64605 e-SOURCEBOOK ICT IN AGRICULTURE Connecting Smallholders to Knowledge, Networks, and Institutions NOVEMBER 2011 REPORT NUMBER 64605 e-SOURCEBOOK ICT IN AGRICULTURE Connecting Smallholders to Knowledge, Networks, and Institutions R epor t Num ber 64605 © 2011 The International Bank for Reconstruction and Development / The World Bank 1818 H Street, NW Washington, DC 20433 Telephone 202-473-1000 Internet www.worldbank.org All rights reserved. This volume is a product of the staff of the International Bank for Reconstruction and Development / The World Bank. The findings, interpretations, and conclusions expressed in this paper do not necessarily reflect the views of the Executive Directors of The World Bank or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. The boundaries, colors, denominations, and other information shown on any map in this work do not imply any judgment on the part of The World Bank concerning the legal status of any territory or the endorsement or acceptance of such boundaries. Rights and Permissions The material in this publication is copyrighted. Copying and/or transmitting portions or all of this work without permission may be a violation of applicable law. The International Bank for Reconstruction and Development / The World Bank encour- ages dissemination of its work and will normally grant permission to reproduce portions of the work promptly. All the queries on rights and licenses, including subsidiary rights, should be addressed to the Office of the Publisher, The World Bank, 1818 H Street NW, Washington, DC 20433, USA, fax 202-522-2422, e-mail pubrights@worldbank.org. Cover photo: Neil Palmer, CIAT. A Kenyan farmer uses a mobile phone in the field. IC T IN A GR IC ULTUR E C O N T E N TS III TABLE OF CONTENTS OVERVIEW OF ICT IN AGRICULTURE: OPPORTUNITIES, ACCESS, AND CROSS-CUTTING THEMES Module 1: Introduction: ICT in Agricultural Development . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Module 2: Making ICT Infrastructure, Appliances, and Services More Accessible and Affordable in Rural Areas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 Topic Note 2.1: Making ICTs Affordable in Rural Areas. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 Topic Note 2.2: Public Innovations in Universal Access to Telecommunications. . . . . . . . . . . . . . . . . . 29 Passive Infrastructure Sharing in Nigeria . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 Turkey’s Oligopolistic Infrastructure Sharing Model . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 Dabba’s Experience with Unlicensed Wireless Services in South Africa . . . . . . . . . . . . . . . . . . . 32 Bhutan’s Community Information Centers Adapt to the Geographical and Consumer Context. . . . . . . . 34 Topic Note 2.3: Mobile Money Moves to Rural Areas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36 M-PESA’s Pioneering Money Transfer Service. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36 Zain Zap Promotes Borderless Mobile Commerce . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38 Pakistan’s Tameer Micro�nance Bank for the Economically Active Poor . . . . . . . . . . . . . . . . . . . 39 Txteagle Taps a Vast Underused Workforce . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40 Topic Note 2.4: Delivering Content for Mobile Agricultural Services . . . . . . . . . . . . . . . . . . . . . . . . 43 First Mover Advantage Bene�ts Reuters Market Light . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43 Long Experience in Farm Communities Bene�ts IFFCO Kisan Sanchar Limited . . . . . . . . . . . . . . . . . . 44 Farmer’s Friend Offers Information on Demand, One Query at a Time . . . . . . . . . . . . . . . . . . . . 45 Module 3: Anytime, Anywhere: Mobile Devices and Services and Their Impact on Agriculture and Rural Development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49 Topic Note 3.1: Key Bene�ts and Challenges Related to Mobile Phones and Agricultural Livelihoods . . . . . . 52 Weather Forecasting Reduces Agricultural Risk in Turkey. . . . . . . . . . . . . . . . . . . . . . . . . . . 57 Mobiles Are the Heart of Esoko’s Virtual Marketplace . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59 Topic Note 3.2: Two Typologies and General Principles for Using Mobile Phones in Agricultural Projects. . . . . 61 Mobile Service Gives Local and Global Edge to Chilean Farmers . . . . . . . . . . . . . . . . . . . . . . . 65 For Reuters Market Light, the Wider Network of People Matters . . . . . . . . . . . . . . . . . . . . . . 66 Nokia Life Tools Uses Simple Technologies to Deliver New Functionality . . . . . . . . . . . . . . . . . . 68 Module 4: Extending the Bene�ts: Gender-Equitable, ICT-Enabled Agricultural Development . . .71 Topic Note 4.1: Entry Points for ICT and Gender in Agriculture . . . . . . . . . . . . . . . . . . . . . . . . . . 75 Community Knowledge Worker Initiative in Uganda . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78 E C O N O M IC AND S E CT OR WORK IV C ONTENTS ENHANCING PRODUCTIVITY ON THE FARM Module 5: Increasing Crop, Livestock, and Fishery Productivity through ICT . . . . . . . . . . . . 85 Topic Note 5.1: Achieving Good Farming Practices through Improved Soil, Nutrient, and Land Management . . 91 Seeing-Is-Believing Project Improves Precision Farming . . . . . . . . . . . . . . . . . . . . . . . . . . . 101 Improving Nitrogen Fertilization in Mexico . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102 Monitoring Livestock to Prevent Pasture Damage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102 Topic Note 5.2: Preventing Yield Losses through Proper Planning and Early Warning Systems . . . . . . . . . . 103 Radio Frequency Identi�cation to Prevent and Treat Cattle Disease in Botswana . . . . . . . . . . . . . . 108 Digital Orthophoto Quads Form a Database for the Dominican Republic . . . . . . . . . . . . . . . . . . . . . . 109 Using Landsat to Assess Irrigation Systems in Mali. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109 Module 6: ICTs as Enablers of Agricultural Innovation Systems . . . . . . . . . . . . . . . . . . . . 113 Topic Note 6.1: ICT in the Agricultural Research Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 119 Advances in ICTs Increase the Utility of African Sites for Testing Varieties . . . . . . . . . . . . . . . . . . 129 KAINet Kenya Knowledge Network Anchored in Partnerships and Collaboration . . . . . . . . . . . . . . 129 Topic Note 6.2: Using ICT in Extension and Advisory Services. . . . . . . . . . . . . . . . . . . . . . . . . . . 130 Farm Radio International Involves Men and Women Farmers. . . . . . . . . . . . . . . . . . . . . . . . . 140 E-Extension in the USA and Philippines . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 141 TECA Uganda Exchange Group Offers Practical Advice for Smallholders . . . . . . . . . . . . . . . . . . . . . . 142 Participatory Video and Internet Complement Extension in India . . . . . . . . . . . . . . . . . . . . . . . 142 Topic Note 6.3: E-learning as a Component of Agricultural Innovation Systems . . . . . . . . . . . . . . . . . . 143 Lifelong Learning for Farmers in Tamil Nadu . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 145 Innovative E-Learning for Farmers through Collaboration and Multi-Modal Outreach . . . . . . . . . . . . 147 Module 7: Broadening Smallholders’ Access to Financial Services through ICT. . . . . . . . . . 151 Topic Note 7.1: The Use of ICT-enabled Financial Services in the Rural Sector . . . . . . . . . . . . . . . . . . 155 Linking Conditional Cash Transfers and Rural Finance in Brazil . . . . . . . . . . . . . . . . . . . . . . . . 159 RFID Facilitates Insurance and Credit for India’s Livestock Producers . . . . . . . . . . . . . . . . . . . . 161 Topic Note 7.2: Policy Strategies and Regulatory Issues for ICT-enabled Rural Financial Services . . . . . . . . 163 Kenya’s DrumNet Links Farmers, Markets, and Financial Service Providers . . . . . . . . . . . . . . . . . 164 A Common Platform Delivers Financial Services to Rural India . . . . . . . . . . . . . . . . . . . . . . . . 167 Module 8: Farmer Organizations Work Better with ICT . . . . . . . . . . . . . . . . . . . . . . . . . . 173 Topic Note 8.1: Finding Better Marketing and Sharing Technical Information Using ICTs . . . . . . . . . . . . . 178 Zambia’s National Farmer Organization Develops SMS-Based Service . . . . . . . . . . . . . . . . . . . . 185 Burkina Faso Farmers Use ICTs to Share New Production, Processing, and Marketing Skills . . . . . . . . 185 The SOUNONG Search Engine for Farmer Organizations in China . . . . . . . . . . . . . . . . . . . . . . 186 Topic Note 8.2: Dairy Cooperatives Lead the Way with Computerized Systems to Improve Accounting, Administration, and Governance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 188 IT Tools for India’s Dairy Industry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 190 CoopWorks Dairy and Coffee, Open-Source Software Launched in Kenya . . . . . . . . . . . . . . . . . . 192 ICTs Improve Marketing and Governance for Malian Coop . . . . . . . . . . . . . . . . . . . . . . . . . . 194 Topic Note 8.3: Giving Farmers a Voice and Sharing Information . . . . . . . . . . . . . . . . . . . . . . . . . 195 Community Listeners’ Clubs Empower SocialNetworks in Rural Niger . . . . . . . . . . . . . . . . . . . . 199 Through Radio and Television, Thai Bank Gives Rural Voices a Wider Audience . . . . . . . . . . . . . . . 200 IC T IN A GR IC ULTUR E C O N T E N TS V ACCESSING MARKETS AND VALUE CHAINS Module 9: Strengthening Agricultural Marketing with ICT . . . . . . . . . . . . . . . . . . . . . . . 205 Topic Note 9.1: Mobile Phones as a Marketing Tool . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 211 Topic Note 9.2: ICTs Improve Logistics, Lower Transaction Costs . . . . . . . . . . . . . . . . . . . . . . . . . 215 In South Asia, Mobile Phones Amplify Investments in Extension and Infrastructure to Bring Farmers to Markets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 217 Across Africa, Mobiles Ease Market Logistics. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 220 Topic Note 9.3: ICTs Facilitate Market Research . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 222 Evidence of the Impact of Immediate Market Information in Asia and Africa . . . . . . . . . . . . . . . . . 229 Web Portals Offer the Big Picture on Markets in Africa, Europe, and Asia . . . . . . . . . . . . . . . . . . 231 Topic Note 9.4: ICTs Facilitate Access to and Delivery of Inputs . . . . . . . . . . . . . . . . . . . . . . . . . . 233 Agribusiness Advises India’s Farmers through e-Choupal Kiosks . . . . . . . . . . . . . . . . . . . . . . . 235 Zambian Farmers Buy Subsidized Inputs via Mobile Phone . . . . . . . . . . . . . . . . . . . . . . . . . . 235 Module 10: ICT Applications for Smallholder Inclusion in Agribusiness Supply Chains . . . . 239 Topic Note 10.1: Private-sector Efforts to Integrate Smallholders in Commercial Supply Chains through ICT Applications. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 246 EID Parry’s Indiagriline Services Improve Sugarcane Production and Sourcing . . . . . . . . . . . . . . . . 248 Virtual City’s AgriManagr Builds Better Supply-Chain Links with Farmers. . . . . . . . . . . . . . . . . . . 250 Topic Note 10.2: Public-sector Efforts to Integrate Smallholders in Commercial Supply Chains through ICT Applications. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 252 ACDI/VOCA’s ICT Solutions Help Private Companies Source from Smallholders in India . . . . . . . . . . . 254 TIPCEE’s ICT Applications Bring Ghanaian Smallholders into Export Supply Chains . . . . . . . . . . . . . 255 Module 11: ICT Applications for Agricultural Risk Management . . . . . . . . . . . . . . . . . . . . 259 Topic Note 11.1: ICT Applications for Mitigating Agricultural Risk . . . . . . . . . . . . . . . . . . . . . . . . . 264 Through mKRISHI, Farmers Translate Information into Action to Mitigate Risk . . . . . . . . . . . . . . . . 268 Topic Note 11.2: ICT Applications to Transfer Agricultural Risk . . . . . . . . . . . . . . . . . . . . . . . . . . 270 ICTs Enable Innovative Index-based Livestock Insurance in Kenya . . . . . . . . . . . . . . . . . . . . . . 272 Kilimo Salama Delivers Index-based Input Insurance in Kenya through ICTs . . . . . . . . . . . . . . . . . 274 Topic Note 11.3: ICT Applications for Coping with Agricultural Risk . . . . . . . . . . . . . . . . . . . . . . . . 275 Electronic Vouchers Are a Targeted, Traceable Lifeline for Zambian Farmers . . . . . . . . . . . . . . . . 277 Community Knowledge Workers in Uganda Link Farmers and Experts to Cope with Risk . . . . . . . . . . 279 Module 12: Global Markets, Global Challenges: Improving Food Safety and Traceability While Empowering Smallholders through ICT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 285 Topic Note 12.1: The Importance of Standard Setting and Compliance . . . . . . . . . . . . . . . . . . . . . . 298 Mango Traceability System Links Malian Smallholders and Exporters to Global Consumers . . . . . . . . . 301 Topic Note 12.2: Traceability Technologies, Solutions, and Applications . . . . . . . . . . . . . . . . . . . . . . 302 ShellCatch in Chile Guarantees Origin of the Catch from Artisanal Fishers and Divers . . . . . . . . . . . . 306 E C O N O M IC AND S E CT OR WORK VI C ONTENTS IMPROVING PUBLIC SERVICE PROVISION Module 13: Strengthening Rural Governance, Institutions, and Citizen Participation Using ICT . 313 Topic Note 13.1: Public Agencies and the Provision of E-government . . . . . . . . . . . . . . . . . . . . . . . 318 Building Public Service Provision through Internet Applications. . . . . . . . . . . . . . . . . . . . . . . . 321 Agricultural and Rural Information through Ministerial Websites . . . . . . . . . . . . . . . . . . . . . . . 323 Using Biometrics to Provide Rural Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 324 E-Government to Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 326 E-Government to Government . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 329 Topic Note 13.2: Civil Society and the Provision of E-Services . . . . . . . . . . . . . . . . . . . . . . . . . . . 330 Providing ‘Hubs’ for ICT Innovation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 331 E-Learning through the Web and SMS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 332 Collecting Data to Protect Local Knowledge and Ecosystems . . . . . . . . . . . . . . . . . . . . . . . . 333 Topic Note 13.3: Increasing Citizen Participation through E-Democracy . . . . . . . . . . . . . . . . . . . . . . 334 Information Kiosks in India. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 335 Virtual Communities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 336 Government Responsiveness through Citizen Participation in Digitized Political Processes . . . . . . . . . 336 Digital Media Forums in Developing Countries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 337 Module 14: ICT for Land Administration and Management . . . . . . . . . . . . . . . . . . . . . . . 343 Topic Note 14.1: Supporting Land Markets with ICT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 356 ICT-based Property Value Estimate Information Services . . . . . . . . . . . . . . . . . . . . . . . . . . . 357 European Land Information Service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 358 Topic Note 14.2: ICT Support for Land Management, Planning, Development, and Control . . . . . . . . . . . . 358 E-Planning Portal in Denmark . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 359 Virtual Landscape Theatre . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 359 Topic Note 14.3: ICT Support for Land Reform . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 360 Sweden’s Large-Scale Land Consolidation Projects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 360 Turkey Land Consolidation Project . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 361 Topic Note 14.4: ICT Support of Good Governance in Land Administration . . . . . . . . . . . . . . . . . . . . 362 ICTs and the Land Governance Assessment Framework . . . . . . . . . . . . . . . . . . . . . . . . . . . 362 Improving Public Access to Land Administration Services in Indonesia. . . . . . . . . . . . . . . . . . . . 363 Topic Note 14.5: Public-sector Information Policy Supporting Effective ICT-based Information Services . . . . . 364 A Policy Framework to Support Lao PDR’s National Land and Natural Resource Information System . . . . 365 Vietnam’s One-Stop Shop for E-Government Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . 366 Topic Note 14.6: Sustainable Funding of ICT in Land Administration. . . . . . . . . . . . . . . . . . . . . . . . 366 ICT Derived Ef�ciencies in Kyrgyz Republic Bene�t Land Of�ce Staff . . . . . . . . . . . . . . . . . . . . 368 Philippines—A Public-Private Approach to ICT Financing and Risk Sharing . . . . . . . . . . . . . . . . . . 368 Topic Note 14.7: Designing Scalable and Interoperable Land Information Infrastructures . . . . . . . . . . . . . 368 Combining Open-Source Solutions with Open Geospatial Consortium Standards . . . . . . . . . . . . . . 369 Kyrgyz Republic’s Open-Source Strategy and GIS Solutions . . . . . . . . . . . . . . . . . . . . . . . . . 370 Social Tenure Domain Model . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 370 IC T IN A GR IC ULTUR E C O N T E N TS V II Module 15: Using ICT to Improve Forest Governance . . . . . . . . . . . . . . . . . . . . . . . . . . . 373 Topic Note 15.1: Pillar 1—Transparency, Accountability, and Public Participation . . . . . . . . . . . . . . . . . 382 Participatory Mapping in Cameroon . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 388 The Central Vigilance Commission Website—India . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 388 PoiMapper in Kenya . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 389 Topic Note 15.2: Pillar 2—Quality of Forest Administration . . . . . . . . . . . . . . . . . . . . . . . . . . . . 390 Fire Alert Systems Integrating Remote Sensing and GIS . . . . . . . . . . . . . . . . . . . . . . . . . . . 394 Kenya: Solving Human-Elephant Conflicts with Mobile Technology . . . . . . . . . . . . . . . . . . . . . . 394 Topic Note 15.3: Pillar 3—Coherence of Forest Legislation and Rule of Law . . . . . . . . . . . . . . . . . . . 395 Ghana National Wood Tracking System . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 398 Liberia: LiberFor Chain of Custody. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 399 Topic Note 15.4: Pillar 4—Economic Ef�ciency, Equity, and Incentives . . . . . . . . . . . . . . . . . . . . . . 400 RFID Chips for Ef�cient Wood Processing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 401 Glossary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 403 E C O N O M IC AND S E CT OR WORK VIII FIGUR ES LIST OF FIGURES Figure 1.1: Percentage of the World’s Population Covered by a Mobile Cellular Signal, 2003 Compared to 2009 . . . . . 6 Figure 1.2: African Undersea Cables, Those Working and Those in Development . . . . . . . . . . . . . . . . . . . . . 7 Figure 1.3: Global ICT Development from 2000–2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Figure 2.1: Access to ICT Infrastructure, Appliances, in Services and the Access Rainbow. . . . . . . . . . . . . . . . 17 Figure 2.2: Access to ICTs by Level of Development, Based on the ICT Development Index . . . . . . . . . . . . . . 18 Figure 2.3: ICT Price Subbaskets by Level of Development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 Figure 2.4: Telecommunications, IT, and Media Industry Convergence . . . . . . . . . . . . . . . . . . . . . . . . . . 22 Figure 3.1: Global Mobile Cellular Subscriptions, Total and per 100 Inhabitants, 2000–2010 . . . . . . . . . . . . . . . 50 Figure 3.2: Information Search Cost by Stage of Farming . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55 Figure 5.1: De�ning the Relationship Between ICTs and Yield Technologies . . . . . . . . . . . . . . . . . . . . . . . 88 Figure 5.2: Organic Carbon, Percent in Subsoils . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95 Figure 5.3: Wireless Sensor Network (WSN), Distributed Collection Architecture . . . . . . . . . . . . . . . . . . . . 98 Figure 5.5: Akvasmart Doppler Pellet Sensor Network . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99 Figure 5.6: Precision Farming through Satellite Technologies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99 Figure 6.1: Knowledge Sharing and Collaboration Tools in the Research Cycle . . . . . . . . . . . . . . . . . . . . . . 121 Figure 7.1: Smallholder Farmers Are the Largest Group of Working-Age Poor . . . . . . . . . . . . . . . . . . . . . . 151 Figure 7.2: Low Access to Financial Institutions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 153 Figure 7.3: Low Utilization of Financial Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 153 Figure 7.4: Access Is Worse for Farmers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 153 Figure 7.5: Commercial Banks Are Main Players . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 153 Figure 7.6: ICT and the Rural Finance Ecosystem . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 156 Figure 7.7: Channels for Financial Inclusion for Bolsa Familia Bene�ciaries . . . . . . . . . . . . . . . . . . . . . . . . 160 Figure 7.8: Bene�ts to Stakeholders in DrumNet’s Sunflower Supply Chain Partnerships . . . . . . . . . . . . . . . . 165 Figure 7.9: Flow of Goods, Information, and Money in DrumNet’s Sunflower Supply Chain Partnerships . . . . . . . . 166 Figure 7.10: Other ICTs Used by the Financial Inclusion Network and Operations . . . . . . . . . . . . . . . . . . . . . 168 Figure 7.11: Cost Structure of Micro�nance Institutions (MFIs) in India . . . . . . . . . . . . . . . . . . . . . . . . . . 169 Figure 7.12: Financiers of the Financial Inclusion Network and Operations . . . . . . . . . . . . . . . . . . . . . . . . . 170 Figure 8.1: Conceptual Technological Framework for the SOUNONG Search Engine . . . . . . . . . . . . . . . . . . . 187 Figure 9.1: Percentage of Farmers Relying on a Given Information Source, India . . . . . . . . . . . . . . . . . . . . . 206 Figure 9.2: Farmers’ Differing Information Priorities and Sources of Market Information in Indonesia, India, and Uganda. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 207 Figure 9.3: Ugandan Farmers’ Use of Voice- and SMS-Based Agricultural Information Services . . . . . . . . . . . . . 208 Figure 9.4: Commercial Farmers and Small Agribusinesses Rate the Relative Importance of Using Mobile Phones on a Scale of 1 to 4 (Very Useful), Malaysia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 213 Figure 9.5: ICT Inputs to Marketing Along the Agricultural Value Chain . . . . . . . . . . . . . . . . . . . . . . . . . . 214 Figure 9.6: Transport Costs for Different Vehicles in Developing Countries (US$ per Ton-Kilometer) . . . . . . . . . . . 216 Figure 9.7: Transport Costs in Relation to Demand, by Mode . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 216 IC T IN A GR IC ULTUR E FI G U R E S IX Figure 9.8: The Emergence of Primary Rural Wholesale Markets at Well-Located Weekly (Haat) Markets in Assam. . . 219 Figure 9.9: Farmers’ Incomes Are Highly Sensitive to Market Issues: Prices, Volume, and Enterprise Diversi�cation . . 222 Figure 9.10: Commercial Farmers’ Information Needs and Sources . . . . . . . . . . . . . . . . . . . . . . . . . . . . 223 Figure 9.11: Traders’ Perceived Bene�ts of Using Mobile Phones, Kenya . . . . . . . . . . . . . . . . . . . . . . . . . 224 Figure 9.12: Traders’ Perception of the Bene�ts of Using Mobile Phones, Ghana . . . . . . . . . . . . . . . . . . . . . 224 Figure 9.13: How Farmers Use Market Information to Improve Prices and Pro�ts . . . . . . . . . . . . . . . . . . . . . 225 Figure 9.14: Aggregate Consumer Demand by Agricultural Product from 2005 to 2020 at a 5.5% Yearly Growth in GDP, India (Rs Billion) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 227 Figure 9.15: Projected Consumer Expenditures in India from 2005 to 2020 and Additional Farm-Gate Income (Rs Billion) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 227 Figure 9.16: Prices Paid to Soybean Farmers in Areas with and without Market Information from e-Choupals (Internet Kiosks) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 229 Figure 9.17: Vegetable Marketing Channels, Republic of South Africa . . . . . . . . . . . . . . . . . . . . . . . . . . . 231 Figure 9.18: Average Tomato Sales for Three Fresh Produce Markets, South Africa . . . . . . . . . . . . . . . . . . . . 232 Figure 9.19: India’s Farmers See the Bigger Picture: AGMARK’s Market Price Projections . . . . . . . . . . . . . . . . 232 Figure 10.1: Examples of Value Chains, Their Participants, and the Value Added Along the Chain . . . . . . . . . . . . . 240 Figure 10.2: Drivers of ICT Applications for Including Smallholders in Supply Chains. . . . . . . . . . . . . . . . . . . . 242 Figure 10.3: Typical ICT Applications and Service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 243 Figure 10.4: Cases and Examples Discussed in Topic Notes and Innovative Practice Summaries . . . . . . . . . . . . . 245 Figure 10.5: The AgriManagr System . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 251 Figure 10.6: The Process by Which Dunavant and MTZL Collaborate to Pay Farmers . . . . . . . . . . . . . . . . . . . 253 Figure 10.7: Partnerships Involved in Developing freshConnect . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 254 Figure 10.8: Declared and Actual Area Can Differ Signi�cantly (Citrus farms) . . . . . . . . . . . . . . . . . . . . . . . 256 Figure 11.1: Ownership of Radios and Mobile Phones in Ghana, Kenya, and Zambia, 2010 . . . . . . . . . . . . . . . . 266 Figure 11.2: The mKRISHI Infrastructure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 269 Figure 11.3: Value and Quantity of Electronic Voucher Transactions in Zambia, 2010. . . . . . . . . . . . . . . . . . . . 279 Figure 12.1: Coffee: Attributes of Interest and Depth of Traceability . . . . . . . . . . . . . . . . . . . . . . . . . . . . 289 Figure 12.2: Mobile Technology as a Key Enabler of Information Counterflow from Farmers to Markets . . . . . . . . . 291 Figure 12.3: Soybean Traceability System in Thailand . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 292 Figure 12.4: Scottish Borders TAG Cattle Tracing System. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 294 Figure 12.5: Incentives for Investment in Traceability Systems . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 296 Figure 12.6: Peanut Corporation of America Recall . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 297 Figure 12.7: Fresh Food Trace Web Platform . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 301 Figure 12.8: ICTs Enable Information Flow from Farmers to Markets. . . . . . . . . . . . . . . . . . . . . . . . . . . . 305 Figure 12.9: Embayment Management and Shell�sh Traceability in Chile . . . . . . . . . . . . . . . . . . . . . . . . . 306 Figure 13.1: Relationships Between Key Stakeholders in the Agrarian Sector . . . . . . . . . . . . . . . . . . . . . . . 315 Figure 13.2: Singular Infrastructure versus Centralized Infrastructure in India . . . . . . . . . . . . . . . . . . . . . . . 322 Figure 14.1: Bene�ts of Good Land Administration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 345 Figure 14.2: Evolution of ICT in Land Administration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 348 Figure 14.3: Sustainable Development Needs Both Urban and Rural Inputs . . . . . . . . . . . . . . . . . . . . . . . . 355 Figure 14.4: Influences on the Land Market. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 356 Figure 14.5: A Property Information Service in the United Kingdom . . . . . . . . . . . . . . . . . . . . . . . . . . . . 357 Figure 14.6: Example of E-Planning Portal. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 359 Figure 14.7: Parcels Before and After Land Consolidation with New Irrigation Network . . . . . . . . . . . . . . . . . . 361 E C O N O M IC AND S E CT OR WORK X IM A GES LIST OF IMAGES Image 1.1: Soil Data Can Be Collected and Disseminated by a Variety of ICT . . . . . . . . . . . . . . . . . . . . . . . 5 Image 1.2: Google Map of Kampala, Uganda. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Image 1.3: Public-Private Partnerships Often Lead to More-Sustainable Services for Rural People. . . . . . . . . . . . . 9 Image 1.4: Determining Levels of Inclusiveness Is a Critical Factor in ICT Interventions . . . . . . . . . . . . . . . . . 11 Image 1.5: A Collaborative Effort Among Diverse Actors Is Important for ICT in Agriculture . . . . . . . . . . . . . . . 12 Image 2.1: Cell Services in Rural South Africa . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28 Image 2.2: Ghana’s Telecommunications Infrastructure Expands the Use of Mobile Money . . . . . . . . . . . . . . . 36 Image 2.3: Girl Uses Phone in Community Meeting in India. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43 Image 3.1: Mobile Phones Can Help Fishermen Sell Their Catch . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57 Image 3.2: Other Challenges, Like Inadequate Transport, Affects Mobile Phone Success . . . . . . . . . . . . . . . . 64 Image 3.3: The Reuters Market Light Interface . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67 Image 3.4: The Agriculture Package in Nokia Life Tools . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68 Image 4.1: Levels of Literacy Affects Women’s Participation in Agriculture Learning . . . . . . . . . . . . . . . . . . . 72 Image 4.2: Women Often Integrate Domestic Roles with Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76 Image 4.3: Women Can Play a Signi�cant Role in Acquiring Family Income . . . . . . . . . . . . . . . . . . . . . . . 78 Image 4.4: ICT Often Requires Additional Inputs to Be Effective . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81 Image 5.1: Nitrogen-Sensor Technology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94 Image 5.2: WSN Can Help Monitor the Quality of Pastures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98 Image 5.3: Farmers Learn to Use Images of Their Farms to Improve Productivity and Resource Management . . . . . 101 Image 5.4: Infrared Sensor Technology Increases the Cost-Ef�ciency of Nitrogen Fertilizer Applications in Yaqui Valley . . 102 Image 5.5: Mobile Applications Help to Monitor and Protect Fishers . . . . . . . . . . . . . . . . . . . . . . . . . . . 103 Image 5.6: Satellite Image of Vegetation Changes from 1998 to 2004 (Red Indicates Decreasing Vegetation and Green Indicates an Increase) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105 Image 5.7: Two Examples of Digital Orthophoto Quads . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106 Image 6.1: Specialized Knowledge on Farm Practices Can Result in Pro�table Enterprise . . . . . . . . . . . . . . . . 116 Image 6.2: ICT Must Be Complemented by Other Inputs Like Improved Seedlings . . . . . . . . . . . . . . . . . . . 117 Image 6.3: Open Access to Genetic Information Can Improve Yields Worldwide . . . . . . . . . . . . . . . . . . . . 124 Image 6.4: AGORA Provides Open Access to Agriculture Research . . . . . . . . . . . . . . . . . . . . . . . . . . . 127 Image 6.5: Accessing Private Sector Research Could Have Wide Impacts on Poor Agriculture. . . . . . . . . . . . . . 128 Image 6.6: Matching ICT to the Diverse Needs of Farmers Is Critical. . . . . . . . . . . . . . . . . . . . . . . . . . . 131 Image 6.7: Timely Advisory Services Improve the Effectiveness of Other Technologies . . . . . . . . . . . . . . . . . 132 Image 6.8: New Technologies Have Allowed for More Innovative Radio Programs . . . . . . . . . . . . . . . . . . . . 135 Image 6.9: Farmer-Led Documentation Processes Can Use Digital Tools in Place of Paper. . . . . . . . . . . . . . . . 137 Image 6.10: Women Can More Easily Participate in Rural Radio Interviews . . . . . . . . . . . . . . . . . . . . . . . . 140 IC T IN A GR IC ULTUR E IMAGES XI Image 6.11: E-learning Creates Opportunities for Rural Participation . . . . . . . . . . . . . . . . . . . . . . . . . . . . 144 Image 6.12: Women Use Mobile Phones to Learn Better Goat Production Techniques . . . . . . . . . . . . . . . . . . 146 Image 7.1: RFID Can Be Used to Track Cattle and Manage Herds. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 161 Image 8.1: Indian Woman Text Messages on Phone in India . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 177 Image 8.2: Telecenters Can Attract a Wide Range of People . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 179 Image 8.3: Women’s Cooperative Processing Shea Butter in Ghana . . . . . . . . . . . . . . . . . . . . . . . . . . . 182 Image 8.4: ICT Programs Like SOUNONG Helps Cooperatives Identify Livestock Disease . . . . . . . . . . . . . . . . 188 Image 8.5: Many Enablers Are Needed to Ensure Coop Function . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 189 Image 8.6: Women Speak About the Livelihood Challenges They Face on the Radio . . . . . . . . . . . . . . . . . . . 198 Image 9.1: The Bangladeshi Community Who Solved Their Chicken Marketing Problems Through Mobile Phones . . . 218 Image 9.2: Produce for Sale at an Assamese “Super-Haat� . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 219 Image 9.3: Inventories of Karaya Gum Mapped and Displayed Through a Mobile Phone Application . . . . . . . . . . . 221 Image 10.1: ICT-Enabled Kiosks in Rural India Can Help to Inform Rice Farmers . . . . . . . . . . . . . . . . . . . . . . 248 Image 10.2: Indiagriline Logon Screen . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 249 Image 11.1: Unexpected Changes in Climate Contribute to Risk . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 260 Image 11.2: The mKRISHI Interface . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 268 Image 11.3: Pastoralism in Africa Is a Critical Means to Rural Livelihoods . . . . . . . . . . . . . . . . . . . . . . . . . 273 Image 11.4: Normalized Difference Vegetation Index, Marsabit District, Kenya, February 2010 . . . . . . . . . . . . . . 274 Image 11.5: Weather Station in Kenya . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 275 Image 11.6: Map of Flood Reports, Pakistan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 277 Image 11.7: Transactions Using Mobile Phones . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 278 Image 11.8: Community Knowledge Workers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 280 Image 12.1: Mango Growers in Mali Use Mobile Devices to Log Traceability Data. . . . . . . . . . . . . . . . . . . . . 301 Image 13.1: Online Access to Public Data Such as the Ghana Living Standards Surveys Can Stimulate Research and Development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 324 Image 13.2: Biometric Identi�cation Can Replace Traditional Forms of Identi�cation. . . . . . . . . . . . . . . . . . . . 325 Image 13.3: One-Stop Shops Using ICT Can Increase Ef�ciencies in SME Start-Ups . . . . . . . . . . . . . . . . . . . 327 Image 13.4: mLab in East Africa Assists Agricultural Entrepreneurs . . . . . . . . . . . . . . . . . . . . . . . . . . . . 331 Image 13.5: CyberTracker Gives Users Icon and Word Options. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 333 Image 13.6: Rural Kiosks Can Lead to Information Sharing Between Agrarian Communities . . . . . . . . . . . . . . . 335 Image 13.7: ICT Can Support Well Water Infrastructure Monitoring . . . . . . . . . . . . . . . . . . . . . . . . . . . . 338 Image 14.1: Women Use GIS Instruments to Map Land and Measure Soil Qualities . . . . . . . . . . . . . . . . . . . 352 Image 14.2: LARASITA: A Mobile Land Of�ce in Indonesia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 364 Image 15.1: Scanning Barcodes in Forests Increases Enhanced Forest Management . . . . . . . . . . . . . . . . . . . 374 Image 15.2: Long-Term Investments Are Critical to Scaling Up Interventions . . . . . . . . . . . . . . . . . . . . . . . 380 Image 15.3: User-Friendly Tools Allows Local Participation in Forest Mapping . . . . . . . . . . . . . . . . . . . . . . . 387 Image 15.4: POIMapping in Kenya . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 390 Image 15.5: Satellite Imagery Can Map Levels of Vegetation, Forest Cover, and Forest Degradation . . . . . . . . . . . 392 Image 15.6: Tracking through Barcodes, RFID, GPS, and Other Technologies Improves the Chain of Custody . . . . . . 398 Image 15.7: Online Timber Sales in the UK . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 401 E C O N O M IC AND S E CT OR WORK XII TA B LES LIST OF TABLES Table 1.1: Themes Treated in Sourcebook Modules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 Table 2.1: Characteristics of Universal Access and Universal Service . . . . . . . . . . . . . . . . . . . . . . . . . . 17 Table 2.2: Key Enabling Factors for Innovations in Rural ICT Provision in Nigeria, Turkey, South Africa, and Bhutan. . . 35 Table 2.3: Lessons Learned from Rural ICT Provision in Nigeria, Turkey, South Africa, and Bhutan . . . . . . . . . . . 35 Table 2.4: Key Enabling Factors for Innovations in Mobile Financial and Income Services Worldwide . . . . . . . . . . 42 Table 2.5: Lessons Learned from Mobile Financial and Income Services in Rural Areas . . . . . . . . . . . . . . . . 42 Table 2.6: Key Enabling Factors for Delivering Agricultural Information to Farmers in India and Uganda. . . . . . . . . 46 Table 2.7: Lessons Learned in Delivering Agricultural Information to Farmers in India and Uganda . . . . . . . . . . . 47 Table 3.1: The Impact of Mobile-Based Livelihood Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61 Table 3.2: Various Roles for Mobiles in Agriculture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62 Table 6.1: Radio Access and Frequency of Listening in the Household (%) . . . . . . . . . . . . . . . . . . . . . . . 141 Table 8.1: Speci�c ICTs Discussed in This Module . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 175 Table 9.1: Summary of ICT’s Impact on Farmers’ Prices and Incomes, Traders’ Margins, and Prices to Consumers . . 208 Table 9.2: Current and Future Roles of ICT in Agricultural Marketing . . . . . . . . . . . . . . . . . . . . . . . . . . . 211 Table 9.3: Size of Loads and Distance Covered in Moving Rural Goods Produced by Small-Scale Farmers, Various Countries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 216 Table 9.4: Average Time and Cost Savings Occurring When Ghanaian Onion Traders Substitute Phone Communication for Travel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 220 Table 9.5: Information Priorities of Farmers Using Mobile Phones in India (Ranked) . . . . . . . . . . . . . . . . . . . 234 Table 9.6: Agricultural Interventions Made through e-Choupal Kiosks and Their Impacts . . . . . . . . . . . . . . . . 235 Table 10.1: The Business Case for and Against Procuring from Small-Scale Producers . . . . . . . . . . . . . . . . . . 241 Table 11.1: Farmers’ Information Needs in Relation to the Crop Cycle and Market . . . . . . . . . . . . . . . . . . . . 262 Table 12.1: Examples of Food Safety Outbreaks (1971–2008) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 288 Table 12.2: Traceability Systems Adopted in Developing Countries . . . . . . . . . . . . . . . . . . . . . . . . . . . . 290 Table 12.3: Examples of Food Traceability-Related Regulations and Standards, with Particular Application in Food Safety and Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 299 Table 12.4: Traceability Applications in Agriculture and Agrifood Systems . . . . . . . . . . . . . . . . . . . . . . . . . 