November 29, 2010 / 8:50 AM / 8 years ago

Firm says phone messages to boost African farmers

ACCRA (Reuters) - Thousands of small farmers in Africa will be able to negotiate better prices for their crops thanks to real-time market data sent to their mobile phones, the Ghanaian company behind the scheme said.

Farm workers are seen at a farm in Eikeihof outside Johannesburg September 30, 2008. REUTERS/Siphiwe Sibeko

The mobile phone application, which sends farmers market data via SMS messages, can be used to monitor prices, crop demand, weather and the location of seeds and fertilizers, software company Esoko said.

The International Finance Corporation and Soros Economic Development Fund (SEDF) have invested $2.5 million in the company, which they think will help revolutionise the terms of trade for small-scale agriculture on the continent.

“Over two-thirds of Africans are engaged in small-holder agriculture so the potential social impact upside is enormous,” Benjamin Matranga of the Soros Economic Development Fund (SEDF) said by telephone from Nairobi.

Farmers send an SMS message with a specific commodity code and receive a list of wholesale and retail prices at markets across the country. Such systems have been used in East African countries such as Kenya but are less prevalent in West Africa.

The platform is interactive so farmers can also publish information, helping companies or governments conduct surveys of rural populations who were hitherto hard to reach.

In northern Ghana, where the system is being piloted, farmers use the data to compare prices around the country and map price changes over time.

“The farmers seem to be getting between 20-40 percent revenue improvements,” Esoko founder Mark Davies told Reuters.

The service, which costs $1 per month, has allowed some farmers to even double their profits by avoiding traders and sending their produce directly to cities like Kumasi or the capital Accra, he said.

COMMODITIES INDEX

Earlier this year Esoko launched a non-tradeable commodity index that tracks wholesale and retail prices of selected agricultural products across the country and through time — a system Davies hopes to roll out across the continent.

“There’s a lot of interest in setting up commodity exchanges across Africa,” he said of an index which currently covers 12 commodities including groundnuts, white maize, millet, soya beans, rice, cowpeas, cassava tuber, wheat, tomatoes and yams.

“One of the things that has been time and again identified is that Africa suffers from a lack of transparent market information, and we think that Esoko has cracked how to make this element sustainable,” Jason Downes, senior investment officer at IFC, told Reuters by telephone.

Africa is one of the fastest growing regions for mobile subscribers, increasing 18 percent over the year to September, according to business intelligence firm Informa. Their research shows Africans account for 10 percent of global subscribers, reaching over 500 million at the end of September.

That in turn is changing how the continent does business, said Esoko’s Davies.

“We’re seeing huge demand from all kinds of businesses and services across Africa that aren’t ready to fully computerize, but want to be able to quickly and cheaply move information up and down their supply chain,” he said.

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