Market Development, Market Access, Value Chain Development – these are the buzzwords in Development Cooperation these days and there’s no end to the lessons learned around the world on this subject. This particular for-profit venture in Kenya, MFarm, has proven to be effective in giving access to the market for small holder farmers using existing technology of mobile phone and mobile money transfers. The innovation is in getting these small-holding farmers to come together and offer their aggregated product for sale to bigger buyers. Collectively their bargaining power improves for both selling their product and buying inputs for their use. The fact that this is a “FOR PROFIT” venture is probably its biggest advantage – this ensures viability and sustainability in the long-term. For-profit ventures don’t sit so easily in the NGO world, organizations are still skeptical and hesitant at exploring partnerships with the private sector.
Personally, since I am from the private sector and also from a project management background, I tend to evaluate everything in monetary terms and return on investments. Almost like an in-built homing device that is constantly humming to find sustainability in economic performance. I truly believe that no matter what we do, if the economic returns are not profitable to our end users/beneficiaries etc. then after the project withdraws, the fund is gone, whatever result was achieved will be lost. Poor people simply do not have the luxury of doing something because it is best-practice, they are short of money and time with only a limited amount of effort that they can put in to achieve the things that they need to keep themselves afloat.
This venture proves that money works. It works for the small-holding farmers, it works for the people running the platform and it has grown from just 2,000 user to over 7,000 in just a couple of years.
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MFarm is a for-profit organization, taking a transaction fee for every deal done using its platform. This has allowed it to grow the number of users from 2,000 in early 2012 to 7,000 now. A study in central Kenya with 600 farmers showed that farmers could double their sales by using MFarm.
“MFarm can lower costs [of supplies] and offer better margins for farmers, but the other value proposition is a consistent market,” says Abass. “It’s not just about the prices but also knowing if a buyer will be available.”
Furthermore, the network can be used to disseminate information relating to international regulations—for example, information about any pesticides that might be banned. “There are so many things you can do with the technology once you have trust,” she adds.
Abass is now focused on the export market and has been in the UK to speak to large retailers who are keen to be more responsible in the way that they source their products.
“They want to have social responsibility,” Abass acknowledges. “By sourcing produce through MFarm, they are playing a vital role in development and securing a consistent supply that is not dependent on middlemen.”
In addition to taking a transaction fee, MFarm has also been selling its data to research organizations looking at consumer behavior and food scarcity.
- Startup gives farmers shot at fair prices, market access via text messages (arstechnica.com)
- MFarm empowers Kenya’s farmers with price transparency and market access (wired.co.uk)
- Mobile Money transforming the lives of the unbanked and banked (spyghana.com)
- How Farm Shop is modernising the agro dealership experience (allanapotashblog.org)
- A Farmer’s Information and Technology Experience (futurescape.in)
- Kenyans Find the Unintended Consequences of Mobile Money (businessweek.com)
- M-Farm, up-to-date market information links farmers and marketplaces (textually.org)
- Appy Agriculture (allanapotashblog.org)
- Kenya’s Micro-Farmers Find New Ways to Help a Friend (citiesofglobalsouthgy2255.wordpress.com)
- Bradford farmers market to raise funds for area farmers (bradfordcares.wordpress.com)