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Building a business case for agro-weather services

Boniface Akuku

Most of the business models for weather services to smallholder farmers in Kenya are financially too unsustainable to scale-up. To do so it requires capacity building and establishing quality management system geared toward validating the impact.

The past two decades have witnessed a spectacular growth in the use of ICTs as a mechanism for improving access to agricultural information and knowledge. The dissemination of climate information and advisories using ICTs to farmers has proved to be very useful in Kenya. This includes SMS, mobile applications and knowledge-bank web portals. The diversity of open weather data services provides evidence on the importance of weather data in supporting adaptation and resilience for smallholder farmers. 

An important element is the design and delivery of weather data as a product and service in a more relevant, cost-effective and usable format to enable farmers to make informed decisions and improve farm management capabilities as they face climate risks. A closer look to open weather data services, reveals that SMS notifications are currently the preferred way to provide smallholder farmers with weather information services and products in Kenya. The experience of KALRO’s agro-weather digital platform shows that cost structures and timeliness are some of the reasons smallholder farmers prefer SMS to other innovations. 

Other innovations such as mobile application and web portals require farmers to own basic smart phones from where they will access a designed portal with weather outlook information, weather forecast information and weather season information. However, in case of SMS the agronomic recommendations, which are matched with weather forecasts, are provided to farmers either on demand or through broadcasts (pull and push technology). In other innovations, farmers are required to download the app on their smart phones and have access to internet or data bundles.

SMS services are available on all types of mobile phone, even the most basic ones. The weather information service that KALRO provides to smallholder farmers incorporates tailor-made climate information and agronomic recommendations to farmers. Such service gives farmers access to real-time location specific information and location-specific recommendations for example on crop varieties, soil preparation, sowing rate and time, irrigation, fertilisation, pest and diseases control, harvest time, and storage options based on weather forecasts. In addition, the innovation is implemented open data and open science principles in this case using open weather data and ICT innovations for improved agricultural productivity, resilience and income for farmers.

Lessons learned

In Kenya, systems that integrate weather data and agronomic information are still very ineffective. As a result, farmers are “weather data watchers” since the majority of farmers are not able to make sense from the weather information as well as agricultural data sets as provided by both meteorological professionals and agricultural research scientists. 

This situation has led to farmers using their own experiences to adapt to agricultural practices. However, these old-ways advisories cannot cope with the changing climate and extreme weather events. The ever-growing complexities in markets, production and management in different agricultural value chains exacerbate the problem. In addition, access to usable weather data, information and knowledge remains problematic. This situation requires appropriate design, delivery and effective use of climate-related information by smallholder farmers. The agro-weather tool of KALRO has improved the way farmers manage weather risks through maximising their productivity and minimising the environmental impacts due to access to timely information. This has resulted in improved decision-making on better farming practices. Through the agro-weather SMS tool, farmers are now able to make the right choices based on synthesised weather data in combination with a crop calendar and agronomic advisories. 

Various lessons have been learned from this Kenya case. Our experience reveals critical gaps in the design, delivery, and effective use of open weather-related data and information for risk management among smallholder farmers. There are various areas that need attention. Firstly, salience that is tailoring content, scale, format, and lead time to farm-level decision-making. The special needs to provide timely access to information to remote rural communities with marginal infrastructure is another lesson learned. Furthermore, legitimacy must be built-in to ensure that farmers own climate services and shape design and delivery. Equity through ensuring that specific groups as women and socially marginalised groups are served is another point for attention. Finally, integration and provision of climate information must be part of a larger package of agricultural support and development assistance, enabling farmers to act after receiving information.

Challenges

Mapping of stakeholders’ value chain priorities and farmer registration process is time consuming. In addition, majority of smallholder farmers are low-income earners. There are also cases of high illiteracy levels, which requires translation of advisories into local languages. 

The main challenge is the cost of sending information to the farmers. Attempts have made to adopt a hybrid cost-value pricing strategy where farmers pay reasonable premium rates based on the perceived value of the service to the farmers, while providing cover for the cost of the service. This model however takes a social enterprise approach that is more service driven than it is commercially reliable. The implication is lack of sustainable structures to ensure continuity of services and products. 

A successful pricing structure largely depends on reaching a high number of users, which is difficult for a service that is new in the market. The agricultural sector in Kenya is largely smallholder farmers and a very conservative community; this has led to incurring marginal loss in operations of the services arising from the infrastructure set-up costs, marketing and efforts of recruiting subscribers. Continuous efficient management and cost-sensitive approach will minimise overheads. 

Sustainable business model

Revenues from advertisements and specialised services through the platform will contribute to the profit margins. However, a better sustainable approach is to seek for impact investors and donors for partnership and collaboration. The diversity of SMS-related weather information services required by farmers in Kenya reflect a relatively well-developing industry. However, some of the barriers to more effective SMS service provision and delivery include limited technical capacity and the absence of a framework to evaluate the impact of the services provided. Most of the business models used by public, international, and for-profit and not-for-profit providers in Kenya are moreover financially too unsustainable to expand to the scale needed. Rapid scale-up of the products and service require prioritisation of capacity building and establishing quality management system geared toward validating the impact. It is evident that there is greater need and demand for timely, relevant weather data and information that co-designed with research scientists, based on properly downscaled weather forecasts at the farmer level. Key priorities for sustained success include strengthening farmers’ knowledge on benefits that facilitate the use of processed weather data in decision-making. 

Related links

http://agroweather.kalro.org/
https://asalkhub.kalro.org
http://www.aidforum.org/reports/planet- of-the-apps-at-the-global-disaster-relief-development-summit-2017
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CTA is a joint international institution of the African, Caribbean and Pacific (ACP) Group of States and the European Union (EU). CTA operates under the framework of the Cotonou Agreement and is funded by the EU.