By Jason Kohn, Contributing Columnist
A while back, I wrote about the potential for mobile banking to create new opportunity and economic growth in developing countries. Now, I’d like to look at how a related application, mobile agriculture (m-agriculture), is transforming rural villages.
M-agriculture is about bringing mobile information access to rural communities and small-hold farmers. While the concept is still in its infancy, early implementations suggest it can make a big difference.
Sam Goundar, writing for the nonprofit DiploFoundation, recently published a paper on m-agriculture and other cloud-based applications in the developing world, and described some examples of how it’s being employed:
Farmers use SMS in relation to market access, interacting with traders and middlemen to distribute and receive information about products, prices, and availability. Other examples of mobile phones used in the agricultural sector of developing countries are:
- Bangladesh’s CellBazaar is a service from Grameenphone that allows people to buy or sell over their mobile phones. Customers looking to sell something, post the information on CellBazaar through Grameenphone, and buyers get in contact.
- Ghana’s TradeNet is an Internet application that enables you to provide market information via the web, email and SMS quickly and affordably. The application has been designed and developed by an international team based in Accra, Ghana.
- Jamaica’s Agriculture Market Information System (JAMIS) is a project by the Ministry of Agriculture and Fisheries aimed at establishing the first electronic market system focused on the publication of weekly prices at the farmgate, at municipal markets, at retail, and wholesale.
These early applications are simply providing basic numeric information — often over 2G networks. What will happen when m-agriculture expands to higher-bandwidth services?
For one possibility, check out this video from Voice of America, on how farmers in developing countries in Africa are using mobile phones to learn and share farming tips and techniques.
Mobile Companies Jumping on Board
The potential of m-agriculture has not been lost on governments, non-governmental organizations, and wireless operators. For example, GSMA, an industry group representing mobile operators worldwide, is now investing in extending mobile communications in Africa with its mFarmer initiative. The program aims to benefit 2 million farmers in developing countries by 2013.
Vodafone also recently sponsored a report, Connected Agriculture, highlighting the huge potential of this market. The report projects a $138 billion uplift in farmers’ incomes in emerging markets, most of which will be realize through mobile services.
Real-time Market Information
Just how much difference can m-agriculture pricing information make to small-hold farmers? Apparently, it is quite a lot.
The Economist recently highlighted a paper from Aparajita Goyal of the World Bank, which examined how Internet kiosks with price information affected the market for soyabeans in central India.
Farmers in the region sell their soyabeans to intermediaries in open auctions at government-regulated wholesale markets called mandis, a system that was set up in order to protect farmers from unscrupulous buyers. The intermediaries then sell on the produce to food-processing companies.
The problem with this approach for the farmers is that the traders have a far better idea about the prices prevailing in different markets and being offered by processing companies. With only a few traders at each mandi, they can easily collude to ensure that they pay less than the fair market price; they can then boost their profits by selling on the beans at a higher price.
To try to address this problem, ITC Limited, one of the largest buyers of soyabeans in India, installed more than 1,700 kiosks in rural Indian villages to display up-to-date prices paid for soyabeans at dozens of regional mandis, as well as weather forecasts and other agricultural information. The upshot:
…the presence of kiosks in a district was associated with an instant and persistent increase of 1.7% in the average price paid at mandis in that district. As expected, the availability of price information increased the level of competition between the traders, raising prices and reducing the variation in prices between nearby mandis. Farmers’ profits increased by 33%, and the cultivation of soyabeans increased by an average of 19% in districts with kiosks.
As we’ve seen time and again, access to information changes everything — even in remote farming villages.