Sending the right message

Farmers in Zambia receive market prices on their mobile phones via SMS

Pieter Goudappel

The Zambia National Farmers’ Union publishes up to date market information on the web and sends out trader and price details to farmers using a system of SMS messages.

‘I used to sell my crop for a very low price, just because I had no idea of how the market was moving’’ says James, a small-scale farmer from the Chongwe district in Zambia. ‘I often felt confused when I was dealing with traders’, he adds. ‘I thought that I had to take the first bid the retailer offered’.
James now receives SMS messages on his mobile phone that give him the latest market prices for whatever crop he is selling, along with information on the traders offering the deals. ‘Now I can choose the best price and trader’, he says. ‘I can also inform colleagues and friends and tell them what price they should get’.
The SMS trade and market information system in Zambia developed from similar initiatives already operating in Kenya. After studying how these systems worked and the benefits they brought to small-scale farmers, Hamusimbi Coillard and his colleagues at the Zambia National Framers’ Union (ZNFU) decided to introduce a similar price announcement service for rural farmers in Zambia.
Coillard managed to gain the support of several other local organizations, including many of the farmers’ cooperatives, the agribusiness chamber and of course the buyers and sellers. But most important, Coillard was able to convince the rural farmers to participate in the project. Together, the partners decided to develop a simple and easy-to-use system of offering market information through SMS messages to mobile phones and on the web. Celtel, Zambia’s largest mobile phone network provider, also agreed to support the system by organizing a bulk messaging process needed to deliver the information to as many mobile phones as possible. The Smallholder Enterprise and Marketing Program (SHEMP) gave additional funding and technical support.

Sellers’ market

The system started operating in August 2006, initially aimed only at the small-scale farmers and giving details of six different commodities. ‘The fact that we are now dealing with 14 commodities shows how successful the system has been and how well it is appreciated by both farmers and traders’, Pamela Mulozi. She is in charge as the market/trade information administrator at the ZNFU head office in Lusaka.
Behind her desk with a laptop and mobile phone Mulozi is diverting all the incoming information to make it available for the website and the SMS information service. ‘There has been a significant change in how farmers and traders are dealing with each other’, she says, ‘traders; they are now taking the farmers much more seriously as trading partners’. Another measure of the success of the information system is the fact that it is not only the traders and farmers who use the system but food processing businesses, government ministries and even the banks are regularly accessing the information to help them in their work and to provide broader support to the country’s agricultural sector.
The whole system is based on the simple fact that there are buyers are looking for commodities and there are sellers who don’t know where to sell. The mobile phone company, Celtel, offered 350 cell phones at a 50% discount to small-scale farmers and ZNFU provided training to show the farmers and traders how to work with the SMS price delivery system.
Each commodity, trader and district has a code. ZNFU supplies everyone using the system with a small information card with instructions and relevant codes. Farmers wanting to know the price of a particular product simply type the code into an SMS message and send t to the specified number. Moments later, the system sends back another SMS with the latest prices and the codes for the traders offering those prices. The farmer selects a trader and sends the code in a second SMS to the system which then replies with the trader’s full name, phone number, business address and even directions. The farmer can then contact the trader directly.
It is important for ZNFU that the pricing system is both transparent and trustworthy in order to maintain a competitive market within Zambia’s vital agriculture-dependent economy. It was essential, therefore, to make the information also available to farmers without mobile phones and in areas with no coverage from a mobile phone network provider. To make sure the information gets to as many farmers as possible, ZNFU trains at least one farmer in every district who acts as the ‘contact farmer’.
The contact farmers are based in district offices and publish the commodity prices and trader information that they get either via SMS or from the website and give that to extension officers. Every week the extension officers display the pricing and trader details on posters in local information centres for anyone to see. Farmers with no access to mobile phones or the internet can still see the current commodity prices and can get in touch with the traders. The farmers are also in a better position to make informed negotiations with other buyers.

Serious business

Farmers told ZNFU, in a user survey at the end of 2007, that they had more confidence when dealing with traders and that they increasingly saw themselves as serious partners in their transactions. Traders, although many were skeptical at first, also benefit as they now deal directly with farmers avoiding the need to share profits with middlemen. In the short time the project has been running there are already definite signs that relationship between farmers and traders is greatly improving.
Other farmers tell stories of having to leave their farm for several days to travel to the market in Lusaka. They had to pay transport costs, find a sleeping place in city then spend time finding and comparing buyers. All this would add up to more than 50,000 kwacha (US$ 11.00) by the farmers then still had to negotiate a price, arrange transport for the crops and often travel back to Lusaka to deliver their produce. Even after all this effort the farmers could never be sure they were getting the best price.
‘The SMS system makes everything so much easier’, says Grace, another farmer involved with the scheme. ‘You can check the market on your phone to find the 10 best prices in the district or even in another district if that works out better for the transport cost’. The farmers are now also able to coordinate their delivery times and organize a single location for the traders to pick up the goods in bulk, rather than lots of individual farmers having to travel to the market in Lusaka. This arrangement saves money and gives farmers more time to work on the farm. ‘Although we still pay for the costs of the SMS messages we end up spending only 5000 kwacha (US$ 1.10),’ adds Grace. ‘It’s a big saving but it also reduces a lot of the risk involved with traveling to the city every time’.

Many of the farmers are now using the money they save from participating in the SMS scheme to pay school fees for their children, for food or to invest in the farm. ZNFU would like to extend the trading system to more farmers throughout the country but the main limiting factor preventing any immediate expansion is the lack of funding.
‘Although there has been a huge demand for this service, we still have to work out how the system will pay for itself’, admits Coillard. ‘We are currently exploring other possibilities of using the system. For example, we are developing plans to extend it to the transport sector. When a truck is unloaded it sometimes drives back empty to the city, but that is a waste of resources. If we can use the SMS system to link up farmers and other small traders to the trucking companies then both sides would benefit and we would gain more subscribers to the scheme’.
As more farmers enjoy the benefits of better contact with traders and a wider choice of buyers, word is spreading and more small-scale producers are joining the scheme. And there has been some recent good news that will help bring the trading system to more farmers. One of the country’s other main mobile phone network providers, MTN, has promised to get involved in the scheme too which will open the service to their customers and extend the coverage to reach more communities.

Farm prices Zambia
As well as providing information via SMS, the Zambian National Farmers Union also operates a website giving current prices for 14 commodities across the provinces and districts of the country.

10 February 2009

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