• Home
  • IFAD website
  • Subscribe to posts
  • Subscribe to comments

By Thomas Rath, Country Programme Manager, Asia and the Pacific Division 

Rural poverty has declined throughout Asia and the overall economic performance has increased. Agricultural development has played a major role in these improvements with smallholder farmers in the lead. Around the world they already feed almost a third of the world’s population and produce 80 per ent of the food consumed in the developing world. But we need to take smallholder agriculture to the next level to make sure rural communities can play an important role in producing enough food for a growing population.

A good opportunity for Asian smallholders to boost their productivity and increase their incomes coincides with an important change in the Asian food retailing market. Supermarkets with global links have emerged, particularly in South East Asia, responding to changes in life styles, the liberalization of retail trade and the entry of foreign direct investment in Asia-Pacific countries. By 2015, supermarkets in China are expected to reach 62 per cent market share, while Malaysia is expected to reach 61 per cent, Thailand 48 per cent, and the Philippines 36 per cent.

Supermarket chains can offer farmers better deals – higher prices and greater certainty of selling the product than traditional supply chains. But in return farmers are obliged to meet stringent quality requirements and adhere to food safety standards. Also supermarkets usually prefer dealing with few large farmers rather than many small farmers.

Producers’ associations or cooperatives can help small producers gain a footing in international food retailing. Belonging to an organized group allows them to bulk produce, reduce costs through economies of scale and, perhaps most importantly, to strengthen their bargaining power with private-sector actors. Membership can also bring access to financial, processing and business service. All of which are key to empowering farmers to deal with the private sector on a more level playing field.

One of the most well-known producer organizations in Asia is the Indian dairy cooperative. It comprises 12 million members, including landless labourers and women, and produces 22 per cent of India’s milk supply. In China, a group of small scale growers, aided by the local government, formed the Ruoheng watermelon cooperative, which then sold directly to wholesalers, retailers and supermarkets. Due to its timely delivery, quality, and marketing success, the cooperative’s membership increased from 29 to 152, and its farmed area increased from 0.2 hectare in 1992 to thousands of hectares in 2005.

The ability of smallholder farmers to increase their production in a sustainable way is enormously important. Not only to further reducing rural poverty in Asia, but also to feeding the world’s growing population and resolving pressing environmental and climate challenges. Enabling smallholder farmers to benefit from the proliferation of supermarkets and export opportunities in the region can set the stage for new progress in overcoming rural poverty and hunger in Asia. Our focus should be on helping them develop the knowledge and the other tools they will need to do precisely that.

Originally posted on Business fights poverty blog

Agriculture in Rwanda: Ownership and Improving Delivery #hlf4

Posted by Roxanna Samii Monday, November 28, 2011 1 comments

By Agnes Matilda Kalibata, Minister of Agriculture and Animal Resources of Rwanda

As the Fourth High Level Forum on Aid Effectiveness held in Busan, South Korea, commences, Rwanda has a chance to convey its way of doing business in a ever–changing aid architecture. The meeting centers on the Paris Declaration, a tool for donors and developing countries to hold each other to account. In Busan, a large and increasingly mixed community of development stakeholders will look back while seeking to outline the future of aid. Rwanda’s experiences are particularly valid for discussion in Busan. Rwanda’s story of aid effectiveness is one of strong leadership and meeting the challenges faced in managing developmental assistance. 

From the President’s lead, vision and ownership has allowed Rwanda to stay focused.  In the agriculture sector, over the past four years Rwanda has received strong support both from aid multilaterals and bilaterals with different modalities, to emerging countries such as India and Brazil, that have begun to provide public and importantly private sector investment in the country, to new cross-cutting funds such as Climate Change funding. Rwanda’s Ministry of Agriculture and Animal Resources (MINAGRI) has sought to improve the efficiency of government structures to deal with various development interventions. Primarily, the sector strategy, the Plan for the Transformation of Agriculture II (PSTA II), allows us to streamline and harmonize assistance through our programs that focus on, among others, irrigation, crop intensification through input provision, post-harvest handling and storage improvements and export promotion. This year, due to this clarity, time-bound respect for results and strong programming, numerous bilaterals, such as DFID and USAID, are seeking to provide budget support to the agriculture sector. 