302 Table 13.1: Examples of ICT in E-Governance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 316 Table 13.2: E-Government Stages . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 319 Table 13.3: ICT-Enabled Agriculture Interventions and Their Impact on Rural Governance . . . . . . . . . . . . . . . . 320 Table 13.4: Comparing Costs for Electronic Toll Collection, India . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 328 Table 14.1: Where Registering Property Is Easy and Where It Is Not . . . . . . . . . . . . . . . . . . . . . . . . . . . 348 Table 15.1: Pillars of Forest Governance and ICT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 378 Table 15.2: Summary of Field Examples . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 381 IC T IN A GR IC ULTUR E BOXES X III LIST OF BOXES Box 1.1: Globalizing Food Markets and New Challenges for Smallholder Farmers . . . . . . . . . . . . . . . . . . . . 4 Box 2.1: The Risks of Picking Winners in the Rapidly Evolving IT Industry . . . . . . . . . . . . . . . . . . . . . . . 19 Box 2.2: Singapore’s Simpli�ed Licenses Encourage Innovative, Cost-effective ICT Infrastructure . . . . . . . . . . 20 Box 2.3: Balancing Quality and Service in Reaching Rural Areas: Fixed-line versus Wireless Backhaul . . . . . . . . 23 Box 2.4: Chile’s ICT Policies for Connectivity and Economic Growth . . . . . . . . . . . . . . . . . . . . . . . . . . 24 Box 2.5: Lessons from South Africa’s Experience in Migrating to Digital Television . . . . . . . . . . . . . . . . . . 25 Box 2.6: CDMA450 Technology Connects Rural Kazakhstan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 Box 2.7: Mobile Phones with Features Attract Rural Users in China and Beyond . . . . . . . . . . . . . . . . . . . 27 Box 2.8: MXit Blends Entertainments and Practical Content in South Africa . . . . . . . . . . . . . . . . . . . . . . 28 Box 2.9: India Exempli�es Evolution in the Public Provision of Low-Cost Devices . . . . . . . . . . . . . . . . . . . 30 Box 3.1: What Is a Mobile Application? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51 Box 3.2: Mobile Phones Enable Kerala Fishers to Identify Better Markets . . . . . . . . . . . . . . . . . . . . . . . 53 Box 3.3: One Device, Many Channels . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55 Box 3.4: Mobile Phones, Agriculture, and Gender. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58 Box 3.5: An Esoko Transaction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60 Box 3.6: Kilimo Salama Demonstrates the Convergence of Mobile Phones and Sophisticated Mobile Services . . . . 63 Box 4.1: Key Constraints Restricting Women’s Access to ICTs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72 Box 4.2: Policy Recommendations for Gender-Aware Universal Access and Rural Development . . . . . . . . . . . 75 Box 4.3: Mobile Phones and Economic Growth . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79 Box 5.1: The Food Security Challenge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86 Box 5.2: Gender in Agricultural Productivity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87 Box 5.3: Using Remote Sensors and Similar Tools to Measure Soil Properties . . . . . . . . . . . . . . . . . . . . . 92 Box 5.4: Collecting African Soil Data Over Time to Understand Soil Degradation Trends . . . . . . . . . . . . . . . . 93 Box 5.5: Rewarding Farmers for Carbon Sequestration in Kenya . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96 Box 5.6: Web-Based GIS for Paddy Precision Farming, Malaysia . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100 Box 5.7: Crowdsourcing Prevents Cassava Losses in Tanzania . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104 Box 5.8: Modeling India’s Groundnut Yield through Climate Information . . . . . . . . . . . . . . . . . . . . . . . . 105 Box 6.1: Datasets on Amazon Web Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115 Box 6.2: Social Media Support Research Project Review and Reporting . . . . . . . . . . . . . . . . . . . . . . . . 115 Box 6.3: Innovation Brokers at the Heart of Networking and Communication in Agricultural Information Systems . . 116 Box 6.4: Key Considerations When Using ICT in AIS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 118 Box 6.5: ICTs Engage Stakeholders in Formulating an Ambitious Research Program . . . . . . . . . . . . . . . . . 120 Box 6.6: Rural Tanzanians Update Researchers on Spreading Cassava Diseases . . . . . . . . . . . . . . . . . . . 121 Box 6.7: Web-Based Tools Facilitate Research Collaboration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 122 Box 6.8: Dataverse: An Open Application for Storing and Analyzing Data. . . . . . . . . . . . . . . . . . . . . . . . 123 Box 6.9: Mendeley: ICT to Expand the Literature Base . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 126 Box 6.10: Driving Developing County Access: The CIARD Initiative . . . . . . . . . . . . . . . . . . . . . . . . . . . 127 E C O N O M IC AND S E CT OR WORK XIV B OX ES Box 6.11: Rural Radio Lets Listeners Speak . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 134 Box 6.12: Mobile Phones as Tools for Farmer Surveys and Feedback . . . . . . . . . . . . . . . . . . . . . . . . . . 139 Box 7.1: Farmers Require Four Kinds of Financial Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 152 Box 7.2: ICT Increases the Availability of Rural Finance in South Africa . . . . . . . . . . . . . . . . . . . . . . . . . 157 Box 7.3: In Rural Kenya and South Africa, ICT Applications Reduce the Cost of Financial Services . . . . . . . . . . 157 Box 7.4: Increased Operational Ef�ciency in Africa through ICT . . . . . . . . . . . . . . . . . . . . . . . . . . . . 158 Box 7.5: Financial Service Providers in the United States and Mozambique Use ICT to Improve Risk Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 158 Box 7.6: Using ICT to Identify Financial Service Clients in Africa and South Asia . . . . . . . . . . . . . . . . . . . . 159 Box 8.1: Factors that Can Hamper Women’s Uptake of ICTs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 176 Box 8.2: Telecenters Build Skills, Directly and Indirectly, in Members of Farmer Organizations . . . . . . . . . . . . 179 Box 8.3: Unintended Consequences of Not Including Women . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 180 Box 8.4: Chile’s Coopeumo and the Mobile Information Project . . . . . . . . . . . . . . . . . . . . . . . . . . . . 181 Box 8.5: A Checklist of Considerations for Designing an Effective, Sustainable ICT-Based Project to Support Farmer Organizations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 184 Box 8.6: Considerations for Effectively, Sustainably Computerizing Farmer Organizations and Cooperatives . . . . . 191 Box 8.7: What Is ERP? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 192 Box 8.8: Considerations for Effectively, Sustainably Enabling Farmers to Share Information and Gain a Greater Voice in the Agricultural Sector . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 199 Box 9.1: Changing Sources of Information for Farmers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 207 Box 9.2: The Spread of SMS-Based Services and Prospects for Reducing Their Costs . . . . . . . . . . . . . . . . 210 Box 9.3: Winter Salad Grower in Georgia Improves His Negotiating Position with Itinerant Traders by Mobile Phone . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 225 Box 9.4: Government-Provided Information on Market Prices: A South Asian Example . . . . . . . . . . . . . . . . 226 Box 10.1: Functions of Supply-Chain Management Systems. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 242 Box 10.2: Companies Use Enterprise Resource Planning Software to Manage Smallholder Suppliers . . . . . . . . . 247 Box 11.1: Reuters Market Light Disseminates Early Warnings to Mitigate Risk . . . . . . . . . . . . . . . . . . . . . 265 Box 11.2: How Does Insurance Work? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 270 Box 11.3: What Is Index Insurance? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 271 Box 11.4: Commodity Futures Markets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 271 Box 11.5: Information Services Used by Community Knowledge Workers in Uganda . . . . . . . . . . . . . . . . . . 280 Box 14.1: Outcomes of Automating Land Registration in Andhra Pradesh . . . . . . . . . . . . . . . . . . . . . . . . 354 Box 14.2: Augmented Reality in Real Estate Marketing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 357 Box 14.3: Reducing Corruption in Land Of�ces. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 362 Box 14.4: Creative Commons Supports Open Government Licenses . . . . . . . . . . . . . . . . . . . . . . . . . . 365 Box 15.1: The Building Blocks of Forest Governance and Their Principal Components . . . . . . . . . . . . . . . . . 375 Box 15.2: Vietnam—Management Information System for the Forestry Sector . . . . . . . . . . . . . . . . . . . . . 376 Box 15.3: Website of the Forestry Commission, United Kingdom . . . . . . . . . . . . . . . . . . . . . . . . . . . . 382 Box 15.4: Advocacy and Awareness Tools . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 383 Box 15.5: Uganda—Environment Alert: Civil Society Organizations Use ICTs in Advocacy Campaigns . . . . . . . . . 384 Box 15.6: How Can Community Radio Bene�t Forest Governance? . . . . . . . . . . . . . . . . . . . . . . . . . . . 385 Box 15.7: Public Participation and Crowdsourcing of Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 386 Box 15.8: Citizen-Powered Urban Forest Map of San Francisco . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 386 Box 15.9: MESTA—Participatory Forest Management Application . . . . . . . . . . . . . . . . . . . . . . . . . . . . 391 Box 15.10: UNODC’s “Go� Family of Products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 396 IC T IN A GR IC ULTUR E FO R E W O R D XV FOREWORD The livelihoods of the world’s poor rise and fall with the fate of agriculture. Enhancing the ability of smallholders to connect with the knowledge, networks, and institutions necessary to improve their productivity, food security, and employment opportunities is a fundamental development challenge. Where once rural areas were largely disconnected from the greater world, today, networks of information and communication technologies (ICTs) enmesh the globe and represent a transforma- tional opportunity for rural populations, both as producers and consumers. However, climate change and price fluctuations in the global food market remind us that realizing this opportunity requires a long-term commitment to mobilizing appropriate resources and expertise. It is for this reason that we are particularly pleased to introduce the ICT in Agriculture e-Sourcebook. This resource was designed to support practitioners, decision-makers, and development partners who work at the intersection of ICT and agriculture. Our hope is that it becomes a practical guide in understanding current trends, implementing appropriate interven- tions, and evaluating the impact of those programs. It combines cutting-edge expertise in ICT with empirical knowledge of a wide range of agricultural sectors, from governance to supply chain management. As an online knowledge source, it will continue to evolve and be updated to reflect the emerging and changing challenges and opportunities facing the sector. This activity was carried out as part of the program on Creating Sustainable Businesses in the Knowledge Economy, for which the Government of Finland provided generous support. The publication represents a partnership of infoDev and the Agriculture and Rural Development Department of the World Bank Group, with significant contributions from outside experts. It is also a companion piece to the Agricultural Innovation Systems Sourcebook (World Bank, forthcoming). We are grateful for the contributions and look forward to continuing work that assists in meeting the Millennium Development Goal of halving the share of people suffering from extreme poverty and hunger by 2015. Valerie D’Costa Juergen Voegele Program Manager Director infoDev Agriculture and Rural Development The World Bank The World Bank E C O N O M IC AND S E CT OR WORK XVI A C K NOW LED GEM ENTS ACKNOWLEDGEMENTS The ICT in Agriculture e-Sourcebook, available at www.ICTinAgriculture.org, is made possible by a number of key individuals, donors and partner organizations. It was financed by the Ministry for Foreign Affairs of Finland under the Finland / infoDev / Nokia program on Creating Sustainable Businesses in the Knowledge Economy, whose generous contributions and ideas served as a foundation for its production. The e-Sourcebook was managed by a core team led by Eija Pehu (World Bank) and Tim Kelly (infoDev), which included Cory Belden (World Bank) and Kevin Donovan (infoDev). Acknowledgements are also due to members of the Steering Committee for the Creating Sustainable Businesses in the Knowledge Economy program, who include Pertti Ikonen (Nokia) and Amb. Markku Kauppinen (Ministry for Foreign Affairs, Finland), Ilkka Lakaniemi (Nokia), Valerie D’Costa (infoDev) and Janamitra Devan (World Bank), Ilari Lindy (World Bank), Philippe Dongier (World Bank), and Riikka Rajalahti (World Bank). Acknowledgements are also due to the authors of each module, who contributed their expertise and knowledgeable experi- ence. These authors include Henry Bagazonzya (World Bank), Peter Ballantyne (International Livestock Research Institute), Michael Barrett (University of Cambridge), Cory Belden (World Bank), Regina Birner (University of Hohenheim), Riccardo del Castello (Food and Agriculture Organization of the United Nations (FAO), Tuukka Castrén (World Bank), Vikas Choudhary (World Bank), Grahame Dixie (World Bank), Kevin Donovan (infoDev), Philip Edge (Consultant), Tina George (World Bank), May Hani (FAO), Julie Harrod (Consultant), Pekka Jamsen (AgriCord), Teemu Jantunen (FM-International Oy FINNMAP), Nithya Jayaraman (Consultant), Ajit Maru (Global Forum on Agriculture Research [GFAR]), Suvranil Majumdar (World Bank), Cristina Manfre (Cultural Practice, LLC), Robin McLaren (Know Edge Ltd), Kerry McNamara (American University), Estibalitz Morras (FAO), Karin Nichterlein (FAO), Eija Pehu (World Bank), Madhavi Pillai (World Bank), Enrica Porcari (Consultative Group on International Agriculture Research [CGIAR]), Luz Diaz Rios (World Bank), Stephen Rudgard (FAO), Zaid Safdar (World Bank), Soham Sen (World Bank), Mira Slavova (International Food Policy Research Institute [IFPRI]), Lara Srivastava (Webster University), Victoria Stanley (World Bank), and Sophie Treinen (FAO). The e-Sourcebook was refined and improved by a large number of peer reviewers, whose work is gratefully recognized. These reviewers include Gavin Adlington (World Bank), Maria Amelina (World Bank), Simon Batchelor (Gamos Ltd), Brian Bedard (World Bank), Deepak Bhatia (World Bank), Fritz Brugger (Syngenta Foundation), Mark Cackler (World Bank), Tuukka Castrén (World Bank), Maria Collion (World Bank), Kristin Davis (Global Forum on Research and Advisory Services), Grahame Dixie (World Bank), Kevin Donavan (infoDev), Fionna Douglas, (World Bank), Shaun Ferris (Catholic Relief Services), Alexander Flor (University of the Phillippines), Steve Froggett (United States Department of Agriculture), Aparajita Goyal (World Bank), Guillaume Gruere (IFPRI), Willem Heemskerk (Royal Tropical Institute), Peter Jaegar (ACCORD), Teemu Jantunen (FM-International Oy FINNMAP), Mercy Karanja (Gates Foundation), Renate Kloeppinger (World Bank), Donald Larson (World Bank), Ilari Lindy (World Bank), Calvin Miller (FAO), Ken Lohento (Technical Centre for Agricultural and Rural Cooperation (CTA)), Bart Minten (IFPRI), Jorge A. Muñoz (World Bank), Clare O’Farrell (FAO), Rodo Ortiz (World Bank), Kevin Painting (CTA), Andrea Pape-Christiansen (World Bank), Judith Payne (US Agency for International Development (USAID)), Eija Pehu (World Bank), Karl Prince (Iceni Mobile), Riikka Rajalahti (World Bank), Eva Rathgeber (Consultant), Lal Rattan (Ohio State University), Mike Robson (FAO), Deborah Rubin (Cultural Practice, LLC), Sandra Sargent (World Bank), Andrew Shepard (FAO), and William Zijp (Consultant). Very special thanks also goes to our editorial support team, which included Kelly Cassaday (Consultant) and Mike Donaldson (Consultant). The team is grateful to Kaisa Antikainen (World Bank) who led the publication process, as well as to the organiza- tions and individuals who contributed photos and other media. Also worthy of recognition are Kimberly Kweder (World Bank) and Ritesh Sanan (World Bank) who provided substan- tial technical web expertise. The team is also grateful to the organizers of infoDev’s 4th Global Forum on Innovation & Technology Entrepreneurship, where the e-Sourcebook was featured and previewed on May 31, 2011 in Helsinki, Finland. IC T IN A GR IC ULTUR E A C R O N Y M S AND ABBRE VIAT IONS X V II ACRONYMS AND ABBREVIATIONS 2G, 3G, 4G second-, third-, and fourth-generation [developments in mobile wireless technology] ACDI/VICA Agricultural Cooperative Development International/Volunteers in Overseas Cooperative Assistance AIS agricultural innovation system B2B business-to-business BSE bovine spongiform encephalopathy C Celsius CaFAN Caribbean Farmers Network CGIAR Consultative Group on International Agricultural Research CIAT Centro Internacional de Agricultura Tropical (International Center for Tropical Agriculture) CIC community information center (Bhutan) CIMMYT Centro Internacional de Mejoramiento de Maíz y Trigo (International Maize and Wheat Improvement Center) CKW community knowledge worker DIT Department of Information Technology (Bhutan) DFID Department for International Development (UK) DNE Dairy Network Enterprise DOQ digital orthophoto quad e- electronic EAP East Asia and Pacific ECA Europe and Central Asia ERP enterprise resource planning EU European Union FAPRI Food and Agricultural Policy Research Institute FEPASSI Fédération Provinciale des Professionnels Agricoles de la Sissili (Federation of Agricultural Producers of Sissili Province) FINO Financial Inclusion Network and Operations G2P government-to-person (cash transfer) GAP good agricultural practice Gbps gigabit per second GDP gross domestic product Ghz gigahertz GigE gigabit Ethernet GIS geographical information systems GLN global location number GM genetically modified GNSS global navigation satellite systems GPRS general packet radio service E C O N O M IC AND S E CT OR WORK XVIII A C R ONY MS AND A B B R EV IATIONS GPS global positioning system GSM Global System for Mobile Communications GTIN global trade item number HACCP hazard analysis and critical control point HIC high-income countries IBLI index-based livestock insurance ICRISAT International Crops Research Institute for the Semi-Arid Tropics ICT information communication technology ICTs information communication technologies IDI ICT Development Index IFAD International Fund for Agricultural Development IFC International Finance Corporation IFFCO Indian Farmer’s Fertilizer Cooperative Limited IFMR Institute for Financial Management and Research (India) IFPRI International Food Policy Research Institute IICD International Institute for Communication and Development IITA International Institute of Tropical Agriculture IKSL IFFCO Kisan Sanchar Limited ILRI International Livestock Research Institute IP Internet Protocol IPS Innovative Practice Summary IRRI International Rice Research Institute IT information technology ITU International Telecommunications Union LAC Latin America and Caribbean Lao PDR Lao People’s Democratic Republic LiDAR light detection and ranging m- mobile Mbps megabit per second MENA Middle East and North Africa MFI microfinance institution Mhz megahertz MNO mobile network operator NAIP National Agricultural Innovation Project (India) NARO National Agricultural Research Organisation (Uganda) NGN next-generation network NGO non-governmental organization NSDI national spatial data infrastructure OECD Organisation for Economic Co-operation and Development OS operating system PDA personal digital assistant PIN personal identification number PKGFS Pudhuaaru Kshetriya Gramin Financial Services IC T IN A GR IC ULTUR E A C R O N Y M S AND ABBRE VIAT IONS X IX PSTNs public switched digital telecommunication networks RFID radio-frequency identification RML Reuters Market Light Rs rupees SA South Asia SCM supply-chain management SDI spatial data infrastructure SIM subscriber identification module SMS short messaging service SSA Sub-Saharan Africa U Sh Uganda shillings UA universal access [to communication networks for ICTs] UA/USFs univeral access/universal service funds UK United Kingdom UNECE United Nations Economic Commission for Europe US universal service [from communication networks for ICTs] USA United States VANS value added network services VAT value-added tax VHRI very high resolution image VoIP Voice over Internet Protocol VSAT very small aperture terminal WFP World Food Programme WG-DSM International Working Group on Digital Soil Mapping WHO World Health Organization WiMAX Worldwide Interoperability for Microwave Access Y Yuan ZNFU Zambia National Farmers Union E C O N O M IC AND S E CT OR WORK SECTION 1 Overview of ICT in Agriculture: Opportunities, Access, and Cross-Cutting Themes S E C T I O N 1 — OV E RVIE W OF ICT IN AGRIC U LTU R E: OPPORTUNITIES, A C C ES S , A ND C R OSS -CUTTING TH EM ES 3 Module 1: INTRODUCTION: ICT IN AGRICULTURAL DEVELOPMENT KERRY MCNAMARA (American University), CORY BELDEN (World Bank), TIM KELLY (Infodev, World Bank Group), EIJA PEHU (World Bank), and KEVIN DONOVAN (Infodev, World Bank Group) INFORMATION AND COMMUNICATION the most promise for pro-poor economic growth. In fact, agri- TECHNOLOGY: FINDING A PLACE IN THE culture is around four times more effective at raising incomes AGRICULTURE SECTOR among the poor than other sectors (World Bank 2008). No Information and communication have always mattered in less important, improved agriculture also has a direct impact agriculture. Ever since people have grown crops, raised live- on hunger and malnutrition, decreasing the occurrences of stock, and caught fish, they have sought information from famine, child stunting, and maternal infirmity. one another. What is the most effective planting strategy on steep slopes? Where can I buy the improved seed or feed this Given the challenges, the arrival of information communi- year? How can I acquire a land title? Who is paying the high- cation technology (ICT) is well timed. The benefits of the est price at the market? How can I participate in the govern- green revolution greatly improved agricultural productivity. ment’s credit program? Producers rarely find it easy to obtain However, there is a demonstrable need for a new revolution answers to such questions, even if similar ones arise sea- that will bring lower prices for consumers (through reduced son after season. Farmers in a village may have planted the waste and more-efficient supply chain management), con- “same� crop for centuries, but over time, weather patterns tribute to “smart� agriculture, and incentivize farmers (for and soil conditions change and epidemics of pests and dis- example, through higher income) to increase their produc- eases come and go. Updated information allows the farmers tion. Public and private sector actors have long been on the to cope with and even benefit from these changes. Providing search for effective solutions to address both the long- and such knowledge can be challenging, however, because the short-term challenges in agriculture, including how to answer highly localized nature of agriculture means that information the abundant information needs of farmers. ICT is one of must be tailored specifically to distinct conditions. these solutions, and has recently unleashed incredible poten- tial to improve agriculture in developing countries specifically. Agriculture is facing new and severe challenges in its own Technology has taken an enormous leap beyond the costly, right (see box 1.1). With rising food prices that have pushed bulky, energy-consuming equipment once available to the over 40 million people into poverty since 2010, more effective very few to store and analyze agricultural and scientific data. interventions are essential in agriculture (World Bank 2011). With the booming mobile, wireless, and Internet industries, The growing global population, expected to hit 9 billion by ICT has found a foothold even in poor smallholder farms 2050, has heightened the demand for food and placed pres- and in their activities. The ability of ICTs to bring refreshed sure on already-fragile resources. Feeding that population will momentum to agriculture appears even more compelling in require a 70 percent increase in food production (FAO 2009). light of rising investments in agricultural research, the pri- vate sector’s strong interest in the development and spread Filling the stomachs of the growing population is only one rea- of ICTs, and the upsurge of organizations committed to the son agriculture is critical to global stability and development. agricultural development agenda. It is also critical because one of the most effective ways of reducing poverty is to invest in and make improvements in But what exactly are ICTs? And can they really be useful and the agricultural sector. Even after years of industrialization cost-effective for poor farmers with restricted access to capi- and growth in services, agriculture still accounts for one-third tal, electricity, and infrastructure? First, an ICT is any device, of the gross domestic products (GDP) and three-quarters tool, or application that permits the exchange or collection of of employment in sub-Saharan Africa. Over 40 percent of data through interaction or transmission. ICT is an umbrella the labor force in countries with per capita incomes in the term that includes anything ranging from radio to satellite US$ 400 to 1,800 range works in agriculture (World Bank imagery to mobile phones or electronic money transfers. 2008). Because agriculture accounts for the vast majority of Second, these ICTs and others have gained traction even the poor’s livelihood activities, it is also the sector that holds in impoverished regions. The increases in their affordability, E C O N O M IC AND S E CT OR WORK 4 MOD ULE 1 — INTR OD UC TION: IC T IN A GRICULTUR A L D EV ELOPM ENT accessibility, and adaptability have resulted in their use even adapt to weather conditions) can now be answered faster, within rural homesteads relying on agriculture. New, small with greater ease, and increased accuracy. Many of the ques- devices (such as multifunctional mobile phones and nano- tions can also be answered with a dialogue—where farmers, technology for food safety), infrastructure (such as mobile experts, and government can select best solutions based on a telecommunications networks and cloud computing facilities), diverse set of expertise and experience. and especially applications (for example, that transfer money or track an item moving through a global supply chain) have The types of ICT-enabled services that are useful to improv- proliferated. Many of the questions asked by farmers (includ- ing the capacity and livelihoods of poor smallholders are ing questions on how to increase yields, access markets, and growing quickly. One of the best examples of these services BOX 1.1: Globalizing Food Markets and New Challenges for Smallholder Farmers Understanding and addressing global agriculture developments—both advantageous and not—are critical to improving smallholder livelihoods, in which ICT can play a major role. The continued increase in globalization and integration of food markets has intensified competition and efficacy in the agriculture sector, and has brought unique opportunities to include more smallholders into supply chains. Yet in the same vein, agriculture faces a range of modern and serious challenges, particularly in developing countries exposed to price shocks, climate change, and continued deficiencies in infrastructure in rural areas. When commodity prices rise quickly and steeply, they precipitate concerns about food insecurity, widespread poverty, and conflict—more so in countries that import high volumes of staple foods. Globalized food markets also increase the risk that some countries and many smallholders will remain marginalized from the expanding and more profitable agricul- tural value chains (such as premium foods, which have seen an increase in demand due to an expanding middle class) that rely on technical sophistication to ensure speed, scale, and customization. Climate change has also played an acute role in keeping smallholders in the underbelly of value chains. Farmers can no longer rely on timeworn coping strategies when all of their familiar benchmarks for making agricultural decisions— the timing of rains for planting and pasture, the probability of frost, the duration of dry intervals that spare crops from disease—are increasingly less reliable. Severe and unexpected weather are shrinking already-limited yields and promot- ing migration from rural areas and rural jobs. Weather-related events leave developing-country governments, who lack the resources and the private sector investment to provide risk management instruments, to cope with major crop fail- ures and the displaced victims only after the fact. It is in the context of globalizing agriculture where the need for information becomes most vivid. The smallholders, who still provide a significant portion of the world’s food, need information to advance their work just as much as industrial- scale producers. Comparing the two types of farmers—industrial and small-scale—exemplifies the latter’s disadvantages. Where wealthier industrial producers can use the Internet, phone, weather forecasts, other digital tools, and technolo- gies as simple as vehicles and infrastructure as basic as electricity to glean information on prices, markets, varieties, production techniques, services, storage, or processing, smallholders remain dependent primarily on word of mouth, previous experience, and local leadership. The smallholder disadvantage does not stop there. Financial and insurance services are often out of reach and poorly understood. Key intermediaries like producer organizations and rural institutions (including local government) could help alleviate the disadvantage, but in many places, the former are just emerging and the latter are inefficient and nontranspar- ent. Both require a variety of technical and financial support to grow and become inclusive and effective. Many of these challenges and others can be addressed by using ICT effectively. Source: Authors. IC T IN A GR IC ULTUR E S E C T I O N 1 — OV E RVIE W OF ICT IN AGRIC U LTU R E: OPPORTUNITIES, A C C ES S , A ND C R OSS -CUTTING TH EM ES 5 IMAGE 1.1: Soil Data Can Be Collected and they can prepare for weather-related events. In resource- Disseminated by a Variety of ICT constrained environments especially, providers use sat- ellites or remote sensors (to gather temperature data), Internet (to store large amounts of data), and mobile phones (to disseminate temperature information to remote farmers cheaply)—to prevent crop losses and mitigate effects from natural adversities. Other, more-specialized applications, such as software used for supply chain or financial management are also becom- ing more relevant in smallholder farming. Simple accounting software has allowed cooperatives to manage production, aggregation, and sales with increased accuracy. The Malian Coprokazan, involved in shea butter production, began using solar-powered computers with keyboards adapted to the local language to file members’ records electronically. Along with electronic administration, the coop plans to invest in Global Positioning System (GPS) technology to obtain certifications and use cameras and video as training materials to raise the quality of production. From 2006 to 2010 alone, the coop’s membership grew from 400 to 1,000 producers (http://www .coprokazan.org/). These examples represent only a minute subset of the information and communication services that can be provided to the agricultural sector through increasingly Source: Neil Palmer, CIAT. affordable and accessible ICTs. Hundreds of agriculture- specific applications are now emerging and are showing great promise for smallholders, as illustrated in the more than 200 project-based case studies and examples in this is the use of mobile phones as a platform for exchanging infor- Sourcebook. In order to exploit the possibilities, countries mation through short messaging services (SMS). Reuters have two tasks: Market Light, for example, services over 200,000 smallholder subscribers in 10 different states in India for a cost of US$ 1.50 (A) To empower poor farmers with information and per month. The farmers receive four to five messages per day communication assets and services that will increase on prices, commodities, and advisory services from a database their productivity and incomes as well as protect their with information on 150 crops and more than 1,000 markets. food security and livelihoods, and Preliminary evidence suggests that collectively, the service may have generated US$ 2–3 billion in income for farmers (B) to harness ICTs effectively to compete in complex, (Mehra 2010), while over 50 percent of them have reduced rapidly changing global markets (avoiding falling their spending on agriculture inputs1. behind the technology curve). ICT-enabled services often use multiple technologies to pro- Accomplishing these tasks requires the implementation vide information (image 1.1). This model is being used to of a complex set of policy, investment, innovation, and provide rural farmers localized (non-urban) forecasts so that capacity-building measures, in concert with beneficiaries and other partners, which will encourage the growth of locally appropriate, affordable, and sustainable ICT infra- structure, tools, applications, and services for the rural 1 See Topic Note 9.4 in Module 9. economy. E C O N O M IC AND S E CT OR WORK 6 MOD ULE 1 — INTR OD UC TION: IC T IN A GRICULTUR A L D EV ELOPM ENT Importantly, ICT is not an end to agricultural development. more accurately, subscriber identity module (SIM) cards— The excitement generated by ICTs as they spread through- are expected to be in use worldwide (Wireless Intelligence out developing countries has often masked the fact that 2011). Mobile phone penetration in the developing world their contributions to agriculture are both rapidly evolving now exceeds two subscriptions for every three people, and poorly understood. It is too early to have a clear idea, driven by expanding networks in Asia and in Africa. The abil- supported by rigorous analysis, of how ICTs support agricul- ity to purchase a low-cost mobile phone is complemented tural development, and under what conditions. While there by the expansion in telecommunications infrastructure; is credible evidence of positive impact, questions remain most countries now have more than 90 percent of their about how to make these innovations replicable, scalable, population served by a cell phone signal, including coverage and sustainable for a larger and more diverse population. A in rural areas (see figure 1.1). This rapid expansion results central goal of this Sourcebook is to analyze and disseminate from enabling regulations that ensure competition in the evidence of the impact of ICTs on agricultural development telecommunications sector as well as from high demand for and rural poverty reduction, exploring opportunities for long- mobile phone subscriptions. term and expansive efforts. The reach and affordability of broadband Internet is also improving dramatically—though somewhat slower—in THE WAY FORWARD: UNDERSTANDING THE WHY developing regions. In 2010, the number of Internet users AND THE HOW surpassed 2 billion and over half of these users are now in Each module in the Sourcebook discusses the key chal- developing countries. Internet connectivity around the world lenges, enablers, and lessons related to using ICTs in a spe- has grown exponentially since 2000, by over 480 percent cific subsector of agriculture. These are derived from a range (Internet World Statistics, 2011).The price of bandwidth has of experiences, and summarize the knowledge gained dur- continued to drop as well, driving down the costs of extend- ing pilot projects and wider initiatives. While different in type ing connections to isolated communities. In sub-Saharan of intervention and approach, a string of themes emerges Africa, which lags other regions in ICT accessibility, a recent from the modules. These themes—namely the why and surge of investments in international undersea cables and how of using ICT in agricultural development—demonstrate inland infrastructure to complete those connections is mak- the great potential of ICT and help to clarify the way forward. ing ICTs services substantially more accessible and afford- able across Africa (figure 1.2). By 2010, 12.3 terabits per second of backbone capacity was operational in Africa, up The Why: Drivers of ICT in Agriculture from less than 1 gigabit per second at the start of the decade Five main trends have been the key drivers of the use of (TeleGeography 2011). ICT in agriculture, particularly for poor producers: (1) low-cost and pervasive connectivity, (2) adaptable and more affordable Telecenters or other community-based facilities can provide tools, (3) advances in data storage and exchange, (4) innova- Internet access in locations where broadband is too expensive tive business models and partnerships, and (5) the democra- tization of information, including the open access movement and social media. These drivers are expected to continue FIGURE 1.1: Percentage of the World’s Population shaping the prospects for using ICT effectively in developing- Covered by a Mobile Cellular Signal country agriculture. 