How can technology be leveraged to help farmers buy and sell goods competitively? The Kenyan agribusiness company M-Farm provides a unique solution to this problem that lets farmers receive crop prices and market information via SMS on their mobile phones. Although it now reaches over 2,000 farmers, the company sparked from humble beginnings in late 2010, when Jamila Abass and Susan Oguya of Akirachix were reading newspapers at Nairobi’s iHub.
“The newspapers always had sad stories of farmers getting exploited by middlemen,” explains Ms. Abbas. She cites an article about farmers who were forced to depend on corrupt intermediaries who routinely squeezed money out of their customers. “I remember getting emotional and sick to our stomachs that some people could ride on other people's sweat like parasites.”
“Little did we know,” Ms. Abbas goes on, “that sympathizing with the farmers will change our lives forever.”
Abbas and Oguya, both IT professionals in Kenya, set out to think of ways to empower farmers. Their brainstorms yielded M-Farm, which provides a digital marketplace for subscribing farmers using mobile phones. A few weeks later, the initiative won a €10,000 investment at the IPO48 competition, an international technology online challenge, and it has taken off since. Earlier this month, M-Farm was named a finalist to the highly competitive 2012 Unreasonable Institute program.
The key to the company’s success is the use of technology to streamline the production chain. Ms. Abbas explains, “M-Farm has a contract with a local exporter, who buys the produce directly from the farmers” using their mobile devices. This gives farmers access to a reliable and guaranteed market that enjoys stable year-round prices while eliminating middlemen and lowering transaction costs.
According to Ms. Abbas, this system sets M-Farm apart from other organizations. Nevertheless, gaining the trust of the farmers was a difficult process. Many farmers were jaded by initiatives that had left them out to dry when they ran out of funds. “There’s an existing body [of projects] supporting the farmers today, and the next day they are no longer there. This makes farmers skeptical and lose trust” in projects similar to M-Farm.” So, the founders’ strategy is to “spend a lot of time and resources to make the farmers understand we are different.”
Thanks to M-Farm’s growing success – investors have committed a second round of investment – M-Farm’s revenue continues to shatter predictions. The company has plans to expand throughout the country, which will entail increasing price data sources from 5 to 16 towns and hiring over twenty new data collectors.
As M-Farm continues to thrive, Ms. Abbas hopes to turn to infoDev for support in scaling M-Farm globally. She has a “vision of replicating the same model to other emerging countries,” forging relationships with entrepreneurs at events like the Global Forum, where M-Farm was featured as an infoDev Top-20 SME Access to Markets and Finance Selectee.
Being involved in the iDisc incubator network also plays a role in M-Farm’s growth. “We were voiceless before,” says Ms. Abbas , “but now the voice of entrepreneurs is heard through the incubator networks.”
The founders’ outlook for the future is understandably optimistic. Her “extraordinary team” is driven by a simple motto: "Make money while doing good," according to Ms. Abbas. “We are gradually achieving both these goals. And there’s no better feeling than putting a smile on a farmer’s face,” she continues.