The last four years have been characterized by turning these investments and support into food security and poverty reduction for Rwandans. Rwanda has moved from a food insecure country with 20 out of the 30 district labeled food insecure by FAO standards to a food secure nation with no single district below the required food needs.  In August 2007, Rwanda initiated the Crop Intensification Program to increase both the levels of production and productivity amidst the various challenges that Rwanda faces.  Key pillars of this effort include, land consolidation, input access, reduction of post harvest losses and access to markets.  The program ensures that every farmer, however small, has access to improved seeds, fertilizers, extension and a market opportunity.  From a country that was in the past characterized by chronic food insecurity, Rwanda’s yields have quadrupled compared to what it was four years ago.  

In many ways Rwanda is a microcosm of the global future of agriculture – a world in which countries have to maintain food production in the face of decreasing arable lands, rising fuel prices, increasing populations and an increasingly volatile climate. For Rwanda, in particular, these challenges will not go away. Therefore, to stand the best chance in developing the country and reducing poverty, how we do the business of development is paramount. The meeting in Busan is a chance to improve this business. From a zero tolerance to corruption to upholding Paris Declaration principles, Rwanda has much to contribute to the Busan meeting. 

Also published in TerraViva

“Happiest man in Africa…….and change is possible….”.

Posted by Roxanna Samii Tuesday, November 22, 2011 0 comments

By Willem Bettink

I participated in the annual regional  implementation workshop of the East and Southern Africa  region. A full week immersion in Africa, to be more precise in northern Tanzania,  at the foot of mount Kilamanjaro. It was an  exciting and dynamic 4 days, not in the least thanks to “veteran” Edward Chumamoto. He facilitated -189 people- with grand style, a sense of humour and enormous skill –a true pleasure!

The project coordinators in the region decided last year to radically change the format as they felt there was not enough interaction and added value generated.  The workshop embraced the  open space methodology which generated many unexpected sessions about a variety topics from learning routes, communication and social media, gender equality and many more.

The theme of this workshop was: Managing for Impact-one of those development  concepts that appear clear at face value, but are not . As a participants said : “over these 4 days we have unpacked the concept and it has become clearer for me what it means to me in my work in our project”. 

Over the days we unpacked the managing for impact into its key elements from the perspective of a project team . One of the  results was a practical diagnostic tool referred to as the learning wheel for managing for impact. It brings together  12 elements that enable a project team to diagnose its performance.

The outcome of this diagnosis enables a team to discuss and agree on corrective actions to improve its delivery to achieve impact. One of these elements is “ continuous experimentation with new ideas and approaches as a source of innovation and performance improvement”.   

Almost all- if not all- development programmes are change management programmes. Research and our own experience  has proven  that a typical organizational change programme has a 20-30% success rate . Or if we  look at innovation and start –up businesses: only 10-15% make it through year  1 and go on to achieve sustainable profits.

If we truly believe in “managing for impact",  it implies that project teams, given the change and innovativeness of development programmes,  continuously need to perform at the top of their toes. Delivery has to be of an exceptional quality while it is conditioned by known obstacles , unplanned interferences, unexpected natural disasters and what have you.

This implies that a project team  needs to have  a strong predisposition to openly reflect upon its challenges and mistakes , harvest the learning (in particular from failed attempts ) and share  this learning with its stakeholders.

In my opinion , managing for impact is closely linked to return on investment. If we do not focus persistently on achieving impact, creating value,  we are not ensuring the pay-off to the rural poor for what they invest to engage with the changes and innovations promoted by development programmes.

A final personal note: that change is possible whether at  personal, process, technological level  I am strongly convinced off. While I was in Arusha  I witnessed the transformation of a colleague to be the happiest man in Africa.  

Managing for impact: learning from successes and failures

Posted by Roxanna Samii Thursday, November 17, 2011 0 comments

The East and Southern Africa (ESA) annual workshop focusing on managing for impact kicked off on 14 November in Arusha, Tanzania. The event brings together 200 participants from 17 countries. 

This is a special event on many fronts. To start with, the participants warmly welcomed colleagues from South Sudan. Secondly, they bid farewell to Ides de Willebois, who is moving on to lead the West and Central Africa division.  And last but not least, this is a unique event because for the first time, participants have embraced moving away their from traditional way of doing workshops and have embraced knowledge sharing methods.

