7 February 2013

Nigeria: Phone for Farmers and Mobile Money Initiative

Nigeria's Agricultural Ministry has moved forward with a controversial plan to provide the country's farmers with cellphones. These phones will be ... ( Resource: Phones for Nigeria's Farmers

The phone-for-farmers project, which has continued to generate controversy since its announcement, if well-implemented, would amongst others, optimise the mobile money initiative by the Central Bank of Nigeria (CBN).

Every sector in Nigeria has continued to introduce a number of projects aimed at revitalising its sector and in turn, grow the nation's economy.

Like other sectors, the ministry of agriculture has come up with an innovative project to distribute 10 million mobile phones to farmers. The project according to the Minister for Agriculture, Dr. Akinwunmi Adeshina, would help develop the first ever registered database of farmers in Nigeria, doing away with a situation where policy decisions are based on guess work.

A laudable project by the ministries of agriculture and communications technology, Nigeria and her farmers may have found a reason to smile at last as the project would encourage the Federal Government to show candid interest in their duties through the direct supply of fertilisers, quality seeds grains and other relevant agricultural products and produce via vouchers to Nigerian farmers. The project will rely on mobile phone services.

To further this mission, the Ministry of Agriculture would connect agricultural information specialists nationwide, providing platforms and spaces for information dissemination, exchange and knowledge-sharing. The project would enable farmers create, capture, access and disseminate information to achieve a more productive and sustainable use of the government subsidies.

The Minister's Rationale

When the controversial story of 10 million phones costing N60 billion for Nigerian farmers first made the headlines, the agriculture minister put out a press release explaining the rationale behind the project.

According to him, the decision by government to subsidise the purchase of cell phones for farmers was tied to the distribution of fertilisers directly to the farmers without the involvement of third parties, who had allegedly been ripping them off.

Akinwunmi, who enthused that the new project was well-thought-out, explained that the initiative was based on well-researched and analysed data on farmers in local governments across the country.

"Government policy must always be based on evidence and well-analysed data. We carried out an analysis of our Growth Enhancement Support (GES) work based on a large sample of 426,000 farmers from various local government areas in 13 states.

"We found that 71 percent of farmers sampled did not have cell phones. This shows that many of our farmers in rural areas are quite poor and are excluded from the benefits of the mobile phone revolution going on in Nigeria," he noted.

The minister said the ministry planned to make phones available to farmers on a gradual basis, noting that: "These farmers cannot access the GES scheme without cell phones and we must find a way to include them. They must not be left behind."

He said: "The government will provide a subsidy to the farmer through the voucher to buy the phone. The farmer takes the voucher to the local mobile phone operator and pays the balance which is the difference between the value of the voucher and the cost of the phone.

"Once a farmer buys a phone and a SIM card, his new phone number will be updated on the e-wallet database and he will be able to receive his e-wallet voucher which will entitle him to purchase fertiliser and seeds at subsidised rates.

"It will provide them access to market price information. They will be able to bargain better and save themselves from the middlemen who currently exploit them by paying them very low prices for their produce.

Stakeholders' Views

How does a phone in the hands of a farmer increases crop yield, facilitate sales and turn in profit? This is the question that has been begging for answer in some quarters since Federal Government announced the initiative.

Although most stakeholders have clamoured that the minister be given a chance, saying the idea had been well-implemented in other countries like Kenya, Malawi, and Uganda, some others who are against the idea believed that Nigerian farmers had more pressing needs than to add a mobile phone to the existing one(s) they already own.

According to them, "how will a farmer in the rural area power and recharge their phones? Will the mobile phones come with generators or solar panels?"

As well, stakeholders against the initiative are quick to point out that the agricultural sector was once the bedrock of the Nigerian economy, "accounting for over 60 per cent of the country's GDP", and that this success was achieved without the use of mobile phones. They questioned why mobile phones must be introduced now.

Stakeholders on the side of the minister responded to this line of argument by citing the need to clean the rot in government ministries, parastatals and agencies. They argued that the idea for mobile phones for farmers came as a result of the need to check situations where products intended for farmers are siphoned by corrupt middlemen.

Without realising, it turns out that both sides are saying the same thing. Farmers need better access to funds, subsidised seedlings and fertilisers, education on how to improve their trade, and new techniques to ease the rigorous and archaic mode of farming. The basis for argument should be which should come first?

Director, Paradigm Initiative of Nigeria, Mr. Gbenga Sesan, was of the opinion that the partnership between the ministries of Communications Technology and Agriculture towards the Phone for Farmers project was very commendable.

According to him, the use of ICT in the development of any sector is great, and it is also good that government agencies are teaming up. However, the project was either badly communicated or the fine details were not settled before the announcement by the Permanent Secretary which was the reason for the initial controversy.

