A study by the Food and Agricultural Organization (FAO) found that upwards of 30% of edible parts of food produced in sub-Saharan Africa never reaches the consumer, and 40% of that loss occurs at post-harvest and processing levels. The 40% loss is equivalent to the annual consumption of 120 million people in sub-Saharan Africa.
Approximately 85 percent of the population of Malawi live in rural areas, predominantly engaging in subsistence agriculture. Productivity levels as well as economic activity are extremely low, with 80 percent of the workforce contributing to little over a third of all GDP. Agriculture is responsible for 90 percent of exports, though only 14% of agricultural produce is exported, and only 1.7% of this has undergone any form of agro-processing (2010). Women in Africa make up 70% of those engaged in Agriculture (Mugede, 2013)
Malawi’s Agriculture Sector Wide Approach 2010 document highlights a reduction in post-harvest losses as a key priority in improving food security. The document notes an average post-harvest loss rate of 25% nationally. This can reach 30% in vulnerable districts in the southern region as depicted by the 2016 crop estimates issued from the Department of Agriculture Development Office (DADO), Nsanje District. Poor storage practices affect both cash and food crops e.g. increased presence of aflatoxin in groundnuts, which is directly linked to inadequate access to appropriate storage facilities.
GOAL notes that communication and access to information and services is a barrier to improved market access, farmer organization, improved food and agriculture supply chains and reduced waste and spoilage. Our research to date has informed our strategic analysis to support identification of appropriate solutions. For example, mobile phone coverage is estimated at 74% nationally in Malawi (IFC and GSMA, 2012), with limited access to ‘smart’ phone technology. Mobile connections are expected to continue to rise as noted by prominent mobile phone services providers such as TNM. Also, GOAL recognizes that gender and power dynamics as well as vulnerability factors influence access to resources such as communication devices and technology. Recent research undertaken by GOAL (2016) in sample communities in Southern Malawi note that women have access to mobile phones. The research also notes that women emphasize the important role mobile technology plays in improving communication. GOAL also undertook research on mobile phone ownership and access among in school and out of school (working) young people in 2015. Up to 65% of out of school young people have access to phones. Literacy rates in Malawi are understood to be 61.3% (UNICEF, 2012).
Our proposal seeks to test the efficacy of our multi-stakeholder, contextually informed mobile technology solution to gaps identified in the agriculture supply chain linked to food waste and spoilage.
This proof of concept will pilot an intervention within the Malawi Food Supply Chain (FSC) intended to contribute to improvements in Agricultural Production, Post-harvest, Processing, Distribution, and to a lesser degree Consumption. The proposed solution will pilot timely, and relevant information to all actors in the Food Supply Chains, using an enhanced USSD technology. Use of this innovative platform allows 2-way communication between actors, without a dependence on expensive SMS messages or internet data, while overcoming restrictions of standard USSD.
The intervention will target subsistence and semi-subsistence farmers inclusive of women and vulnerable groups. Our proposed technology solution will explore opportunities for Interactive Voice Response (IVR) to ensure broader inclusion such as those with low literacy rates.
We propose that if all actors in the FSC have access to timely, accurate, and actionable information, on variables that affect their ability to produce, harvest, process, and distribute food as well as access to complimentary services, then food loss will be significantly reduced.
The Malawi Food Chain Transparency Solution will be designed as follows:
- GOAL will engage our partners’ nFrnds and Microsoft 4Afrika to develop a human centered interaction platform and framework for various internal and external application services, enabling mobile users, via simple mobile phones and smart phones to enjoy various advanced applications. This USSD two-way communication platform will facilitate access to information, communication and services.
- Farmers will be afforded access to information such as availability of quality inputs e.g. seed varieties and weather forecasts linked to appropriate planting/harvesting timelines.
- Farmer groups will be facilitated to engage with buyers to retrieve information regarding produce demand, price, market access and point of sale as well as communication among themselves to promote greater organization with a view to aggregation, casual labor and combined transportation.
- Buyers will have access to expected quantity, quality and location of production and be better positioned to negotiate and influence quantity and quality of product to meet their consumer demands.
- Greater planning and organization of processing will mitigate waste and potentially expose opportunities for expansion of processing facilities. We propose that improved information flow and facilitation of business agreements will reduce the need for storage facilities and associated costs as well as waste linked to lack of access to this service.