Ides de Willebois in his opening remarks reiterated the fact this is a learning and sharing event. “Without learning and sharing we cannot improve and we cannot have impact”. He also went on to say that “we need to have a better understanding of what we do, so that we can do it better.”
In concluding his remarks, de Willebois mentioned that he is planning to start an exchange visit between East and Southern Africa and West and Central Africa. “I hope that West and Central Africa colleagues will join next year’s annual event, so that they can learn from your experience”. 

Breaking the mould
Whenever you decide to innovate or break away from business as usual, there is some apprehension. You feel gratified when breaking the mould ends up being successful and resonates with the expectations. And this is exactly what happened at the ESA event.

It was so refreshing to see 200+ participants embrace knowledge sharing methods such as openspace, spectogramme and world cafe type discussions. Thanks to these participatory methods, they started to mingle, bond and in no time they got to know each other.  

In the process, they heard many stories, including one about how ESA implementation workshops evolved from a being top-down loan administration events to more learning events owned and organized by the projects.

The majestic mount Kilimanjaro and the Kalali women dairy cooperative
As a child, when school was  over, I would be counting the days so that I could join my grandmother in Mount Damavand. Damavand is Persia’s tallest mountain in the Alborz mountain range. Grandma had these wonderful stories about mount Everest, the far way mount Fuji and then a majestic mountain in Africa - mount Kilimanjaro. 

I was intrigued by mount Kilimanjaro, because as a I child I found it difficult to fathom that Africa had mountains. So, on Monday when we had to sign-up for the field trips, I could not believe that finally I would be able to see this far far away mountain.

Unfortunately the majestic mount Kilimanjaro decided to remain pretty veiled and the clouds did not cooperate. But nonetheless, seeing it was an emotional moment and brought back many fond childhood memories.

We then moved on to visit the Kalali women dairy cooperative. This cooperative is part of the Agricultural Sector Development Programme where IFAD is investing loan funds in supplementing financing to the nationwide development programme, to counteract the depletion of the initial funds committed by development partners as part of a basket fund arrangement.

The cooperative is located in Machame division, Hai district in Kilimanjaro region. Inspired by a local daily community business, this cooperative was established with 132 members in 1988. The cooperative’s goal is to:
  • increase income of poor rural households, particularly women in the area through a number of different income generating activities
  • improve lives of orphans and provide assistance to poor families who were unable to provide education and sound nutrition for their children
“To get going the cooperative members contributed 1000 shillings each and payed a membership fee of 50 shillings,” explained Nancy Manasseh Kidin, the cooperative’s chairperson.

Considering their scarce income, these monies were paid in 4 installments. The cooperative started with 8 dairy cows. In 1995 they had 41 dairy cows.

Considering the vital role women play in rural societies, the cooperative decided that women headed-households were the ones to receive the cows.  They agreed that the person who receives the cow for a period of seven months would:
  • give one litre of milk a day to the orphanage
  • give the calves to other women headed-household and members of the cooperative 
As a result in a short time, 24 women who had signed up to this deal managed to provide dairy cows to 117 cooperative members.

Today the cooperative has a total of 260 members.

Diversifying activities
These industrious women used their income to diversify their business. In the 90s they bought themselves a milling machine.

“We provided milling service in the local market and expanded our business by buying a container to store the maize”, said Kidin.

“We also used the profits from the milling business to buy seeds.”

In 1993, they went one step further and bought themselves an electric machine and donated their diesel operated milling machine to another women group.

With the profit from their milling business they bought feed for the cows.

A terrible blow
They had a flourishing business, produced milk in abundance and sold this to a company in Arusha, thinking that a company is a reliable partner.

“We failed to ask for the money upfront and the company failed to pay us 12,000,000 schillings”, said Kidin.

This was a terrible blow for them. The community lost confidence in cooperatives and felt let down.
This mishap taught the cooperative an important lesson: never accept an “IOU”, always finish a transaction, sell, get your money and go on.

Despite this set back, they managed to back on their feet, thanks to the generous contribution of Italians.

A new door opens: dairy processing 
The Italians provided them processing instruments and that is how they started making butter and cheese.

Today they produce:
  • 400-800 litres of milk a day
  • 10-20kg of cheese per day
  • 50-95 packs of butter per week
  • 400-600 packs of yogurt per week
They keep track of their daily production and make some impressive graphs without using Excel. They also have a sophisticated booking keeping practice.

They package their products and have a registered trademark. “We sell the dairy products at Moshi, to grocery stores, to hotels and send our cheese and butter all the way to Zanzibar”, explains a proud Kidin.

