Distribution Is The Real Disruption

Distribution Is The Real Disruption

While emerging technologies like blockchain and artificial intelligence can capture our imagination, some of the most game-changing innovations for smallholder farmers are more modest. Seeds. Roads. Electricity.

While such technologies may seem mundane, they are anything but. Reaching smallholder farmers in rural areas takes a nuanced combination of appropriate innovations, sophisticated distribution systems, and a human touch. One organization celebrated for its approach is One Acre Fund, a non-profit social enterprise working with 600,000 farmers in East Africa. I spoke with Ilana Kessler, Impact Ventures Growth Director, about scaling innovative approaches to help smallholder farmers grow their way out of poverty and hunger.

Lorin Fries: What’s the essence of One Acre Fund’s model?

Ilana Kessler: One Acre Fund works directly with farmers to get better harvests and increase the profit from their farms. We have a substantial on-the-ground operation in communities, helping farmers access inputs like high-quality seeds and fertilizer, services like training and financing, and products like solar lights, cookstoves and trees. We provide a bundle on credit with a farmer-friendly repayment schedule. In 2017, on average, a farmer who worked with us saw $171 more profit — equivalent to a 65% higher income — than his or her neighbors who weren’t enrolled with us. For a smallholder farm family, that’s a lot.

Fries: Which technologies have you seen making positive impacts in East Africa?

Kessler: Mobile phones have been game-changing – especially for enabling mobile money. In 2016 I helped to shift One Acre Fund’s entire program model in Kenya over to M-PESA, and now all payments from our 370,000 farmers come to us via mobile. The transition took some time but ultimately, the farmers loved it. It has facilitated many solutions, from increased efficiencies to deepened trust, reduced fraud and streamlined remittances. Elderly people in rural communities were making payments by phone before people like me had used Venmo in the US.

Mass SMS has also been helpful. When we adopted mobile money and SMS-based receipting, it drastically reduced people’s stress, because they knew their payment had been received. We also use SMS to encourage adoption of lime – which is a stretch investment, but one that pays off over the long term and is one of the best things they can do for their fields. From our trial we found that by incentivizing our field officers around farmers’ adoption and using an SMS-based nudge to farmers that explained the benefits of lime, we moved the needle from nearly zero to 30% adoption among farmers working with us.

Solar lights are quite impactful for improving quality of life and reducing cost. Solar makes it possible to light a home without kerosene, saving money over time, allowing children to study, making the family feel safer, and charging devices like a mobile phone or radio.

Finally, I’d like to highlight the importance of improved seeds. This is old technology — nothing fancy — to get a better yield and increase resistance to drought. But that’s a big part of the magic of our program.

Fries: How could we scale these positive impacts?

Kessler: The most important innovations for this context are those focused on the distribution of existing technologies. One priority should be getting mobile money systems broadly adopted in countries beyond Kenya. The biggest barrier is regulation; clearly phone companies and others want to get those systems up and running, but the laws are hard to navigate. M-PESA has been transformative for Kenya, in both urban and rural areas. It’s unleashed all sorts of economic activity, removing friction in the economy. Mobile money could be one of the biggest drivers of development on the continent.

Read more at Forbes