Although there are other systems which deliver information to FSC actors, our proposed solution adds particular value in the following key ways:
- An interaction platform and framework enabling mobile users, via ‘simple’ mobile phones to access various advanced applications normally accessible via ‘smart’ phones and/or internet access.
- Relevant customized information – unlike most other information delivery systems which rely on SMS messages to broadcast the same message to all, our proposed system uses profile data to deliver customized information to recipients.
- Interactive and on-demand – most information systems are one-way SMS broadcasts, but our solution utilizes Unstructured Supplementary Service Data (USSD) with some key enhancements which allow for a customized and interactive experience. Unlike Short Message Service (SMS) messages, USSD technology creates a real-time, persistent connection which allows a two-way exchange of a sequence of data, making USSD much more effective than SMS services.
- Affordability – In addition to the technology, the proposed solution is based on a business model which offers unlimited access to the information for approximately $1 a month subscription. Revenues are shared with the mobile operators.
- One-to-many communication – the proposed solution includes a ‘chat’ feature allowing actors to communicate among themselves, to share best practices and request community support and greater organization.
- Human-centered design solution - the proposed technology solution will target subsistence and semi-subsistence farmers inclusive of women and vulnerable, ensuring contextually appropriate solutions that meet real needs. Options for Interactive Voice Response (IVR) will be explored to support targeting farmers with low literacy levels to be included.
Extension workers will create profiles of actors in the FSC, including farmers, distributors, buyers and processors. For the farmer, soil samples are taken of their plots, and information is recorded of the crop they intend to grow. Based on that information, the system provides custom information about fertilizers for their plot, the best seeds to plant, and alerts about when to plant based on weather information. During the growing stage, information is provided to the farmer regarding pesticides and or herbicides if needed; again customized to the farmer’s location and their crop.
When it comes to harvest, information is provided on the best time to harvest and delivery to the aggregation points. The farmer can request for information from a known authority, or reach out to the community for guidance on a given situation. All this information is available on-demand to the farmer, and is accessible on their feature phone at fixed cost of approximately $1 a month. Other market actors such as processors, transporters, storage facilities, and buyers all have profiles on the system, and are able to communicate with the farmer and among themselves all for a standard monthly subscription fee.
The proof of concept includes 2 key outputs:
- A market assessment and stakeholder mapping exercise.
- A two-way USSD communications platform.
The proposed action will seek to demonstrate that improvements in communication and access to services will improve the sampled agriculture and food value chain, reducing waste and spoilage. We propose that the proof of concept will deliver demonstrable improvements in farmers’ incomes and private sector profit margins leading to greater demand for the service and willingness to pay. A local company identified will be tasked with broadening the business portfolio, managing the service and payment processes. The company will be engaged to develop a business development strategy to take the application to scale, securing engagement from multiple market actors willing to pay for the service. This will facilitate a self-sustaining system.
The proposed intervention includes four primary cross-cutting themes namely access to financial services, connection to markets, access to information and storage and processing:
Access to financial services: The application will include access to financial services including credit and investment opportunities. Mobile money will be a key feature to ensure unbanked populations are reached. The application will include the development of a user profile intended to facilitate competition for clients on the part of service providers and an incentive to uphold credit commitments on the part of the farmer.
Connection to markets: Connection to markets is a key focus of the proposed intervention. Facilitating two way communication between farmers and buyers will improve the buyers’ knowledge and influence regarding expected production of saleable produce. Likewise, farmers will receive up to date information on prospective buyers and market prices informing demand driven decisions on crop production. Farmers can make informed decisions on engagement with market actors thus improving sale price and incomes. Demand driven production will reduce waste and spoilage and improvements in the supply chain will ensure market availability of food.
Access to Information: The USSD platform will enable ‘unconnected’ farmers to access content and information ordinarily accessible using smart phones and mobile data only. Information will be tailored according to the context, needs and barriers impeding efficient agriculture supply chains in Malawi. Information will be real-time and relevant; the content updated by a locally sourced business development company. Market actors including private sector agri-companies and farmers will pay for access to information, the cost of which will be offset by improved profit margins and incomes as a result of a more effective supply chain.
Storage and processing: Access to information and services regarding storage such as warehouse receipt systems will improve storage options, reducing spoilage and enhancing farmers’ capacity to negotiate the market in line with favorable pricing conditions. The creation of a user profile will enhance traceability of product and contribute to favorable conditions for processing.