The cooperative has the necessary certification to package its product, however, they are faced with the challenge of not having adequate technical support. This means they are unable to take their business to the next step and benefit from industry’s best practice.

One thing that we observed was the BEST BEFORE DATE on their products. Without exception their products seem to have a shelf life of one year!!!!

Kidin shared with us that the cooperative aspires to be able to:
  • procure large 50 litre metal containers to store the milk instead of using plastic containers
  • avail themselves of technical expertise and training so that their products are of high quality meet regional standards, have bar codes and can compete with Kenyan products
  • have access to veterinary service
  • have access to East African Community Market and get packaging machinery 
  • have all the women of the community become members of the cooperative
  • become a renown cooperative both inside and outside Tanzania
In conducting their business, the cooperative has learnt the importance of:
  • providing thorough and in depth training to the machine operators, so that they do not only know how to operate the machine, but also maintain it properly
  • understanding the market demand and their potential competitors
  • doing a good market search before buying equipment and better understanding what is needed and how a piece of equipment can help them 
Expanding the business and facing new challenges
With a relatively good income from their dairy business, the cooperative bought a sunflower oil pressing machine and started a savings credit cooperative (SACCOS).

The SACCOS has 375 members and started with a capital of 3.2million schillings.

The older women of the community put their savings in the SACCOS and the more business oriented women use the SACCOS to get a loan. The loans have an interest rate of 3%.

Kidin shares with us that the SACCOS are faced with two challenges:
  • underpayment
  • corruption
This has led to a loss of 22 million schillings.  This loss made the community understand the importance of choosing right people as SACCOS board members. They now know that a board member:
  • needs to be a trusted member of the community
  • one who understands the ins and outs of the business and entire process
  • one who has knowledge of financial management so that they can play a supervisory role, detect collusion and immediately take corrective actions
Investing in health and eduction of young people
The community is committed to provide education for the children and young people - especially to orphaned children and those from less advantaged families.

They use their profits to send children from disadvantaged families to school and are also assisted by Italians who are sponsoring a number of children and putting them through school.

Their vision is that every child has to go to school.
Their sustained programme of investing in education of their children is one of their great successes. Thanks to this initiative many young people have successfully finished school, obtained their degree and now serve as accountants, agriculture specialists, engineers and health workers.

Many have heard of WFP’s school feeding programme. Well, the Kalali women dairy cooperative runs a similar programme - they support school feeding by providing one glass of milk per class. 

The cooperative challenges
Kidin shared with us the cooperative challenges: 
  • continuous power cuts which lasts days
  • lack of access to adequate and state of the art machinery for packaging and conservation so that they are able to compete in the  market
  • lack of access to technical expertise to take the business to its next level
  • lack of local talents and expertise
  • lack of access to appropriate equipment for conservation
  • high taxation and cumbersome regulations
  • competition with Kenyan products
The cooperatives aspirations
Kidin and the cooperative members aspire to:
  • have all women in the area become members of the cooperative
  • give dividends to all the members and not just provide contributions in kind
  • create more employment opportunities
  • send all children to school
  • expand the sunflower pressing business
  • innovate and continuously provide new services to the community
  • provide capacity building
  • build technical and leadership skills and groom local talents
  • set up a milk bar so that community members understand that there are other options to drinking alcohol
  • do more follow-ups and have a better feel what you can realistically achieve 
  • develop robust business plans
We cannot but wish this group of hardworking and resilient women the best of luck. They are a great example of how when a community takes development in their hands, despite set back, they are able to move on and bring about change. I am sure the Kalali women dairy cooperative will go from success to success and manage to fulfill all their aspirations and be a model for many more women.

We are all  concerned about climate change, and we are all aware of the impact of emissions on climate change. We know that continued emissions at or above current rates would cause further warming of the planet and cause many changes in the global climate system (e.g. increase risk of flooding and drought in certain areas). However, our emissions rather than decreasing are increasing; a trend that needs to be reversed  urgently. That is why, the “UN system is collectively developing a climate-neutral approach for its premises and operations. The responsibility for the future lies in our hands. Let change begin at home” (foreword by the UN Secretary-General to “Moving Towards a Climate Neutral UN) and we also committed to play a proactive role in moving towards a climate neutral UN.
The workshop held on 8 November was a great opportunity to:

•    be briefed on what we have done thus far to reduce emissions
•    understand why we need to develop and implement an IFAD   emission reduction plan
•    generate ideas that can  impact on emissions reduction
•    assess the viability of the ideas proposed during the workshop.

