understanding of these outcomes would help in designing new interventions. A recent review of ICT-based interventions in agriculture suggests a number of questions to address (Aker 2010b):

• What is the impact of ICT on farmers’ knowledge, agricultural practices, and welfare?
• Are the observed changes due to the ICT or something else?
• What is the causal mechanism behind the effect?
• How does the impact differ between both farmers and type of information provided?
• What are the potential spillovers or unintended consequences for participants and nonparticipants?
• Is the ICT-based approach cost-effective relative to other, more traditional, interventions?
• Do the results transfer to different regions and contexts?

Lessons Learned

Although mobile phones continue to evolve quite rapidly, the evidence suggests that they can promote improved livelihoods through networking and informing previously unconnected portions of the population. The evidence comes from users’ own rapid grasp of the technology’s potential (Kerala’s fishers using phones to seek optimal markets for their catch) and from planned efforts originating from commercial information providers and development practitioners (as in the market information and insurance programs described in the innovative practice summaries that follow).

Improving agricultural productivity is one of the most pressing issues for developing regions. Although mobile phones are no silver bullet, their widespread availability and flexibility position the technology as a necessary component of sustainable improvements in agriculture. Coupled with corresponding innovation in existing social and institutional arrangements, mobile phones have the potential to make significant contributions. As mobile phones converge with other mobile devices such as netbooks and tablets, the opportunities will proliferate.

For donors, governments, NGOs, and private entities working to promote better agricultural policies, current efforts offer much to learn. Designing programs and initiatives in a careful, flexible manner will enable rural communities to adopt and use new technologies and methods to improve their lives.

In Chile, the Mobile Information Project (MIP) delivers targeted agricultural information from the web directly to farmers, using software to create news channels on mobile phones.⁸The software, developed by DataDyne (a nonprofit organization based in the United States), organizes searchable content from the Internet into news feeds (RSS) and then transmits that content to farmers via SMS messages. The system was designed to work on the simple mobile phones sell for US$ 15–20 in Chile and operate effectively even over slow networks with intermittent connectivity.

MIP solved the challenge of sending information from the Internet via SMS messages; the next challenge was to ensure that the content was valuable to the user. Because text messages transmit a maximum of 160 characters, there is no guarantee that messages contain useful information. Even when a system chooses relevant information, the first 160 characters may not accurately convey its meaning.

Starting Small: A Pilot with a Small Cooperative

To test the system, a pilot project, DatAgro, was set up in early 2009 between DataDyne and an agricultural cooperative in the Cachapoal Valley, two hours south of the capital, Santiago. The cooperative, Coopeumo, has just under 350 small-scale farmer members, most of whom grow maize and some other crops. Members’ coop dues covered the cost of the new SMS system. There was no extra subscription fee and no charge for the text messages (the current cost of US$ 0.06 is borne by the coop). Training sessions were held at the beginning of the project to teach farmers how to send and receive text messages. Most coop members are men, thus about 90 percent of those receiving training were men.

Coopeumo farmers received weather, news, sports, and other information via SMS. The information came from several sources. Two of the project’s partners, UNESCO and Chile’s Foundation for Agricultural Innovation (FIA),⁹created messages based on work already done but not yet shared with the community. Two national newspapers sent news to the system. Users could customize the feeds they subscribed to and could rate the messages they found the most helpful.

Impact: Local and Global Advantages

In less than a year, the DatAgro service proved popular. One Coopeumo member, Hugo Tobar, reported that his entire crop for 2009 was saved by an SMS message that urged him to delay planting because of impending bad weather. Torrential rain during the next week would have washed his seedlings away.

Ricardo Danessi, executive manager of Coopeumo, said, “Our farmers can now find information about supply prices, product prices, the weather, and what’s going on in international markets. That’s important, because today, everything that goes on outside Chile also affects us. When there’s an excess of production in one place, the prices go down here. Or when there is a sudden disaster or catastrophe somewhere else, the prices improve here. When demand goes up in China or India, the prices here get better. Everything is related in this connected world, and small-scale farmers aren’t left out of that reality” (quoted in Cagley 2010).