2003 2009 Low-Cost and Pervasive Connectivity The pervasiveness of connectivity—to mobile phones, Internet, 10% not covered and other wireless devices—is due to a number of factors, including decreases in costs, increases in competition, and 39% not covered 61% expansion of last-mile infrastructure. Several trends, working in covered tandem, are making ICT devices and services more affordable 90% covered in ways that also extend access to small-scale producers. Mobile phones are in the vanguard of ICTs in agriculture. By the end of 2011, over 6 billion mobile phone subscriptions—or Source: International Telecommunications Union. IC T IN A GR IC ULTUR E S E C T I O N 1 — OV E RVIE W OF ICT IN AGRICULTU R E: OPPORTUNITIES, AC C ES S , A ND C R OSS -CUTTING TH EME S 7 FIGURE 1.2: African Undersea Cables, Those Working and Those in Development This map was produced by the Map Design Unit of The World Bank. IBRD 38933 The boundaries, colors, denominations and any other information shown on this map do not imply, on the part of The World Bank ESTONIA NOVEMBER 2011 Group, any judgment on the legal status of any territory, or any endorsement or acceptance of such boundaries. Mediterranean Undersea Cables RUSSIAN FEDERATION RUSSIAN LATVIA 320 gigabits DENMARK FED. Atlas Offshore Active UNITED LITHUANIA KINGDOM THE 1280 gigabits IRELAND NETH. BELARUS SAS-1 Active GERMANY POLAND Highbridge Bude BELGIUM 3840 gigabits LUX. CZECH REP. UKRAINE SEA-ME-WE 4 Active SLOVAK REP. Penmarc'h FRANCE AUSTRIA HUNGARY MOLDOVA 3840 gigabits SWITZ. SLOVENIA ROMANIA I-ME-WE Active CROATIA BOSNIA SERBIA Marseille Monaco Vigo ITALY & HERZ.KOSOVO BULGARIA 3840 gigabits MONTENEGRO FYR KYRGYZ REP. PORTUGAL SPAIN ALBANIA MACEDONIA EIG Active Lisbon Seixal MONACO Palermo TURKEY TURKMENISTAN Sesimbra Chipiona Catania GREECE TAJIKISTAN Portimão Annaba Bizerte CHINA Gibraltar (UK) CYPRUS SYRIAN Asilah ARAB REP. TUNISIA LEBANON Tripoli ISLAMIC REP. Casablanca OF IRAN AFGHANISTAN Tripoli IRAQ ISRAEL West Bank MOROCCO Alexandria and Gaza KUWAIT Cairo Suez JORDAN PAKISTAN Buena Vista BAHRAIN ALGERIA NEPAL Alta Vista QATAR LIBYA ARAB REP. Former Fujairah Spanish OF EGYPT Karachi Sahara SAUDI U.A.E. ARABIA Muscat Jeddah INDIA MAURITANIA Port Sudan OMAN Mumbai Nouakchott CAPE VERDE MALI NIGER Praia SUDAN ERITREA REP. OF YEMEN Dakar To SENEGAL CHAD Malaysia, Banjul Chennai Thailand, BURKINA Singapore THE GAMBIA Bissau FASO Djibouti DJIBOUTI GUINEA BENIN Kochi Conakry NIGERIA GUINEA-BISSAU TOGO SIERRA LEONE CÔTE GHANA ETHIOPIA SRI Freetown D’IVOIRE Cotonou Lagos CENTRAL SOUTH LANKA Lomé Colombo Monrovia Abidjan Accra CAMEROON AFRICAN REP. SUDAN LIBERIA Limbé SOMALIA Douala Kribi MALDIVES To Bata Mogadishu UGANDA Penang Santana Libreville CONGO GABON KENYA DEM. REP. RWANDA EQU. GUINEA OF SEYCHELLES SÃO TOMÉ AND Pointe-Noire CONGO BURUNDI Mombasa Victoria To PR�NCIPE Fortaleza, Muanda TANZANIA Brazil Dar Es Salaam Cacuaco Luanda COMOROS Moroni ANGOLA Kaouéni MALAWI West Coast ZAMBIA Mayotte (Fr.) 340 gigabits SAT3/SAFE Active MOZAMBIQUE Toamasina 1920 gigabits ZIMBABWE Terre- MAURITIUS Rouge MaIN OnE Active NAMIBIA MADAGASCAR Savanne Saint-Paul 2500 gigabits BOTSWANA Réunion Swakopmund GLO-1 Active Toliary (Fr.) East Coast 320 gigabits 5120 gigabits Maputo SEAS Q3 2012 SWAZILAND WACS Q4 2011 1280 gigabits SOUTH Mtunzini TEAMs Active AFRICA LESOTHO 5120 gigabits 1280 gigabits Seacom Active ACE Q3 2012 Yzerfontein Melkbosstrand Cape Town 1280 gigabits Lion2 Q2 2012 12800 gigabits 1300 gigabits Lion Active SAex Q2 2013 4720 gigabits EASSy Active Source: Adapted from Steve Song, http://manypossibilities.net and TeleGeography. for individuals to use on their own. Internet access is also Adaptable and More Affordable Tools expected to increase through the continued rollout of third- and The proliferation of adaptable and more affordable technolo- fourth-generation (3G and 4G) mobile networks that greatly gies and devices has also increased ICT’s relevance to small- improved capacity for carrying data. Smartphones, such as holder agriculture. Innovation has steadily reduced the pur- BlackBerries or iPhones, which include 3G mobile services with chase price of phones, laptops, scientific instruments, and remote Internet connection, will increase access to information specialized software. Agricultural innovation in developed even to poor farmers. The International Telecommunication countries has become more applicable to developing-country Union (2010) reports that at the end of 2010, 143 countries needs. The intuitive design of many technologies and their offered commercial 3G services, providing at least 256 kilobits capacity to convey information visually or audibly make them per second of bandwidth and supplying voice and data simul- useful to people with limited formal education or exposure taneously (figure 1.3 shows the slow, but increasing rate of to technology. uptake of mobile broadband) and other ICT tools. E C O N O M IC AND S E CTOR WORK 8 MOD ULE 1 — INTR OD UC TION: IC T IN A GRICULTUR A L D EV ELOPM ENT FIGURE 1.3: Global ICT Development from 2000–2010 100 90 Mobile cellular telephone subscriptions Internet users 80 Fixed telephone lines 70 Per 100 inhabitants Active mobile broadband subscriptions 60 Fixed (wired) broadband subscriptions 50 40 30 20 10 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Source: International Telecommunications Union’s World Telecommunication/ICT Indicators database. Mobile-based applications are also becoming more suitable most likely to benefit from using e-vouchers to purchase for poor and isolated communities, especially though feature fertilizer). phones. Drawing on simple, available technologies such as SMS, service providers can offer mobile banking, other trans- Advances in Data Storage and Exchange actional services (selling inputs, for example), and information Greatly increased data storage capacity and the ability to services (market price alerts). Other publicly and privately access data remotely and share it easily have improved the provided services such as extension and advisory services use of ICT in agriculture. Sharing knowledge and exchanging are delivered over mobiles, which are increasingly not just data have created opportunities to involve more stakehold- “phones� but are actually multifunctional wireless devices. ers in agricultural research—involvement facilitated by an Geospatial information is also becoming easier to access and use as mapping tools, such as Microsoft Earth or Google Maps (image 1.2), bring geographical data information to IMAGE 1.2: Google Map of Kampala, Uganda. nonspecialist users. Scientists and development organiza- tions have created substantial sets of georeferenced data on population, poverty, transportation, and any number of other public goods and variables through more afford- able, usable geographic information systems available on standard PCs and mobile devices using web-based tools. Satellite images and similar representations have improved exponentially in quality and detail. These tools and remote sensors use less energy and require less human attention than in previous years. The capacity to overlay geospatial information with climate and socioeconomic data opens many options for analyzing biophysical trends (such as ero- sion or the movement of pathogens), making projections (about the effects of climate change or the best location of wholesale markets in relation to transport infrastructure), and selecting particular groups to test new technologies or farming practices (for instance, identifying farmers that are Source: Google Maps. IC T IN A GR IC ULTUR E S E C T I O N 1 — OV E RVIE W OF ICT IN AGRIC U LTU R E: OPPORTUNITIES, A C C ES S , A ND C R OSS -CUTTING TH EM ES 9 improved e-learning environment and networking capacity. because they often lead to increased efficiency and revenue Advances in data storage and sharing have improved the abil- as well as extensions to client bases like isolated farmers. ity to exchange information—for instance, between depart- ments and levels of government—and avoid costs associ- New forms of business incubation and knowledge brokering ated with data transmission charges. are also contributing to ICT in agriculture. The private sector has a keen interest in investing in firms that come out of Improvements in data storage and sharing have underlying such incubation schemes, speculating on the ability of an causes. The capacity of hard drives and the speed of micro- innovative idea to expand into a highly profitable enterprise. processors have continued to rise, making it dramatically Incubators identify additional investors and other suitable cheaper to store data. Cloud computing offers access to partners, including technical experts. In many instances, numerous shared computing resources through the Internet, they develop enterprises through which private and public including sharable tools, applications, and intelligently linked providers of agricultural services collaborate to deliver prod- content and data. These advances address some of the ucts more efficiently to farmers; in developing, sharing, and information and communication constraints of agricultural capitalizing on innovations for agricultural development, they research institutions, government offices, cooperatives, almost always use ICT and often develop new ICT tools. and development organizations. Benefits of enhanced data capacity range from more accurate targeting of agricultural IMAGE 1.3: Public-Private Partnerships Often Lead to development programs to better preparation for handling More-Sustainable Services for Rural People surpluses or scarcities at the farm level. New Business Models and Public-Private Partnerships The development and use of many ICTs originated in the public sector but were quickly dominated by the private sector when their profit potential became clear. The public sector maintains great interest in ICT as a means of provid- ing better public services that affect agriculture (for instance, land registration, forest management, and agricultural exten- sion services), as well as for connecting with citizens and managing internal affairs. Private sector involvement in some of these efforts has enhanced the access, affordability, and adaptability of ICTs for development. Unlike other develop- ment strategies, which often struggle to survive or be scaled Source: Nokia. because the public sector cannot fund them, development strategies featuring ICTs have benefited from growing pri- Knowledge brokering, in which a private enterprise provides vate sector interest and public demand (image 1.3). information for a fee (for example, farmers obtain market, The entrepreneurial nature of ICTs attracts new partner- price, crop, and weather information via their mobile phones), ships and forms of investment. Mobile phone applica- is also gaining traction. This business model reduces the tions, software design, local language customization, and burden on the public sector while increasing the abilities of remote transaction services represent only a fraction of the brokers and farmers to profit from information sharing. opportunities for continued innovation. Private companies that have invested in technology and applications are often Democratization of Information, the Open Access interested in working with the public sector to provide their Movement, and Social Media products and services to smallholders. Mobile network The democratization of information and science facilitated by operators, for example, can invest by providing large text ICTs is also contributing to agriculture and rural development packages at a lower price, collecting premiums, distributing more broadly. Vast quantities of information held by institu- payments, or participating in extending networks to rural tions and individuals are becoming visible, publicly accessi- areas. Commercial enterprises such as processors, input ble, and reusable through the open access movement. Many suppliers, and exporters are also motivated to invest in ICT governments and organizations such as the World Bank, the E C O N O M IC AND S E CT OR WORK 10 MOD ULE 1 — INTR OD UC TION: IC T IN A GRICULTUR A L D EV ELOPM ENT Food and Agriculture Organization, the Consultative Group Concentrate on the Demand, Not on the Technology on International Agricultural Research are aiming to make The versatility and near-constant innovation that characterize data—like national surveys or research findings—publicly ICT can be a distraction: They can cause interventions to focus available. These actions have not only improved transparency more on the technology than on the priorities of the intended and accountability but have invited the public, private, and clients and the tradeoffs imposed by resource-constrained research sectors to participate in solving long-term economic environments. It is important to begin any ICT-in-agriculture and social problems, including those involving agriculture. intervention by focusing on the need that the intervention is purposed to address—not the need for ICT—but the need The expansion of open access software also enables grass- for better and more timely market information, better access roots community organizations to share knowledge with one to financial services, timely and appropriate crop and disease another. Social media, once used purely for entertainment, management advice, stronger links to agricultural value has great potential to be used for knowledge sharing and chains, and so forth. In some cases, ICT will not be an effec- collaboration even in agriculture. Although penetration of the tive means to meet these needs at all. most popular social medium, Facebook, was estimated at just 3 percent in Africa and almost 4 percent in Asia in 2010, Years of agricultural development experience show that proj- compared to 10.3 percent (over half a billion users) globally ects that involve new technologies require farmers’ engage- (Internet World Statistics, 2011), recent geopolitical events ment, right from the start. Interventions that make meager highlight the effectiveness of social media for sharing infor- efforts to involve farmers in planning and design result in low mation and motivating collective action—two key features of uptake, trust, and interest. The same is true for programs agriculture development. or strategies involving ICTs for development. A weak focus on farmers’ needs at the expense of ICT will ignore ancillary Finally, crowdsourcing, in which scientists, governments, needs for investment in human capacity, community partici- and development organizations request feedback from farm- pation, or infrastructure. ers and consumers through devices like mobile phones, is also facilitating agriculture development. Farmers can use Use Appropriate Technologies SMS to send critical local agricultural information like inci- The attractiveness of the newest ICTs can lead to a pref- dences of pests or crop yields that was previously difficult to erence for the latest technologies at the expense of older obtain without expensive surveys by researchers. Using the technologies (such as radio), yet the newest, most elaborate, digital tools available, consumers can also provide informa- or most innovative technology is not automatically the most tion related to changing consumption patterns and tastes to appropriate one. Moreover, an innovative mix of technologies private enterprise. (for instance, radio programs with a call-in or SMS facility for feedback) can be the most cost-effective solution. Well- reasoned assessment of the tradeoffs between the added The How: Lessons Learned So Far cost of a technology or service and benefits relative to other A number of key lessons related to ICT-in-agriculture options (technological and other) is important. policies and projects were gleaned during the research for this e-sourcebook. Using ICT to achieve agricultural The wide coverage of mobile devices reduces but does not development goals requires supplementary investments, eliminate these tradeoffs. In considering the appropriate- resources, and strategies. Flexible but strongly support- ness of technology, assessing the human capital available for ive policies and regulations, complementary investments developing and disseminating the ICT device or application is in physical infrastructure, support to men and women critical. The more complex the technology, the more training farmers of different age groups, technological appropri- and (qualified) extension support it will require. In environ- ateness, and the enabling environments for innovation ments where infrastructure is not conducive to a particular and new businesses will determine the long-term impact instrument, other means should be used. and sustainability of these efforts. These lessons are not conclusive—much remains to be learned—but they Finally, it is important to recognize that these newer technol- serve as sound considerations as investments are made ogies do not automatically replace the more traditional forms in future interventions. of communication, knowledge sharing, and collective action IC T IN A GR IC ULTUR E S E C T I O N 1 — OV E RVIE W OF ICT IN AGRIC U LTU R E: OPPORTUNITIES, A C C ES S , A ND C R OSS -CUTTING TH EM ES 11 that have evolved within a given community or region. In family income can prevent women from owning or even using designing ICT interventions, it is necessary to research and phones. However, the growing availability and lower cost of understand local information and communication practices, mobile phones, as well as other contributing factors, has the barriers to ICT-enabled empowerment, and priority informa- potential to meet women’s agricultural needs (image 1.4). tion and communication needs of end users. Using conven- tional information and communication tools to address the IMAGE 1.4: Determining Levels of Inclusiveness Is a needs of those who cannot access the ICT because of limita- Critical Factor in ICT Interventions tions related to literacy, isolation, and social norms is often required. Focus on Affordable Access and Use, Not Ownership In designing ICT-in-agriculture interventions, it is vital to bear in mind that “access� refers not only to the physical proxim- ity and accessibility of ICT infrastructure, tools, and services but also to their affordability, use, and usage models that are appropriate for the local physical, environmental, and cultural constraints. The specific mix of individual-user and shared- use/public-access models that is most appropriate and locally sustainable will vary depending on local needs and resources, and will change over time as devices and services diversify further and become even more affordable. As the costs of Source: Nokia. ownership of ICTs have come down, the affordability and accessibility divide has improved, especially for individual Social access issues extend beyond gender. A full under- user services. However, it also may be that in some cases, standing of the local, national, and regional agricultural learning is better facilitated through shared access than indi- economy is important for ensuring that ICT interventions do vidual access facilities. not restrict poor producers’ participation to the low end of agricultural value chains like other technologies have. ICT Actual use of the technology should also be monitored, in itself does not guarantee full participation by all social as a supplied technology does not necessarily imply that groups. Efforts to be inclusive must focus on the full range it is being used for economic means. Many times, mobile of capacities and resources that small-scale producers will phones and other devices function strictly as a tool for basic need to benefit from an intervention. Questions of social communication or entertainment. This is often a result of par- access should be raised consistently when using ICT to ticipants’ low exposure to ideas or methods on how the ICT improve rural livelihoods. Do sociocultural norms or divi- can be used to achieve agriculture or other economic goals. sions prevent certain groups from using the technology? Will better-off groups benefit more than poor groups? Will Be Aware of Differential Impacts, Including Gender floods of entertainment and spurious information dilute the and Social Differences in Access and Use knowledge needed for sustainable agricultural and rural Under certain conditions, ICT interventions can worsen development? Broad-based rural development depends on rather than alleviate underlying economic, social, and political monitoring and evaluating outcomes and making adjust- inequalities, including those between women and men. Rural ments along the way. women, face significant disadvantages in accessing informa- tion and communication assets and services. Many of the Create an Enabling Environment for Innovation in fixed-location ICT projects designed to enhance rural access Infrastructure Investment, Business Models, Services, to information assets and services were or are owned or man- and Applications aged by men. Cultural attitudes and women’s multiple roles Effective design and consistent, transparent implementation and heavy domestic responsibilities often exclude them from of appropriate policies and regulations guiding a country’s these services. The same attitudes and lack of control over investment in and provision of ICT infrastructure, tools, and E C O N O M IC AND S E CT OR WORK 12 MOD ULE 1 — INTR OD UC TION: IC T IN A GRICULTUR A L D EV ELOPM ENT services is key to enabling ICT interventions. In creating a multi-level policy makers; and farmers and farmers’ organi- supportive environment for ICT innovation and service provi- zations who can provide local know-how, are also often all sion, effective policies and regulations in a number of other needed in one way or another. key areas are equally important, such as public and private financing of infrastructure, the business environment, sup- Promote Leadership and Find Champions port for innovation, and intellectual property. ICT-in-agriculture Last, but not certainly not least, ICT interventions require interventions require a strong, but flexible, regulatory envi- leadership. Champions are needed to push projects forward ronment; the policy environment is further strengthened by in the development agenda and make them visible and incentives for the private sector to make investments. interesting to the stakeholders—farmers, businesses, and others—who need them. These leaders must operate at the Develop Sustainable Business and Investment Models national level where budgetary and strategic decisions are through Partnerships made. They must also operate at local levels, modeling the Public-private partnerships are now considered essential to effective use of a technology and building farmers’ trust in its the long-term viability of most interventions that use ICT efficacy. Leaders build public confidence in an intervention. in agriculture. The public sector in developing countries Uptake is typically low if confidence in the chosen ICT and particularly may need guidance in providing technological its potential impact is minimal. Leaders are needed for the services; a lack of human and financial resources as well as long haul, as interventions that require new infrastructure or the overwhelming needs of the agrarian population weaken policy and institutional reforms take years to complete. its ability to provide widespread services of acceptable quality. USING THIS E-SOURCEBOOK With private investment, public service provision can be more The ICT for Agriculture e-Sourcebook has been devel- sustainable. Other partnerships also appear important to oped jointly by the World Bank’s Agricultural and Rural sustainability (image 1.5). Technical experts with experience in various subsectors; information technology (IT) teams for Development Sector and infoDev, and has benefited from technological maintenance, design, and troubleshooting;generous funding from the Government of Finland under the Finland/infoDev/Nokia program IMAGE 1.5: A Collaborative Effort Among Many Actors Is Important for ICT Creating Sustainable Businesses in Agriculture in the Knowledge Economy. It is designed to support practitioners and policy makers in taking maxi- mum advantage of the potential of ICTs as tools for improving agricul- tural productivity and smallholder incomes, strengthening agricultural markets and institutions, improv- ing agricultural services, and build- ing developing-country linkages to regional and global agricultural value chains. It focuses primarily on how ICT can assist small-scale producers and the intermediate institutions that serve them, yet it also looks at how to link smallholders to ICT-enabled improvements in larger-scale farm- ing, markets, and agribusiness to Source: Neil Palmer, CIAT. stimulate the broader rural economy. IC T IN A GR IC ULTUR E S E C T I O N 1 — OV E RVIE W OF ICT IN AGRIC U LTU R E: OPPORTUNITIES, A C C ES S , A ND C R OSS -CUTTING TH EM ES 13 The Sourcebook provides users with a fairly comprehensive  A number of Topic Notes that address subjects related overview of current and upcoming ICT-in-agriculture applica- to each focus area, pinpointing how ICTs can be used tions and how they might improve agricultural interventions to meet specific objectives; and or strategies. The Sourcebook is not a primary research  Innovative Practice Summaries and other exam- product nor does it claim to be the definitive treatment of a ples that demonstrate success and failure in sector that is evolving so rapidly. The modules are intended interventions. to serve as a practical resource for development profession- als seeking a better understanding of the opportunities and In the beginning of each module, an “In this Module� Box existing applications offered by ICT as tools for agricultural briefly describes the content in the modules, including the development. overview, Topic Notes, and Innovative Practice Summaries. The Innovative Practice Summaries are bulleted underneath Overall, each module seeks to provide guidance through the description of the Topic Note, and can be viewed directly real examples for development practitioners in the following by clicking on the title. Many of the tools, examples, and areas: projects discussed also include links to websites and other  Providing a landscape of existing ICT applications that useful resources. assesses applications in their local context. Due to the changing nature of ICT, the Sourcebook is pro-  Understanding current trends in ICTs as they per- vided electronically at http://www.ictinagriculture.org/. The tain to agriculture and the contributions that ICT can website provides a wide array of additional resources, fol- make to enhance agricultural strategies and their lows new private and public sector applications, reviews implementation. impact assessments and research, and presents updates  Designing, implementing, and evaluating appropri- from interventions discussed in the modules. In addition, ate and sustainable ICT components of agricultural the website maintains occasional forums and discussions, projects. creating a space for practitioners from various disciplines to  Building effective partnerships—public and private—to share knowledge and experiences. The online version also promote ICT access and innovation for agriculture. allows users to “build their own Sourcebook� by download-  Including ICT in policy dialogue and planning with ing modules relevant to their needs and linking directly from country counterparts on agricultural and rural develop- hyperlinks in the text to projects or technologies of interest ment goals and priorities. in the other modules or on the web. To facilitate learning, the Sourcebook is split into this introduc- Over time, the World Bank and infoDev will continue to build tory module plus 14 modules focusing on specific aspects collaborations with other organizations and subject mat- of the agricultural sector in relation to ICTs (table 1.1). Each ter experts to expand and update the Sourcebook as new module provides: examples, evidence, and good practices emerge. Given the  An overview of how ICT is used in each focus area, still-limited evidence on how to implement ICT-in-agriculture along with the current trends; initiatives, the World Bank plans to further develop its opera-  The challenges, lessons, and key enablers for using tional practices and country-specific technical assistance as ICTs; evidence and analysis accumulates. TABLE 1.1: Themes Treated in Sourcebook Modules OPPORTUNITIES, ACCESS, & ENHANCING PRODUCTIVITY ACCESSING MARKETS IMPROVING PUBLIC SERVICE CROSS-CUTTING THEMES ON THE FARM AND VALUE CHAINS PROVISION Access and affordability Increasing productivity Market and price information Rural governance Mobile applications Agriculture innovation systems Supply chain management Land administration Gender and ICT services Rural finance Risk management Forest governance Farmer organizations Traceability and food safety E C O N O M IC AND S E CT OR WORK 14 MOD ULE 1 — INTR OD UC TION: IC T IN A GRICULTUR A L D EV ELOPM ENT REFERENCES AND FURTHER READING UNFAO. 2009. How to Feed the World 2050. http://www.fao.org/filead- min/templates/wsfs/docs/expert_paper/How_to_Feed_the_World_ International Telecommunications Union. 2010. International in_2050.pdf, accessed September 6, 2011. Telecommunications Union’s World Telecommunication/ICT Indicators database. http://www.itu.int/ITU-D/ict/statistics/, Wireless Intelligence. 2011. Global Mobile Connections to Surpass accessed September 5, 2011. 6 Billion by Year-end. https://www.wirelessintelligence.com/ analysis/pdf/2011-09-08-global-mobile-connections-to-surpass-6- Internet World Statistics. 2011. Facebook Users in the World. billion-by-year-end.pdf, accessed September 15, 2011. June 2011, http://www.internetworldstats.com/facebook.htm, accessed September 15, 2011. World Bank. 2011. Food Price Watch. February 2011, http:// siteresources.worldbank.org/INTPREMNET/Resources/Food_ Mehra, A. 2010. “Small Technologies Fuel Big Results in the Price_Watch_Feb_2011_Final_Version.pdf, accessed September 4, Developing World.� The Huffington Post, September 13, 2010. 2011. http://www.huffingtonpost.com/amit-mehra/small-technologies- fuel-b_b_715274.html, accessed September 2011. World Bank. World Development Report 2008: Agriculture in Development. http://siteresources.worldbank.org/INTWDR2008/ TeleGeography. 2011. http://www.telegeography.com/, accessed Resources/2795087-1192111580172/WDROver2008-ENG.pdf, September 23, 2011. accessed September 10, 2011. IC T IN A GR IC ULTUR E S E C T I O N 1 — OV E RVIE W OF ICT IN AGRIC U LTU R E: OPPORTUNITIES, A C C ES S , A ND C R OSS -CUTTING TH EM ES 15 Module 2: MAKING ICT INFRASTRUCTURE, APPLIANCES, AND SERVICES MORE ACCESSIBLE AND AFFORDABLE IN RURAL AREAS MICHAEL BARRETT (University of Cambridge) and MIRA SLAVOVA (International Food Policy Research Institute) IN THIS MODULE Overview. What are “accessible� and “affordable� information communication technologies (ICTs)? What general policy strategies, infrastructure, technology, and business models mediate ICTs’ accessibility and affordability? Partnerships among organizations with different specialties, capacities, and profit motives are key to improving access and affordability. The task of regulation policy is to keep pace with technological developments and reduce inequalities within countries while maintain- ing sound business reasoning within the telecommunications sector. Policy interventions must consider ICTs and their users as a socio-technical system through which equitable access to ICTs translates into sustainable benefits for rural residents. Topic Note 2.1: Making ICTs Affordable in Rural Areas. In developing countries, infrastructure, appliances, and ser- vices influence the delivery of affordable ICTs. What wired and wireless infrastructure can improve domestic backbone and “last mile� connectivity in rural areas? What tradeoffs exist between quality and quantity of service? What devices appear most adaptable to the needs of rural users? Finally, how can services benefit from synergies among network infrastructure, connectivity modalities, access devices, and content? Topic Note 2.2: Public Innovations in Universal Access to Telecommunications. It is within the domain of govern- ment to provide innovative methods for access to ICTs in rural areas. Public agencies help develop infrastructure where incentives for private investment are insufficient; public policy encourages demand for telecommunications through such mechanisms as universal access/universal service funds or support for low-cost devices.  Passive Infrastructure Sharing in Nigeria  Turkey’s Oligopolistic Infrastructure Sharing Model  Dabba’s Experience with Unlicensed Wireless Services in South Africa  Bhutan’s Community Information Centers Adapt to the Geographical and Consumer Context Topic Note 2.3: Mobile Money Moves to Rural Areas. In developing economies worldwide, companies deliver finan- cial services and new sources of income outside of conventional bank branches, through mobile phones and nonbank retail agents. Mobile financial and income-generating services cost little and operate on all handsets, making them advan- tageous on a large scale, even in more remote rural areas.  M-PESA’s Pioneering Money Transfer Service  Zain Zap Promotes Borderless Mobile Commerce  Pakistan’s Tameer Microfinance Bank for the Economically Active Poor  Txteagle Taps a Vast Underused Workforce Topic Note 2.4: Delivering Content for Mobile Agricultural Services. New services offer critical information for farm- ers to improve their livelihoods. The technical aspects of delivering content and services that rural users value are influ- enced by the partners engaged in providing the service, the regulatory environment, business model, and the networks, infrastructure, and devices available.  First Mover Advantage Benefits Reuters Market Light  Long Experience in Farm Communities Benefits Indian Farmer’s Fertilizer Cooperative Limited (IFFCO) Kisan Sanchar Limited  Farmer’s Friend Offers Information on Demand, One Query at a Time E C O N O M IC AND S E CT OR WORK 16 MODULE 2 — MAKING ICT INFRASTRUCTURE, APPLIANCES, AND SERVICES MORE ACCESSIBLE AND AFFORDABLE IN RURAL AREAS OVERVIEW the mobile microfinance industry to grow. Topic Note 2.4 explores ICTs have a demonstrably positive effect on income growth efforts to build on expanding mobile networks in rural areas to in developing and developed countries (Röller and Waverman deliver value-added livelihood services to farmers (primarily infor- 2001; Waverman, Meschi, and Fuss 2005). In rural areas, ICTs mation to reduce agricultural losses and increase income). can raise incomes by increasing agricultural productivity (Lio and Liu 2006) and introducing income channels other than “Access� in Relation to Two Broad Concepts in traditional farm jobs. Current limited evidence from individual Telecommunications Policy: Universal Access and farmers and fishers in India supports the conclusion that ICTs Universal Service improve incomes and quality of life among the rural poor (Goyal Within telecommunication policy, “access� can be under- 2010; Jensen 2007). The idea that wider access to and use of stood in relation to two broad concepts: universal service and ICTs throughout a country will reduce inequalities in income universal access (Gasmi and Virto 2005). “Universal service�1 and quality of life between rural and urban residents is compel- is a policy objective primarily used in developed countries. ling. Despite the scarcity of evidence to support this notion It focuses on upgrading and extending communication net- (Forestier, Grace, and Kenny 2002), it underlies widespread works so that a minimum level of service is delivered to policy initiatives to ensure equitable access to ICTs in all areas. individual households, even in the least accessible areas. US objectives are generally pursued by imposing universal ser- Creating affordable ICT services in rural areas is a complex vice obligations on network operators. “Universal access,�2 a challenge. In these areas, the “last mile� of telecommunica- policy objective more typical for developing countries, seeks tions infrastructure is provided at a very high cost that may to expand the geographic access to ICTs of the population at not be justified by the resulting use and effects of the tele- large, and often for the very first time. UA obligations provide communications network. Affordable access to ICTs in rural for a minimum coverage, especially of remote communities, areas can be frustrated at the supply as well as the demand thereby allowing all citizens to “use the service, regardless of end of the service-provision chain. To supply ICTs and related location, gender, disabilities, and other personal characteris- services in rural areas, the main challenge is the high level of tics� (Dymond et al. 2010). Table 2.1 outlines the characteris- capital and operating expenses incurred by service provid- tics of universal access and universal service in terms of their ers. On the demand side, rural adoption of ICTs in developing availability, accessibility, and affordability. countries is curtailed by low availability of complementary public services, such as electricity and education, and by the In designing policy interventions to promote equitable access relative scarcity of locally relevant content. to ICTs, the technology and its users must be considered as forming a socio-technical system through which improved ICT Recognizing the equity implications of access to ICTs, govern- access translates into improved rural livelihoods and sustain- ments have adopted regulatory policies to enable the rollout of able benefits for rural residents. Many authors have considered ICT infrastructure and the supply of services in rural areas, and access to ICTs holistically, with an aim of understanding differ- they have addressed low rural demand by introducing locally ent aspects of how access is enabled or impeded, including relevant content in the form of e-government and e-agriculture technological, socioeconomic, and cultural aspects.3 This mod- services. The task of regulation policy has been to keep pace ule uses the Access Rainbow Framework (Clement and Shade with technological developments while maintaining licens- ing policies geared toward equity; in other words, to reduce 1 “Universal service (US) describes when every individual or inequalities within countries while maintaining sound busi- household can have service, using it privately, either at home or increasingly carried with the individual through wireless devices. ness reasoning within the telecommunications sector. For some services, a goal of full US would be too ambitious at present in a developing country, because the services must be This module describes what is meant by “accessible� and affordable as well as available. Goals may relate to the proportion “affordable� ICTs and discusses the more general policy strate- of the population that can afford private service (i.e., subscriber penetration targets)� (Dymond et al. 2010). gies that influence rural access to ICTs. Topic Note 2.1 is a rela- 2 “Universal access (UA) describes when everyone can access the tively technical review of the infrastructure, networks, devices, service somewhere, at a public place, thus also called public, and services for delivering ICTs affordably in rural areas. Topic community or shared access. . . . In general there would be at least one point of access per settlement over a certain popula- Note 2.2 considers the role of public innovation in achieving uni- tion size� (Dymond et al. 2010). versal access to infrastructure and appliances. The compounded 3 For example, Benkler (2006) focuses on technological aspects access problem, consisting of limited rural access to ICTs and and proposes a model of access consisting of a content layer, a service layer, a network layer (physical transport and logical limited rural access to financial services, is discussed in Topic transmission), and a device layer (logical device operating sys- Note 2.3. The discussion focuses on business models that enable tem (OS) and physical machinery). IC T IN A GR IC ULTUR E S E C T I O N 1 — OV E RVIE W OF ICT IN AGRIC U LTU R E: OPPORTUNITIES, A C C ES S , A ND C R OSS -CUTTING TH EM ES 17 TABLE 2.1: Characteristics of Universal Access and Universal Service ASPECT UNIVERSAL ACCESS UNIVERSAL SERVICE Availability Focused coverage Blanket coverage Public access (e.g., at a pay phone or telecenter) Private service on demand Free emergency calls Free emergency calls Accessibility Walking distance, convenient locations and hours Simple and speedy subscription Inclusively designed premises (e.g., for wheelchair users); inclusively Inclusively designed terminals and services (e.g., for blind or deaf designed terminals or available assistance (e.g., for the blind or deaf) people) Assistance from an attendant Assistance through the terminal (e.g., by making calls or viewing help pages for the web) Adequate quality of service (e.g., having few failed call attempts) Reasonable quality of service (e.g., having few dropped calls) Affordability Options of cash and card payment Cost of average monthly usage is a small percentage of monthly GNI per capita Options of cash and card payment Options of cash, card, and electronic payment Payment per use (e.g., for a single call or message or an hour of Flat rate, bundles of services or low monthly subscription fee Internet access) Source: Dymond et al. 2010. FIGURE 2.1: Access to ICT Infrastructure, Appliances, in Services and the Access Rainbow Governance Literacy/social facilitation Access to services Service/access provision Content/services Software tools Access to appliances Devices Carriage facilities Access to infrastructure Source: Authors, following Clement and Shade 2000. 