The good news is that a number of concrete actions with a view to reduce emissions have already been taken, some examples:

•    green building certification award at the Gold level in recognition of IFAD’s state-of-art HQ
•    reduction in consumption of electricity from 2009 to 2010
•    reduced use of plastic water bottles by installing drinking water fountains
•    shuttle bus service from/to metro station to discourage the use of private cars
•    reduction in paper consumption by implementing double-sided printing
•    implementation of parking fees to encourage the use of public transportation
•    video-conference facilities to reduce the number of travels to attend meetings.

Much has been done,  but  more needs to be done. Elina Virtanen and Pasi Rinne, the experts from Gaia   Innovative Solutions for Sustainability, presented the  baseline figures for reporting on IFAD’s emissions. Did you know that IFAD total emissions in 2009 were equivalent to 5089 tCO2 ?

Did you know that from 2009 to 2010 IFAD emissions have increased by 10 %  and that  air travel emissions have increased by 17 %?

Did  you know that in 2009 IFAD emissions per staff  were equal to 5,7 tCO2 ; far from a sustainable level! Based on IPCC estimates, in 2050  the emissions per person should be 2.8 t CO2. 

While it's true that IFAD compared to other UN organizations has lower emissions, numbers still show how far we are from a sustainable emission level for our planet.  Figures tell us we have to start planning today to achieve tomorrow’s targets. IFAD’s emission reduction plan  is the tool  we will be using to:

•    define where we are today in terms of emissions caused
•    identify the required actions to reduce emissions
•    indicate realistic objectives and  timeline.

We, as participants of the workshop, had the chance to “scout for ” ideas on how to further reduce emissions in the following areas:

•    facility
•    paper consumption and waste
•    ICT (energy efficiency and enabling virtual meetings)
•    travel
•    commuting
•    procurement
•    others (thinking out of the box)

It’s amazing how many ideas were “sticked”   in about 30 minutes. I was also impressed by the number of “green” stickers that we used to mark the proposed actions as  “realistic” and “viable” , in other words, actions that could be included  in IFAD’s emission reduction plan.
The ones I liked the most?
Adopt a sustainable procurement policy that takes into account the   environmental  impact of products and services 
All staff teleworking 1 day a week
 "Think big" and have a low-carbon cafeteria
 Adopt a green travel policy

As Matthias Meyerhans, director ADM, pointed out “we have to change our habits if we intend to seriously pursue climate neutrality …..only if we as staff member and environmental conscious citizens are willing to change, significant emissions reduction can be achieved”

IFAD’s emission reduction plan is about us, about the way we will be working in the coming years. If you did not have the chance to participate in the workshop and are interested in knowing more about the actions proposed,  you can still contribute by sharing your ideas through yammer 

“Our programs focus increasingly on adaptation to climate change and it is right that we look for measures to reduce emissions in our own activities.”
Elwyn Grainger-Jones, Director ECD

Let's make climate change talks inclusive

Posted by Roxanna Samii Monday, November 14, 2011 1 comments

by Prof. M.S. Swaminathan Member of Parliament of India, Rajya Sabha, and Chairman, M.S. Swaminathan Research Foundation and Kanayo F. Nwanze, IFAD President

Price volatility and the persistence of widespread and hidden hunger underline the need for enhancing the productivity and profitability of smallholder agriculture in an environmentally sustainable manner.

When world leaders sit down again to discuss climate change, we hope that the people who live and work on the world's 500 million small farms will be with them, at least in spirit. Their voice — and the issue of agriculture as a whole — has, for too long, been missing from the conversation. But without increased support to smallholder farmers now, the number of hungry people will grow, and future food security will be placed in jeopardy.

The upcoming 17th Conference of the Parties (COP17) to the United Nations Framework Convention on Climate Change (UNFCCC), and the United Nations Conference on Sustainable Development (UNCSD) in Rio de Janeiro in June 2012 — marking the twentieth anniversary of the landmark Earth Summit that produced Agenda 21, “a roadmap” for sustainable development — will both need to ensure that agriculture and the world's smallholder farmers are high on the agenda if we are to overcome the many challenges we face in achieving the Millennium Development Goal 1.