Sustaining the Gains and Scaling Up

Farmers have stressed the importance of the information they receive and the convenience of the MIP platform. Since the close of the pilot project, Coopeumo has assumed responsibility for creating, sending, and paying for the SMS messages. The only ongoing cost to DataDyne is the incremental cost of maintaining and continuing to improve MIP. Developing the MIP platform, testing it in the field, and local implementation cost a little over US$ 200,000.

Looking to the future, DataDyne plans to expand the use of MIP based on use of the successful mobile data collection tool, EpiSurveyor (http://www.episurveyor.org). EpiSurveyor, available via the Internet, can be used free of charge by everyone who wants to collect data, unless they have very heavy needs or require new functions. After a little more than a year, more than 2,500 organizations in more than 140 countries are using EpiSurveyor, 99 percent of them for free. The same model will be used for MIP. If new functions are needed, DataDyne can tailor the system accordingly and charge a fee for doing so, but it will automatically make the new functions available for free to other users. In the case of heavy data requirements, DataDyne will charge a US$ 5,000 annual license fee. There will also be a charge related to the cost of SMS messages, because the telecoms companies have to be paid to transmit the messages.

The experience in Chile suggests that disseminating information via simple mobile phones is a good way to reach farmers in areas where Internet facilities are unlikely to be provided in the near future. Refinements to the system should make it easier to provide relevant content to each individual, and a current challenge is to tailor the content automatically; when information is mediated by a human editor, bottlenecks can be introduced.

While on a fellowship at Stanford University, a Reuters employee hit upon the idea of offering highly customizable market information to farmers through the increasingly ubiquitous platform of mobile phones. From this initial idea, the international news giant launched Reuters Market Light (RML) in 2007 to provide market prices, weather, and crop advisory services to farmers in India. This launch was preceded by 18 months of market research, tests, and pilot programs to refine the idea and tailor it to the local context (LIRNEasia 2008).

To subscribe, a farmer calls a toll-free number to activate the service in the local language and specify the crops and markets in which he or she has an interest. Throughout the subscription, farmers receive four to five SMS alerts with relevant information throughout the day. According to RML’s managing director, Amit Mehra, the pilot farmers greatly preferred automated messages instead of having to ask for them. Initial studies show that farmers who receive the service are receiving 5–10 percent more income. See IPS “Impact of Immediate Market Information in Aisa and Africa” in Topic Note 9.3 in Module 9 for additional details on farmers’ gains through RML.

Impact

Today, the application is one of India’s largest market information services, serving hundreds of thousands of paying customers in tens of thousands of villages. Via SMS, it delivers highly personalized, professional information to India’s farming community, covering more than 250 crops, 1,000 markets, and 3,000 weather locations across 13 Indian states in 8 local languages (Mehra 2010) (image 13.3). The impact is likely even larger than Reuters can count due to the widespread sharing of information that takes place within informal farmer networks. Additionally, RML today has hundreds of employees, many of whom are trained as dedicated price collectors in markets throughout India.

Image 3.3: The Reuters Market Light Interface

Source:  Medianama.

Continuing Competition for Clients

Reuters Market Light has sought to reach as many customers as possible through a number of strategies. RML has attempted to avoid exclusive partnerships with MNOs, though in some cases it has found that telecommunications firms provide a strong value proposition (notably through sales reach and providing a subscriber catalog that could lessen customer turnover). To make it easy for unregistered users to try the service before committing to a subscription, RML has set up sales offices through the postal network, local shops, input suppliers, and banks. Customers can obtain RML in basic SMS through prepaid scratch cards that give access to the service for a given amount of time—initially only 1 month, but now 3, 6, and 12 months. After much experimentation, pricing has settled at Rs 60, 175, 350 and 650, respectively. (For details of the technology and business model, see IPS “First Mover Advantage Benefits Reuters Market Light”in Topic Note 2.4 in Module 2.)

