Mobile apps and ICT platforms have potential to transform farmers’ lives by vastly improving access to markets and the performance of the agricultural sector.
However, there are several challenges that can limit the success of apps targeting smallholder farmers:
- Most farmers in ACP countries do not have access to a smartphone to use apps;
- Many farmers do not understand how to use ICT platforms and the benefits they can bring;
- The majority of farmers either do not to have the funds, or are not willing to pay for the ICT services offered;
- A similar and better performing app may already exist;
- There may not be sufficient market demand for the service
- In many countries, governments are not sufficiently supporting the adoption of ICTs by farmers
Start-ups and software developers planning to roll-out a new app, which offers a solution to a defined problem in agriculture, need to ensure that they thoroughly research the market context in order to avoid encountering any of the above problems. Only apps that have been appropriately designed, after extensive market research, to meet the target customers’ needs will add value and have a sustainable impact.
Educate your end-users
Many start-ups have developed software to help address problems in agriculture, but farmers often aren’t ready to pay for these services. There are several reasons for farmers’ reluctance to pay for apps, aside from not having the funds to afford the services – they may not understand how the application works and the benefits it could bring, or they simply might not believe in it.
Entrepreneurs intending to scale-up an innovative app, therefore, need to invest in on-the-ground advocacy and training to show farmers how to use their services and demonstrate the benefits of doing so. Adequate customer development strategies – which may include collaboration with public organisations or tapping into public funds to support farmers – need to be developed for this purpose.
Choose the right customer
At CTA, we are advising that, as another option to directly targeting farmers, some start-ups offer their services to organisations like agricultural cooperatives, NGOs or even public institutions, after carefully identifying their needs. Many of these institutions have the means to pay for apps, and in some cases, they can act as proxy organisations so that the farmers still benefit from the app’s services. With the membership fees paid by individual farmers, or through other revenue streams, these proxy organisations offer a sustainable market for app developers.
There are a variety of the agricultural value chain segments and stakeholders that can be individually targeted as potential clients, from farmers to food consumers. A generally successful strategy is to partner with organisations, such as telecom operators, that have a large user-base in order to tap into their clients. However, start-ups need to offer high quality services before such institutions are readily willing to enter into a business partnership with them. Start-ups who provide their services to proxy organisations or collaborate with other value chain actors tend to generate more revenue and become viable.
Offer a variety of services
Sometimes when an app offers a single service, such as market information, farmers may not want to pay for it because they are not sure that the service will bring them enough value. Instead, app developers should consider incorporating their original service with other services, such as weather forecasts, tips on best farming practices and drought-tolerant seed. To provide a range of services that offer more value for farmers, entrepreneurs may need to think about partnering with other businesses offering complementary products or services. By offering a ‘bundle of services,’ which farmers (or the institutions supporting them) pay for as a package, entrepreneurs will steadily generate more revenue and repeat purchases.
Ensure the market demand exists
Some apps just don’t have a large enough market for the service that they’re offering. In West Africa, for example, some entrepreneurs were developing an app for fish farmers, but the number of fish farmers in the targeted region was very limited – there were only about 3,000 who could benefit. It was completely unrealistic that they could be profitable by directing their services at this market. Only a fraction of the market would pay for their services, so they could end up with just 10% of the 3,000 fish farmers prepared to pay for the app. The business was therefore not sustainable and unable to achieve long-term impact.
Many apps can only be used if farmers have access to the internet and a smart phone, tablet or computer. So, young innovators must also ensure that their target consumers have access to the necessary technology to use their services. In some cases, it may be more relevant to design innovative services that are accessible via basic feature phones.
Find adequate support
Apps have a widely acknowledged potential for improving the performance of the agricultural sector. However, in both Western and ACP countries, ICT for agriculture is a business segment that bears many challenges due to the general customer profile of its market and the novelty of the technologies. CTA has therefore been supporting young innovators and entrepreneurs with the ambition to use ICTs to address some of the agricultural sector’s key challenges through many initiatives, such as the AgriHack Talent initiative.