The front line
In the last 20 years the global population has risen from about 5.3 billion to seven billion; the reality of climate change has been accepted beyond doubt; and the number of hungry people in the world has remained stubbornly around the one billion mark. Meanwhile, aid to agriculture has only just recently begun to pick up after decades of stagnation. More needs to be done — a lot more — and supporting smallholder farmers must be at the heart of any agenda.

The rural poor across the world, including India, have contributed little to human-induced climate change, yet they are on the front line in coping with its effects. Farmers can no longer rely on historical averages for rainfall and temperature, and the more frequent and extreme weather events, such as droughts and floods, can spell disaster. And there are new threats, such as sea level rise and the impact of melting glaciers on water supply.

How significant are small farms? As many as two billion people worldwide depend on them for their food and livelihood. Smallholder farmers in India produce 41 per cent of the country's food grains, and other food items that contribute to local and national food security. Small farmers cannot be ignored, and special attention must be given to the most vulnerable groups — particularly women, who make up a large percentage of farmers in the developing world.

Small farms also add up to big business: In the world's 50 least developed countries, agriculture is the backbone of the economy, accounting for 30 to 60 per cent of Gross Domestic Product and employing as much as 70 per cent or more of the workforce. Addressing the plight of smallholders isn't just a matter of equity, it's a necessity if we are going to be able to feed ourselves in the future. Smallholders farm 80 per cent of the total farmland in sub-Saharan Africa and parts of Asia. If we don't help them to adapt to climate change, their achievements — feeding a large portion of humanity — will be endangered.

With appropriate support, smallholders can play a key role in protecting our environment, for example through actions that contribute to carbon sequestration and limit carbon emissions (planting and maintaining forests, engaging in agro-forestry activities, managing rangelands and rice lands, and watershed protection that limits deforestation and soil erosion).

To continue farming in a sustainable way in the face of climate change, rural women and men need to be given the resources to cope with the challenges. Smallholder farmers need support such as resilience-building technologies (including drought- and salt-tolerant seed varieties and new methods of rainwater harvesting), and training in sustainable practices of conservation agriculture, such as minimum-till farming to reduce erosion and moisture loss. Investing in adaptation measures now will be far less costly than in the future.

The International Fund for Agricultural Development (IFAD) and the M.S. Swaminathan Foundation, together with the government of India and other partners, have undertaken a range of projects to do just that.

For example, in Tamil Nadu, we have been supporting rural communities to produce and market nutri-cereals like millet, which can easily grow in dry and arid environments. We worked with smallholder farmers to use simple techniques to increase their yields, while also helping rural women create and market modern recipes — for example, a millet malt drink now being sold in major health food stores in India. The result has been not only increased food for the community, but also increased income and non-farm employment opportunities.

To help farmers adapt to increasingly dry conditions, a programme in Chhattisgarh has expanded cultivation of traditionally produced Niger seed oil, which grows well in areas that receive little rain. Land and forest regeneration were promoted to improve soil structure and moisture levels, and solar energy technology and biogas digesters have been introduced, which reduce greenhouse gas emissions as well as the need for fuelwood. Another project in the northeast has helped restore degraded jhumland and has benefited almost 40,000 households in 860 villages.

Climate-resilient sustainable agriculture requires knowledge. Successful projects such as these can provide a model for others to follow. Knowledge transfer that brings the benefits of research from the laboratory to the farm is essential.

Programmes targeted at vulnerable groups such as women and tribal communities are particularly important. IFAD-supported programmes and projects in India promote tribal development by building and strengthening grassroots institutions that enable vulnerable people to plan and manage their own development, negotiate improved entitlements, and broaden their livelihood opportunities. Conferences and talks among world leaders can do many things but they don't feed people. We hope that leaders will keep in mind those who do: the smallholder farmers. Price volatility and the persistence of widespread, endemic and hidden hunger underline the need for urgent attention to enhancing the productivity and profitability of smallholder agriculture in an environmentally sustainable manner. This is the pathway to increasing agriculture's contribution to climate change mitigation as well as to sustainable food security.

Originally published in The Hindu

Once a luxury item, mobile telephony is now a catalyst to bring about economic development and social inclusion in developing countries, especially in Africa. For economist Jeffry Sachs “mobile telephony is the single most transformative technology for development”.

Mobile phone numbers talk for themselves. According to International Telecommunication Union (ITU) the number of mobile phone subscriptions worldwide has reached 4.6 billion.  ITU estimates show that in sub-Saharan Africa there is 60% mobile coverage and one-third of the population has a mobile subscription.