Although a leading example, RML is hardly a monopoly. It competes with both traditional information services (radio, market intermediaries, newspapers) and other services that use mobile phones. IFFCO Kisan Sanchar Limited (IKSL)  offers similar market information for rural farmers but uses voice messages so that illiterate farmers are able to use the service. Best of all, the service is free and benefits from the partnership of India’s largest MNO (Bharti Airtel), which views the service as a way to attract new customers in rural areas.

According to Mr. Mehra, reaching economies of scale is essential for profitability. Media reports suggest that RML had invested US$ 2 million by late 2009 and expected to break even within a few more years. In 2009, RML reportedly crossed the US$ 1 million sales mark. Farmers seem willing to pay for the service—indeed, they are paying for longer periods of service than they were before. Up to 2008, most farmers purchased quarterly installments of the service. Today, the half-year and one-year plans are becoming more popular (Preethi 2009). It also partnered with Nokia as an information supplier for Nokia’s Life Tools application. There are plans to bring the service to Afghanistan and Africa (Reuters Market Light 2009).

Providing Customized Information Requires Wide Network of People

RML and its competitors suffer from the high expense of collecting market information and maintaining sophisticated technological infrastructure. RML sources information from various content providers and sorts, organizes, and personalizes it for dissemination. A significant portion of this information comes through partnerships with agricultural institutes. These institutes are typically government funded but lack the means to disseminate the information. Students and researchers in these institutes contribute content relevant to RML, which includes it in their package and delivers it to farmers (Preethi 2009).

To process the information, RML employs over 300 office staff in eight states. The teams are organized according to content area and include a news division that scours media sources for agricultural news (pest and disease reports, government programs, weather reports, and local news). The information is finely sorted by geography. Farmers are informed if a particular market in a village is closed or if a pest or disease could affect their specific crops (Preethi 2009).

The importance of customized information is highly evident in RML’s operations. As much as technical acumen is important in mobile phone interventions, RML shows that a wide network of people—in this case, price collectors, agricultural institutes, and other information providers—is another essential ingredient.

Nokia is famous for making the low-cost handsets that sit in more pockets than the products of any other manufacturer.¹⁰More recently, the Finnish mobile phone maker has begun developing mobile applications for its phones, and low-income communities are one of its primary audiences. The most notable of these efforts is Nokia Life Tools, unveiled in mid-2009 for the Indian market and subsequently expanded to other countries (China, Indonesia, and Nigeria) (O’Brien 2010).

Life Tools is aimed at rural, predominantly agricultural communities of the developing world. It is available on a number of Nokia handsets that retail for much less than US$ 50, and despite the application’s rich graphic elements (image 3.4), it uses SMS to communicate, making it affordable and widely accessible. Additionally, because SMS can be delayed, users need not have perpetual network coverage. The application is a prime example of how simple technologies can be tweaked to bring about new functionality.

In India, Nokia has collaborated with multiple partners across the Indian government and private enterprises, including Tata DOCOMO, MSAMB, Syngenta, Pearson, RML, and EnableM to create a rich ecosystem to deliver the services. Content is divided into:

• Basic agriculture, at Rs 30 per month, provides tips on technique and news.
• Premium agriculture,at Rs 60 per month, additionally offers market prices and weather updates.
• Education,also Rs 30 rupee per month, provides simple English courses and exam preparation services. For an additional Rs 30, the General Knowledge option provides daily world news.
• Entertainmentat Rs 30 per months provides regional news, astrological predictions, cricket news, and ringtone downloads.

The agriculture service, available across 18 states, offers two plans. The basic plan, at 30 rupees (Rs) per month, provides daily weather updates and agricultural news, advice, and tips. The premium plan, at Rs 60 per month, provides the closest market prices for three crops chosen by the subscriber, as well as weather information, news, advice, and tips. Nokia Life Tools supports 11 Indian languages: Hindi, Malayalam, Kannada, Tamil, Telugu, Punjabi, Marathi, Bengali, Gujarati, Oriya, and English.

Because most subscribers are prepaid users who do not have a contract, the charges are subtracted weekly. To facilitate this payment, Nokia has partnered with the MNO IDEA Cellular.

