Mobile Solutions for Agricultural Value Chain

Tigo Rwanda Ltd
Tigo - Tea Leaves Picking

Tigo Rwanda Ltd was established in 2009 and is a subsidiary of Millicom. Tigo Rwanda is one of three Mobile Network Operators (MNO) in Rwanda, currently possessing the largest network of active agents across the country. In January 2015, Tigo, in partnership with The Wood Foundation Africa (TWFA) was awarded a grant by TradeMark East Africa Challenge Fund (TRAC) to implement their project which will provide mobile-based solutions to agri-business payment and communications challenges that will enhance the efficiency of the agricultural integrated value chains from the production to delivery of the agricultural product to the main process facility; with a special focus on the value chains of exported products such as coffee and tea.

The project will introduce a new set of interlinked products for the first time to the East African market resulting in higher levels of trade between Rwanda and other Eastern African countries.

The mobile solutions will provide efficient ways of managing cash along the chain with effective tracking tools, through the introduction of electronic warehouse receipts which will also help increase technological literacy amongst rural communities. Information services and access to financial and weather services will improve the competitiveness of existing farmers and cooperatives thus resulting in enhanced farmers’ and agricultural workers’ incomes. This will in turn impact directly on farming communities livelihoods. It also expects to further increase mobile penetration amongst farmers and their families, targeting specifically women who are usually underrepresented. The project will benefit a total of 11,000 people, most of whom are poor farmers located in the Northern and Southern Districts of Gicumbi and Rusizi, Rwanda respectively.

The project implementation is structured into 4 milestones as indicated below:

  1. the establishment of an integrated software system developed by Tigo for the tea sector

  2. 11,000 farmers sensitized on the Tigo solution and product, with 5,000 handsets distributed to farmers

  3. the system providing delivery records and net payments to 11,000 tea farmers per month and at least 10,000 SMS per month sent on weather, and agronomic advice per month

  4. at least 3,000 participating tea farmers reporting an increase in tea production from January 2014 figures (TWFA)

Tigo Agriculture

Project Objectives

Tigo Rwanda
  • Tigo Cash (Mobile Financial Services provided by Tigo) aims to facilitate control of payment transfers to all farmers, by providing cooperatives and buyers with a web-based interface to manage their payments; farmers knowing beforehand how much money they will receive via SMS notification, saving farmers transportation costs to urban centres where they would typically cash their sales cheques, the funds being now available from any TigoCash agents located closer to their place of residence and work. Farmers would also be able to request and pay for a loan from their mobile phone as banks and micro finance will have access to records of both their productivity and their revenue hence they can analyze the data to determine the credit worthiness of the farmer.
  • A mobile application that will allow for the recording of deliveries as well as confirmation of the price and the payment schedule, thus addressing the underlying lack of trust that leads to cash-only exchanges between farmers and buyers. This will allow the farmer to keep records of their deliveries and check their accumulated deliveries for the week/month which will give him/her an indication of his/her weekly/monthly revenues by initiating a query via a USSD session through their handset.
  • Farmers will have access to a service from The Wood Foundation Africa (TWFA) that will share regular SMS updates of market prices and weather information as well as advisory services related to agriculture, initially focused on the tea sector, through their mobile phones. This will lead to an increased quality of farmers’ produce, resulting also in open and direct communications being developed between buyers and sellers, minimizing problems and delays arising from miscommunications.Farmers will have access to a service from The Wood Foundation Africa (TWFA) that will share regular SMS updates of market prices and weather information as well as advisory services related to agriculture, initially focused on the tea sector, through their mobile phones. This will lead to an increased quality of farmers’ produce, resulting also in open and direct communications being developed between buyers and sellers, minimizing problems and delays arising from miscommunications.
  • Tigo will develop a communication plan, which will detail the awareness and educational programmes for the farmers. It will involve training the trainers in the Farmer Field School (FFS) training methodology as well as promoting awareness of Good Agricultural Practices (GAP), resulting in the establishment of an association of commercial trainers with the capability to independently provide FFS and GAP training initially to about 10,600 smallholder farmers in Mulindi and Shagasha, but thereafter the wider tea industry in Rwanda.
  • Farmers who receive Tigo handsets will be registered and trained on functionality by the Point of Activation developers who will ensure that farmers are actively using the products and services introduced to them. They will also help to resolve any outstanding issues and provide feedback to the developers.

Challenges and Lessons Learned

Despite the recognized successes, the project’s implementation was not entirely challenge free as there were delays in the accomplishments of the agreed milestones; the main obstacles to progress including the following:
  • The integration of data was more complex than initially anticipated resulting in delays and increased costs associated with developing an entirely new interface, so a parallel content provider was considered that would provide comparably accurate data.
  • The challenge of reaching critical mass of mobile customers using Tigo solutions was addressed by Tigo providing subsidies to mobile phones to facilitate access (making phones more affordable for end-customers) and combining efforts with financial institutions to provide loans for mobile phones, which customers could pay for in installments, resulting in increased opportunities for the cooperatives and main buyers to provide effective services.
  • Indications that the uptake of technology by Rwandan farmer may be behind the levels of acceptance and understanding that is shown by other East African farmers who have already been introduced to mobile based platforms a decade ago were noted, so the better targeting and on-going awareness raising campaigns have been developed to help farmers understand the product better.
Mobile Network Rwanda

Conclusion

The project is innovative and will have a high significant impact in that this is the first time in the region that a mobile operator enhances their product in such a way that it makes agricultural value chains more efficient. The mobile solutions provided by Tigo will substantially improve farmers’ and agriculture workers’ income, impacting directly on their families lives. Users of these solutions will be able to create historical data about their revenues, which provides additional information for financial institutions to secure loans and other financial products.