2000), depicted in figure 2.1, to understand access to ICTs. consisting of installed network capacity, network connectiv- The Access Rainbow Framework demonstrates the multifac- ity, and interoperability standards. In this module, this layer is eted nature of access to ICTs and captures the socio-technical interpreted as access to ICT infrastructure. Access to ICT appli- architecture instrumental to it. The framework goes beyond a ances is captured by the physical layer of ICT hardware devices mechanical understanding of ICT access by including enablers and the logical layer of software tools on these devices. With of ICT such as locally relevant content, ICT literacy, proximal ICT its twofold (hardware and software) nature, access to ICT appli- use,4 and social mechanisms for governing ICT use. ances links the supply of ICT infrastructure with the provision of services targeted at end users. Access to ICT services is The Access Rainbow provides a framework for discuss- a more amorphous concept, consisting of: (1) the ready avail- ing access to ICT infrastructure, appliances, and services. ability of content (resources), fulfilling users’ roles as citizens, The “carriage facilities� layer is a physical technology layer producers, and consumers; (2) the ready availability (to those who are not experts in the technology) of network access and 4 ICT use intermediated by skilled users in the rural community. appropriate support services through commercial vendors; E C O N O M IC AND S E CT OR WORK 18 MODULE 2 — MAKING ICT INFRASTRUCTURE, APPLIANCES, AND SERVICES MORE ACCESSIBLE AND AFFORDABLE IN RURAL AREAS (3) the availability of formal and informal learning facilities FIGURE 2.3: ICT Price Subbaskets by Level for developing network literacy; and (4) the ready availability of Development of channels through which individual users can participate in 2009 decisions about telecommunications services, their social 250 Developed Developing inclusiveness, and the public accountability of their provision. 200 190 In considering interventions to improve access to ICTs, prac- PPPS titioners must consider the complexity of access to ICT infra- 150 structure, appliances, and services. It is important to locate the access layer within which an intervention is anchored 100 and to assess how it relates to contingent aspects of access. 50 For public policy makers, a comprehensive understanding 28 21 16 18 15 of the processes determining ICT access is best achieved 0 within a holistic framework, but policy makers may also Fixed Mobile Fixed find some value in quantifying ICT access within countries telephone cellular broadband Source: ITU 2010. and drawing comparisons across countries. To measure the Note: PPP$ = GNI per capita in current international dollars, obtained using digital divide between countries and assess countries’ ICT Purchasing Power Parity (PPP) conversion factors. development potential, the International Telecommunication Union (ITU) introduced the ICT Development Index (IDI) as an indicator of countries’ level of ICT development. The IDI “Affordability� as a Function of Pricing and Business Model measures access by considering ICT readiness and five addi- An affordable universal service is one in which the “cost of tional indicators: fixed telephony, mobile telephony, inter- average monthly usage is a small percentage of monthly gross national Internet bandwidth, households with computers, national income (GNI) per capita� (Dymond et al. 2010). As a and households with Internet (ITU 2010). Figure 2.2 shows concept, affordability is easier to measure than access. As a that in recent years (2002–08) developing countries have measure of affordability, ITU uses the ICT price basket, which exhibited considerably greater access values than developed includes price indicators for fixed telephones, mobile phones, countries, largely owing to explosive growth in mobile tele- and fixed broadband service (ITU 2010).5 Figure 2.3 clearly communications in developing countries. shows that by this measure fixed-line broadband was the sin- gle most expensive and least affordable service in developing countries as of 2009. In using this means of assessing afford- FIGURE 2.2: Access to ICTs by Level of Development, ability, however, it is vital to determine if the contents of the Based on the ICT Development Index price basket are relevant to the access problem at hand (for 7 example, Topic Note 2.1 questions whether in some contexts the affordability of fixed-line broadband infrastructure merits 6 concern). Access sub-index value 5 2002 2007 2008 The Access Rainbow Framework (introduced in the “Access 4 Concept� section) helps in understanding issues of afford- CAGR 2002–2008 5.8% ability and sustainability, because it represents the layered 3 system of interdependencies within which technology dif- 2 fusion, business development, and regulatory policies take 1 CAGR 2002–2008 9.4% 0 5 The fixed telephone sub-basket captures the average monthly Developed Developing cost of a basic, local, fixed residential telephone service. The mobile cellular sub-basket represents low monthly mobile Source: ITU 2010. usage, namely 25 outgoing calls per month (on-net, off-net, and Note: For each year, the figures use the simple average value of the IDI access subindex over all developed or developing countries. The compound to a fixed line, and for peak, off-peak, and weekend periods) plus annual growth rate (CAGR) of the IDI access subindex is computed by the 30 SMS messages. The fixed broadband sub-basket represents formula (Pv / P0)(1/n) − 1, where Pv = present value, P0 = beginning value, n = a typical monthly offer based on a 256 kilobit connection and a number of periods. The result is multiplied by 100 to obtain a percentage. minimum of 1 gigabyte of data. IC T IN A GR IC ULTUR E S E C T I O N 1 — OV E RVIE W OF ICT IN AGRIC U LTU R E: OPPORTUNITIES, A C C ES S , A ND C R OSS -CUTTING TH EM ES 19 place. For example, the ICT layer carrying the highest value and upper bounds on the number of subscribers, which proposition for end users is the content/service layer.6 The skewed the viability of fixed-line rollouts by private conces- framework makes it possible to consider the financial viabil- sion holders. ity of all contingent layers (network capacity, availability of appliances, customer support, and so on) and how they may In addition to competition, technology neutrality is another affect the value derived from the content/service layer. leading regulatory policy principle for ensuring the affordabil- ity of ICTs. Technology neutrality is the principle of refraining From a regulatory standpoint, the Rainbow approach cap- from specifying technology requirements within telecom- tures the significance of the separation between layers, munications licenses. Historically, specifying technology most prominently the separation between the carriage and requirements was a means of stimulating domestic equip- the content layers. Focusing regulatory efforts within lay- ment manufacturing, but technology neutrality is advisable ers and enabling competition within and between layers is within the present rapidly evolving IT industry, because regu- central to achieving quality end-user services at affordable latory decisions on technology selection can be risky (box 2.1 prices. From a regulatory policy perspective, the layered presents an example from Korea). structure illustrates the trend in policy to enable competition among technologies delivering comparable functionality by BOX 2.1: The Risks of Picking Winners in the Rapidly following the principles of competition, technology neutrality, Evolving IT Industry and licensing flexibility. In Korea, the licensing of new technologies arguably Ensuring competition within each of the layers is a longstand- led to market growth for domestic equipment manufac- ing policy priority, especially where the economies of scale turers such as Samsung and LG, yet this strategy may are conducive to monopolistic market structure.7 Market lib- prove more risky in the IT domain. Government support eralization and free entry give incumbents incentives to pur- for WiBro, a Korean version of mobile WiMAX (a tele- sue a higher quality of service. For example, starting in 1992 communications protocol that provides fixed and mobile Thailand sought to break up the Communication Authority of Internet access), has since been viewed as misguided. Thailand’s monopoly over international gateway services by By the end of 2008, WiBro had attracted only 170,000 introducing concessions to private companies under build- customers for Korea Telecom and SK Telecom combined, transfer-operate agreements. The entry of the private sector a fraction of the government’s expected 1.4 million sub- alongside state-owned enterprises, such as the Telephone scribers. Within the Korean market, LTEa mobile broad- Organization of Thailand, led to remarkable expansion of sub- band services were emerging as a more viable alterna- scriptions for both fixed and mobile services. Yet the level tive to WiBro, and both Korea Telecom and SK Telecom and the degree of competition in the fixed line and mobile announced plans to launch commercial LTE services at subsectors varied considerably because of the number of the expense of languishing WiBro services. concessions and their terms and conditions (Nikomborirak Source: Author, based on Kim 2009a, 2009b. and Cheevasittiyanon 2008). Competition in the mobile mar- (a) Long Term Evolution (LTE) is a preliminary mobile communication ket yielded improved connectivity and affordability, while the standard, formally submitted as a candidate 4G system to ITU-T in late 2009. Commitment to LTE among mobile network operators has been fixed-line subsector stagnated. growing steadily. The lesson is that the welfare benefits of market liberaliza- tion are achieved by implementing complementary policies on competition that enable market pricing and restrict preda- Because no specific technology standards are designated, tory pricing by incumbents facing new entrants throughout technology neutrality widens the scope for competition the structural layers of the ICT sector. In Thailand, fixed-line within each layer of the Access Rainbow. Competing opera- concessions were restricted by stipulated fixed-call rates tors choose the technology standards that allow them to deliver services cost-effectively. The regulatory policy drift 6 Layer number 4 in figure 2.1. toward technology neutrality is supported by technology 7 International Internet gateways and local-loop or “last mile� fixed developments that lead to increased standards of interoper- networks are examples. Local-loop networks are the fixed net- ability (see Rossotto et al. 2010). works that deliver connectivity from the local exchange to the homes of end-users. Because of the high cost of entry in devel- oping these networks, this segment is conducive to a monopo- The main policy lever for assuring market competition and listic market structure. technology neutrality is flexible licensing policies and the E C O N O M IC AND S E CT OR WORK 20 MODULE 2 — MAKING ICT INFRASTRUCTURE, APPLIANCES, AND SERVICES MORE ACCESSIBLE AND AFFORDABLE IN RURAL AREAS enforcement of flexible spectrum rights. Strict licenses and KEY CHALLENGES AND ENABLERS spectrum rights can be counterproductive if they restrict the The challenges and enablers related to making ICTs more services that can be provided or the technologies used to widely and affordably available to rural people in developing provide the services (for example, WiMAX licenses have countries are discussed in the sections that follow. Particular been issued limiting service provision to fixed broadband, attention is given to the kinds of partnerships, regulations, to the exclusion of mobile broadband). In addition to lim- and policies needed to reach that goal. iting the technology possibilities, restricted licenses and spectrum rights can also reduce the bidding incentives in Partnerships spectrum auctions. Technology flexibility can be achieved Considering the multilayered nature of the problem of ensur- within each of the interconnected layers of the ICT system ing affordable rural access to infrastructure, devices, and through unified licenses and simplified licenses (Rossotto services, partnerships among organizations with different et al. 2010). Box 2.2 describes Singapore’s experience with specialties, capacities, and profit motives appear to be a key facilities-based and service-based operating licenses. way to improve access and affordability. Partnerships serv- ing as critical mechanisms for improving rural ICT access can BOX 2.2: Singapore’s Simplified Licenses Encourage take the form of partnerships within the public sector, negoti- Innovative, Cost-effective ICT Infrastructure ated public-private partnerships, private agreements among stakeholders in the telecommunications sector, or informal By ensuring that the installation and operation of any net- understandings between service providers and stakeholders work infrastructure in Singapore is covered by a license, the at the community level. Infocomm Development Authority of Singapore ensures Enabling such partnerships and maintaining them remains a the development of innovative and cost-effective infra- key government role. For example, the public sector played structure. Simplified licenses are issued to facilities-based a considerable within the M-PESA collaborative partnership operators (FBOs) and services-based operators (SBOs) of (see IPS “M-PESA’s Pioneering Money-Transfer Service� in telecommunications networks. FBOs include companies Topic Note 2.3). This role involved financially supporting the deploying submarine cables to improve international con- collaboration among mobile network operators (MNOs) dur- nectivity infrastructure, companies rolling out fiber-optic ing software development. In Bhutan, partnerships among cables to improve domestic backhaul connectivity, and departments within government were instrumental to the companies setting up broadband Internet Protocol (IP) or rollout of community information centers in remote areas infrared networks. Wireless networks making demands (see IPS “Community Information Centers: Bhutan,� in Topic on scarce spectrum resources are licensed separately and Note 2.2). subject to comparative selection or auctioning. The opera- tions of FBOs effectively remain within the carriage layer, A variety of motives engender private partnerships that but FBOs have the flexibility to deploy and/or operate any improve rural access to infrastructure and services. For form of telecommunication networks, systems, and/or example, in infrastructure-sharing arrangements discussed facilities on a technology-neutral basis. in Topic Note 2.2, explicit agreements were enacted to share SBOs remain within the service/access provision layer, passive infrastructure costs and implement 3G technology. but they have full flexibility to choose their technology. Agreements between commercial and nonprofit partners Individual SBO licenses are intended for companies also make a compelling case for the significance of part- that plan on leasing international connectivity capacities nership in implementing projects to deliver improved rural installed by FBOs. Individual SBO licenses cover ser- access to ICTs. For example, the Farmer’s Friend service vices such as international simple resale, public Internet could be implemented only through collaboration incorporat- access services, and store-and-forward value-added ing Grameen Foundation’s understanding of the nonprofit services. SBO class licenses cover store-and-retrieve sector, Google’s technology expertise, MTN’s network cov- value-added network services, Internet-based telephony, erage, and the local agricultural knowledge of the Busoga resale of public switched telecommunication services, Rural Open Source Development Initiative. and other services. Source: Halewood 2010. Regulation and Policy Challenges Note: One result of this clear, flexible approach to ICT development is Singapore’s extensive e-governance system, described in Module 13. Although the evolution of ICTs in developing countries has far to go, it has moved significantly forward in the past decade. IC T IN A GR IC ULTUR E S E C T I O N 1 — OV E RVIE W OF ICT IN AGRIC U LTU R E: OPPORTUNITIES, A C C ES S , A ND C R OSS -CUTTING TH EM ES 21 The rapid expansion of mobile phone networks and market with pure data transmission regulations (UNCTAD 2010). In uptake of Global System for Mobile Communication (GSM) terms of competition, policies fostering the effective man- technologies8 following liberalization and deregulation are the agement of competitive markets, interconnection regimes, most frequently cited examples of this evolution. and mobile termination rates can provide incentives to invest in quality of service, differentiation, and innovation. Informed and effective regulation is necessary for creating an enabling environment that will maximize entrepreneurs’ abilities With the increasing adoption of ICTs and growing promi- to expand market offerings and minimize the negative effects nence of ICT-enabled services in consumers’ lives in devel- of competition on consumers. Barriers such as a monopoly oping countries, it is worth emphasizing the significance of operator, excessive licensing regimes in some contexts (for consumer protection regulation for ensuring the effective example, requiring local community networks to have licenses) governance of multilayered ICT access. Recurrent problems can negatively affect business potential. At the other end of include gaps between advertised “headline� broadband the spectrum, a supportive fiscal and financial environment access speeds and what subscribers actually experience, and entrepreneurs’ access to financial services can enable and lack of transparency in the pricing of mobile voice and data increase the number of socially oriented services. services, lack of effective mobile number portability, and excessive SMS pricing. Consumer-focused regulations Significant regulatory issues in the telecommunications sec- should also target improvements in the legibility and ease tor include taxes, licensing, liberalization, and competition of comprehension of transactions, made possible through policies. Taxes on communication services strongly influence improved ICT access. Consumer protection can pursue such the affordability of ICTs in Africa, for example, given the low goals through measures for mobile phone number registra- average incomes. Import duties on IT equipment, value- tion, identity verification, confidentiality, and privacy. added tax (VAT) (ranging from 5 to 23 percent) on goods and services, and excise taxes on communications services all Finally, the advent of financial services implemented on mobiles raise prices, discouraging use. Excessive licensing can also makes it essential to create an environment that integrates stifle the delivery of various content-based ICT services. financial regulation and telecommunication regulations. These Regulations on content broadcasting should be synchronized services are discussed in greater detail in Topic Note 2.3. Topic Note 2.1: MAKING ICTS AFFORDABLE IN RURAL AREAS TRENDS AND ISSUES Convergence (as the name implies) blurs the distinctions “Fixed-mobile convergence� is the increasingly seamless between the domains of Internet service providers, cable connectivity among wired and wireless networks, devices, television media companies, fixed-line telecommunication and applications, which permits users to send and receive companies, and operators of mobile telephony networks data regardless of device and location. Convergence is the (figure 2.4).9 With this context in mind, the discussion that result of converting content formats (text, images, audio, follows examines how technology trends in infrastructure, video), devices for creating and communicating this content, appliances, and services can influence the delivery of afford- and telecommunications infrastructure to digital standards. able ICTs in developing countries. Device convergence allows devices to support different functionalities and different network access technologies. INFRASTRUCTURE Service convergence means that end users are able to What are the current wired and wireless options to improve receive comparable services via different devices and tech- domestic backbone and “last mile� connectivity? As noted, nologies for accessing networks. Network convergence wired telecommunications infrastructure tends to reach rural means that a single network is able to carry voice and data areas in the wake of complementary rural access infrastruc- formats and can support access by different technologies. ture such as roads and electricity and the expansion of public 8 GSM standards for 2G cellular networks serve an estimated 9 Offers that span three out of these four services have become 80 percent of the global mobile market, according to the GSM known as “triple play� offers. (Sunderland 2007) points to such association (http://www.gsm.org/). offers in Cape Verde and the Caribbean. E C O N O M IC AND S E CT OR WORK 22 MODULE 2 — MAKING ICT INFRASTRUCTURE, APPLIANCES, AND SERVICES MORE ACCESSIBLE AND AFFORDABLE IN RURAL AREAS FIGURE 2.4: Telecommunications, IT, and Media Industry Convergence mobile networks fibre optical networks mobile data Mobile TV circuit switched package switched voice data global networks FMIC managed network & ICT World Telecom Industry application services VoIP Collaborative Internet computing client-server web-services technology Triple/Quadruple main frames desk top computing (PC) enterprise integration Play mini computers advanced planning systems ERP, CRM, SCM & business intelligence Home IT Industry packaged software automation media centre IP TV gaming Narrow digital audio & video digital photography casting radio, television & print electronic publishing optical storage Video on (CD/DVD) digital broadcasting demand Media Industry incl. Consumer Electronics flat screen technology 1970 1980 1990 2000 2010 Source: Caneval Ventures, “ICT and media industry� (http://www.caneval.com/vision/ictmediaindustry.html, accessed July 2011). services such as education. The lag between the arrival of In considering how best to develop affordable telecommu- complementary infrastructure and public services and the nications infrastructure in developing countries, all three establishment of wired ICT infrastructure in rural areas can connectivity segments of the network need to be taken be considerable, but the introduction of wireless, especially into account: (1) the international and domestic connectiv- mobile, infrastructure is bound neither by the presence of ity that makes up the network’s backbone capacity, (2) the roads nor by access to the electricity grid. domestic backhaul connectivity that enables the intermedi- ate links, and (3) the local loop or “last mile� connectivity that Rural infrastructure development needs to be considered in serves end-user access at the edges of the network. (Each light of the different opportunities offered by wired and wire- of these networks segments is discussed in greater detail less technologies and the fixed-mobile convergence occur- in “Domestic backbone and rural backhaul connectivity� and ring throughout the ICT sector. Sunderland (2007) notes that “local loop or ‘last mile’ connectivity.�) The expansion of fixed-mobile convergence differs in developed and developing backhaul connectivity and the provision of “last mile� con- countries, where fixed-line teledensity is low. As a result, con- nectivity pose particular challenges to extending ICTs to rural vergence in developing countries largely amounts to conver- areas in an affordable way (box 2.3). gence in the delivery of Internet access and voice telephony services over wireless networks. For example, in rural Africa Wireless infrastructure may be an economical option, but it where the teledensity of fixed networks is low and their roll- has certain cost constraints. Buys et al. (2009) show that the out can be prohibitively expensive, fixed-mobile convergence probability of the presence of mobile tower base stations is enables the use of wireless “last mile� infrastructure, while the positively correlated with the potential demand (population backhaul traffic is carried on fixed fiber-optic cables because of density, per capita income), as well as with the absence of their high capacity. In small-island developing countries, fixed- factors that increase operational and capital expenditures, mobile convergence allows for international connectivity via such as elevation, slopes, lack of all-weather roads, unreli- satellite rather than undersea cable. able power supplies, and even insecurity. (See IPS“Passive Infrastructure Sharing in Nigeria� in Topic Note 2.2.) Telecommunications networks comprise a hierarchy of links that connect users at the “edge� of a network to its “core,� At the carriage level, network convergence is associated with also called the “backbone� (the high-capacity links between the transformation from circuit-based public switched digital switches on the network). The backhaul portion of a network telecommunication networks (PSTNs) to packet-switched consists of the intermediate links between subnetworks at networks using the Internet Protocol (IP) and known as next- the users’ end and the core network. generation networks (NGNs). Both PSTNs and NGNs are IC T IN A GR IC ULTUR E S E C T I O N 1 — OV E RVIE W OF ICT IN AGRIC U LTU R E: OPPORTUNITIES, A C C ES S , A ND C R OSS -CUTTING TH EM ES 23 BOX 2.3: Balancing Quality and Service in Reaching Rural and delay can mar the quality of the connection. A comparison Areas: Fixed-line versus Wireless Backhaul between traditional fixed-line telephone services and voice over IP (VoIP) clearly demonstrates the difference between Even though wireless is accepted as an economical the two types of networks. NGNs completely separate the option for delivering “last mile� connectivity, backhaul packet-switched transport (connectivity) layer and the service traffic is usually carried via fiber-optic networks because layer, enabling any available fixed-line carriage infrastructure of their high capacity. Connectivity is often limited by the to be used efficiently for any service. limited penetration of the fixed-line backhaul that sup- ports it. The delivery of connectivity to rural areas lacking Domestic Backbone and Rural Backhaul Connectivity fixed-line backhaul involves balancing concerns about ICT access, connection quality, and the expenditures As end users’ demand for additional bandwidth grows, insuf- and delays entailed in rolling out fixed lines and sup- ficient domestic backbone can pose a considerable chal- porting infrastructure. The benefits of wireless backhaul lenge to the roll-out of fixed-line broadband services. In the technology are worth considering in such cases. mobile sector, insufficient backhaul capacity is becoming a limitation, particularly with the increase of rural 3G data use. Wireless backhaul is increasingly recognized as an Government interventions in support of rural backhaul solu- option for combating the expenditures involved in pro- tions have included the introduction of public-private funding viding fixed-line rural connectivity. Wireless network mechanisms (as in Korea and Chile; see box 2.4), construc- backhaul solutions can take the form of point-to-point tion subsidies (as in Canada), and the rollout of fiber-optic or point-to-multipoint wireless Ethernet bridges or wire- networks connecting public institutions (Rossotto et al. 2010). less mesh networks. They can use licensed or unli- Complementary regulations can be used to ensure competi- censed microwave links (see Unlicensed Wireless Use). tive conditions in the provision of domestic backbone and rural With throughput from as low as 10 Mbps up to GigE backhaul. The policy tools for supporting domestic backbone full duplex (with gigabit wireless), a licensed microwave rollout and rural backhaul connectivity include infrastructure link or wireless bridge can provide sufficient capacity for sharing,10 functional separation,11 and cross-ownership restric- many rural applications. Because it is compatible with tions, allowing for interplatform competition12 (Dartey 2009). mobile phone standards (GSM, CDMA), the WiMAX standard offers opportunities for rolling out affordable wireless rural backhaul. Advocates of the technology are Local Loop or “Last Mile� Connectivity optimistic about its potential for linking wireless fixed- The delivery of network access in the “last mile� is the most location base stations to the core network. costly and challenging element of rural deployments. The Source: Authors. technology options for delivering wired local loop broadband Note: Mbps = megabit per second; GigE = Gigabit Ethernet; GSM = Global System for Mobile Communication; CMDA = Code Division Mul- connectivity include the rollout of xDSL,13 cable, and fiber to tiple Access (CDMA) 2000, a wireless air interface standard; WiMAX = the home infrastructure. Wireless options include the rollout Worldwide Interoperability for Microwave Access. of mobile (2G, 3G, 4G),14 wireless broadband (WiMAX, Wi-Fi, made up of telephone lines, fiber-optic cables, microwave 10 “Infrastructure sharing� is a mechanism for reducing capital expenditures and operating expenditures. Passive infrastructure transmission links, mobile networks, communications satel- sharing consists of colocating competitors. Active infrastructure lites, and undersea telephone cables. sharing consists of sharing the network base station controllers, both circuit-switched and packet-oriented domains, mobile ser- vices switching center, GPRS support node, and so on. The difference between the two kinds of networks lies in 11 In “functional separation,� an incumbent operator is required to their switching mechanisms. Under circuit switching, the establish separate divisions for managing fixed-line services and providing wholesale services to retail competitors. connection is established on a predetermined, dedicated, 12 Cross-ownership restrictions prevent operators, such as tele- and exclusive communication path for the whole length of phony operators, to control competitive network infrastructure, the communication session. Consequently, PSTN connectiv- such as cable television networks. For example, restrictions may be placed on the simultaneous control of telephony and cable ity is costly. In packet-switching protocols, such as IP, the television network infrastructures in a specified area. communicated data are broken into sequentially numbered 13 xDSL refers to all digital subscriber line (DSL) technologies. packets, each of which is transmitted to the destination via 14 2G mobile wireless has basic functionality: voice and short mes- saging service (SMS); 3G has advanced functionality: general an independent path, and then the packets are reassembled. packet radio service; and 4G has broadband functionality: long- In packet-switching, the potential for congestion, packet loss, term evolution (LTE). E C O N O M IC AND S E CT OR WORK 24 MODULE 2 — MAKING ICT INFRASTRUCTURE, APPLIANCES, AND SERVICES MORE ACCESSIBLE AND AFFORDABLE IN RURAL AREAS BOX 2.4: Chile’s ICT Policies for Connectivity and WLAN),15 and satellite very small aperture terminal (VSAT) Economic Growth infrastructure. Within cell-based (mobile) wireless standards, all users connect to a single base station, and the transmis- Chile regards ICT policies as important tools for increas- sion bandwidth has to be shared among all users in the cell’s ing the nation’s economic growth. The government has coverage area. introduced policies addressing both the supply of and demand for ICT. These policies go beyond infrastructure Within a short range, wireless broadband transmission is to include programs for e-literacy, e-government, and possible at relatively high data rates—hundreds of megabits ICT diffusion. (Mbps) to a few gigabits (Gbps)—but services of such high quality are not foreseeable for existing mobile standards. Chilean ICT policies consistently distinguish between Conversely, mobile technologies have the advantage of reli- the domains of the private and public sector and rely pri- ability within a greater access range. Point-to-multipoint solu- marily on market forces to dictate the development of tions, combining VSAT terminals with wireless broadband the telecommunications sector. For example, the broad- local access, are increasingly viable and promising. Unlike band market in Chile has high levels of interplatform cell-based connectivity, satellite connectivity does not distrib- competition: Multiple operators offer competing broad- ute the available bandwidth among the users; instead, each band services through different networks. Government user is connected independently, so satellite solutions can involvement is limited to cases where market forces offer better quality of service. Yet the low density of wired alone fail to provide incentives for growth in the sector. infrastructure, combined with the limited domestic fiber Starting in 2002, for example, government investments backbone in developing countries, makes wireless a practical focused on improving the connectivity of rural schools, option for connectivity in rural areas, despite the limitations developing fiber backbone infrastructure, and training imposed on users by sharing capacity. people in remote areas in computer skills. In 2008, the government embarked on a more ambitious project to As this discussion implies, finding the network solution extend at least 1 megabits per second connectivity to that can ensure affordable ICT in rural areas can be an inno- 92 percent of the population and intensify the use of vative, challenging, and exhausting process. The choice ICTs in agriculture and tourism. Candidates for deliver- depends largely on the availability of technology, of rural ing this project were selected through a reverse auc- backhaul, and of complementary infrastructure. It also tion. The Chilean government participated by offering a depends on the flexibility and responsiveness of the regu- subsidy of US$ 70 million and the spectrum in the 3.5 latory framework to the prevailing technology constraints gigahertz band. and opportunities. The Chilean Universal Access/Universal Service Fund Polices related to the development of rural wireless infra- has been praised for its accomplishments. Between structure require careful study of the trade-offs between 1994 and 2002, by providing public pay phones to more affordability and usability. Policy makers must determine than 6,000 rural locations, the fund reduced the frac- where the value lies (in terms of use) in developing the infra- tion of the population living without access to basic structure. Regulatory policy must consider the trade-offs voice communication from 15 percent to 1 percent. between reach, speed, frequency, and transmission. For The subsidies required to achieve this goal cost less example, the choice to use technology with low transmis- than 0.3 percent of telecommunications sector reve- sion power can lead, on the one hand, to a great increase in nue over the same period. The opportunity for existing the available bandwidth per user, but on the other hand, it and new operators to use the subsidized pay phone may require a direct line of sight between the antenna and infrastructure to provide individual telephone lines and the user. Consequently, the number of access points needed value-added services (voice mail, Internet access, and to cover a fixed area, and therefore the required capital so on) was key to success. An interconnection rate expenditures, will rise considerably. with access charges capable of surpassing 40 percent of rural operating revenues was the other key to com- mercial success. 