Over the last decades we’ve seen the socio-economic benefits of mobile telephony on the lives of many poor rural people. We’ve seen how thanks to mobile phones those who previously were both socially and economically excluded are now actively participating in the economy and are able to connect with their families and friends. We’ve seen how mobile phone supports bottom-up economic development, provides entrepreneurship opportunities and gives voice to poor rural people and the voiceless.

Experts categorize the benefits of the mobile telephony in three categories:

  • incremental: improving the speed and efficiency of what people already do
  • transformational: offering something new such as comprehensive agricultural services (what to plant when, where to buy inputs, access to price information, potential buyers, transport, pest control and more)
  • productive: offering employment and income opportunity

Next time you are in Zambia,  ask a smallholder producer, what is your lucky number. And do not be surprised if they say: “ZNFU4455”.

ZNFU4455 is a market information service open to all smallholder producers and traders, a service that encapsulates and touches on all three categories of benefits of mobile phone listed above.

Designed in 2006 with the assistance of IFAD-funded smallholder enterprise marketing programme and in cooperation with the Zambia National Farmers Union (ZNFU), ZNFU4455 provides accurate and up-to-date agriculture and market information covering the entire value chain. It allows smallholder producers to make informed decision about what to grow, volumes required, storage, processing, marketing and investment opportunities.

ZNFU4455’s prime objective is to make markets functional for smallholder producers and traders. The service provides a list of 180 traders - 50% of whom are active -  and their offer for 15 commodities. To find the best price on offer, smallholder producers and traders send an SMS message to 4455 containing the first four letters of the commodity and the district or province. They immediately receive a text message listing the best prices and codes designating the buyers offering them. After selecting the buyer that best responds to their needs, farmers send a second SMS with the buyer’s code. A text message is returned with the contact name and phone number. Farmers are then able to phone the buyer and start trading. Each message costs around US$0.15.

This demand-driven service responds to the evolving needs of the Zambia smallholder farmers and traders. It has helped reverse the trend of smallholder producers being exploited and passive players to becoming successful entrepeneurs by addressing challenges such as:
  • limited access to credit
  • limited access to price information
  • limited access to appropriate technology
  • limited business and negotiating skills
  • weak organizations
  • weak bargaining power
  • poor access to transport networks
  • little or no knowledge of market trends

The success of this service is manifold. To start with, it benefitted from an excellent marketing campaign.  It’s business model is based on making revenue through advertisement and sponsorships.

It is one of those few IT applications that has little bells and whistles, it is easy to understand and use. It is a service that provides information upon request, as opposed to indiscriminately pushing content. It does so through different means such as  cellphone (SMS), internet and radio. The radio programme is broadcast in seven local languages and in English.

Most importantly, it got the government’s full support and is an integral part of the national agricultural policy. Zambia’s good rural coverage of mobile phones and the fact that it is hosted in a credible institution, such as Zambia National Farmers Union, with a strong management team have contributed to its impressive success.

Between its launch in August 2006 and August 2009, ZNFU4455 managed to improve the bargaining power of smallholder producers, by providing them better access to markets and allowing them to deal with traders on an equal footing. Farmers have managed to reduce their transaction costs, are now producing more high value produces and targeting different markets. Thanks to the weekly updates, they are no longer overproducing, thus eliminating storage challenges.

Policy makers are using ZNFU4455 up-to-date information to identify trends in price fluctuations and to flag emergent and imminent food security challenges.

To date, 90 percent of traders and 60 per cent of the Zambian farmers have benefitted from ZNFU4455. Forty percent have managed to negotiate better prices, 52 per cent have sold their products to different traders and buyers, 23 per cent managed to build new trading relationships, more than 50 per cent increased their income, 15 per cent of initial SMS messages to the system led directly to farmers selling their produce, and over 90 per cent of the calls to buyers led to transactions.

ZNFU4455 and many other similar initiative and services highlight the fact that developing countries see and want mobile phones as the preferred information delivery system. At the same time, there is enough evidence that poor rural people are willing to spend part of their income on such services. The challenge now is to move beyond pilots and make sure that we systematically embed and mainstream ICT4D activities and projects in rural development projects and programmes so that we can have many more successful experiences such as ZNFU4455.

For more information visit http://farmprices.co.zm/