At the start of each new planting season, smallholder farmers need seeds and fertilizers, however, the purchase of inputs is costly and risky.
Farmers lack funds to invest in their farms and even when they do, the quality of inputs is not guaranteed, and inputs are frequently not available on time. Farmers also need information on weather conditions, crop disease and other challenges in growing healthy crops. These are some of the challenges smallholder farmers in the far western region of Tanzania face, which are being addressed through DMA’s digital platform that is accessible through farmers’ individual mobile phones in the Kigoma region.
Under the strategy of Leaving No One Behind in the Digital Era, UNCDF promotes digital solutions to help farmers in Tanzania better prepare for pre- and post-harvest opportunities and challenges, while reducing their individual risk. With this objective and as part of the Kigoma Joint Programme, UNCDF is working with the FAO, WFP and ITC to provide a digital platfrom through which farmers can access financial services and connect to input supply companies, buyers and off-takers of agricultural produce. The digital solution being piloted allows smallholder farmers to access formal financial products, training on good agricultural practices and lower-priced inputs. The platform is being developed by Digital Mobile Africa (DMA), a UNCDF partner. DMA’s vision is to become a digital marketplace and aggregator enjoying a national reach in Tanzania.
DMA’s online platform helps registered users place orders and access formal financial services for individuals and groups. The platform is integrated with mobile network operators (MNOs) and a financial service provider, the Tanzania Postal Bank. The key to the success of the digital platform is farmer data. Aggregated orders allow farmers to benefit from wholesale input prices and direct delivery from suppliers. Individual data on farmers transactions and crop yields provide financial institutions with farmer financial histories which can be leveraged to provide financial services while mitigating their risk.
UNCDF partnered with DMA in 2019 under a performance-based agreement grant to develop the platform for targeted agricultural value chains in the Kigoma Region. In addition to the grant, the UNCDF team provides technical assistance to DMA to connect them to stakeholders of the different value chains and the financial service providers and farmer savings groups. The objective is to reach 8,000 farmers by June 2021. Since the start of implementation, a total of 6,688 farmers have registered for DMA services.
How does it work?
Farmers struggle to save for targeted investments. Through its NGO partners in the Kigoma region, UNCDF encourages smallholder farmers to save for agricultural inputs through their savings groups.
Then, as part of the registration to DMA, farmer information is collected and stored in the digital platform. Such information includes savings amount and crop management. During registration, farmers specify their requirements and commitment to buy agricultural inputs. These can be bought in three ways.
The most convenient purchase of inputs is through a USSD code. Farmers are only asked for the ID corresponding to their wallet. They place an order and pay via their mobile phones. Goods are delivered to the nearest agri-dealer shop within a few days.
Farmers can also go to the DMA Village Digital Agents (VIDA) in their village or to an agri-dealer’s shop. In addition to offering agricultural inputs, the VIDA local agent network acts as an information point, as well as an agent for financial service providers and mobile network operators.
Process on DMA platform
By leveraging data from the savings groups – savings, aggregated demand and crop information – DMA and UNCDF are helping farmers get what they need: access to financial services, high-quality agricultural inputs at affordable prices, timely delivery of inputs, and access to a reliable nearby agent network for customer support.
The project is well on track to exceed the target of 8,000 smallholder farmers by June 2021. To learn more about how farmers perceive the services and how it changed their livelihoods stay tuned for our next post.
Original Source : UNCDF News