15 WiMAX (worldwide interoperability for microwave access); Wi-Fi Source: Mulas 2010; Wellenius 2002. (wirelessly connecting electronic device); WLAN (wireless local area network). IC T IN A GR IC ULTUR E S E C T I O N 1 — OV E RVIE W OF ICT IN AGRIC U LTU R E: OPPORTUNITIES, A C C ES S , A ND C R OSS -CUTTING TH EM ES 25 Several key technology parameters should be considered in BOX 2.5: Lessons from South Africa’s Experience in decisions about the expansion of rural connectivity and the Migrating to Digital Television choice of technological delivery mechanism. They include the availability of spectrum frequencies, number of base stations South Africa developed a digital migration strategy needed to cover an area of specific size given a fixed operat- to stimulate growth in its electronics manufacturing ing frequency, achievable connection speed, data transmis- sector. The strategy featured a digital switch-on date sion rates, and downlink and uplink speeds. in 2008 and an analog switch-off date at the end of 2011. The reduced costs of simultaneous analog and Given the complexity of such decisions, the role of the regula- digital broadcasting (€ 750 million for three years) tory environment should be to expand the set of viable tech- were considered a strong advantage of the ambi- nology options. Flexibility in allowing licensed and unlicensed tious, three-year migration plan. Other expected costs use of operational frequencies can be advisable. Wellenius included € 800 million for the digital rollout, as well (2002) describes how Chile identified cost-effective solutions as € 2.5–3.5 billion for subsidies to local manufactur- to reduce the gap between urban and remote areas in access ers producing digital set-top boxes. In early 2011, the to basic communications technology. South African minister of communications announced that the switch from analog would be postponed until The “digital dividend� has been widely hailed as the solu- December 31, 2013. Observers have raised ques- tion to urban-rural inequities in digital ICT access. The “digi- tions about the practicality of the plans and even the tal dividend� is the reassignment of operational frequencies postponed date. The lesson is that the certain costs that become available following the switch from analog to of switchover plans need to be balanced against their digital television broadcasting. The Geneva 2006 Agreement uncertain benefits, including the uncertain demand sets June 17, 2015 as the final date for protecting currently for the released telecommunications spectrum and assigned analogue television transmission frequencies. The for additional digital TV services. digital dividend spectrum is found between 200 megahertz Source: Author, based on Pham 2009; Armstrong and Collins (MHz) and 1 gigahertz (GHz). It offers a combination of 2011; and Government of South Africa, “Statement by Minister of Communications,� January 14, 2011 (http://www.doc.gov.za/ transmission capacity and distance coverage conducive to index.php?option=com_content&view=article&id=478:statement- the extension of wireless broadband infrastructure in rural by-the-honorable-minister-of-communications-mr-radhakrishna-l- padayachie-roy-on-progress-made-with-regards-to-the-digital-migration- areas. Using this spectrum, a few stations can transmit with process&catid=88:press-releases, accessed July 2011). high power, thereby providing Internet coverage to large rural areas where population is low and demand sparse. The advantage is the low capital expenditure required; the downside is the low bandwidth available to individual users. used for this purpose in Kazakhstan; see box 2.6). CDMA450 The process is accepted as inevitable, however, and it pro- is a cellular technology based on the CDMA2000 standard, vides opportunities for efficient spectrum management in with an operating frequency of 450 MHz. The technology rural areas. uses the same air interface as CDMA2000 but operates at a lower frequency and is able to offer the same basket of How to reassign digital dividend frequencies efficiently high-speed voice and data connectivity over a greater range, remains open to debate. Some advocate the reassignment thereby implying lower capital expenses. In rural settings, of analog transmission frequencies to MNOs, without impos- CDMA450 has a range of up to 50 kilometers. Owing to a ing requiring that rural infrastructure investments be tied to process known as “cell breathing,� however, such ranges urban infrastructure investments (Picot et al. 2010). Others are not achievable under cell loads approaching cell capac- propose allocating the digital dividend frequencies to short- ity. CDMA450 appears to be best suited to mixed urban-rural range communications. Countries’ experiences with the deployments, in which urban deployments are capacity- crossover to digital television have varied and remain difficult centric and rural deployments are coverage-centric. Another to evaluate, as the process is still unfolding (box 2.5 has an disadvantage of CDMA450 is the large antenna required to example from South Africa). allow the extended coverage for meeting low rural demand. The major limitation of CDMA450 solutions is the scarcity Some observers (Nedevschi et al. 2010) have considered of mobile devices that can use the 450 MHz frequency (the CDMA450 a solution to rural connectivity problems (it is majority operate at 900–1800 MHz. E C O N O M IC AND S E CT OR WORK 26 MODULE 2 — MAKING ICT INFRASTRUCTURE, APPLIANCES, AND SERVICES MORE ACCESSIBLE AND AFFORDABLE IN RURAL AREAS BOX 2.6: CDMA450 Technology Connects Rural smartphones and Netbook appliances). Conversely, bulkier Kazakhstan stationary devices such as the desktop computer have evolved functionalities traditionally associated with more por- Kazakhtelecom, the biggest telecommunications opera- table devices, such as VoIP telephony and on-demand radio tor in Kazakhstan, introduced CDMA450 technology in and TV broadcasts. rural areas in the north. The CDMA450 base stations cover 25–35 kilometers and can serve up to 1,000 Among rural users in developing countries, the trend is to subscribers. The project, which began in 2008, had move from mobile phones with basic voice and text message installed 399 base stations by 2010, providing connec- capabilities to feature phones. Feature phones are low-end tivity to approximately 1,800 rural settlements. The proj- phones that access various media formats in addition to ect intends to roll out 900 base stations throughout the offering basic voice and SMS functionality, capturing the func- country by 2013, enabling voice and Internet access ser- tionalities of multiple ICT devices that are also available as vices at speeds up to 3.1 Mbps. standalone appliances. Rural consumers prefer the combined Source: Author, based on “Implementation of CDMA-450 in North devices because of their affordability. Features appreciated Kazakhstan,� August 5, 2009, Cellular News (http://www.cellular- by consumers in developing countries include digital camera, news.com/story/38960.php, accessed July 2011) and “Base stations WLL CDMA cover about 80% rural settlements in Kyzylorda oblast,� voice recorder, flashlight, radio, and MP3 player. Bluetooth Kazakhtelecom press release (http://www.telecom.kz/?muin= and general packet radio service (GPRS) are the most widely 1240831664&mchapter=1272548824&lang=eng&n_date=2010-04- 29&act=archive, accessed July 2011). available connectivity options in addition to GSM. Chinese mobile phone manufacturers tend to be at the forefront of making devices that are particularly affordable and attuned to APPLIANCES the needs of rural users in developing countries (box 2.7). From a user’s perspective, device convergence has two main The demand for features tends to vary depending on the avail- aspects. First, users can access content in different formats ability of complementary rural services. For example, radio is a (audio, data, location data, pictures, maps, text) and with dif- feature very commonly targeted at the rural market, owing to ferent dynamic properties,16 produced by different authors, the traditional significance of radio broadcasting in rural areas. on the same device. Second, users can take advantage of Nonetheless, the choice of radio devices by rural residents is different options (radio, GSM, Wi-Fi, Bluetooth, satellite) for largely determined by the availability of electricity. The radio accessing that content. feature of mobile phones tends to consume the device bat- tery fairly fast. Rural residents off the electricity grid find this The evolution of appliances in the mobile phone market illus- feature uneconomical, because the cost of recharge services trates these two trends. The discussion that follows focuses provided by local entrepreneurs are not negligible. Rural on portable devices that support multiple functionalities or residents at locations off the electricity grid in Ghana report multiple connectivity options, because they are vast majority paying 0.50 cedis per charging, comparable to the price for of ICT appliances available in the world today. one kilogram of plantains or oranges.17 In agricultural areas such as northern Ghana, solar-powered and windup charging Portable devices, including but not limited to mobile phones, devices have durability and maintenance issues (although they are starting to allow users dual (or multiple) mode flexibility. appear useful elsewhere; see IPS “Long Experience in Farm For example, dual connectivity (Wi-Fi/GSM and Bluetooth/ Communities Benefits IFFCO� in Topic Note 2.4).18 By com- GSM) enables mobile phones to conduct both VoIP and stan- parison, traditional, battery-powered, dedicated radio receiv- dard mobile calls. Dedicated telephone devices are able to ers appear to be a more affordable choice. process VoIP phone calls using Session Initiation Protocol, as well as regular phone calls using analog signals. Gains in processing power allow functions with higher technol- ogy requirements to work on smaller devices (high-end SERVICES Services entail much more than access to hardware; they 16 Such as “online� and “offline� content; “online� content is encompass affordable access to locally relevant rural content communicated but not recorded or reusable (such as a radio broadcast),whereas “offline� content is recorded and reusable, once it has been communicated (such as audio podcasts, SMS 17 See Esoko (http://www.esoko.com). messages, or voice mail). 18 Details available from the authors. IC T IN A GR IC ULTUR E S E C T I O N 1 — OV E RVIE W OF ICT IN AGRIC U LTU R E: OPPORTUNITIES, A C C ES S , A ND C R OSS -CUTTING TH EM ES 27 BOX 2.7: Mobile Phones with Features Attract Rural Users in China and Beyond Chinese mobile phone producers are concentrated in the city of Shenzhen, Guangdong Province. They, as well as their products, have become known as shanzhai.a At least two innovative features associated with shanzhai devices have wider relevance to rural consumers’ use of, and preferences for, devices in developing countries. The first feature is that they allow users to store multiple (physical) SIM cards within the device, which allows them to switch between carriers without having to reboot the device. This feature responds to the price sensitivity of rural con- sumers in developing countries, who switch between carriers to take advantage of preferential termination rates for the carrier of their calling destination. Because the choice of mobile network operator can be limited in rural areas, consum- ers have strong incentives to take advantage of cost-saving opportunities when they exist. This demand-driven innovation has made no inroads into the products of popular mobile phone manufacturers, which are reluctant to undermine the business models of mobile network operators worldwide. Consumers who cannot purchase these devices can achieve the same results through street-level hack services offering software to configure from 6 to 16 SIM card identities on one physical SIM card, enabling users of unlocked mobile phones to switch conveniently among carriers. A second feature of devices from Chinese mobile phone manufacturers (relevant to convergence in the “infocom� sec- tor) is the addition of analog television reception. This feature is found in phones with large LCD screens like those of smartphones. The features in these devices illustrate ways that the global mobile phone industry could choose to respond to the demands and constraints of rural consumers—but has not. The preference of rural consumers in developing countries for access to television over radio is well established but constrained by poor access to the electricity grid. Unlike dedicated radio receivers, television sets have not evolved to operate on dry cell battery power alone, and mobile phone devices with analog television functionality are the exclusive option for rural populations. Given that television remains an effec- tive means of delivering agricultural extension messages, the lack of support for these and other innovative features introduced by Chinese phone manufacturers represents a missed opportunity in rural communication. Source: Authors; Chipchase 2010; Abbey-Mensah 2001. (a) Shanzhai signifies Chinese imitation and pirated brands and goods, particularly electronics (http://en.wikipedia.org/wiki/Shanzhai, accessed July 2011). through connectivity providers, content creators and dissemi- use time, quantity of data transferred, or communications dis- nators, information intermediaries, social facilitators, informa- tance covered. Such models increasingly are replaced by more tion literacy educators, and the governance channels steering flexible subscription models and models centered on realized the performance of these services.19 Concerns with rural interactions and transactions, paid for via micropayments. In content have traditionally been alien to public policies aimed at developing countries, where consumers are more price sensi- universal service and universal access, but the convergence of tive and less willing to pay, the trend toward micropayments the mass media and telecommunications sector, as well as the poses a considerable challenge to content and value-added rise of the information society, make such concerns increas- service providers. The challenge is compounded by the mar- ingly prominent and crucial to unleashing a virtuous cycle of ICT ginal success of government and donor efforts to provide adoption and use in rural areas. The delivery of content-based content-driven rural services in developing countries. agricultural services is discussed in Topic Note 2.4. Traditionally, rural information services focused on provid- The service layer reflects the synergies (or lack thereof) ing broadcasting (“push�) content, such as rural radio pro- among network infrastructure, connectivity modalities, access gramming, but the ubiquity of mobile devices enables the devices, and content. The dynamics of the worldwide content sourcing and sharing (“pull�) of rural content. The presence marketplace point to the dying out of traditional communica- of mobile technology as an authoring tool in rural areas pres- tions business models, which centered on tariffs anchored in ents an untapped opportunity to engage rural users in author- ing content, thereby increasing the demand for existing rural 19 See the earlier discussion of the layered nature of access infrastructure. Mobile devices, in combination with broad- (“Access Concept�) and the Access Rainbow Framework. casting technologies such as radio, enable rural residents to E C O N O M IC AND S E CT OR WORK 28 MODULE 2 — MAKING ICT INFRASTRUCTURE, APPLIANCES, AND SERVICES MORE ACCESSIBLE AND AFFORDABLE IN RURAL AREAS participate in public discourse and influence decision making. who cannot afford their own phones or are not permitted to In reviewing communication and media needs at the com- use personal phones of family members (Burrell 2010). The munity level in Ghana, (Dartey 2009) points out that call-in sharing and collaborative use of personal mobile phones can radio programs have become widely popular. Such programs enhance social ties but may also cement social inequalities. allow Ghanaians to express their opinions on issues of local concern. Another trend to be noted is the divergence in focus and targets of local (especially rural) demand-driven information The provision of rural ICT-based services in developing services relative to supply-driven services. Content-focused countries has a few discernible characteristics. One recur- service innovations tend to respond to local needs within the rent characteristic in successful business models is found entertainment, social networking, game, and music domains. at the literacy/social facilitation level of the Access Rainbow If managed carefully, such services can be legitimate drivers Framework. Successful business models manage to lever- of ICT use for demand-driven services in education, public age social networks and social value (UNDP 2008). Engaging awareness, health, and agriculture. Introducing immediately rural residents as individuals rather than as beneficiaries popular content is a way to attract and retain users. Once the appears to be essential in delivering a worthwhile value prop- user base is established, there is room for introducing more osition. Allowing rural residents to be trainers, to facilitate practical content, such as mobile banking (box 2.8). access to content, and to provide local support and mainte- nance appears to be a successful business strategy for the delivery of rural services (image 2.1). BOX 2.8: MXit Blends Entertainments and Practical Content in South Africa IMAGE 2.1: Cell Services in Rural South Africa Founded in 2003, MXit is a pioneering mobile media and social networking company based in South Africa. Initially community issues and causes formed a strong focus for the networking it facilitated. Subsequently it has expanded to cover entertainment (music downloads, mul- tiplayer games, TV polls), dating, classifieds, education, counseling (drugs, youth helpline), and mobile banking. The primary MXit product is software allowing mobile users to use instant messaging to participate in com- munity forums on different topics. The software can be installed for free, and there is no subscription and no charge for messaging. By using IP-based (GPRS, 3G) connectivity, MXit allows instant messaging at a cost Source: John Hogg, World Bank. per character hundreds of times smaller than the cost of an equivalent SMS message. These costs are cov- ered by revenues from advertising (wallpapers, promo- Even though the diffusion of personal mobile phones has tions, brand portals) and content sales (skinz, music, eroded the business logic behind well-documented models classifieds). such as the Grameen Village Phone (an owner-operated GSM Source: Chigona et al. 2009; Prows 2009; Ramachandran 2009. payphone) (Futch and McIntosh 2009), the significance of social value remains a key building block of business models aimed at delivering rural ICT-based services. As pricing plans have changed over the past few years, the mobile payphone Currently, prepaid subscription models appear to be the has become less profitable as a business asset. Even so, standard operational mode for providing services in devel- the impersonal nature of mobile payphones is instrumental oping-country markets. Yet as Topic Note 2.4 indicates, this to addressing concerns related to equal access. From the strategy may be impractical for rural content providers, given standpoint of public service provision, equal access to public the risks involved in subscription renewal and the high fixed phones continues to be significant, especially for women costs of generating relevant rural content. IC T IN A GR IC ULTUR E S E C T I O N 1 — OV E RVIE W OF ICT IN AGRIC U LTU R E: OPPORTUNITIES, A C C ES S , A ND C R OSS -CUTTING TH EM ES 29 Topic Note 2.2: PUBLIC INNOVATIONS IN UNIVERSAL ACCESS TO TELECOMMUNICATIONS TRENDS AND ISSUES Broadening Mandate of Universal Access/Universal With technology moving toward fixed-mobile convergence, Service Funds the provision of minimum services (other than telephony) The main vehicles for improving access to ICTs in rural areas and public access to ICT devices has fallen within the man- have been the univeral access/universal service funds (UA/USFs) date of universal service regulations. This note examines established in the 1990s. The funds originally offered an opportu- the public sector’s changing and recently expanding role in nity for funding and access to ICT solutions in underserved areas providing affordable access to ICT infrastructure, appliances, (Hudson 2010). Dedicated at first to increasing the penetration and services, including the growing use of universal access/ of landline telephone services, the funds now support mobile universal service funds. network development and Internet services in most countries.20 In some countries, such as Ghana and Mongolia, funds are Changing Role of the Public Sector disbursed to aid the provision of rural public access telephony Public involvement in the telecommunications sector evolved and Internet facilities. Although the expansion of mobile net- in a nonlinear way (Gómez-Barroso and Feijóo 2010). An early works has reduced the urgency of public access to voice tele- monopolistic stage after the Second World War was suc- phony, arguments based on gender inequality and perceptions ceeded by a series of crises in the 1970s as services came of social obligation still favor the provision of public access to be considered a “public matter� demanding closer govern- (Burrell 2010). In allocating UA/USF funds toward services ment involvement. In the 1980s, the public sector started other than voice telephony, some governments specify addi- giving way to the private sector, which was considered better tional criteria such as the nearby presence of public-access equipped to deliver value and efficiency. facilities (telecenters, libraries, Internet cafes, and so on). The public sector’s current role in telecommunications can be Since cost-effective technologies for the delivering rural described as promoting the information society. Governments access to ICTs are evolving constantly, it is essential that act as facilitators and enablers of universal access to telecom- UA/USFs do not limit their technological scope and maintain munications, and the public sector has re-emerged as an technological neutrality. It is advisable for UA/USFs’ tender active participant in the sector. In both developed and devel- requirements to specify coverage, bandwidth, quality of ser- oping countries, public agencies are regarded as partners in vice, target price, and so on—but not technology. Rural areas funding infrastructure in areas where the incentives for private where the profitability of telecommunications services is low investment are insufficient; they are also regarded as partners can be of limited commercial interest to telecommunications by virtue of their role in encouraging demand for telecom- companies. Consequently, the UA/USF levy can run the risk of munications. In developing countries, local governments and becoming a simple direct tax on the operator, and a strategic international development partners actively facilitate access approach is needed to deliver ICT services and “unlock� the to ICTs at all levels (infrastructure, appliances, and services). potential of UA/USFs (especially in Africa) (UNCTAD 2010). It is within the domain of local government and public admin- istration to provide innovative methods for access to ICTs Public Support for Low-Cost Devices in rural areas. Effective partnerships and public support are Unlike public support for the provision of infrastructure, pub- capable of overcoming obstacles at different access layers. lic support for the provision of low-cost devices has experi- Until recently, the public sector was not considered an inves- enced considerable criticism. The most prominently instance tor in telecommunications, but under the increasing pres- sure of the international financial crisis, governments have 20 The objectives of UA/USFs can be at very different stages of development and maturity. Hudson (2010) reviews key lessons looked to ICTs as fiscally sound investments relative to other related to UA/USFs’ management, professional capacity, size public stimulus options. Investments in broadband and next- of funding, and expanding mandate. Stern, Townsend, and Ste- generation networks are proving to work as countercyclical phens (2006) recommend the accelerated, simplified, and diver- sified use of UA/USFs. UNCTAD (2010) discusses in detail the tools for creating jobs and as building blocks of long-term challenges and opportunities for financing ICTs in rural areas of economic recovery (Qiang 2010). developing countries through UA/USFs. E C O N O M IC AND S E CT OR WORK 30 MODULE 2 — MAKING ICT INFRASTRUCTURE, APPLIANCES, AND SERVICES MORE ACCESSIBLE AND AFFORDABLE IN RURAL AREAS BOX 2.9: India Exemplifies Evolution in the Public infrastructure sharing is distinguished from “active infrastruc- Provision of Low-Cost Devices ture sharing,� which can involve the shared use of electronic infrastructure such as network components (for example, India’s Union Minister for Human Resource Development access node switches), radio transmission equipment, and announced that the government would continue to sup- core network software systems (Ghosh, Aggarwal, and port development of a low-cost device with computing Marwaha 2009). Although active infrastructure sharing can and communication capabilities. The cost of the tablet raise concerns among mobile network operators, passive device, commonly known as the “Sakshat� (“before infrastructure sharing has become established as a reliable your eyes�), currently stands at US$ 35, but it is pro- mobile network expansion strategy, particularly for expen- jected to decline to US$ 10 through continuing research sive rural sites with high transmission and power costs. and development cooperation with private manufactur- ers. The government is committed to first provide the Nigeria has been named one of the telecommunications technology to 110 million schoolchildren. markets with the most promising potential for growth. Even so, the National Communications Commission has identi- The Indian program clearly demonstrates how the fied several issues as detrimental to this growth, including scope of public initiatives providing access to low-cost poor public power supply, poor security, and high operational devices has evolved, largely as a result of the compre- costs (Onuzuruike 2009). In Gupta and Sullivan (2010) found hensive approach of the One Laptop per Child project. unreliable electricity and insecurity to be the main challenges Government initiatives aimed at the development of low- to operating mobile networks. These challenges were much cost technology devices include the active participation more prominent in Nigeria compared to other West African of technology development partners (for example, the countries with more reliable access to the electricity grid Indian Institute of Technology Rajasthan) as well as fur- (such as Ghana, Cameroon, and Côte d’Ivoire). Gupta and ther development and investment in communication lay- Sullivan (2010) calculated that costs of fuel for generators, ers other than the appliance itself. The Indian Ministry for including a minimum of 20 percent of fuel lost to theft, Human Resource Development is simultaneously tack- amounted to 60–90 percent of the costs of running network ling the problems of device/hardware affordability and sites in Nigeria. Base station costs in Nigeria add up to content creation by ensuring that electronic content for US$ 200,000–250,000, 3.5 times higher than in India (US$ the devices is generated under the National Programme 60,000–70,000). Some of these limitations are at last being on Technology Enhanced Learning. overcome through passive infrastructure sharing. Source: Author, based on “India to Unveil £ 7 Laptop,� The Guard- ian, February 2, 2009 (http://www.guardian.co.uk/world/2009/feb/02/ india-computer-cheapest, accessed July 2011); “Undia Unveils World’s Helios Towers Nigeria (http://www.heliostowers.com/ Cheapest Laptop,� The Guardian, July 23, 2010 (http://www.guardian. homepage) significantly decreases the impact of such issues. co.uk/world/2010/jul/23/india-unveils-cheapest-laptop. , accessed July 2011); “Low Cost access-Cum-Computing Device Unveiled by Shri In 2005 Helios Towers became Africa’s first independent Kapil Sibal,� The Hindu, July 23, 2010 (http://www.thehindu.com/news/ resources/article529944.ece, accessed July 2011). mobile tower company, enabling wireless network operators to share infrastructure. The organization buys nonelectronic infrastructure at the cell site from telecommunications provid- ers, such as towers and power supplies, or develops new infra- was government involvement in the One Laptop per Child structure where none exists. Telecommunications companies project (Burke 2006; Hollow 2009; Kleine and Unwin 2009). rent space at the towers and access to other elements of the Yet government efforts to provide low-cost devices persist communications infrastructure, sharing it with other providers. and are evolving (box 2.9). Helios Towers estimates that clients colocating on one of their towers can save over US$ 200,000 in capital expen- INNOVATIVE PRACTICE SUMMARY ditures and up to 20 percent in operating expenditures. Passive Infrastructure Sharing in Nigeria Helios Towers also provides wireless operators with power, “Passive infrastructure sharing� is the sharing of nonelec- round-the-clock security and access (shelters have typically tronic infrastructure, equipment, and services at mobile been subject to vandalism), as well as other services such network base stations, including the site space, buildings, as installation and maintenance. According to its website, towers, masts, and antennas; power supply, back-up bat- the company’s large-scale and numerous sites allows it to teries, and generators; security; and maintenance. Passive offer a guarantee of 99.9 percent uptime for service users, IC T IN A GR IC ULTUR E S E C T I O N 1 — OV E RVIE W OF ICT IN AGRIC U LTU R E: OPPORTUNITIES, A C C ES S , A ND C R OSS -CUTTING TH EM ES 31 compared to a 70 percent industry average. Network opera- problems faced by operators in operating and managing wire- tors thus improve the quality of service for customers and less infrastructure. As Onuzuruike (2009) notes, tower manage- can pass the associated cost reductions on to them. ment companies usually enjoy scalable and long-term recurring revenues with contracted annual escalations. They also benefit The economies of scale that Helios Towers and companies from low churn rates and low operating and capital costs. Hence like it generate enable them to provide access in areas where they are able to ensure the fair treatment of new entrants while it would not be financially advantageous for other companies, satisfying incumbents (by purchasing their infrastructure and such as the network operators, to do so. Access is increased allowing the operators to outsource at a lower cost), at the in rural areas, for example, or areas where power supplies same time providing more comprehensive service to end users. previously were poor. Helios Towers depends on wireless operators buying into its Helios Tower’s first site went live in June 2006, and since service. The company is able to offer a basis for partnership then the company has expanded to include over 1,000 four- that makes their proposition highly attractive to corporate operator sites across Nigeria’s six geopolitical zones. Through clients: infrastructure sharing lowers the risk represented by them, MTN Nigeria provides services in 223 cities and towns, investment in network expansion and upgrades. The company more than 10,000 villages and communities, and a growing counters the rising price of site rentals by sharing this cost number of highways across the country. In August 2004, MTN among partners; site owners, in response to the rising demand had coverage in all 36 states and the Federal Capital Territory for provision in underserved areas, have increased their rents, Abuja, and their signal reached 80.9 percent of Nigeria’s total and local government restrictions on new tower construction population, living in 58.33 percent of its landmass.21 Similarly, owing to health and environmental hazards have only increased through Helios Towers, Zain Nigeria22 (MTN Nigeria’s largest the attractiveness of passive infrastructure sharing. competitor) currently covers over 1,500 towns and 14,000 communities across all six geopolitical zones. Zain was the To retain its many partners (aside from MTN and Zain, they first telecom operator to serve all of the zones.23 Considerable include EMTs, Starcomms, Reliance Telecoms, and Visafone) overlap in the coverage offered by these and other network and provide comprehensive nationwide service, Helios offers operators provides significant advantages to end users: The services to the full range of wireless operators: GSM, CDMA, resulting competition lowers tariffs and enhances choice. and WiMAX operators utilizing 2G, 3G, and 4G technology platforms. It is also prepared to build towers where there The National Communications Commission supported this are none, even when it is not financially advantageous in the new business model and developed a regulatory framework short to medium term, to improve its network and remain for potential colocators. This framework suggests how to the dominant supplier. As a result, operators can expand into share infrastructure to promote fair competition and infra- rural markets and other underserved areas while keeping structure sharing among the telecoms’ licensees. It effec- their costs—and, crucially, their tariffs—low. tively enables organizations such as Helios Towers to operate with state support and gives network operators a strong incentive to align with such a powerful ally. INNOVATIVE PRACTICE SUMMARY Turkey’s Oligopolistic Infrastructure The business model developed by the growth of tower man- Sharing Model agement companies such as Helios Towers has helped erase The Turkish mobile telecommunications market is dominated by Turkcell, Vodafone Turkey, and Avea (a wholly owned 21 See http://www.mtnonline.com/index.php/about.html, accessed subsidiary of Turk Telekom, the largest telecommunications July 2011. 22 In 2010 Bharti Airtel of India completed the acquisition of the Zain company in Turkey). Following an agreement announced by Group in a US$ 10.7 billion deal (Pan 2010), which included own- Turkcell and Turk Telekom in August 2009, the two compa- ership of Zain’s assets in Africa (network operations in Burkina nies (and to a lesser extent Vodafone) have made strides to Faso, Chad, Democratic Republic of Congo, Republic of Congo, Gabon, Kenya, Ghana, Malawi, Madagascar, Niger, Nigeria, Tan- reduce the costs of introducing 3G mobile broadband tech- zania, Sierra Leone, Zambia, and Uganda). In these countries, nology in Turkey through passive infrastructure sharing.24 Zain operations are currently known as Bharti Airtel. This section maintains references to Zain Nigeria. 23 Coverage information publicized online (http://www.ng.zain.com/ 24 “3G in Turkey: By Sharing Infrastructure?�, Developing Telecoms, System/AboutUs/tabid/59/Default.aspx) by Zain Nigeria, prior to August 12, 2009 (http://www.developingtelecoms.com/3g-in- its acquisition by Bharti Airtel. turkey-by-sharing-infrastructure.html) , accessed July 2011. E C O N O M IC AND S E CT OR WORK 32 MODULE 2 — MAKING ICT INFRASTRUCTURE, APPLIANCES, AND SERVICES MORE ACCESSIBLE AND AFFORDABLE IN RURAL AREAS They have signed contracts with Huawei, ZTE, and Ericsson by the highly competitive business models of infrastructure for this purpose. providers, which enable more and later entrants to the mar- ket (such as ZTE). The price-competitive business model has This highly interesting development in infrastructure also enabled customers to receive services at lower prices: sharing involves competition from both ends of the part- Ericsson, Huawei, and ZTE must streamline their own profits nership. Unlike in Nigeria, where Helios Towers enjoyed to offer the MNOs maximum cost savings (to gain market unparalleled relationships with both Zain and MTN, here share), and Turkcell, Vodafone, and Telekom Turk must pass the infrastructure managers must fight to retain convivial on a significant proportion of these savings to customers relationships with their clients. This competitive landscape (again to achieve greater market share). reflects the business model promoted by Turkey’s regula- tory framework. Although the partnership structure that has evolved in Turkey is less convivial than that in Nigeria, it has still been key Turkey’s ICT sector lags its European counterparts in some to implementing 3G technology. The agreement between areas, with declining numbers of fixed telephone lines (27.3 Turkcell and Telekom Turk to jointly reduce infrastructure percent of the population in 2000, compared with 24.6 per- costs has been particularly instrumental in avoiding another cent in 2007) and slow penetration of the Internet market (2.2 false start in bringing 3G to Turkey (Rossotto et al. 2010). percent in 2000 to 6.3 percent in 2007) but rapid growth in mobile subscriptions (rising from 23.9 percent penetration in The competition among key players in the infrastructure 2000 to 83.9 percent in 2007) (Rossotto et al. 2010:229–30). provision industry has ensured comprehensive coverage This sector profile reflects Turkey’s young population: 92.9 of the different routes and technologies into mobile broad- percent are under the age of 64 (Rossotto et al. 2010:230). band: Ericsson’s Converged Package Gateway, for example, This demographic suggests the huge potential of wireless is suitable for operators “providing high performance broad- broadband in Turkey, which is why international players band LTE services, CDMA operators moving to LTE, and such as Vodafone, Huawei, and Ericsson are keen to invest operators wanting to provide mobility between LTE, 3GPP heavily in the country and compete among themselves for and ‘non-3GPP’ access networks such as wireless LAN or market dominance. Because contracts were exchanged only Wimax.