Nokia believes that hyperlocalization is key to the success of this service. The Indian application was launched with nine local languages, and future expansions will reformulate Life Tools for the unique conditions of new countries and regions.

Image 3.4: The Agriculture Package in Nokia Life Tools

Source:  Nokia.

The key lesson is that Nokia’s mobile application recognizes the multiplicity of human interests: Packaging agricultural information with entertainment can drive adoption (a lesson learned by MxIt as well). Nokia also has shown that partnerships are a viable alternative to going it alone.

 

 

 

 

 

 

 

 

 

 

References and Further Readings

• Aker, J.C. 2010a. “Information from Markets Near and Far: Mobile Phones and Agricultural Markets in Niger.” American Economic Journal: Applied Economics 2(3):46–59.
• __________. 2010b. “Dial ‘A’ for Agriculture: A Review of Information and Communication Technologies for Agricultural Extension in Developing Countries.” Agricultural Economics (Forthcoming).
• Bartlett, S. 2008. “Making the Marketplace Mobile.” ICT Update No. 44, http://ictupdate.cta.int/en/Feature- Articles/Making-the-marketplace-mobile, accessed May 2011.
• Cagley, M. 2010. “From the Web to the Phone.” ICT Update. http://ictupdate.cta.int/en/Feature-Articles/From-the-web-to-the-phone
  , accessed May 2011.
• Cisco. 2010. “Cisco Visual Networking Index: Global Mobile Data Traffic Forecast Update, 2010–2015.” San Jose: Cisco. http://www.cisco.com/en/US/solutions/collateral/ns341/ns525/ns537/ns705/ns827/white_paper_c11-520862.pdf
  , accessed July 2011.
• De Silva, H., and D. Ratnadiwakara. 2008. “Using ICT to Reduce Transaction Costs in Agriculture Through Better Communication: A Case-Study from Sri Lanka.” LIRNEasia, http://www.lirneasia.net/wp-content/uploads/2008/11/transactioncosts.pdf, accessed May 2011.
• Donner, J. 2009. “Mobile-Based Livelihood Services in Africa: Pilots and Early Deployments.” In Communication Technologies in Latin America and Africa: A Multidisciplinary Perspective, edited by M. Fernández-Ardèvol and A. Ros. Barcelona: IN3. Pp. 37–58.
• Esoko. 2010. African Farmers Get Boost from IFC, Soros Economic Development Fund, and Esoko.” Press release, November 22, 2010. http://www.esoko.com/about/news/pressreleases/2010_10_22_Esoko_IFC_SEDF_..., accessed May 2011.
• Fafchamps, M., and R. Vargas Hill. 2004. “Selling at the Farm-Gate or Travelling to Market.” CSAE Working Paper Series 2004-30. Oxford: Centre for the Study of African Economies, University of Oxford.
• Ferris, S., P. Engoru, and E. Kaganzi. 2008. “Making Market Information Services Work Better for the Poor in Uganda.” CAPRi Working Paper No. 77. Washington, DC: CGIAR Systemwide Program on Collective Action and Property Rights (CAPRi).
• Goyal. A. 2010. “Information, Direct Access to Farmers, and Rural Market Performance in Central India.” American Economic Journal: Applied Economics 2(3):22–45.
• Gakuru, M., K. Winters, and F. Stepman. 2009. “Inventory of Innovative Farmer Advisory Services Using ICTs.” Paper presented at the W3C Workshop on Africa Perspective on the Role of Mobile Technologies in Fostering Social Development, April 1–2, Maputo. http://www.w3.org/2008/10/MW4D_WS/papers/fara.pdf, accessed May 2011.
• Hellstrom, J. 2010. The Innovative Use of Mobile Applications in East Africa. Stockholm: Swedish International Development Cooperation Agency.
• Heeks, R. 2008. “Mobiles for Impoverishment?” Blog post, ICTs for Development, December 27, 2008, http://ict4dblog.wordpress.com/2008/12/27/mobiles-for-impoverishment/, accessed May 2011.
• IFC Advisory Services. 2011. Kilimo Salama: Index-Based Agriculture Insurance: A Product Design Case Study. Washington, D.C.
