This colloquium was presented by Sriganesh Lokanathan, LIRNEasia.
Objective: to find out how Mobile 2.0 services are and can be used in the agricultural market.
Mobile 2.0 services are defined as services for more-than-voice, can include both one-way and two-way information.
Agricultural sector in Asia:
- Share of GDP is quite high even in 2009
- 12.8% in Sri Lanka
- 17.5% in India
- 21.8% in Pakistan
- Sector accounts for a large percentage of overall employment
- Directly nearly 20% in India
- Characterized by large number of small landholdings
- Average land holding size in India is 4.9 Acres
- Small farmers in general have
- Poor market orientation
- unfavorable linkages to markets
- Various well know examples exist:
- Internet kiosks: e-Choupal in India (see Goyal 2008)
- Mobile phones: Kerala fishermen (Jensen 2007), Grain Markets in Niger (Akers 2008)
- With communication costs continuously falling market prices are only a phone call away.
How do ICTs increase market efficiencies:
- Efficient allocation of commodities across markets so as to reduce/ eliminate wastage (Jensen 2007)
- Reduction in price dispersion (Jensen 2007, Akers 2008, Goyal 2008)
- Access/ use of phones in India (LIRNEasia 2008 study):
- Two-thirds had used a phone in the last week
- 36% of the Indian rural BOP population owns their own mobile as opposed to 7% who have a household fixed phone
- But Internet use in India is low (IMRB study 2008):
- 0.4% active rural internet users (includes BOP as well as other SEC groups)
Ayesha – we can include Teleuse@BOP data here.
Mobile 2.0 use among the BOP in India is very low. However, much of these services were not introduced only till after the survey was conducted.
Current State of Play in India of market information access through mobiles – Business Models:
- Mostly joint ventures between telcos and others:
- Telecos & Farmer organization:
- IFFCO Kisan Sanchar Ltd (2008): Bharti Airtel & IFFCO
- BSNL & NFL venture (2010)
- KRIBHCO Reliance Kisan Ltd (2009): Reliance Communications & Krishak Bharati Cooperative Limited
- Telecos & VAS companies
- Mandi Bhav (2009): Tata Teleservices & Impetus Technologies
- Idea Krishi (2010): Idea Cellular & RML
- Telecos, VAS companies & state bodies
- Mandi on Mobile (2008): BSNL, OnMobile & Uttar Pradesh Agricultural Marketing Board
- Telecos & Farmer organization:
- VAS companies using a direct selling approach
- Subscription model:
- Monthly, quarterly, semi-annual and/or yearly (RML, Mandi Bhav)
- Free VAS service
- IFFCO Kisan Sanchar Ltd
- BSNL & NFL
- Usage based:
- Mandi on Mobile
- Market price information:
- Crop advisory (e.g. general best practices or more specific; some services based on both the crop and location; SMS based):
- RML, IFFCO Kisan Sanchar Ltd, BSNL & NFL
- RML, BSNL & NFL
- SMS (RML, BSNL & NFL, Mandi Bhav)’
- WAP (Mandi Bhav)
- Dedicated Application (Mandi Bhav)
- IVR (Mandi on Mobile, BSNL & NFL)
Mostly large farmers who are using this. BOP use is very low. even when poor farmers are using this, it is usually in places like Maharashtra, more likely due to closer proximity to larger farmers.
helani – has anyone studies on seeing if prices are converging since prices are online?
sriganesh – no.
harsha – ideally, if there locations close to each other and these prices are available, they need to converge. but what we found was that it was different. the conclusion was that they were not using kiosks to get the prices.
sriganesh – when farmers say that they see value from mobile 2.0 services, it is more crop advisory rather than prices.
IFMR Trust Pilot in Kadi
- Provide an accurate, transparent and optimal price realization process for farmers.
- Provide commodity backed financing for farmers against their harvested castor seed crop as collateral
There were 3 partners – ATMNE, NSEL and NK Industries
- Higher price realizations
- Eliminated commissions
- NK industries’ vertical integration allows them to be able to offer higher prices
- Electronic weighing and superior quality certification has meant farmers are getting higher prices for their produce.
- Commodity backed financing helps them ride out moments of over supply in the market
- Costs incurred for this service (INR 0.15 per bag per month + 10% interest on loan) are still lower than the increased profit from selling later
helani – do they have value on volume and grade sold?
sriganesh – the price quoted on the hub is for a specific standard; then depending on the quality of the product, the price will be raised or lowered in relation to this (based on predetermined calculation)
rohan – if there was RSS standard, everyone outside of the country would know what this standard is.
you need a confluence of actors. the Kadi pilot was an example, if it is to scaled, need cold storage and warehouse facilities which is provided right now at the KADI premises.
Effective engagement in markets means confluence of a variety of actors who can provide:
- Warehousing / cold storage
- Crop insurance and loans
- ICTs to link stakeholders
The above are not all in the domain of telecommunication regulators
people are still more comfortable using voice based services, rather than SMS. the missed call strategy works better than the sms strategy (one price a day).
helani – do they need to go to warehouse to sell, and can sell it to an outside party?
sriganesh – no, you can fix the price over the phone.
Awareness building and training
- Youth are faster adopters and serve as gateways for their less savy parents
- Companies need to engage in more awareness building for their services
- Small farmers close to bigger farmers have better technology adoption
when talking abt crop advisory, there may be an incentive to understand the information better. if service provider see this as a profitable venture, there is no reason why they shouldn’t spend more on marketing it. telcos don’t really see the value of the service in itself, but rather as a way of attracting/retaining more customers.
Telco as a partner or as a conduit
- VAS companies may not have the resources (advertising, marketing) necessary for going solo
- Telcos are better off partnering with organizations specialized in providing information that farmers want
- RML is cited has giving more relevant and timely information
- When telecos collect information it is deemed as less reliable (e.g. with IFFCO Kisan Sanchar Ltd)
Too early to say which model is better.