�26 ZTE and Huawei provide similarly encompassing recently (2009), it is still difficult to evaluate the impact of the services. technology or the competitive business model under which it is provided.25 INNOVATIVE PRACTICE SUMMARY Regulatory reform of the Turkish telecommunications indus- Dabba’s Experience with Unlicensed try has been a concern. Rossotto et al. (2010) report that Wireless Services in South Africa regulators seek to promote a fully competitive market sector One obstacle to expanding wireless technologies is the unli- through plans modeled loosely around the EU framework. censed use of wireless services. The main problem associ- Although Turk Telekom (privatized in 2005) dominates the ated with unlicensed multipoint wireless services is interfer- telecommunications industry with its 93 percent market ence arising from the operations of other wireless networks share, this dominance is being most convincingly challenged within an area. Interference often causes unlicensed wire- in mobile communications. Turkcell and Vodafone both enjoy less services to have much higher error rates and interrup- greater market share in this subsector, thanks to the regula- tions than equivalent wired or licensed wireless networks tory efforts made to ensure fair competition. (for example, copper telephone, coaxial cable, and mobile Despite these efforts at promoting competition, a market networks). For these reasons, unlicensed multipoint services share analysis demonstrates that the market is moving often grow slowly and lose customers; their operators may toward an oligopolistic structure in terms of competition be required to rethink their business model. among mobile network operators as well as among infra- Interference problems have yielded several responses. An structure managers such as Ericsson. This shift is reflected organizational response has been to establish voluntary 25 “Ericsson to Build 3G Network for Turkcell,� Ericsson, March 11, 2009 (http://www.ericsson.com/news/1296824, accessed July 26 See http://www.ericsson.com/ourportfolio/telecom-operators, 2011. accessed July 2011. IC T IN A GR IC ULTUR E S E C T I O N 1 — OV E RVIE W OF ICT IN AGRIC U LTU R E: OPPORTUNITIES, A C C ES S , A ND C R OSS -CUTTING TH EM ES 33 spectrum coordination organizations, entirely independent of Dabba offers free calls within the local network and pay- government, to coordinate the actions of unlicensed wire- as-you-go cards for users who wish to place distance calls less network operators and minimize disruptions through (avoiding subscription fees). the maintenance of an operator frequency and sources data- base. Cooperation with the voluntary coordination body is Initially, Dabba exploited the new regulatory freedom pro- enforced through peer pressure by cooperative operators on vided by an August 2008 High Court Ruling, which ruled that uncooperative operators.27 anyone in possession of a Value Added Network Services (VANS) license (which Dabba held) was entitled to “self- A technology-centered approach to the interference issue is provide� and compete in the formerly oligopolistic market the development of adaptive and mesh network technolo- (Esselaar et al. 2010). The market grew from four players to gies. Adaptive networking improves performance by devel- potentially hundreds overnight. Dabba took this relative free- oping dynamic interference and fault detection and recon- dom beyond its regulatory limits, however, and was found to figuration protocols. Mesh networking optimizes quality over be using ISM (industrial, scientific, and medical) Wi-Fi bands, routing and the possible paths for the delivery of service to for which it was not licensed, and using equipment that was customers. Neither technology is yet capable of delivering not type-approved.29 high-speed, low-latency, business-class, and reliable local loop service, however.28 Such unlicensed use perhaps derived from Dabba’s business model, with its ever-pressing need to reduce operating costs. As partners of The Village Telco service in South Africa, the Dabba adds value for consumers by offering them the least company Dabba and the Shuttleworth Foundation in the expensive rates (free local calls, pay-as-you-go distance calls, Orange Farm Settlement provide telephone and mobile no subscriptions). Cheap service compensates for the lower access through VoIP wireless routers. Founded by Rael quality of service that Dabba’s technologies sometimes pro- Lissous in 2004, Dabba reprogrammed Wi-Fi routers as base vide. Although this model enabled Dabba to grow quickly in stations and used open source firmware to make up the its pilot area, where customers had little to lose by joining components of a telecommunications network. Following the network, it generated enormous pressure to operate complaints to the Independent Communications Authority of cost-effectively. South Africa by the incumbent operator Telkom that Dabba was interfering with its licensed service provision, Dabba’s This pressure has abated through Dabba’s new partnership equipment was seized in February 2009. Dabba has since with Cisco. Cisco has provided new equipment and support returned to work with a new business partner, Cisco, the and has provided 100,000 rand to initiate an ICT entrepreneur international networking and communications expert. program, enabling Dabba to expand into two new town- ships.30 Dabba has also received additional support from Dabba is an example of innovation to avoid the high costs the Shuttleworth Foundation, which underwrites all of their typically associated with telecommunication service provi- work. Dabba can now pursue its original business model sion to rural and unserved areas. Wi-Fi enables access to while remaining more firmly within South Africa’s regulatory large areas at a low cost, as hot spots with amplifiers can framework. cover ranges of up to 8 kilometers, allowing Dabba to serve entire townships with minimal outgoing expenses. In the The lightweight Ubiquiti equipment employed since Cisco’s densely populated townships, this has proved a winning involvement is inexpensive. It uses solar energy and bat- formula for providing telecommunications to large numbers tery packs connected by locally made antitheft brackets to of people and for passing on the low costs to the end user. reduce costs further. This setup, combined with the use of Wi-Fi and wireless mesh networks, make Dabba well- suited to provide coverage for small, local groups and 27 BANC (Bay Area Network Coordination), the first voluntary coordination body, was founded in 2003 by NextWeb, Etheric Networks, GateSpeed and a handful of other companies. BANC comprised the majority of operators in California’s Bay Area and 29 “ICASA defends Wi-Fi equipment confiscation in South Africa,� used peer pressure to get uncooperative operators to conform. Balancing Act, Issue 443, February 27, 2009 (http://www BANC was subsequently deployed in Los Angeles. Despite their .balancingact-africa.com/news/en/issue-no-443/internet/icasa- efforts, some members of BANC switched to licensed opera- defends-wifi-e/en), accessed June 2011). tions because of the high costs of interruptions, and the system 30 “Low-cost phone and voice operator bounces back with entre- foundered. preneur support from Cisco,� Balancing Act, Issue 451, April 23, 28 The source for this paragraph is http://en.wikipedia.org/wiki/ 2009 (http://www.balancingact-africa.com/news/en/issue-no-451/ Wireless_local_loop. top-story/low-cost-phone-and-v/en, accessed June 2011). E C O N O M IC AND S E CT OR WORK 34 MODULE 2 — MAKING ICT INFRASTRUCTURE, APPLIANCES, AND SERVICES MORE ACCESSIBLE AND AFFORDABLE IN RURAL AREAS townships, where large, centralized projects could not They also suggest that Bhutan’s relatively young population provide services that most users could afford. Dabba is an indication of the potential impact of the telecommunica- has renewed its operations so recently, however, that its tions sector. impact remains unclear. A key factor enabling development of the CICs is that they not only receive strong government support but are in fact gov- INNOVATIVE PRACTICE SUMMARY ernment led and organized and in effect also self-regulating. Bhutan’s Community Information Centers Adapt As long as local managers produce a profit and offer the ser- to the Geographical and Consumer Context vices detailed in the government guidelines, they are free to operate their CICs as they see fit. Running the centers is thus Bhutan’s Department of Information Technology (DIT) has rendered attractive to local entrepreneurs. established a series of community information centers (CICs) to provide sustainable, commercially viable ICT services in This business model of local autonomy underwritten by rural areas. DIT provides all of the equipment for offering government support is crucial to the CICs’ success. Some CIC services, and the local community provides an individual villages are so remote (in extreme cases, several days walk who is employed to promote and maintain those services. from the nearest road) that only locals can understand the Services available at the CICs include basic and advanced market conditions.34 By international standards, Bhutan’s computer training, non-Internet-based games, digital repro- national media (particularly its newspapers) are weak, and duction, Internet, telephone facilities, government informa- rural service users are likely to have higher levels of trust tion and forms, and lamination and scanning. in local business managers. However, central intervention will be necessary to subsidize the high costs of access- In line with the government’s ninth five-year plan, the CICs ing some rural areas, which is crucial if telecommunica- represent an updated effort to provide rural Bhutan (just over tions are to reach the population at large. The partnership 79 percent of the population) with some telecommunica- between local and players and government strikes a favor- tions connectivity. Bhutan’s mountainous, forested terrain able balance. (forests occupy nearly three-quarters of its land area)31 have made wired Internet and telephone connectivity prohibitively The Government of Bhutan plans to provide a hub-and-spoke expensive for operators and end users. The CICs reduce the network, enabling it to overcome the difficulties associated costs for the end user, who pays on demand only for the with placing infrastructure in mountainous and remote ter- services required, and public access through CICs renders rain. It seeks to provide a network of broadband connection service provision more attractive by expanding the customer through fiber-optic cables from the capital and out to the 20 base. Individuals who could never afford their own personal districts (dzongkhag) and village groups (gewog). The con- connection to the telecommunications network may still nection from districts to village groups and on to the villages prove a significant source of income to the CIC, especially will be provided by wireless technologies such as GSM. when such individuals are considered in the aggregate (vil- These “spokes� lead to the CICs.35 lages average 43 households).32 The CIC initiative is still in its infancy; the decision to move LESSONS LEARNED from government-owned facilities to commercial, locally The enabling factors and lessons surrounding regulation, managed centers was made in late 2008. Microsoft’s base- business models, partnerships, and infrastructure for these line surveys suggest that when access to telecommunica- initiatives in Nigeria, Turkey, South Africa, and Bhutan are tions was available, “the population was adept at using the summarized in tables 2.2 and 2.3. devices and their usage permeated . . . the community.�33 31 Tobgyl (n.d.:3). 32 Tobgyl (n.d.:4). 33 Bhutan Department of Information Technology, “Microsoft 34 Tobgyl (n.d.:4). Unlimited Potential Baseline Survey on Socio-economic Demo- 35 Ministry of Information and Communications (Bhutan), “Vision graphics and Information Needs,� (http://www.dit.gov.bt/content/ for Information Society� (http://www.moic.gov.bt/pdf/Vision%20 microsoft-cic, accessed July 2011. for%20information%20Society.pdf, accessed July 2011), p. 10. IC T IN A GR IC ULTUR E S E C T I O N 1 — OV E RVIE W OF ICT IN AGRIC U LTU R E: OPPORTUNITIES, A C C ES S , A ND C R OSS -CUTTING TH EM ES 35 TABLE 2.2: Key Enabling Factors for Innovations in Rural ICT Provision in Nigeria, Turkey, South Africa, and Bhutan HELIOS TOWERS, NIGERIA INFRASTRUCTURE SHARING, DABBA WIRELESS COMMUNITY INFORMATION TURKEY SERVICES, SOUTH AFRICA CENTERS, BHUTAN Regulation  Support from Nigerian ICT  Telecommunications sector  Changes to VANS licensing  Government-led and organized, regulatory body recently focused on regulatory opened a formerly restrictive hence effectively self-regulating  Framework to suggest how to reform and promoting a fully telecommunications market to service share infrastructure to promote competitive market structure new players such as Dabba,  Local entrepreneurs free to act fair competition and infrastruc-  Allows companies like Vodafone allowing them to “self-provide� as they feel most appropriate, ture sharing among telecoms’ and Turkcell to thrive; enables if they did not cause interfer- provided they make a profit and licensees backs Helios business new companies to enter the ence to licensed networks and offer the services detailed by model market used type-approved equipment government guidelines (within the framework of other laws) Business  Scalable and long-term recur-  Oligopolistic model has led  Low-cost/lower-capabilities  Local autonomy underwritten Model ring revenues, low churn rates, to price competition, giving model: Offers customers a by government support enables and operating costs: allow consumers connectivity at lower-commitment approach to the CICs to combat the remote NMOs to achieve savings increasingly lower prices telecommunications nature of some locations through outsourcing while  Network managers such as  Free Internetwork calls and pay- and the lack of inbuilt trust retaining profit themselves Ericsson must pass more of as-you-go card for distance and in national communication their own savings on to MNOs international calls systems (due to a weak national media) Partnerships  Large numbers of corporate cli-  Agreement between major  Cisco has offered equipment  Partnership between govern- ents, rendering Helios dominant mobile telecommunications and financial support ment departments and villages network: financial capability to operators to share infrastructure  Has paid to initiate an entre- (gewog) to provide national expand throughout Nigeria and costs in the implementation of preneurship scheme, enabling service in remote areas become most comprehensive 3G technology Dabba to expand into two new  Microsoft involved in planning network  On-record support for passive townships and development, bringing infrastructure sharing from experience and expertise in multiple players systems implementation Network and  Helios offer services to the full  Comprehensive service provided  Lightweight Ubiquiti equipment  Hub and spoke network, with Infrastructure range of wireless operators: due to network management is low cost and uses solar fiber-optic broadband connec- GSM, CDMA, and WiMAX companies’ desire to remain energy and battery to reduce tion to the districts (dzongkhag) operators using 2G, 3G, and 4G competitive: Variety of entries costs further passed on through wireless platforms provided to mobile broadband  Wi-Fi and wireless mesh technologies to the gewog and  Willing to build new towers service networks well-suited to provide eventually individual villages. where there are none coverage for small, local groups combats problems of wired and townships access in difficult terrain Source: Authors. TABLE 2.3: Lessons Learned from Rural ICT Provision in Nigeria, Turkey, South Africa, and Bhutan INFRASTRUCTURE SHARING, DABBA’S WIRELESS SERVICES, COMMUNITY INFORMATION HELIOS TOWERS, NIGERIA TURKEY SOUTH AFRICA CENTERS, BHUTAN  Outsourcing can lower costs:  Companies must adapt to the  Consider regulatory issues:  Geography matters: Bhutan may Economies of scale enabled Helios existing market structure: Dabba lost valuable time and equip- have to accept that nationwide con- Towers to make a profit in difficult Attempts to produce fully competi- ment investment by working outside nectivity is not financially feasible areas and enabled MNOs to enter tive markets have stalled in the face of regulatory approval in the short to medium term due to previously unserved areas of Turkey’s dominantly oligopolistic  Employ local expertise: Antitheft the remoteness of some villages and  Service provision is a vital part system brackets produced in the network’s rough terrain of product provision: Helios has  Powerful players can lead area and other locally made equip-  Adapt the service to consumer offered security assurance and to consumer savings: Turkey’s ment has helped keep costs down needs: Studies have shown that 24-hour access, alongside its towers telecommunications industry is the people of Bhutan have found and connectivity, to assuage fears oligopolistic in multiple and vital little need for technologies such affecting MNOs’ own operations sectors, forcing all to use economies as fax; implementers should offer (e.g., vandalism) of scale to provide savings to clients technologies in such a way that their consumer added value is immedi- ately apparent Source: Authors. E C O N O M IC AND S E CT OR WORK 36 MODULE 2 — MAKING ICT INFRASTRUCTURE, APPLIANCES, AND SERVICES MORE ACCESSIBLE AND AFFORDABLE IN RURAL AREAS Topic Note 2.3: MOBILE MONEY MOVES TO RURAL AREAS TRENDS AND ISSUES IMAGE 2.2: Ghana’s Telecommunications Infrastructure One consequence of improved access to ICT infrastructure, Expands the Use of Mobile Money appliances, and services in rural areas may be that rural peo- ple will gain better access to financial services and additional sources of income (image 2.2). The telecommunications and microfinance industries have grown rapidly in recent years and are overcoming the traditional challenges of reaching rural and formerly underserved areas. This topic note exam- ines specifically the business models and enabling factors that are making new sources of financing and income acces- sible in rural areas. Mobile banking is a logical consequence of the growth of telecommunications and microfinance. In developing economies worldwide, companies have sprung up to deliver Source: Arne Hoel, World Bank. financial services outside of conventional bank branches, through mobile phones and nonbank retail agents. A particu- larly well-known service is M-PESA. Operated by Safaricom Such ventures are united by the goal of enabling the eco- in Kenya, M-PESA allows users to transfer money through nomically active poor to use telecommunications technology their mobile phones, without having to register or qualify for to help themselves. Mobile financial and income-generating a bank account. services such as M-PESA, Zain Zap, easypaisa, and txteagle, M-PESA does not operate in a vacuum: easypaisa in Pakistan, discussed in this note, cost little and operate on all hand- G-Cash in the Philippines, and Bancosol in Bolivia are just a sets, making them advantageous on a large scale, even in few enterprises that provide some form of mobile financial more remote rural areas where previous efforts made few services to the un- and underbanked poor. One rural bank, inroads. Advances such as smartcards, fingerprint-sensitive Green Bank, has calculated the substantial savings from ATM machines and market kiosks equipped with electronic using mobile technology: By switching from field-based to point-of-sale devices have also made such programs vastly text-based collection, they reduced their interest rates from easier to implement (and more likely to reach the intended 2.5 to 2 percent and their service charges from 3 to 2.5 beneficiaries). percent, yet profits rose by US$ 16 for every US$ 400 loan (Kumar, McKay, and Rotman 2010). INNOVATIVE PRACTICE SUMMARY The rise of mobile income sources is another trend behind M-PESA’s Pioneering Money Transfer Service the demand for mobile financial services. In recent years Based on a pilot funded in part by public funds from the UK conditional cash transfer programs in many countries have Department for International Development, Vodafone and provided government payments to economically and socially Safaricom launched M-PESA in Kenya in February 2007 in disadvantaged households, especially the economically partnership with Sagentia.36 The M-PESA pilot focused on active poor, conditional on measurable actions (for example, microloans and repayments, but research indicated that con- enrolling girls in school, obtaining consistent prenatal care, sumers primarily would use the service for person-to-person or using agricultural inputs). Telcommunications technol- money transfers. ogy is transforming governments’ capacity to deliver these additional sources of income quickly, reliably, and at a lower Following the pilot, M-PESA launched with a person-to- cost. It is also allowing farmers to access commercial banks person business model in which customers can buy e-money and critical services including credit, savings accounts, and remote transfers even despite distance and lack of local banking facilities. 36 “M� for “mobile; “pesa� for “money� (Swahili). IC T IN A GR IC ULTUR E S E C T I O N 1 — OV E RVIE W OF ICT IN AGRIC U LTU R E: OPPORTUNITIES, A C C ES S , A ND C R OSS -CUTTING TH EM ES 37 from agents throughout Kenya. Any commercial space may The importance of this flexible “proportional risk� system of become an agent, making this model particularly effective regulation is evident in M-PESA’s stalled attempts to operate in rural areas. Mobile phones are used to perform financial in India, where regulators insisted on a connection with a transactions such as sending money to others, paying bills, licensed bank. In Afghanistan, regulations to prevent money and even withdrawing cash from an ATM (without needing a laundering have constrained M-PAISA’s development as a bank account). E-money can be cashed in with agents who money transfer service, and it operates predominantly as receive a commission for the services they provide and for a microfinance service. The need for identification details registering customers. detracts from M-PAISA’s simplicity and thus its appeal. M-PESA’s great innovation has been to provide a service accessible to the unbanked populations of emerging econo- A Business Model that Sidesteps the Banking Sector mies at a low cost. M-PESA costs users about one-third as The M-PESA business model is characterized by low margins much as using a money-transfer company such as Western and high volumes, whereas banks traditionally need relatively Union, and it is cheaper still than the banks. Such companies high margins from far fewer people with bank accounts. cannot match M-PESA’s low rates because their operating Independence from the banking sector opened up a huge costs are higher (Omwansa 2009:6). untapped market for M-PESA: 90 percent of Kenyans did not have a bank account. Although only registered users can initi- M-PESA now has over 10 million customers in Kenya, and ate transactions, anyone may receive money from M-PESA services have been introduced in Tanzania and Afghanistan and withdraw it as cash. This positive nonuser experience (called M-PAISA in the latter); a number of other deploy- was crucial to the user network’s growth. This business ments are planned across Africa and Asia.37 Success has model has allowed M-PESA to become the dominant and so exceeded expectations that M-PESA has faced system most attractive network. M-PESA’s low costs have enabled capacity and cash flow problems. Cash flow problems have it to challenge money transfer companies and banks even arisen internally (as agents are paid to register customers, where they are present. Yet over time many M-PESA users who take time to become profitable) and at the point of use graduated to having bank accounts, and M-PESA is now inte- (agents run out of both e-money and cash). The problem par- grated with the banking system. ticularly affects rural areas, where people receive remittances from urban workers and withdraw it as cash. To counteract Partnerships Facilitate Marketing and Technical this problem, larger agents now act as “super-agents,� selling Operations e-money and cash to smaller agents. M-PESA’s collaborative nature is fundamental to its success. Vodafone, as well as providing the initial funding, holds a A Flexible Regulatory Environment coordinating role. Safaricom has provided a brand that many Flexible regulation has been critical to M-PESA’s success. Kenyans trust, and its nationwide airtime reseller distribu- Working with the UK Treasury, the Central Bank of Kenya tion network easily transformed into a network of dedicated set up special provisions for M-PESA to launch its product M-PESA agents, enabling more rapid market penetration. with limited risk to the consumer but without being linked Vodacom undertakes Safaricom’s role in Tanzania (and is its directly to a bank and with relatively low levels of regulation. sister company); in Afghanistan, Roshan, a large MNO, has Subsequently the Central Bank provided informal monitoring been vital in developing the service. Sagentia (IBM as of as opposed to formal regulation. By the time banks and com- September 2009) provided key technical expertise. The use petitors realized M-PESA’s potential and began to demand of public funds during the development stage is regarded as its regulation, the firm was already well established and crucial for maintaining interest in the telecommunications respected. At the urging of the banks, the Central Bank con- sector during the pilot, which took longer than expected. ducted a thorough audit of M-PESA and found it to be fulfilling all its consumer obligations; the Central Bank has therefore Networks, Appliances, and Infrastructure continued enabling this special regulatory environment. Registering with M-PESA requires proof of identity, a SIM card, and the submitting of a PIN. In addition to providing 37 Safaricom statistics, June 2010 (http://www.safaricom.co.ke/ security, another key success factor was the added conve- index.php?id=1073, accessed June 2011). nience of the customer being able to retain his or her phone E C O N O M IC AND S E CT OR WORK 38 MODULE 2 — MAKING ICT INFRASTRUCTURE, APPLIANCES, AND SERVICES MORE ACCESSIBLE AND AFFORDABLE IN RURAL AREAS number. Since applications are on the SIM cards, they do not In 2010, Zap expanded to Niger and Sierra Leone, and it has depend on the functionality of the handsets, a factor crucial a pilot scheme in Malawi. Zain claims Zap is now the most for making M-PESA financially accessible: M-PESA works on comprehensive mobile commerce service in Africa, with even the most basic and inexpensive handsets. In Tanzania, over 150 million customers. This claim suggests significant M-PESA uses USSD technology, which does not require impact in some of the world’s most unbanked populations, the SIM card to be replaced and allows transactions to be particularly in rural areas without physical bank facilities. Zain completed in real time without any application stored on the eventually plans to roll out Zap in all 24 countries in Africa phone. and the Middle East where it has mobile networks. If regula- tion permits this growth, Zain’s infrastructure leaves it better M-PESA has a widespread and dense network of agents. placed for such expansion than M-PESA. Kenya had 7,000 M-PESA agents in April 2009 but only 750 bank branches, allowing M-PESA to reach significantly more people, especially rural people, than competitors.38 Thriving within Regulatory Constraints The advantage obtained by being first in the market allowed Zain’s expansion has been checked by regulatory constraints: M-PESA to build the dominant network in its pilot country Zain operates in Lebanon and Zambia without One Network and become the most attractive network for new customers because it has not yet received governmental approval in and businesses (as with companies such as eBay). these countries. However, Zain makes good use of its various partners to ensure that national and international banking regu- lations are met, and the company seems happy to operate INNOVATIVE PRACTICE SUMMARY within this framework. Zain works with the National Bank of Zain Zap Promotes Borderless Mobile Commerce Malawi and NBS bank in Malawi, Eco-bank in Niger, and Zenith Bank in Sierra Leone. In Kenya, Tanzania, and Uganda, Citibank Zain Zap is a mobile phone–based banking service.39 As and Standard Chartered work in partnership with Zain. M-PESA’s largest competitor, Zain Zap allows clients to trans- fer money via mobiles but requires each user to have a bank account. Although registering with Zap is more complicated A Business Model Seeking to Balance Availability than registering with M-PESA, Zap offers potential access to and Accessibility a greater number of services. In partnership with banks in Zain’s business model treads a fine line between widespread Kenya, Tanzania, and Uganda, Zap provides platform access availability and accessibility. Its interaction with banks and its to financial services to people without a nearby bricks-and- provision of mobile banking opportunities to all its dispersed mortar bank. customers allow greater possibilities for the business to grow in rural areas, as small-scale business owners gain access to Zain Zap has differentiated itself from M-PESA by inno- financial services they previously lacked. Zain’s only source vating along international lines, operating across Kenya, of revenue comes from a fixed fee for every transfer made Tanzania, and Uganda without subjecting users to addi- through Zap, however. It does not attempt to make money tional fees, administration, or regulation. It forms part of a on deposits or withdrawals but recommends a fee to agents, wider Zain Network, called One Network, which provides who are then free to charge as much as they like. This prac- international mobile coverage without the expensive rates tice could lead to very high prices for customers, especially usually associated with cross-border communication. until other agents appear. Before Zap, Celtel (now Zain) introduced a competing product soon after the launch of M-PESA, but the product’s very different pricing structure caused it to be withdrawn Partnerships with Big Banks and Big Clients due to low demand. Non-Zain mobile operators can buy a place in the service: In November 2009, Egypt’s Mobinil joined, adding 24 million 38 See “M-PESA power: Leveraging service innovation in emerging customers to the platform. This practice aids international economies,� M. Barrett, M. H.S.A Kim, and Karl J. Prince (2009). expansion and allows for the inclusion of local expertise in Case study and teaching note, available through www.ecch.com. 39 After the 2010 acquisition of Zain Group’s African assets by Bharti the business model. As well as partnering with large-scale Airtel, the Zain Zap platform has been rebranded as Airtel Money. banks, Zain has also signed deals with large corporate clients Bharti Airtel mobile network operators from Africa maintain their participation in the One Network, alongside Zain mobile network such as Coca-Cola and Kenya Airways to allow users to pay operators in the Middle East. for these companies’ products through their mobiles. IC T IN A GR IC ULTUR E S E C T I O N 1 — OV E RVIE W OF ICT IN AGRIC U LTU R E: OPPORTUNITIES, A C C ES S , A ND C R OSS -CUTTING TH EM ES 39 Networks and Infrastructure a strong opportunity for income generation in underbanked The primary factor in Zap’s successful development is that it areas. Though Tameer largely operates through bank branches belongs to Zain’s One Network, the world’s first borderless at present (despite its branchless banking license), and thus mobile service. According to Zain’s corporate website, One favors urban areas, the rise of its easypaisa service looks set Network offers over 90 million of Zain’s (and partner mobile to counteract this imbalance. operators’) customers relatively inexpensive rates, free of Since its commencement, Tameer has disbursed more than high roaming charges for cross-border communications. 3.5 billion rupees (Rs), with an active portfolio of Rs 1.4 billion One Network not only aids rapid expansion by giving Zap a and over 80,000 loan customers. The total customer base of pretargeted customer base, it also offers consumers large Tameer is over 170,000; it employs 1,100 staff.41 incentives to join Zain’s network and use its services (over others, such as M-PESA). A Business Model Benefits from Microfinance Regulation As CEO Nadeem Hussain noted, one of the major enabling INNOVATIVE PRACTICE SUMMARY factors for Tameer was the SBP 2001 Microfinance Ordinance, Pakistan’s Tameer Microfinance Bank for the which regulates the creation of commercial microfinance Economically Active Poor banks. Tameer argues that unless microfinance is financed Tameer Microfinance Bank describes itself as “one of the through commercial sources, it will remain in the realm of first nationwide, private sector, non-NGO transformed, com- development aid and its growth will be limited.42 For this mercially sustainable microfinance institutions in Pakistan.�40 reason, the Consultative Group to Assist the Poor has been A majority share is held by Telenor Pakistan. Tameer has involved with branchless banking regulation in Pakistan from produced an innovative hybrid of M-PESA and Zain Zap’s ser- the beginning. Regulation has allowed the use of retail stores vices for the economically active poor in Pakistan. as agents. With its new easypaisa service, Tameer matches M-PESA’s Regulation also made it possible for bank and telecom opera- ability to reach the unbanked. Currently, easypaisa is available tors to enter into a business model conducive for commercial to pay utility bills, but it plans to expand into sending and success. The two partners offer those services that each is receiving money within Pakistan and receiving money from best placed to deliver: Telenor acts as a distribution arm for abroad. As with M-PESA, customers do not need a bank branchless banking, organizes channel management and account and can access the service from a variety of portals, retail setup, and hosts the technology and operation of a call including their mobile phones. Tameer also operates as a center that provides customer service and complaint han- bank much as Zain’s Zap platform does, although not through dling. Tameer is responsible for operating accounts, creating partnerships with other banks. Since it became the first bank ledgers, reconciliation, fund settlement, risk, and compliance to gain a branchless bank license in Pakistan (2008), it has and fraud investigations.43 been able to offer loans, deposits, overdrafts, insurance, and domestic remittances. Partnerships Tameer’s innovations are notable for their focus on entrepre- In May 2010, Tameer joined with Pakistan Telecommunication neurs and the self-employed. Their aim is to actively gener- Company Limited (PTCL), Pakistan’s largest national telecom ate income in underserviced, frequently rural, areas, often by solution provider. PTCL will provide network connectivity to freeing customers from moneylenders and their prohibitive all of Tameer’s outlets. This provision of centralized connec- interest rates. Prior to Tameer’s penetration of the market, tivity has been one of the key enabling factors in easypaisa’s such moneylenders were generally the only option for small- success and, crucially, has allowed them to provide easily scale businesses in need of cash. Tameer loans have been accessible, low-cost services. used to buy new equipment, buy raw materials when they are cheapest, enlarge or purchase new property, and provide insurance against business failure. As such, they represent 41 Easypaisa (http://www.easypaisa.com.pk/about-tameerbank.php, accessed April 2010). 42 Easypaisa, (http://www.tameerbank.com/ceomsg.htm, accessed 40 Tameer Microfinance Bank (http://www.tameerbank.com/about April 2010). .htm, accessed April 2010). 43 Mir (2010). E C O N O M IC AND S E CT OR WORK 40 MODULE 2 — MAKING ICT INFRASTRUCTURE, APPLIANCES, AND SERVICES MORE ACCESSIBLE AND AFFORDABLE IN RURAL AREAS Networks and Infrastructure Asia, and the Americas, as the market for mobile phones Tameer’s large agent network allows customers to access expands rapidly in such areas as rural China and India. services in a number of ways: via mobile phone, easypaisa authorized shops, Telenor franchises, Telenor sales and ser- An Outsourcing Model Outside the Regulatory Flow vice centers, or Tameer Microfinance Bank branches. Like Txteagle operates fairly unconstrained by regulation M-PESA, Tameer uses USSD, so customers do not need because it is classified as a financial creditor, rather than new SIM cards to store the application. This lowers the cost as any form of banking or microfinance institution. This of signing up to the service even further. Tameer does offer setup gives txteagle a great deal of flexibility in its busi- new SIM cards for purchase, however, on which the Tameer ness model and where it operates, enabling rapid inter- application has already been uploaded. national expansion. As clients become more diverse, this operational flexibility will become a key asset, as txteagle will need workers with different languages and skills sets. INNOVATIVE PRACTICE SUMMARY Txteagle Taps a Vast Underused Workforce Txteagle’s business model enables outsourcing at a lower A large, global, and reasonably educated workforce remains cost because of savings in office-based costs and its access underused because of poverty and isolation, especially in to a previously isolated workforce. Low costs and a guar- rural areas. With the rapid penetration of telecommunica- antee of quality (clients pay only for adequately completed tions in developing economies, Txteagle believes this work) attract corporate clients. situation can change, particularly as more economies launch payment platforms like M-PESA. Txteagle is a mobile Adapting to Partners’ Needs phone-based SMS server application that takes tasks from Txteagle partners with a number of providers of wireless corporate clients (such as Nokia and Google), breaks them services, such as Safaricom in Kenya, Telefónica México in down into multiple microtasks, and sends them out for Mexico, MTN across Africa and the Middle East, and Viva completion to registered users. Targeted users are the rural in the Dominican Republic. As it relies on these partners poor in developing economies, who, through their mobile to provide its service, txteagle is eager to adapt to their phones, supplement their incomes with these microtasks. needs, from configuring the txteagle platform to operate Tasks include translation, image sorting, and audio tran- only during off-peak times, to providing assistance to their scription. Txteagle is similar in some respects to Amazon’s customer support teams. This situation has led to worries Mechanical Turk, which also divides up tasks, but differs in that txteagle could prove exploitative unless well regulated. that it distributes them by mobile phone, a technology with a higher penetration rate. Network and Infrastructure Txteagle operates primarily in East Africa, where it relies on A key enabling factor in txteagle’s business model is its technologies such as those developed by M-PESA, but it also Accuracy Inference Engine (AIE), which, once tasks have sends work to users in Asia and the developing economies been broken into microtasks, can monitor user performance. of the Americas. In areas not covered by payment platforms The AIE platform is a set of computational routines that can such as M-PESA, users are paid in airtime credited to their dynamically predict which available workers will be most mobile phones. likely to complete the given task successfully, correctly infer when the job has been satisfactorily completed, and differen- Txteagle’s impact is unclear because the company is still in tially pay workers in proportion to their level of contribution, its start-up phase. Given the growing number of subscribers all to within a 99 percent confidence interval of accuracy.45 to wireless phone technology (more than 1 billion people in The firm also uses a database that monitors and records user the developing world had a mobile phone in 2006),44 tech- performance. As the system learns more about the capabili- nologies such as txteagle have the potential to enjoy great ties and expertise of its individual users, it updates the algo- success. If txteagle can maintain and expand its systems rithms used to assign tasks to make the service as efficient capacity, it has the potential to extend its workforce in Africa, as possible. 44 Tryhorn (2009). 