ICT Update spoke to Ben Addom from CTA, who is the programme manager of the MUIIS project in Uganda, to find out more about the partnership and business model that he hopes will ultimately make this a standalone, sustainable project.
MUIIS – the Market-led, User-owned ICT4Ag-enabled Information Service – is a project funded by the Dutch Ministry of Foreign Affairs through the Netherlands Space Office’s G4AW programme. The initial subsidy was for three years, after which MUIIS was intended to stand on its own two feet. The consortium, with CTA as its lead partner, developed the business model and put together a team of partners. With the second year now coming to a close, the moment in which MUIIS will have to stand on its own two feet is drawing nearer.
Step one: forming a solid partnership
‘As soon as we heard about the grant,’ says Ben Addom, MUIIS programme manager at CTA, ‘which asked us to form a public-private partnership, we realised that we were well positioned to meet the requirements.’ Indeed, CTA has been cooperating with other organisations from a variety of sectors for years, especially with ICT partners. ‘In the case of MUIIS, we needed a mix of partners, from data companies to package the raw data into something useful for farmers, to people on the ground to train farmers, the ultimate end users, to use the service. We started modestly and contacted those in our network that we thought would fit into this long chain of partners. And in the meantime, others had gotten wind of the fact that CTA was putting together this consortium. So we were approached by them as well.’
Indeed, CTA had no problem putting together a list of potential partners. In fact, one of the projects requirements was synergy, as opposed to duplication. In other words, the chosen partners had to complement each other, rather than do the same work. ‘That’s ultimately how you form a strong partnership. To avoid duplication, we had to eliminate some of the shortlisted partners, and that’s how this consortium of seven came about. We had worked with some of the partners before, such as AGRA, EAFF and eLEAF, but we also started to work with organisations that were less familiar to us, such as Mercy Corps and aWhere.’
Step two: the initial business model
So with such a variety or partners, from both the private and public sectors, what kind of a business model was developed to satisfy everyone’s wishes? ‘The initial grant was meant to cover three years,’ Addom says. ‘We’ve just finished the second year, so there’s one year of subsidy left to lean on. In our proposal for this grant, we set the aim of breaking even in this project by the fourth or fifth year. We knew from experience that MUIIS would not start to earn a profit by the end of the third year.’ That meant that the MUIIS project needed to find other resources to bridge that gap, which CTA is attempting to mobilise during the transition period to make sure that the project moves forward.
‘The idea behind the original business case was to simply put forward the argument that MUIIS is a service that has value that people are willing to pay for,’ Addom says. ‘We worked together with farmer organisations to help us estimate how many farmers could potentially use this product, which ended up being about 4 to 4.5 million farmers.’ Based on that advice, CTA targeted 350,000 farmers for the MUIIS service, which are being reached through awareness creation training. But CTA’s ultimate goal – based on its calculations and cash-flow analysis – was to have 200,000 of these farmers subscribing to and using the MUIIS information service for three years. This would mean breaking even.
In the end, it took a year to actually develop the product. ‘So a year passed without a sale,’ Addom says. ‘We’ve now ended the second year and are starting the third. We’ve only had one test season to gauge the minimum viable product, in other words whether the MUIIS product has what it takes to satisfy early customers. The test season involved about 100 farmers, who paid for the information service, and we’re waiting for their feedback.’
Step three: the model for the future
CTA hopes that the second season, which is just underway, can attract more subscriptions. ‘It’s clear that we won’t achieve the goal of getting 200,000 paid subscriptions by the end of the third year, so we’re updating the business model.’ One of the obstacles is that smallholder farmers are much more willing to pay for tangibles, such as fertiliser, seed and chemicals, than they are to pay for intangibles, such as information services or insurance. ‘That’s why the original design was to organise farmers into groups and cooperatives and have them pay for a subscription through them, a bundle that includes the information service and insurance. That hasn’t quite worked out yet, so we’re now concentrating on increasing the number of groups that subscribe to the MUIIS service. But we’re also looking for other resources, financial investors interested in accessing the farmers’ data.’
Our focus now is the future ownership of this unique satellite data-enabled information asset, which currently comprises over 130,000 farmer profiles. Now MUIIS needs an investor, a social entrepreneur or a business entity that can turn it into a business – not for themselves but for the smallholder. In the coming months, we are going to engage with different entities to identify the ideal profile that will encourage smallholder farmers to work with farmer organisations for sustainability.
by Chris Addison and Chipo Msengezi
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