He said: "Ideally, it is wrong to focus on buying phones for farmers instead of either building information needs on the phones the farmers already have or getting telcos to offer bundles that will include phones, access to information and more, considering the scale of participation in the country.

Sesan however stated that if successfully implemented, the impact of the project would give the same result as the Kenya M-pesa for the Nigeria agricultural sector.

"If successful (and the minister said they have seen some successes via an earlier pilot), then farmers can boycott middle-men, get access to relevant information, share details of produce to help with inventory/transportation management. The value-add of ICTs to agriculture is limitless as the farmers will also discover new ways to apply the phone as a tool in their work."

But Sesan stated that poor service quality had remained an unsolved issue in the telecoms sector and would surely affect the use of phones for calls, SMS, etc. "If the farmers need to access online information as part of the project, this will also be a major challenge which must be addressed together with the telecoms operators."

He added that although the primary purpose of the project was to monitor the distribution of fertiliser, phones, and other ICT tools, are way more useful than for just fertiliser distribution.

"Accessing information, sharing inventory status, managing logistics, and more, can be done by farmers via phones, especially when the ecosystem is really optimised for end-to-end technology contribution," he said.

Sesan called for initial focus on the farmers who reside in economically disadvantaged states with poor electrification.

He said: "Even as both ministries work towards this great project, they must devise a means through which the farmers can continually power their mobile handsets or else the farmers might become frustrated and discard the phones even before it has achieved its purpose."

He added that the phone for farmers project would also go a long way to optimise the Central Bank of Nigeria (CBN) mobile money initiative which is a veritable tool to create payment access to the unbanked Nigerian in rural areas, and also help drive financial inclusion in the country.

Executive Director, One network, Mr. Sola Bickersteth, was also of the opinion that the phone for farmers project was a laudable project if it would be fully implemented.

According to him, the phone for farmers project could help spur the CBN's planned introduction of agency banking with a targeted number of 170,000 agents by 2020.

He said: "The project can help spur industry growth as banks would have the opportunity to invest in agent locations as a better alternative to banks investing in ATMs.

Bickersteth further explained that the initiative has being extremely successful in countries like Kenya and Uganda, where a lot of businesses have being integrated into the mobile money initiative.

"Mobile money will benefit government to citizen services like tax as well as the planned agriculture disbursements of fertilisers," he said.

He however advocated the need for the government to have an alternative means for the farmers to continually power and recharge their phones.

He said: "The ministries must ensure that the phones can always be charged using solar and/or battery phone chargers."

Kenya M-pesa Experience

Launched a few years ago by Safaricom, the Kenya M-pesa has spread quickly and has become the most successful mobile phone-based financial service in the world. Within the first month after launch Safaricom was said to have registered over 20,000 M-pesa customers most of whom were from the rural areas.

Over 700 businesses integrated with M-pesa to extend various innovative services to all Kenyans at lower cost to the people in remote areas; in agriculture, UAP Insurance and the Syngenta Foundation offered farmers index-based insurance dubbed Kilimo Salama using M-pesa to collect small premiums and issue payouts and kick-start used M-pesa layaway program to enable poor farmers acquire irrigation pumps.

In health, Changamka Microhealth Limited used M-pesa's bill pay function to help expectant mothers save for maternity health care, and in microfinance, Women Enterprise Fund used M-pesa to provide easier, faster, efficient and secure loan repayment method.

The statistics on financial access before the launch of M-pesa in Kenya (just like in Nigeria) showed that the formal financial system was serving just over a quarter (26.4 per cent) of Kenya's adult population. Kenya had only 450 bank branches and 600 automatic teller machines, or less than 2 bank branches per 100,000 people.

As of today, M-pesa has over 35,000 agents in Kenya, and about 70 per cent of financial transactions are now handled by M-PESA, which is a ubiquitous venue for utility bills, water purchases, farm equipment purchases, payroll, goods and services and international money transfers.

Copyright © 2013 This Day. All rights reserved. Distributed by AllAfrica Global Media (allAfrica.com). To contact the copyright holder directly for corrections — or for permission to republish or make other authorized use of this material, click here.

AllAfrica publishes around 2,000 reports a day from more than 130 news organizations and over 200 other institutions and individuals, representing a diversity of positions on every topic. We publish news and views ranging from vigorous opponents of governments to government publications and spokespersons. Publishers named above each report are responsible for their own content, which AllAfrica does not have the legal right to edit or correct.

Articles and commentaries that identify allAfrica.com as the publisher are produced or commissioned by AllAfrica. To address comments or complaints, please Contact us.