45 Txteagle (http://txteagle.com/technology/aie, accessed April 2010). IC T IN A GR IC ULTUR E S E C T I O N 1 — OV E RVIE W OF ICT IN AGRIC U LTU R E: OPPORTUNITIES, A C C ES S , A ND C R OSS -CUTTING TH EM ES 41 LESSONS LEARNED between allowing the freedom for such ventures to become Mobile phones have the potential to provide low-cost banking commercially attractive and the constraints to ensure that wherever there is network coverage, but the use of mobile they do not exploit the people they aim to help. Chile’s con- banking services has been held back because mobile bank- gress has only just approved a law demanding network neu- ing services and microfinance institutions often play quite trality, guaranteeing that Internet service providers cannot different roles that prevent them from leveraging their full interfere with content accessed by Internet users. As Chile is potential. There is a wide variety of mobile services; some among the most progressive of the Latin American and other do not involve banking licenses and are therefore nonbank developing economies in its governance of Internet use, its implementations, while others may involve banking partners. position demonstrates the great strides regulators must take Mobile banking companies such as M-PESA primarily work in this emerging area, if mobile and Internet technologies with money transfers and payments, using some of the most (such as mobile banking) are to become widely and equitably advanced infrastructure available. By contrast, microfinance accessible. institutions tend to focus on credit and savings, and use less One of the biggest challenges for regulators is to find a bal- advanced technologies. A marriage between the two can ance between delivering the financial services that meet produce commercially attractive coverage of the market, as inclusion targets and at the same time combat fraud and seen with Telenor and Tameer Microfinance Bank, but such terrorism. The temptation is always to overregulate, to err on partnerships can be difficult to source and sustain. Indeed, in the side of safety. The World Bank has been working to cre- the future, traditional banks may also find themselves trying ate guidelines for services such as money transfer to encour- to deliver these services. age them to operate under tough regulation. The emergence of competition in the sector (such as between M-PESA and Zain Zap) has begun to erode differences in the Apart from these regulatory issues, service users have roles of mobile banking services and microfinance institu- demonstrated the wider applicability of the technologies tions, however. In May 2010, M-PESA joined with Equity involved by manipulating them to their own advantage. Bank in Kenya to produce its most integrated product yet: a Bancosol in Bolivia, for example, has implemented a partial low-cost, low-entry microsavings account called M-Kesho. It use of the technology by providing SMS information services hopes to provide its 9.4 million users with accessible bank before committing to full mobile banking. The Rural Bankers’ accounts, which will allow them to hold savings and take Association of the Philippines has made GXI’s G-Cash ser- out microinsurance and microloans, all managed from their vice possible in rural areas by grouping 60 rural banks to act mobile phones. as agents and to use G-Cash to pay their employees. Alone, these banks were too small to be commercially interesting The competition between Zain Zap and M-PESA in particu- to the mobile service, but through collective action they have lar highlights interesting considerations for the future. With become a significant business proposition. network-based firms such as eBay and Wikipedia, the more dominant a single network becomes, the more attractive it Customers have found moneymaking opportunities in becomes to new users (because it is the most comprehen- these financial services of which their founders did not sive), and it compounds its success. Should either Zain Zap dare to dream. M-PESA’s users have translated access to or M-PESA win the battle for dominance in Kenya, the winner secure money transfers into innovative income-generation could offer a more comprehensive and more widely acces- opportunities, often in rural areas. By transferring primar- sible service. The ensuing lack of competition could raise ily to M-PESA-based payments, users enjoy the safety of prices, however, cutting off access to the poorest sectors being able to travel without cash and have reduced service of the community. The regulation of competition between times (customers no longer fumble about with change). The these networks will determine the shape of the industry— growth of the network of agents has created a large num- and of commerce in Kenya—in the future. bers of jobs, many in the rural areas in which M-PESA, and institutions like it, flourish. M-PESA has benefited from relative regulatory freedom to become a comprehensive mobile financial service provider Tables 2.4 and 2.5 summarize the key enablers of the innova- and harness the negotiating power of Equity Bank. If such tive financial service models described here and the lessons innovations are to spread, regulators must walk a fine line derived from their experience. E C O N O M IC AND S E CT OR WORK 42 MODULE 2 — MAKING ICT INFRASTRUCTURE, APPLIANCES, AND SERVICES MORE ACCESSIBLE AND AFFORDABLE IN RURAL AREAS TABLE 2.4: Key Enabling Factors for Innovations in Mobile Financial and Income Services Worldwide M-PESA (EAST AFRICA, ZAIN ZAP (AFRICA AND TAMEER MICROFINANCE TXTEAGLE (AFRICA, ASIA, SOUTH ASIA) MIDDLE EAST) (PAKISTAN) LATIN AMERICA) Regulation  Lack of regulation of new tech-  Works with banking partners to  Microfinance Ordinance  It is classified as a financial nology in Kenya: Establishes ensure international financial allowed the creation of com- creditor rather than a banking self in regulation vacuum regulations are met mercial microfinance banks: or microfinance institution,  Willingness to adapt when  Seems happy to work within Allows for wider growth so it can operate fairly free of regulation necessitates: More regulatory framework, rather  Allowed use of retail spaces regulation closely resembles a microfi- than seek to bypass it as rivals as agents nance service in Afghanistan have done Business  Initial independence from bank-  Users must have a bank  Easypaisa concentrates on  Use of mobile technology to Model ing sector and bricks-and-mortar account: Potential to provide paying bills, with expansion into reach previously untapped banks allowed provision of a more diverse services than money transfer market: Relatively educated low-cost service rivals  Clients do not need a bank rural poor  Allow nonuser trial: M-PESA  Users send funds across country account, but Tameer offers  Offers additional source of becomes dominant network boundaries without paying diverse financial services as it income to isolated workers additional fees is itself a bank and opportunity for corporate  Fixed fee for transfers; other  Focus on entrepreneurs and clients to save money in their fees set by agents: Potential for self-employed outsourcing large profits encourages busi- nesses to become Zap agents. Partnerships  Backed by large MNO: Vodafone  Signed deals with large  Tameer is itself a bank and  Works with local wireless ser-  Local brand equity and distribu- corporate clients to encourage so is not reliant on deals and vices (e.g., Safaricom in Kenya tion network from Vodafone user growth partnerships with other banking and Viva in the Dominican subsidiary: Safaricom  Non-Zain MNO can buy into institutions Republic)  Use of local companies (e.g., One Network, increasing  Partnership between a bank  Signs up large corporate clients Roshan in Afghanistan) provision and a telecom operator: Allows such as Google services to be provided and distributed in-house Network and  Widespread and dense network  Use of Zain’s One Network:  Large agent network: Customers  SIM card functionality: Works Infrastructure of agents: Uses first mover Infrastructure and distribution can access services from their on the most basic handsets advantage to become dominant network already widely avail- mobile phone, easypaisa autho- Accuracy Inference Engine network able in multiple countries rized shops, Telenor franchises, monitors individual perfor-  SIM card functionality: Telenor sales and service mances and assures quality Customer can use existing centers, or Tameer Microfinance control to corporate clients phone (more affordable service) Bank branches Source: Authors. TABLE 2.5: Lessons Learned from Mobile Financial and Income Services in Rural Areas M-PESA ZAIN ZAP TAMEER MICROFINANCE TXTEAGLE  Consider regulatory issues:  Strategies need to be imple-  Entrepreneurs make good cli- Not so much what has been learned, M-PESA has struggled to take hold mented to combat first mover ents: Tameer has found a new and but what it is vital to learn: in countries where regulation has advantage: Zain has had to offer loyal market in Pakistan by focusing  The move away from “charity� to proved tighter than in Kenya more services and work with big on this group (previously forced to helping people help themselves  Be adaptable: M-PESA changed name brands to combat M-PESA’s rely on extortionate moneylenders) should not be a move toward the its business model when money dominant network in Kenya  Rural areas can be profitable: exploitation of a still-vulnerable transfer proved more popular than  Customer service is vital: Zap has Tameer has rolled out easypaisa group: Deference to corporate microfinance in the pilot phase lost customers to M-PESA due to its to meet the needs of the rural clients and local MNO partners  The move toward also providing more complicated sign-up procedure workforce, recognizing that rural should not mean that workers are bank accounts is another sign of and the poor service and large fees areas hold large numbers of the paid unfairly for their contributions flexibility and may help solve regula- levied by some agents commercially minded self-employed or abandoned when microtasks such tory problems as those provided by txteagle run out Source: Authors. IC T IN A GR IC ULTUR E S E C T I O N 1 — OV E RVIE W OF ICT IN AGRIC U LTU R E: OPPORTUNITIES, A C C ES S , A ND C R OSS -CUTTING TH EM ES 43 Topic Note 2.4: DELIVERING CONTENT FOR MOBILE AGRICULTURAL SERVICES TRENDS AND ISSUES farmers is seen throughout developing economies. Prominent The value of knowledge in the world economy has grown with examples include the Agricultural Market Information Systems increased technological innovation in distributing information in Bangladesh, Farmer’s Friend (a Google product) in Uganda, and greater incorporation of information in economic activity. and Ovi Life Tools by Nokia. The latter started off in partnership As developed economies become increasingly knowledge and with RML in India but wanted to offer a wider range of informa- service based, developing economies (agricultural or industrial) tion. It now provides education and entertainment services and must be capable of communicating in and using the language of has rolled out in Indonesia and China as well as India. knowledge if they are to be economically active on a global scale. This sourcebook describes a number of efforts to benefit from The spread of telecommunications technologies over the past mobile telecommunications in agriculture. Two of the examples decade has outpaced the spread of Internet technologies, discussed below are also discussed in Module 3 (RML) and which require more costly infrastructure, particularly for rural Module 6 on AIS (Farmers’ Friend), yet they are reviewed here users. In India, for example, mobile technology has reached to highlight technical considerations in delivering content and over 30 times as many people as the Internet.46 Because much services that rural users value. IFFCO Kisan Sanchar Limited of India, like many developing economies, remains predomi- and RML have been implemented through a variety of plat- nantly agricultural, thought has turned to using mobile technol- forms and business models, with voice and text-based plat- ogy for the benefit and service of agriculture (image 2.3). Rural forms being the primary competing modes of delivery. Farmer’s economies lose billions of dollars each year because critical Friend differs from those services by using Google’s experience information is inaccessible: information on production prac- as a search engine to provide an on-demand service and a data- tices, information on impending extreme weather or epidem- base that may be searched in the same manner as the Internet. ics, or information that could enable farmers to transport crops more effectively to markets and sell them at better prices. INNOVATIVE PRACTICE SUMMARY Reuters Market Light (RML) offers farmers information on First Mover Advantage Benefits Reuters Market Light crops, diseases, and market prices, as does the subsidiary group of the Indian Farmer’s Fertilizer Cooperative, Kisan Reuters Market Light (RML) is a subscription-based SMS Sanchar Limited. This trend toward mobile services for service providing Indian farmers with information that helps them increase productivity, maximize revenue, manage risk, and reduce waste. The service, launched in late 2007, pro- IMAGE 2.3: Girl Uses Phone in Community Meeting in vides localized and personalized information on commodity India prices, crop cultivation (covering 17 crops), and the weather.47 Mobile telecommunication was the obvious platform for pro- viding this service, as India has one of the fastest-growing mobile markets in the world, with over 427 million mobile connections. By contrast, there are only 37.5 million landline connections and 13.5 million Internet subscribers.48 The predominance of agriculture (which employs slightly more than half of India’s 523.5 million strong workforce) gives Reuters a large potential audience. As of February 2010 it had more than 200,000 subscribers in 15,000 villages across 10 states. Supply chain and information failures cause Indian farmers to receive 47 “Reuters Market Light Wins Award for Innovation,� Thomson Source: Simone D. McCourtie, World Bank. Reuters Press Release, April 6, 2010 (http://thomsonreuters.com/ content/news_ideas/articles/financial/RML_wins_award,accessed June 2011). 46 Prakash and Velu (2010). 48 Prakash and Velu (2010). E C O N O M IC AND S E CT OR WORK 44 MODULE 2 — MAKING ICT INFRASTRUCTURE, APPLIANCES, AND SERVICES MORE ACCESSIBLE AND AFFORDABLE IN RURAL AREAS about half of the value of their crops that their Western counter- communications and thus requires mobiles to be GPRS parts do (20–25 percent). If the service helps farmers to resolve enabled (adding to their cost and decreasing their accessibility). these problems, the potential benefits for farmers are large. INNOVATIVE PRACTICE SUMMARY Regulation: Freedom to Develop Its Business Model Long Experience in Farm Communities Benefits RML used its first mover advantage in India to become a trusted IFFCO Kisan Sanchar Limited network—a necessary strategy given that their main competi- IFFCO Kisan Sanchar Limited (IKSL), another information ser- tor, IKSL, is active in rural areas through its links with the IFFCO vice for farmers, is a joint venture between the telecom network farmer cooperatives. Active support from the government has operator Airtel and the Indian Farmer’s Fertilizer Cooperative given RML relative freedom to develop its business model. Limited (IFFCO, from which the initiative takes part of its name). In addition to crop advice and the weather, IKSL provides advice The subscription-based business model allows RML to derive on animal husbandry, rural health initiatives, and the availability a steady and regular flow of income, allowing for future plan- of products such as fertilizer. Unlike RML, IKSL’s information ning toward expanding the service. The lack of reliable address arrives via voice rather than text message. databases prevents sales staff from locating farmers and con- solidating the customer base. Another drawback is that the Users access the service through traditional wired tech- subscription fee makes RML expensive relative to on-demand nology based at kiosks at rural cooperative societies services (like those provided by Farmer’s Friend in Uganda, throughout India. The kiosks are supplemented by mobile discussed later). A survey of 1,000 households in 100 vil- technology: Mobile phones are sold bundled with the Airtel lages by the South Asia Sustainable Development Agriculture mobile network, which essentially converts the phones department in the World Bank found that only around half of into personalized communication kiosks. Members of the RML users planned to renew their subscription. Of those who service receive five free voice messages a day with agricul- had not signed up to the service, 95 percent cited cost factors tural information and advice; they also have free access to as the reason (G. Dixie, personal communication). a dedicated agricultural help line. IFFCO has around 40,000 societies, is present in 98 percent of India’s villages, and In response, RML has enabled post offices across the states brings a receptive audience to the enterprise. This extensive covered by Reuters to provide the information service to coverage and wide farmer base gives IKSL the potential to unregistered users. This adjustment in its distribution platform make a significant impact on agricultural communities. makes the service available to those who do not own a mobile phone as well as those who wish to try the service before IFFCO is clearly attuned to making its products and services they commit. The postal network has been crucial for RML’s accessible to rural people. Mobile phones are accompanied presence in rural areas and the growth of its user network. by a hand-cranked charger. This innovation is crucial, given the scarcity and cost of power in much of rural India. IKSL’s wired Partnerships with Multiple Operators Offer Scalability information kiosks can be operated through pedal power. RML’s regulatory freedom is complemented by partnerships These adaptations ensure that the service is not a drain on a with multiple operators, which frees the system’s content highly limited resource and should permit its wider use. from dependence on any single network and is crucial to the scalability of the business. The links with the post office are Regulation for Quality and Compliance with Standards a valuable asset for RML’s distribution network. RML is dis- IFFCO is subject to high levels of regulation owing to its domi- cussing a more formal association with the Indian Council of nant presence in the fertilizer trade, which is regulated by the Agricultural Research or Punjab Agricultural University, which government. To ensure compliance with the standards set for contribute some of the service’s crop information. IFFCO as an organization, IFFCO’s off-shoots are regulated by an in-house Representative General Body made up of members Network, Appliances, and Infrastructure of the Board of Directors and representatives of the larger mem- RML is “network agnostic,� meaning that it is not constrained ber societies in every state/territory.49 To ensure quality, Kisan by the limitations of any one MNO, and its service has SIM Sanchar is assessed by experts from the agricultural universi- rather than handset functionality. Information is provided by ties, and peer reviews are conducted by panels of scientists.50 SMS and therefore can be accessed from the most basic hand- sets, even those only possessing text capabilities. This deliv- 49 See http://www.iffco.nic.in/ifc/web.nsf. 50 “Content Management� (http://www.iffco.nic.in/iksl/ikslweb ery format contrasts with that of RML’s former partner Nokia, .nsf/ef05d07df0ecee65652575040037b375/733c79d21f573e whose Life Tools uses voice recordings instead of text-based 15652577a7002b2cd4?OpenDocument, accessed July 2011). IC T IN A GR IC ULTUR E S E C T I O N 1 — OV E RVIE W OF ICT IN AGRIC U LTU R E: OPPORTUNITIES, A C C ES S , A ND C R OSS -CUTTING TH EM ES 45 A Business Model to Deliver More Diverse Agricultural forecasts and agricultural advice, Farmer’s Friend forms part of a Information to an Extensive Rural Base wider initiative that includes health tips, a clinic finder, a Google IFFCO has branched out from its original business as a fertilizer trading service for agricultural commodities, and other products. cooperative into many other areas, and it has a great deal of This innovation differs from RML and IKSL in that it is not experience in growing new businesses in rural India. The part- prepaid; the system is a search engine, and the user pays nership between IFFCO and another large company, Airtel, has for each query at the point of purchase. Customers text been crucial to success. As one of the largest MNOs in India, their query and location and receive a nearly instant reply. Airtel can provide cellular connectivity to areas where it is not The service is currently free from Google, but customers financially advantageous (an example is the Aruku Valley in the are charged by their network operator for each query. Pilots Visakhapatnam District). Access at cooperative societies, facili- demonstrate significant uptake of the AppLab’s services: the tated by IFFCO, is also crucial to the success of IKSL, because 10 SMS applications that were trialed generated more than new users can try the service before they commit to it, allow- 54,000 inquiries among their 8,000 respondents. ing for the growth of the network. This capacity ensures that IKSL achieves maximum coverage and consumer awareness. Farmer’s Friend also generates employment among farmers, some of whom are hired to collate data and pictures of sick In this way IKSL’s business model carefully navigates plants on local farms. They provide Grameen with more compre- between the steady income of a subscription service and hensive information and the potential to offer for better advice. the value added for the consumer by offering flexibility. Users pay Rs 47 to activate the mobile service, which lasts a life- Farmer’s Friend launched at the end of June 2009. Like many time, and then 50 paise per minute for calls between IFFCO efforts initiated recently in rural areas, its impact is not yet members (the rate is slightly higher for calls to nonmembers). apparent. The service has the potential to achieve significant Membership comes with five free daily messages, as noted. penetration in rural areas because it can leverage MTN’s net- work of over 10,000 village phone and other shared phone ISKL’s information is more diverse than that available from by operators, as well as all of the privately owned mobiles. RML, although it is still centered on agriculture (for example, farmers can obtain information on fertilizer and farming equip- ment and limited information on rural healthcare). In offering Regulation a more comprehensive service, IKSL may be attempting to Farmer’s Friend’s regulatory framework is derived from that combat the first mover advantage of its nearest rival. of its parent organizations. Google adheres to US Safe Harbor Privacy Principles, is registered with the US Department of Network, Appliances, and Infrastructure Commerce’s Safe Harbor Program, and works with appropri- ate local regulatory authorities, primarily local data protection The innovation is SIM rather than handset dependent but authorities.51 The service self-regulates through its guidelines does not work on the most basic handsets unless they are and maintains that it is “ready to assist any government that updated. IKSL hopes the kiosks will counteract this problem. wishes to seriously work to create an enabling environ- The prices of the phones used in the pilot—made by Sinocell ment.�52 The Grameen Foundation has criticized the very and sold for about Rs 4,000—would deny the poorer seg- loose regulatory framework surrounding Farmer’s Friend. ments of the population access to the technology, but Alcatel, Philips, and Samsung have developed less expensive models that may solve this problem. IKSL also has the potential to A Business Model Designed to Increase Access develop a suitable phone. The voice recordings are provided Farmer’s Friend’s business model is specifically designed in all local languages where the service is provided, a key to increase access. The service works on the most basic enabling factor in the challenge to increase access. handsets. The organization’s membership in a much wider platform (which includes Google Trader and health advice) ensures a broader base of awareness in the community and INNOVATIVE PRACTICE SUMMARY further opportunities to develop brand loyalty. The pay-on- Farmer’s Friend Offers Information on Demand, demand system increases access because the financial com- One Query at a Time mitment is far smaller than with subscription models; RML Farmer’s Friend is a Ugandan mobile phone application by Grameen Foundation’s AppLab. Working with MTN Uganda as 51 For details on the Safe Harbor certification program and privacy principles, see www.google.com/privacy/privacy-policy.html. its MNO and using the Google SMS search platform, it provides 52 http://www.grameenfoundation.org/recommendations-creation- information on demand for farmers. In addition to weather pro-microcredit-regulatory-framework, p.6. E C O N O M IC AND S E CT OR WORK 46 MODULE 2 — MAKING ICT INFRASTRUCTURE, APPLIANCES, AND SERVICES MORE ACCESSIBLE AND AFFORDABLE IN RURAL AREAS membership lasts an average of five months (Preethi 2009). buy the equipment and profits from reselling the services the Farmer’s Friend users can return to the service at any time. phone offers. Farmer’s Friends expects to establish 5,000 Village Phone operators over time. Each is expected to serve An Array of Strong Commercial and Noncommercial as many as 2,000 people, greatly enhancing Farmer’s Friend’s Partners prospects for growth. (See IPS “Community Knowledge Worker Initiative in Uganda� in Module 4.) A key enabling factor of the initiative has been its marriage between strong commercial and nonprofit partners. The non- LESSONS LEARNED profit Grameen Foundation increases access to technologies. As well as using the search expertise of Google and the network Table 2.6 recapitulates the factors enabling farmers to receive coverage of MTN Uganda (Uganda’s largest MNO), Grameen agricultural information through the increasingly accessible receives agricultural information from the Busoga Rural Open mobile phone services in rural areas—whether the information Source Development Initiative, a local NGO that collects local arrives through personal or shared phones. The lessons learned farming expertise from networks of farmers. Weather reports so far from the new services are summarized in table 2.7. are provided by Uganda’s Department of Meteorology. REFERENCES AND FURTHER READING Networks, Appliances, and Infrastructure Abbey-Mensah, S. 2001. “Rural Broadcasting in Ghana.� Presented As noted, the services work on the most basic handsets and at the International Workshop on Farm Radio Broadcasting, February 19, FAO, Rome. http://www.fao.org/docrep/003/ are not handset specific, but users need to be part of the x6721e/x6721e12.htm, accessed July 2011. MTN Uganda network. To widen its distribution network, Armstrong, C., and R. Collins. 2011. “Digital Turmoil for South African Grameen is trying to establish Village Phones in rural Uganda. TV.� International Journal of Digital Television 2 (1):7–29. As mentioned in this overview, this service, successfully Benkler, Y. 2006. The Wealth of Networks: How Social Production used by Grameen in Bangladesh, involves public pay phones Transforms Markets and Freedom. New Haven: Yale University run by local entrepreneurs. An entrepreneur obtains a loan to Press. TABLE 2.6: Key Enabling Factors for Delivering Agricultural Information to Farmers in India and Uganda REUTERS MARKET LIGHT, INDIA IFFCO KISAN SANCHAR LIMITED, INDIA FARMER’S FRIEND, UGANDA Regulation  Actively supported by the Indian government:  IFFCO regulated by Indian government  Derives regulatory framework from parent Operates with relative regulatory freedom and expert assessment from agricultural organizations universities  Google works with US Department of  IFFCO regulates all of its suborganizations to Commerce and local regulatory authorities ensure they comply with its own standards Business  Subscription-based service: Regular local  Voice rather than SMS information provision  On-demand rather than subscription service. Model information for farmers, steady income for  More diverse information than rival RML: Service is free from Google, but users are RML Also provides advice on animal husbandry charged by their MNO  The potential to try the service in post and products such as fertilizer  Rather than simply receiving advice, users offices before subscribing has been crucial  Wireless technology supplemented by can make queries based on specific needs in the growth of the user network kiosks in cooperatives and commercial  Supplemented by village phone operators  Service provided in multiple languages areas: Increases distribution and market in areas with few mobile phones: Income penetration generation for vendor and wider use Partnerships  Subsidiary of large, powerful company,  IFFCO uses experience of growing new busi-  Marriage between strong commercial and Thomson Reuters: strong financial backing in nesses in rural India nonprofit partners: Farmer’s Friend enjoys implementation stages  Airtel (one of the largest MNOs in India) multiple brand equities and financial backing  Crop advisory tips are derived from trusted creates wide coverage by setting up towers in implementation stages sources (e.g., Indian Council of Agricultural at sites provided by IFFCO cooperatives and  Partnership with Busoga Rural Open Source Research) by providing connectivity in areas where Development Initiative uses networks of it is not financially advantageous to do so: farmers to provide localized information: Combats first mover advantage of RML Encourages user support Network and  Network agnostic: allows for maximum  Free, dedicated help line for service users  Part of wider information platform, which Infrastructure coverage, as not restricted to one operator  SIM rather than handset dependent, so has includes health tips and a trader function:  Information is provided by SMS, so it works the potential for extensive uptake: SIMs Diverse capabilities offer greater potential on the most basic handsets, even those with must be updated for frequent use and opportunities to develop only text functionality (unlike competitor brand loyalty  Widespread cooperative-held kiosks help Nokia’s Life Tools, which requires mobiles to provide service to poorer customers and  Queries access information database: be GPRS enabled to receive voice messages) allow for trial: Helps grow user network Provides Internet-style capabilities where no  Single, automated platform for customer such platform exists  IFFCO has cooperative presence throughout services rural India: Strong agent network allows  Work on the most basic mobile phones IKSL to become dominant (including SMS only): Greater market pen- etration potential Source: Authors. IC T IN A GR IC ULTUR E S E C T I O N 1 — OV E RVIE W OF ICT IN AGRIC U LTU R E: OPPORTUNITIES, A C C ES S , A ND C R OSS -CUTTING TH EM ES 47 TABLE 2.7: Lessons Learned in Delivering Agricultural Information to Farmers in India and Uganda REUTERS MARKET LIGHT, INDIA IFFCO KISSAN SANCHAR LIMITED, INDIA FARMER’S FRIEND, UGANDA  Subscription services can be problematic:  Access is a balancing act: The use of voice  Diverse capabilities offer greater potential to 64% of users feel RML helps them achieve higher technology in a variety of local languages combats develop brand loyalty: Farmer’s Friend’s position prices, but only around half plan to renew their the problem of illiteracy, but at the same time within a wider information service provided by subscription increases the required capability (and therefore Grameen and Google affords it greater publicity.  Higher costs decrease access: 95% of those cost) of the handsets providing the service As customers use one service to positive effect, who haven’t bought into the service state that this  The use of branded handsets in the trials of the they become aware of and begin to trust the other, is because of its cost. Subscription fees increase innovation have increased this problem related services costs relative to on-demand services  Alternatives must be provided: IKSL has sought  On-demand payment can prove effective:  Database management is crucial: Problems to combat access issues through the use of kiosks Though providing less stable revenue, the lower with finding subscribers by their listed addresses held by the farmers’ cooperatives (offshoots of cost commitments involved for users allows them and the difficulty of reaching them in their rural IFFCO) in villages: Less expensive wired technol- to come back to the service at any time locations have negatively affected subscriptions ogy supplements the convenience of wireless  Strong financial backing plays a key role: All to RML developments three of the initiatives are backed by large-scale commercial and nonprofit organizations, which are able to support the innovators in their rollout phases, provide brand equity, and provide key technical expertise Source: Authors. 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IC T IN A GR IC ULTUR E S E C T I O N 1 — OV E RVIE W OF ICT IN AGRIC U LTU R E: OPPORTUNITIES, A C C ES S , A ND C R OSS -CUTTING TH EM ES 49 Module 3: ANYTIME, ANYWHERE: MOBILE DEVICES AND SERVICES AND THEIR IMPACT ON AGRICULTURE AND RURAL DEVELOPMENT KEVIN DONOVAN (InfoDev, World Bank Group) IN THIS MODULE Overview. What has been the impact of mobile phones on agriculture and rural development? This module describes current knowledge, innovative practices, opportunities, and challenges in using mobile phones to benefit agriculture. Based on what has been learned to date, it provides principles for practitioners seeking to use the mobile platform to improve farmers’ livelihoods. Topic Note 3.1: Key Benefits and Challenges Related to Mobile Phones and Agricultural Livelihoods. Mobile phones may help to increase income, improve the efficiency of markets, reduce transaction costs, and offer a great opportunity for innovative interventions, especially in service delivery. Yet to realize the full potential of enhanced com- munication of market information, the use of mobiles must be coupled with additional investments (in roads, education, financial services, and so forth). Mobile services and applications also need to provide compelling value. They must be affordable and have useful content. Finally, mobile phones may not confer their benefits in an equitable fashion or be used in other socially and economically beneficial ways. Context matters. Technology cannot be airdropped into a situa- tion and guarantee positive results.  Weather Forecasting Reduces Agricultural Risk in Turkey  Mobiles Are the Center of Esoko’s Virtual Marketplace Topic Note 3.2: Two Typologies and General Principles for Using Mobile Phones in Agricultural Projects. Two frameworks help for understanding and designing initiatives that use mobiles for achieving development goals. One typology focuses on the services that operate through mobile phones to improve aspects of agricultural livelihoods. A second focuses on the various forms that mobile applications might take to develop the agricultural sector. A number of principles improve the chances of sustainable impact: understand users and the technology; engage in participatory, iterative project design; identify partners with the appropriate knowledge, collaborative capacity, and alignment of goals; ensure that the technology is widely accessible; develop a viable business plan to ensure sustainability; and use moni- toring and evaluation to develop a better understanding of outcomes, which would help in designing new interventions.  Mobile Service Gives Chilean Farmers a Local and Global Information Edge  For Reuters Market Light, the Wider Network of People Matters  Nokia Life Tools Uses Simple Technologies to Deliver New Functionality OVERVIEW can be found in the pockets of the wealthy and poor alike. In July 2010, the number of mobile phone subscriptions sur- Even in rural areas, mobiles are growing in number and passed the five billion mark (figure 3.1), further establishing sophistication. Recent figures suggest that although only mobile phones as the most popular form of global connectiv- 81 million Indians (7 percent of the population) regularly use ity.1 In their various designs and capabilities, mobile phones the Internet, price wars mean that 507 million own mobile phones. Calls cost as little as US$ 0.006 per minute, and Indian operators are said to sign up 20 million new subscrib- 1 According to https://www.wirelessintelligence.com/. ers per month (The Economist 2010). E C O N O M IC AND S E CT OR WORK 50 MODULE 3 — ANYTIME, ANYWHERE: MOBILE DEVICES AND SERVICES AND THEIR IMPACT ON AGRICULTURE AND RURAL DEVELOPMENT Figures for access to mobiles are higher than ownership rose from 12 percent of the global population to nearly figures. A survey in Uganda found that 86 percent of those 76 percent. A series of innovations drove this adoption, espe- asked claimed to have access to a mobile phone, although cially in developing countries, which had 73 percent of the only one-quarter of farmers said they actually owned one world’s mobile phones in 2010.2 Like other digital technolo- (Ferris, Engoru, and Kaganzi 2008). gies, mobile phones benefit from Moore’s law, which states that computational power doubles approximately every two This module highlights the impact of mobile phones on years. The newest smartphones are far more sophisticated agriculture and rural development by outlining current knowl- than the more affordable models populating poor regions, edge and describing innovative practices. The discussion but those simple phones are still leaps and bounds ahead of complements information in Module 2 on technical aspects devices that were cutting edge a decade ago—and they are of increasing mobile phone use in rural areas and agriculture. entirely relevant to agriculture. It also serves as a preface to numerous other descriptions of mobile phone applications throughout this sourcebook. An additional reason for focusing on mobile phones is that regulatory design has improved in recent decades, boost- The rise of the mobile phone has been one of the most stun- ing competition among telecommunications companies. ning changes in the developing world over the past decade. Competition has spurred significant innovation in business The increasing ubiquity of mobiles in developing countries models. For example, in most of the developing world, in presents both opportunities and challenges, especially for contrast to practices in some wealthy countries, only the critical sectors such as agriculture. Like other technologies person making the phone call pays. Moreover, mobile phone before it, the mobile phone is likely to be the subject of airtime is available in prepaid bundles, allowing poor custom- inflated expectations and hopes. To caution against the hype, ers to avoid lengthy contracts and manage their expenditure this module also explores barriers to using mobile phones in a discrete, granular manner. For those at the bottom of to benefit agriculture and provides recommendations for the pyramid, where income is indeterminate and manag- practitioners seeking to use the mobile platform to improve ing finances is very important, this model is a key driver of farmers’ livelihoods. access and use. (For additional discussion and examples of regulation and business models as key enablers of mobile FIGURE 3.1: Global Mobile Cellular Subscriptions, Total telecommunications, see Module 2.) and per 100 Inhabitants, 2000–2010 These supply-side improvements have met strong demand 6000 100 from customers around the globe. Like all networked tech- Subscriptions (millions) Per 100 inhabitants 90 nologies, mobile phones exhibit network effects, making 5000 Subscriptions (millions) 80 them more valuable as more devices are in use. Also, in Per 100 inhabitants 70 contrast to landlines, the mobility and personal nature of this 4000 60 technology have a strong appeal to users. Being connected 3000 50 means being reachable (Ling and Donner 2009). The mobile 40 phone adds a layer of security, allowing someone to reach 2000 30 loved ones or assistance following an accident. It also allows 20 1000 for microcoordination of activities, limiting the need for plan- 10 ning and the cost of changing plans on the fly (Ling 2004). 