• Ilahiane, H. 2007. “Impacts of Information and Communication Technologies in Agriculture: Farmers and Mobile Phones in Morocco.” Paper presented at the Annual Meetings of the American Anthropological Association, December 1, Washington, DC. IT News Online. 2010. “Nokia, Tata DOCOMO to Offer Ovi Life Tools in Rural, Semi-Urban India.” IT News Online, July 20, http://www .itnewsonline.com/news/Nokia,-Tata-DOCOMO-to-Offer -Ovi-Life-Tools-in-Rural,-Semi-Urban-India/19934/7/1, accessed May 2011.
• Jensen, R. 2007. “The Digital Provide: Information (Technology), Market Performance, and Welfare in the South Indian Fisheries Sector.” Quarterly Journal of Economics 122(3):879–924.
• Koh, D. 2009. “Case Study: Nokia Life Tools.” CNEt Asia, October 20, 2009, http://asia.cnet.com/reviews/mobilephones/0,39050603,62058745,00.htm, accessed May 2011.
• Kubzansky, M., A. Cooper and V. Barbary, 2011. “Promise and Progress: Market-Based Solutions to Poverty in Africa.” Cambridge: Monitor Group.
• Labonne, J., and R.S. Chase. 2009. “The Power of Information: The Impact of Mobile Phones on Farmers’ Welfare in the Philippines.” Policy Research Working Paper No. 4996. Washington, DC: World Bank.
• Ling, R., and Donner. 2009. Mobile Communication. Cambridge: Polity. LIRNEasia. 2008. “Agricultural VAS through Mobile 2.0.” Policy Brief. http://www.lirneasia.net/wp-content/uploads/2008/05/AgricultureVAS_brief..., accessed May 2011.
• Magada, D. 2009. “Esoko: The New Market Info System for African Farmers.” BNET, May 2009, http://findarticles.com/p/articles/mi_qa5327/is_353/ai_n31882131/, accessed May 2011.
• Mehra, A. 2010. “Small Technologies Fuel Big Results in the Developing World.” The Huffington Post, September 13, 2010. http://www.huffingtonpost.com/amit-mehra/small-technologies-fuel-b_b_715..., accessed October 2010.
• Muto, M., and T. Yamano. 2009. “The Impact of Mobile Phone Coverage Expansion on Market Participation: Panel Data Evidence from Uganda.” World Development 37(12):1887–96.
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• 1 According to https://www.wirelessintelligence.com/.
• 2 See ITU (http://www.itu.int/ITU-D/ict/statistics/).
• 3 See “mWomen” under http://gsmworld.com/our-work/mobile_planet/development_fund/index.htm.
• 4 This section draws on World Bank (2010) and personal communication from H. Agah, Senior Rural Development Specialist, World Bank (interview with C. Belden, Agriculture and Rural Development, World Bank, March 22, 2011).
• 5 Aside from the sources cited in the text, this summary also draws on Gakuru, Winters, and Stepman (2009).
• 6 Esoko, which began as a private initiative with encouragement from FAO and the UN, became a partner with USAID’s MISTOWA program in West Africa and CIAT’s FoodNet program in Uganda, and it was supported with a grant of US$ 11 million. More recently, IFC (a member of the World Bank Group) and the Soros Economic Development Fund (a nonprofit investment fund that works to alleviate poverty and community deterioration) each invested US$ 1.25 million of equity into Esoko. The investment will give smallholder African farmers and businesses timely crop information that can be shared via text messaging, enabling farmers to increase their incomes.
• 7 See http://failfaire.org/2010/10/15/brilliant-fails-in- m4d/
• 8 This summary is based on information from Cagley (2010) and personal communication with John Zoltner, DataDyne.org.
• 9 UNESCO = the United Nations Educational, Scientific, and Cultural Organization; FIA = Fundación para la Innovación Agraria.
• 10 The material for this case study was drawn primarily from Koh (2009).

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