Strategic partnership for change:
The proposal draws from GOAL’s expertise in working with small holder farmers, technology partner nFrnds, who are providing the enhanced USSD technology and aided by Microsoft, Export Trading Group, a major player in the FSC in Malawi and other countries in the region, as well as mobile network operators in Malawi.
The rationale for a multi-stakeholder intervention is based on the premise that traditional development programming which is often input based and dependent on non-profit engagement and funding has not delivered sustainable and systemic change; thus a systemic approach establishing a multi-stakeholder platform is necessary to ensure sustainability, impact and scale. Food waste and spoilage are symptoms of broader issues connected to ineffective agriculture supply chains which is in turn impeded by poor infrastructure including technology, communication and information. Addressing those systemic issues in a sustainable way calls for a multi-stakeholder intervention.
The action draws on GOAL’s 15 years’ experience in Malawi and almost 40 years’ experience worldwide implementing market development programs aimed at stimulating long-term positive changes for poor and marginalized groups including women, by reducing economic and social pathways out of poverty. GOAL favors the M4P approach (Making Markets work for the Poor) which seeks to work within the market system to address the root causes of underperformance and identify opportunities to strengthen the market and promote pro-poor growth. GOAL will manage the contract with IDEO ensuring strong project and financial management in accordance with robust, transparent and accountable systems regularly audited and aligned to international best practice. GOAL will facilitate communication and negotiation among partners as well as lead on the strategic design of the program. GOAL will be responsible for monitoring, evaluation and reporting. Adaptive management will be prioritized and managed by GOAL, adaptations to the intervention will be facilitated as necessary throughout the life cycle of the program. GOAL will partner with nFrnds, Microsoft 4Afrika and Export Trading Group (ETG) to design and test this concept.
nFrnds provides a managed cloud solution enabling business of all sizes to connect to the 4.2 billion people who are currently ‘unconnected’ to the digital world. The nFrnds platform provides the technology for users to leapfrog from being unconnected to using cutting edge cloud-enabled SaaS solutions. The nFrnds platform provides truly affordable end-to-end solutions to the next 4 billion at rates as low as $1 per month per user, requiring zero installations, zero data and zero hardware. The nFrnds platform includes the most advanced USSD platform in the market enabling many unique capabilities such as multi-application, multi-tasking, search over USSD, dynamic menus, dynamic group interfaces, reporting and analytics, advanced help and tutorials, and much more. The platform will be available in vernacular language and will explore cost effective options for Interactive Voice Response (IVR). nFrnds will be responsible for the initial market assessment and ecosystem mapping with a view to understanding current processes to inform the design of the suggested new digital processes. nfrnds will identify the local company who will be initially supported to engage with multiple market actors willing to pay for the service.
Export Trading Group connects commodities sourced at the farm gate to local economies, local economies to the broader marketplace and emerging markets to each other and the world. Founded in Kenya nearly 50 years ago, ETG has emerged as one of Africa’s largest and most respected traders in agricultural products. ETG will support this proof of concept by engaging in the initial design and roll out of the application with a view to determining the feasibility of the application to strengthen their supply chain. ETG will link the intervention with ETG targeted farmers and provide information on seeds/crops/processes. Adaptive management processes will include feedback from ETG on how to strengthen the system. ETG’s engagement in this pilot will support the demonstration of a business case for this application. Following the proof of concept it is expected that ETG will be willing to pay for the service. The service will also be pitched locally to alternative buyers who are expected to demonstrate interest based on ETG’s success and in line with the concept of ‘crowding in’. nFrnds will provide ETG with a SaaS CRM to provide manage the farmer interactions, customer information.
The 4Afrika Initiative focuses on three critical areas of development for the continent – World-class skills, Access and Innovation. Microsoft 4Afrika’s primary role will be to provide an advisory role particularly with regard to support for the ERP/CRM (part of the nFrnds platform). Microsoft will Share technical and business lessons learned over the past 5 years of incubating, launching, and sustaining transformative agricultural value chain solutions in sub-Saharan Africa. Microsoft will build capacity of the solution developers by loaning senior employees as volunteers to the innovative solution developers the MySkills4Afrika employee volunteer program. They will provide Microsoft software; tools, platforms, and cloud, to qualified software startups and support the solution developers’ Go-To-Market strategy by introducing the solution to Microsoft partners and customers in the agricultural value chain.