Using ICT to Provide Agriculture Market Price Information in Africa Last updated November 20102
Some Key Prerequisites
for scal-able and sustainable market priceinformation services include:
One or more service providercompanies with a large numberof subscribers in rural areas anda willingness to invest in newproducts and services. It maybe that a partnership with amobile network operator (e.g.,a cell phone service provider)can be helpful given the opera-tor can use this value addedservice to reach new customersor reduce customer “churn”(e.g., customers switching be-tween networks).
A network of trusted marketprice enumerators to provideaccurate and up-to-date com-mercial prices for the most im-portant commodities in keymarkets. This calls for an on-going system to spot check thevalidity of the prices by inde-pendent sources.
A way to regularly validate thatusers are actually finding theservice
to help themincrease their incomes or re-duce costs (or whatever otherimpact metric is chosen). Mea-suring value will help serviceproviders hone the service tothe most important markets,commodities, and price types(e.g., wholesale, retail).
A business model that enableservices to sustain themselvesand grow either through cus-tomer fees or on-going subsi-dies from government or frombusinesses (e.g., in exchange foradvertising).
A subsidy from governmentmay also be helpful for startupcosts, on-going operations orfor a specific level of service(e.g., SMS queries) or for a setof target users (e.g., in a specificarea or for specific commodi-ties). Higher end services (e.g.,“pushing” prices for certainmarkets or commodities tosubscribers based on profiles)could be on a fee basis.
1. Mobile network operators(MNOs).
Given MIS is provided via cellphone, MNO’s are always involvedsomehow in provision of MIS (and arelikely partners to any service provider),but sometimes they are the primary ser-vice providers themselves. With strongcompetition for market share, MNOs insub-Saharan Africa seek a variety of val-ue-added services to attract customers;increase the minutes they buy; and re-duce market “churn” (customers chang-ing MNOs). Some MNOs offer servicesthat allow farmers, traders, and otherusers to receive price alerts, weatherand crop information. This information isaccessed on a mobile phone in the formof interactive voice recognition (IVR),short message service (SMS), wirelessapplication protocol (WAP) browsing,and Web-based Internet browsing. Userspay a fee for service to their mobilephone provider. Internet browsing is on-ly available on higher end mobile handsets and more advanced networks (andoften not in rural areas) making SMS-based services the most accessible andpopular today.CellBazaar is an example of an MNOthat offers market information servicesin Bangladesh. It provides a mobilephone-based “virtual marketplace” thatallows Grameenphone users to buy andsell any number of goods (including agri-cultural products) and access marketprice information through IVR, SMS,WAP, and the Web. The company gene-rates direct revenues through its SMS,WAP browsing and IVR fees, and indi-rect revenues from phone calls made tocomplete transactions. One of CellBa-zaar’s key challenges is to teach their ru-ral customers to use mobile phones. Todo this the company has partnered withKatalyst, a local market developmentproject, to assist with the growth of mo-bile phone telephony for small and me-dium enterprises.
Quadir, Kamal and Naeem Mohaiemen,“
Other examples of MNO services in-clude instances where MNOs have part-nered with their governments or otherorganizations to provide the service, in-cluding:
MIT Innovations Case Study
A partnership among Vodacom, theGovernment of Tanzania and the In-ternational Fund for Agriculture De-velopment (IFAD) for farmers andtraders to access the latest com-modity prices via SMS
A similar collaboration among mo-bile phone company Celtel (nowZain), the Zambia National FarmersUnion, and IFAD to provide com-modity prices to farmers via SMS
It is not yet clear if these examples willbe sustainable without ongoing donorsupport.
2. Third-party providers of marketinformation services.
Some compa-nies are taking advantage of increasingmobile phone penetration in developingcountries to develop ICT solutions tar-geted at customers working in agricul-ture value chains. These companies work through mobile phone networks and In-ternet service providers to offer an arrayof services that allow producers, traders,and others to get up-to-date price in-formation, weather alerts, and other in-formation. The information they providecan be accessed via mobile phone tele-phony (voice, SMS, WAP) and Internetportals.Although there are several examples of third party market information servicesin sub-Saharan Africa, perhaps the twomost prominent are Esoko and Manobi,which both have affiliations with USAID-funded programs and are still working todevelop viable business models..Esoko (formerly TradeNet) began in2005 with funding from USAID/WestAfrica’s MISTOWA project.
A for-profitprivate company with private investors(as well as the IFC), Esoko has substan-tially enhanced its technical platform,services offered, and business model and
(May 1, 2009)