0 0 Finally, as anyone who has made a phone call while waiting 2000 01 02 03 04 05 06 07 08 09 2010* *Estimates for the bus or checked his or her BlackBerry during a meeting Source: ITU World Telecommunication/ICT Indicators database. knows, mobile phones allow for multitasking. What this proliferation means is that while mobiles may be Why Mobile Phones? a substitute or complement for landlines in rich countries, Mobile phones are but one form of ICT. Personal computers, they are more frequently the first form of telephony for many laptops, the Internet, television, radio, and traditional news- of the world’s poor. Through allowing communication at a papers are all used to promote improved rural development. distance, mobile phones allow users to overcome limits of So why focus on mobile phones? time and space. The most obvious answer is the sheer scale of adoption. In the ten years before 2009, mobile phone penetration 2 See ITU (http://www.itu.int/ITU-D/ict/statistics/). IC T IN A GR IC ULTUR E S E C T I O N 1 — OV E RVIE W OF ICT IN AGRIC U LTU R E: OPPORTUNITIES, A C C ES S , A ND C R OSS -CUTTING TH EM ES 51 Why Agriculture? BOX 3.1: What Is a Mobile Application? In many countries, agriculture accounts for the overwhelm- ing majority of rural employment. The manifold benefits A mobile application is a piece of software on a portable that accompany improvements in agricultural productiv- device (such as a mobile phone handset, personal digi- ity are well known: Farmers’ incomes rise, food prices tal assistant, or tablet computer) that enables a user to fall, and labor is freed for additional employment. In some carry out one or more specific tasks that are not directly instances productivity improvements have proven elusive, related to the operation of the device itself. Examples as climate change and uncertain commodity prices have include the ability to access specific information (for worsened agrarian conditions for many rural communities. instance, via a website); make payments and other Development practitioners have rightly focused on the dif- transactions; play games; send messages; and so on. ficult situations of many farmers, especially smallholders, The application (app) might come preinstalled but more who have little room for error and even less protection from usually is downloaded (for free or for payment) from a social safety nets. Technical innovation, most prominently wireless network from an online store and may require demonstrated in the Green Revolution, has been key to a live connection to function effectively. Simple apps improving agricultural markets in the developing world. may make use of the built-in low-speed data communi- Mobile phones, despite their recent entry into agrarian com- cation facilities of digital mobile phones, such as short munities, are already helping those communities improve message service (SMS) or unstructured supplementary their agricultural activities. service data (USSD). On many low-cost phones, appli- cations are available through Java software. More com- plex apps use the Internet protocol-based data commu- THE VIRTUOUS CIRCLE OF MOBILES nication facilities of higher-speed networks on third- or AND AGRICULTURE fourth-generation mobile phone networks. The broad Advances throughout the mobile phone ecosystem tend to range of applications available includes: act as a positive feedback loop. This “virtuous circle� of inno-  Stand-alone software apps downloaded onto vation enables a number of benefits, even for smallholder a device, such as an iPhone app. As of April 2010, farmers: third-party developers provided 185,000 apps, and more than 4 billion had been downloaded since  Access. Mobile wireless networks are expanding as the iPhone was launched in July 2008, based on technical and financial innovations widen coverage to Apple’s presentation at the iPhone OS 4 media more areas. preview event.  Affordability. Prepaid connectivity and inexpensive  Applications that require an elaborate eco- devices, often available second hand, make mobile system to support them, such as Safaricom’s phones far cheaper than alternatives. M-PESA application for mobile payments in Kenya.  Appliances. Mobile phones are constantly increasing M-PESA (which operates in a number of countries) in sophistication and ease of use. Innovations arrive has some 15,000 agents and over 9 million users. through traditional trickle-down effects from expensive  Applications built upon a specific platform that models but have also been directed at the bottom of is itself an application. For instance, the MXit the pyramid. instant messaging platform, which began in South  Applications. Applications and services using mobile Africa, now supports 250 million messages per day. phones range from simple text messaging services It provides tools for users to develop their own to increasingly advanced software applications that applications running on the platform. provide both livelihood improvements and real-time Source: Author. public services (box 3.1). Through this expansion process, formerly costly technolo- The topic notes that follow review numerous ways that gies quickly become everyday tools for the bottom of the private industry, government bodies, and nonprofit orga- pyramid. Additional opportunities for more frequent and reli- nizations are using mobile phones in agriculture. Many of able information sharing will open as technological advances these programs are relatively new, and conclusive results lead to additional convergence between mobile phones and are difficult to ascertain. Most show promise, but there the Internet, GPS, laptops, software, and other ICTs. are reasons for caution and the barriers to surmount. Topic E C O N O M IC AND S E CT OR WORK 52 MODULE 3 — ANYTIME, ANYWHERE: MOBILE DEVICES AND SERVICES AND THEIR IMPACT ON AGRICULTURE AND RURAL DEVELOPMENT Note 3.1 focuses on what is known so far about the benefits, mobile phones as agricultural development technologies and challenges, and enablers related to using mobile phones help them determine whether and how to incorporate them to improve agriculture and rural welfare. Topic Note 3.2 in the design of new initiatives. The Topic Notes are followed describes two typologies that can help practitioners under- by Innovative Practices Summaries that highlight approaches stand the various roles and rationales surrounding the use of taken so far. Topic Note 3.1: KEY BENEFITS AND CHALLENGES RELATED TO MOBILE PHONES AND AGRICULTURAL LIVELIHOODS TRENDS AND ISSUES but smallholder farmers, lacking a social safety net, are The proliferation of mobile phones across the globe has often highly risk averse and therefore not very market ori- impinged on agriculture in various ways. Mobiles are ented. A study from Uganda found that market participation being used to help raise farmers’ incomes, making agri- rose with mobile phone access (Muto and Yamano 2009). cultural marketing more efficient, lowering information Although better market access can be a powerful means of costs, reducing transport costs, and providing a platform alleviating poverty, the study found that market participation to deliver services and innovate. Whether the potential of still depended on what producers had to sell: Perishable these trends can be realized more widely, especially in rural bananas were more likely to be sold commercially than less- areas and in an equitable way, is uncertain. Every aspect perishable maize. of the technology is changing rapidly; the public sector, Mobile phones can serve as the backbone for early warning private sector, and private citizens are constantly experi- systems to mitigate agricultural risks and safeguard agricul- menting with new applications for it; and governments are tural incomes. In Turkey, local weather forecasts transmitted grappling with any number of strategies to ease the digital through SMS provided very timely warnings of impending divide. This note summarizes what is known so far about frosts or conditions that favored pests. the benefits, challenges and enabling factors associated with mobile phones in relation to several aspects of agri- Mobile platforms may also have potential for enabling rural cultural livelihoods. people to find employment. In Uganda, Grameen AppLab partners with government and NGOs to employ farmers to collect information (for more on Grameen, see Module 3). Helping Farmers Raise Their Incomes This method, which relies on local people to transmit data to In some instances, access to mobile phones has been associ- more centrally located research and extension staff, is much ated with increased agricultural income. A World Bank study less costly and can provide much more timely information conducted in the Philippines found strong evidence that than traditional disease surveys. purchasing a mobile phone is associated with higher growth rates of incomes, in the range of 11–17 percent, as measured Txteagle provides employment for relatively educated through consumption behavior (Labonne and Chase 2009). users (see “Txteagle Taps a Vast Underused Workforce� One reason for this finding is that farmers equipped with in Module 2), and even the very poor in rural areas could information have a stronger bargaining position within exist- eventually benefit from access to a mobile job board. ing trade relationships, in addition to being able to seek out Farmers could advertise when they need additional labor other markets. A study of farmers who purchased mobile for harvesting or other high-intensity tasks via mobile phones in Morocco found that average income increased by phone, creating a simple advertising portal. Workers could nearly 21 percent (Ilahiane 2007). find jobs without wasting time and money traveling. A group called BabaJob is developing such a service in India, Mobile phones seem to influence the commercialization of where recruiters and workers submit listings by SMS, but farm products. Subsistence farming is notoriously tenuous, it remains in the developmental stage. IC T IN A GR IC ULTUR E S E C T I O N 1 — OV E RVIE W OF ICT IN AGRIC U LTU R E: OPPORTUNITIES, A C C ES S , A ND C R OSS -CUTTING TH EM ES 53 Making Agricultural Marketing More Efficient regions, fishers who were previously ignorant of daily prices At a fundamental level, markets are about distributing infor- in different markets were able to contact various ports to find mation. They do so through prices, which serve as a unifying the best offer for their catch. The result was demonstrable signal to participants to allow for the coordination of dis- welfare gains for fishers because fish were sold where they persed producers and consumers. Underlying this powerful were more highly valued. Waste decreased and prices equal- mechanism, though, is the assumption that everyone knows ized throughout the regional ports; there were even small the market prices for commodities, which is not the case in gains in consumer welfare (Jensen 2007). much of the developing world. Farmers have little information Other studies have confirmed this effect. Despite hav- about market prices in urban areas of their own countries, let ing the lowest mobile phone penetration in sub-Saharan alone internationally. The result of this information asymmetry Africa, Niger has seen important effects on agricultural is price dispersion—the same goods sell for widely different markets from mobile phone diffusion. As mobile networks prices in markets merely a few kilometers apart. have expanded, grain price differences have decreased Mobile phones, in addition to other ICTs, can overcome this by 20 percent, traders’ search costs have decreased by problem by informing both producers and consumers of the 50 percent, scarce resources have been better allocated, prices offered for agricultural products in various locations. A and consumers paid, on average, 3.5 percent less for grain, number of studies have shown that when mobiles are intro- which is equivalent to 5–10 days of grain consumption duced to farming communities that previously lacked any annually (Aker 2010a). A small study in Morocco found that form of connectivity, prices unify as farmers learn where they farmers with mobile phones increasingly dealt directly with can sell for a better price. (See Module 9 for more informa- wholesalers or larger-scale intermediaries than smaller tion on marketing through ICTs.) intermediaries (Ilahiane 2007). These studies, in conjunc- tion with a host of anecdotal and theoretical evidence, A striking example comes from the Indian state of Kerala point to the promise of mobile phones in making markets (box 3.2). As mobile networks were rolled out in coastal more efficient. BOX 3.2: Mobile Phones Enable Kerala Fishers to Identify Better Markets As mobile phone coverage increased in Kerala, fishermen bought phones and started phoning along the coast to look for beach auctions where supplies were lower and prices higher than at their home beach. Fishermen rapidly learned to calculate whether the additional fuel costs of sailing to the high-priced auction were justified. The figure below tells a vivid visual story of how phones affected prices (reduced volatility) and wastage (significantly reduced). Price dispersion was dramatically reduced, declining from 60–70 percent to 15 percent or less. There was no net change in fishermen’s average catch, but more of the catch was sold because wastage, which previously averaged 5–8 percent of the daily catch, was effectively eliminated. The rapid adoption of mobile phones improved fishermen’s profits by 8 percent and was coupled with a 4 percent decline in consumer prices. By 2001, over 60 percent of fishing boats and most wholesale and retail traders were using mobile phones to coordinate sales. The phones were widely used for fish marketing. Fishermen with phones generally carry lists with numbers of potential buyers. They typically call several buyers in different markets before deciding where to sell their catch. Boats using mobile phones on average increased profits by Rs 184 per day, compared to Rs 97 for nonusers who tended to follow the mobile phone users. Boats with mobile phones gained more (nearly twice as much) in part because they were on average larger boats and thus caught more fish and because they were more likely to be able to profitably exploit the small remaining arbitrage opportunities. Phones appear to be a worthwhile investment: The net increase of Rs 184 per day in profits for phone users would more than cover the costs of the phone in less than two months (assuming that there are 24 days of fishing per month, and given that the handset costs approximately Rs 5,000 and monthly costs are Rs 500). Fishermen are still using phones for marketing purposes to date. (continued) E C O N O M IC AND S E CT OR WORK 54 MODULE 3 — ANYTIME, ANYWHERE: MOBILE DEVICES AND SERVICES AND THEIR IMPACT ON AGRICULTURE AND RURAL DEVELOPMENT BOX 3.2: continued Cell Phone Impact on Fish Marketing (SW India) REGION II 1 Phones Added .2 .4 .6 .8 2 pct_phone % with phone Cell phones purchased 0 0 10 20 30 40 50 60 70 80 90 100 110 120 130 140 150 160 170 180 190 200 210 220 230 240 250 Survey Week REGION II Reduced volatility and 4 6 8 10 12 Phones Added increased average price Price (Rs./kg) 0 2 0 10 20 30 40 50 60 70 80 90 100 110 120 130 140 150 160 170 180 190 200 210 220 230 240 250 Survey Week Fish wastage 5–8% .25 % fishermen with waste Fish wastage reduced to zero 2 pct_has_waste .2 .15 .05 .1 0 0 10 20 30 40 50 60 70 80 90 100 110 120 130 140 150 160 170 180 190 200 210 220 230 240 250 Survey week Source: Jensen 2007. Lowering the Costs of Information These costs can account for a large share of the cost of a The most obvious and cross-cutting way that mobile phones farm enterprise. can improve agriculture is by improving access to informa- tion and making it less costly to obtain. In many rural areas, In a study that compared transaction costs throughout an the arrival of mobile coverage is a radical change in the extended period, 15.2 percent of the total cost of farming nature of the information ecosystem. Although simply hav- was transactional, and of that, 70 percent was informational ing more information is not sufficient to make advantageous (as opposed to, say, the cost of transporting crops to market). decisions (other resources may be needed to implement Undertaken in Sri Lanka, where an inconsistent subsidy on fer- them), it is a necessary step toward access to knowledge. tilizer introduces considerable uncertainty, the study found that 53 percent of the informational transaction costs were incurred Transaction costs are present throughout agricultural value during the growing season, when farmers were attempting chains, from initial decisions about whether and what to to ascertain fertilizer costs. As shown in figure 3.2, another plant, to all of the operations during the growing cycle, 24 percent were incurred during the initial decision to plant or harvesting, postharvest and processing operations, and sell- not, while only 9 percent of the costs related to information ing (to intermediaries, consumers, processors, exporters). were incurred during the selling stage, where studies typically IC T IN A GR IC ULTUR E S E C T I O N 1 — OV E RVIE W OF ICT IN AGRIC U LTU R E: OPPORTUNITIES, A C C ES S , A ND C R OSS -CUTTING TH EM ES 55 FIGURE 3.2: Information Search Cost by Stage production cycles. Farmers who use mobiles can also save of Farming on transport costs (Overa 2006)—an effect that is stronger the more rural the area (Muto and Yamano 2009). Harvesting, packing, and storing Transportation cannot be avoided entirely: Crops need to get to Selling customers. Although mobiles can inform farmers where they should travel to market their crops, evidence suggests that the Decision wealthy maintain an advantage in their ability to make use of Seed purchase this information (Fafchamps and Hill 2004). In combination with and seed bed improved rural roads, ICT will encourage larger truck-traders to Land preparation and planting visit harder-to-reach areas, connecting rural and urban regions. Growing As noted in Module 9, the onion wholesalers known as “Market Queens� increasingly use mobile phones to coor- Source: Adapted from De Silva and Ratnadiwakara 2008. dinate supply among themselves and to improve profits by facilitating reductions in their transportation and opportunity focus (De Silva and Ratnadiwakara 2008). It is easy to under- costs (Overa 2006). These costs are particularly high in com- stand how mobile phones could reduce farmers’ informational modity chains that are geographically extensive and organiza- transaction costs at critical points in the production cycle. tionally complex, such as the onion trade in Ghana. Reducing Transport Costs Mobile phones may help users to substitute phone calls A Platform for Service Delivery and Innovation for travel. Where safety standards are minimal, roads are in The numerous capabilities of mobile phones (box 3.3) pro- disrepair, and distances are great, substituting phone calls vide ample opportunities to deliver traditional and innovative for travel reduces farmers’ time and cost burdens. Time sav- services. Traditional agricultural extension agents are increas- ings are important for agricultural households, because many ingly being outfitted with mobile phones through programs crops have extremely time-sensitive and labor-intensive to increase their effectiveness by networking them to BOX 3.3: One Device, Many Channels Mobile phones are multifunctional devices. From smartphones to models available secondhand in rural markets, mobiles do much more than simply place voice calls. In designing a mobile intervention or project, it is important to keep in mind the various channels through which populations can be reached. In much of the world, voice is still king, owing to widespread illiteracy, but other considerations such as cost, ease of use, and trust influence users’ choices. In Africa, the high cost of calls has made 160-character text messages (SMS) very popular. As networks and devices acquire more capabilities, richer uses of phones are unfolding, and information channels are converging. Camera phones send images, data transfer brings the mobile Internet to the bottom of the pyramid, down- loaded software applications provide advanced functionality, and GPS sensors provide mapping functionality. Emerging market consumers are more likely to have their first contact with the Internet through a mobile device, and many are mobile-only users.a Cisco estimates that by 2015 there will be 788 million mobile-only Internet users, and though rural areas will lag behind, the highest rates of growth will be in the Middle East, Africa, Latin America, and Eastern and Central Europe.b In Kenya, Safaricom recently unveiled a service that converts e-mails to SMS messages and an interactive voice response (IVR) service, in which a computer responds to voice inquiries. Combining mobile phones with other technolo- gies, such as radio or telecenters, can enhance their capabilities. This potential is important to understand. It shows how adaptable the technology is and how it can be used in areas where smartphones are likely to remain inaccessible to many in the near future. (continued) E C O N O M IC AND S E CT OR WORK 56 MODULE 3 — ANYTIME, ANYWHERE: MOBILE DEVICES AND SERVICES AND THEIR IMPACT ON AGRICULTURE AND RURAL DEVELOPMENT BOX 3.3: continued Each form of mobile communication has its strengths and weaknesses. For example, SMS requires some form of literacy and is limited to 160 characters (although some mobile information interfaces are striving to become more visually intui- tive). Data transfer is inexpensive but not available on most phones. The table summarizes types of mobile technologies and their availability. Types and Availability of Mobile Technologies TECHNOLOGY DESCRIPTION AVAILABILITY Voice The most basic channel; avoids most literacy or Basic phones linguistic barriers Short Message Service (SMS) Ubiquitous text-based messaging limited to Basic phones 160 characters Unstructured Supplementary Service Data (USSD) A protocol used by Global Service for Mobile Basic phones Communications (GSM) phones to communicate with the mobile network Interactive Voice Response (IVR) Computer programs that respond to the voice input Basic phones of callers General Packet Radio Service (GPRS) Low bandwidth data service Midrange phones Software App (e.g., Java or iOS) Preinstalled or downloaded software of varied Midrange, but increased sophistication with sophistication smartphones Mobile Wireless Application Protocol (WAP) A limited manner of browsing the Internet Midrange phones Multimedia Messaging Service (MMS) SMS-based technology to transmit multimedia Midrange phones (including images and video) Camera For capturing still or moving images Midrange phones Bluetooth Protocol for transmitting data over short distances Midrange phones Mobile Web Full-fledged web access Smart phones Global Positioning System (GPS) Technology allowing for location-based information Smart phones Source: http://www.crisscrossed.net/2009/11/01/the-many-potential-channels-for-mobile-services/; (a) http://www.slideshare.net/ondevice/the-mobile- only-Internet-generation; (b) Cisco (2010). knowledge banks. Extension can reach more clients through political voice, raising the level of interaction between mobile-based learning platforms—textual or richer platforms, policy makers and their constituents. Mobile phones can such as video—that provide tips to farmers to improve agri- be used to direct bottom-up insights towards the appropri- cultural skills and knowledge. (See the detailed discussion of ate recipients, informing and improving governance (see advisory services and ICTs in Module 6.) Module 13). Significantly, mobiles are also a platform for user innovation. Mobile money services, now so prominent in countries such as LESSONS LEARNED Kenya and the Philippines, originally began as informal mecha- nisms between family and friends. Software engineers in devel- As mobile phones come into more widespread use and oping countries are creating locally appropriate applications to phone applications for agriculture increase, it is clear that be deployed inexpensively. This form of innovation is possible they have the potential to confer significant benefits. To due to the functionality of mobile phones, but capacity needs to summarize, they may help to increase income, improve be grown and technological barriers, such as incompatible net- the efficiency of markets, reduce waste, and improve works, need to be addressed (see the discussion in Module 2). welfare. They can reduce agriculture’s significant transac- tion costs, displace costly and time-intensive travel, and Finally, the popularity of mobile phones means that previ- facilitate innovative interventions, especially in service ously excluded populations can have considerably more delivery. IC T IN A GR IC ULTUR E S E C T I O N 1 — OV E RVIE W OF ICT IN AGRIC U LTU R E: OPPORTUNITIES, A C C ES S , A ND C R OSS -CUTTING TH EM ES 57 Yet as many examples in this sourcebook indicate, mobiles and Soysa 2008). But when mobiles were used for timely and ICTs more generally may serve agricultural development interventions through SMS, up to 40 percent of wastage best when accompanied by complementary investments could be prevented, a service for which farmers were willing and reforms. For example, shoddy roads—or no roads—limit to pay (De Silva and Ratnadiwakara 2008). farmers’ ability to sell their grain in prime markets. Poor access to education can prevent many rural people from Because mobile phones may be purchased as a status sym- taking advantage of mobile phone services that depend on bol, and because their uses are not necessarily economically being able to read. valuable (entertainment and other social uses are popular), some mobile phone owners may decide to substitute their A lack of financial services can undermine the new options use for important expenditures such as school fees or food. that mobile phones allow. As discussed, Kerala’s fishers saw Given this possibility, it is even more important that devel- their welfare increase through the use of mobile phones opment practitioners promote policies and programs that (image 3.1), but they ran into another financial barrier. Without improve livelihoods (Heeks 2008). access to capital, the fishers cannot own their boats. The phones eliminated some intermediaries, but boat owners An additional caution is that without specific attention to may still force the fish to be sold in a less-than-optimal port. equity issues, mobile phones may reinforce inequitable social Small-scale producers and fishers can gain better access to structures. Larger traders are more likely to own mobiles services if they organize (see Module 8), but in many set- than small-scale traders (Overa 2006). Compared to men, tings, increasing the bargaining power and political clout of women are less likely to have access to mobile phones3 small-scale producers remains an issue (Reuben 2007). (box 3.4 provides additional insight into the role of mobiles in relation to gender equity). To avoid exacerbating such inequalities, agricultural programs using mobiles should be IMAGE 3.1: Mobile Phones Can Help Fishermen Sell designed with equity in mind from the start. Their Catch Finally, context matters. Technology cannot be airdropped into a situation and guarantee positive results, and mobile phones may not necessarily be directed at economically useful behavior. INNOVATIVE PRACTICE SUMMARY Weather Forecasting Reduces Agricultural Risk in Turkey A project recently implemented by the Government of Turkey in collaboration with international donors is an exemplary model of local weather forecasting.4 Rather than focusing on aggregate, national data, this project, implemented by the Agriculture Directorate of Kastamonu Province, focused on the microclimatic conditions essential for monitoring pests Source: Curt Carnemark, World Bank. and diseases accurately and increasing productivity. To succeed, mobile services and applications also need to The Problem and the Technology provide compelling value, especially for the poor. Access to Most producers in Kastamonu maintain orchards, which devices and networks is insufficient; the technology also are extremely susceptible to frost and local pests. Before must be affordable and have useful applications and content. For example, in Sri Lanka, where researchers found signifi- cant potential cost savings from the use of mobile phones, 3 See “mWomen� under http://gsmworld.com/our-work/mobile_ farmers rarely used their phones to obtain market data planet/development_fund/index.htm. because they could not obtain accurate and timely informa- 4 This section draws on World Bank (2010) and personal communi- cation from H. Agah, Senior Rural Development Specialist, World tion. Instead, farmers made frequent and costly trips to dis- Bank (interview with C. Belden, Agriculture and Rural Develop- tant markets to determine prices (Ratnadiwakara, De Silva, ment, World Bank, March 22, 2011). E C O N O M IC AND S E CT OR WORK 58 MODULE 3 — ANYTIME, ANYWHERE: MOBILE DEVICES AND SERVICES AND THEIR IMPACT ON AGRICULTURE AND RURAL DEVELOPMENT BOX 3.4: Mobile Phones, Agriculture, and Gender The larger development community recognizes the importance of emphasizing equitable opportunities and benefits for both genders (for example, see the Gender and Agriculture Sourcebook)—a principle endorsed for the use of ICT in agri- culture as well. Access to and use of ICTs are often unequal, with women suffering the consequences. In a number of cases, however, ICT has been used to benefit agriculture while empowering women. Kenya is a country of 5 million farmers, ranging from the smallest subsistence growers to large industrial agricultural- ists. It is also increasingly a hotbed of technological innovations such as M-Farm, a mobile service that aims to improve Kenya’s agricultural sector by connecting farmers with one another, because peer-to-peer collaboration can improve mar- ket information and enhance learning opportunities. Based around farmers’ traditional needs, such as the need for market price and weather information, M-Farm is a rela- tively new subscription service that also works with larger institutions, such as NGOs and the government, to connect them with farmers. The idea was generated at IPO48, a weekend-long “boot camp� where technologists and entrepre- neurs bring businesses from idea to initial product in only 48 hours. M-Farm, created by AkiraChix (an all-female team of developers who are now pursuing the project full time) won the 2010 IPO48 competition’s first-place prize of more than US$ 10,000. AkiraChix is also the recipient of an infoDev/World Bank grant to facilitate monthly networking events for mobile entrepreneurs and developers in Nairobi. Both networking and incentives such as IPO48 have proven essential to facilitate the rapid creation of sustainable busi- nesses based on mobile devices and the empowerment of women. Though IPO48 and M-Farm are new and their impacts still limited, they are expected to generate widespread improvements in agricultural marketing, particularly for women. The Village Phone program of the International Finance Corporation may also benefit rural women. The program provides microloans to rural entrepreneurs who purchase a mobile phone, long-range antenna, solar charger, and airtime. The recipient earns a livelihood by operating a phone kiosk in areas underserved by mobile networks. As is typical in micro- finance, the loan recipients tend to be women. Since the program’s inception, nearly 6,000 women have received loans and close to 10,000 have been trained in countries such as Madagascar, Malawi, and Nigeria. Source: Author. the project commenced, producers had little time to react these stations, the province maintains 14 reference farms to weather that might harm their orchards, because national where temperature is measured and pest cycles are moni- weather forecasts for the next day were broadcast in the tored. Monitoring the life cycle of pests, along with collecting evening (both FM radio and broadband Internet were unavail- climate data, allows researchers to predict pest outbreaks able). Given these constraints, mobile phones with SMS more accurately, because pest maturation depends largely were the most applicable ICT for the project. on environmental conditions. National aggregate weather forecasts are not particularly With localized weather indicators disseminated daily through useful for pest management and frost prevention in rural SMS, producers can apply pesticides when needed and in locations. Local, specific conditions vary widely from farm to appropriate amounts. In the first two years of the project, pro- farm depending on such variables as humidity, precipitation, ducers’ costs fell dramatically. Pesticide applications dropped crop type, and soil fertility. In addition, rural weather is often a by 50 percent in one year, saving farmers around US$ 2 per few degrees cooler than weather in urban areas where most tree. Considering the size of the orchards, overall production forecast data are generated. costs could be reduced by as much as US$ 1 million each year. The provincial directorate established five mini meteoro- A similar design was used to avert frost damage. Climate logical stations in rural areas throughout the province. The change and shifting temperatures have increased spring stations collect data on variables such as temperature, pre- frosts in Kastamonu Province. If the meteorological stations cipitation, wind, leaf wetness, and soil moisture, most of measure lower-than-normal temperatures, subscribers with which are not collected at the national level. In addition to personal digital assistants (PDAs) and mobile phones receive IC T IN A GR IC ULTUR E S E C T I O N 1 — OV E RVIE W OF ICT IN AGRIC U LTU R E: OPPORTUNITIES, A C C ES S , A ND C R OSS -CUTTING TH EM ES 59 alerts at 4:00 P.M., giving them sufficient time to prepare for challenges. Turkey’s national meteorological system is more the cold snap. advanced than the system of most of its neighbors. High- resolution images and national capacity for weather forecasting are necessary to achieve local efforts. Because global satellites Anecdotal Evidence of Impact provide basic climate information free of charge, they may fill Though the project has not gone through rigorous assess- the technological gap in some countries, but their resolution ment, anecdotal evidence clearly points to its success. The is low. Alternative strategies like climate modeling have suc- means chosen to disseminate information were essential to ceeded in Latin America and Africa, but they have not been the project’s success, because mobile applications matched empirically tested for their effectiveness in forecasting weather. the technological capacity of the area. Other dissemina- tion and awareness strategies raised the project’s visibility, Anecdotal evidence also shows that technological capacity including the mass media, village leaders, and other forms of is not the only factor influencing success. Institutional capac- human interaction and leadership. It is likely that the weather ity is equally important. The local government’s high level of forecasts had the ripple effect common to other ICT projects, commitment to the project and consistent implementation because those who received the service shared the informa- were crucial to building client trust and ensuring that the tion with family and neighbors who did not. Farmers who technologies were used appropriately. participated in the project were successful in planting and protecting their crops. Of 500 farmers reached through this information channel, not one experienced crop losses from INNOVATIVE PRACTICE SUMMARY frost, although farmers who did not receive the service did. Mobiles Are the Heart of Esoko’s Virtual Marketplace Scaling Up and Sustaining the Benefits Esoko (http://www.esoko.com/) (which began as TradeNet in 2005) is a market information service that provides price The project could be scaled up, but cost is a concern. For information and a virtual marketplace for buyers and sellers of the first two years, project costs were fairly low. The five sta- agricultural commodities to connect through mobile phones tions, telecoms, software, and system upkeep cost around and the Internet.5 Mark Davies, a successful British technol- US$ 40,000. Costs will climb over time, however, as donor ogy entrepreneur who also manages Ghana’s largest ICT cen- financing ends and climate conditions change (which could ter, BusyLab, set up Esoko.6 Since then, it has become one make it important, for example, to change the system to of Africa’s most successful agricultural services using ICTs. include other variables). Esoko’s technology is used in nine African countries and is Several strategies could reduce the cost to government once expanding quickly. Mobiles are at the center of the system. external funding ends. For example, the government could partner with the private sector. Firms interested in domestic Services or export markets for the area’s crops may have an incentive to Esoko provides four key services: fund some of the technologies or develop the content. Revenue could also be collected through small or tiered subscriber fees  Live market feeds. Real-time SMS alerts on mar- (daily forecasts in the Kastamonu Province are currently free). ket prices and offers are delivered automatically to subscribers. Users can submit offers directly into the Scalability is also difficult because of the nature of this system using SMS. particular project. Site-specific climate information is more expensive to obtain than aggregate temperature predictions. 5 Aside from the sources cited in the text, this summary also draws on Gakuru, Winters, and Stepman (2009). Moreover, other areas will produce crops vulnerable to a dif- 6 Esoko, which began as a private initiative with encourage- ferent spectrum of biological and climate stress, making each ment from FAO and the UN, became a partner with USAID’s target group fairly small. One way to reduce these costs and MISTOWA program in West Africa and CIAT’s FoodNet program in Uganda, and it was supported with a grant of US$ 11 million. broaden the scope of a similar program might be to focus More recently, IFC (a member of the World Bank Group) and the first on crops or livestock that represent the most widely Soros Economic Development Fund (a nonprofit investment fund pursued or highest-value enterprises. that works to alleviate poverty and community deterioration) each invested US$ 1.25 million of equity into Esoko. The invest- ment will give smallholder African farmers and businesses timely Transferring this kind of early warning system to Central Asian crop information that can be shared via text messaging, enabling countries as planned by the World Bank may pose particular farmers to increase their incomes. E C O N O M IC AND S E CT OR WORK 60 MODULE 3 — ANYTIME, ANYWHERE: MOBILE DEVICES AND SERVICES AND THEIR IMPACT ON AGRICULTURE AND RURAL DEVELOPMENT  Direct SMS marketing and extension. This service farmer groups. The firm also publishes the first commodi- targets specific user groups or sends extension mes- ties indexes in Africa. These powerful tools ensure that sages, which reduces travel and communication costs. farmers are fairly compensated for their crops, as formal  Scout polling. It is possible to set up automatic SMS commodity exchanges are very rare on the continent. The polling for field activities to track inventories and crop company is initially publishing two indexes that provide activities (among other things) and monitor and report prices for 12 agricultural commodities in 7 markets in on crop cycles and yields. Ghana.  Online profiling and marketing. All users can have a customizable web space to advertise their goods and Impact services. This space can be updated using Esoko’s The impact of this information on traders, exporters, trans- mobile2web content management service. porters, procurers, and others in the agricultural value chain is still to be determined. The service is believed to have Participants throughout agricultural value chains can the potential to reduce inefficiencies in the value chain. For exchange real-time market information. Farmers receive cur- example, an exporter took 60 days and needed 5 people in rent demands, prices of crops, and the location of seed and the value chain to procure a natural plant product, but with fertilizer outlets directly on their mobile phones. Businesses Esoko’s technology, the procurement process required 31 can track how their products are used and market themselves days and 3 people, improving both the major traders’ and to new customers. Associations and governments can share producers’ share of the export price. Free field trials for critical information with thousands using a simple feature for farmers elicited self-reported evidence of a 20–40 percent bulk text messaging. improvement in revenue. Sixty-eight percent of farmers Anyone in the world can visit esoko.com and register for a said that they would pay for the service; every farmer free account. There, in addition to 800,000 prices from hun- who received information would forward it to an additional dreds of markets, users will find a library of resources and 10 farmers. thousands of members offering to buy and sell agricultural products. Prices and transactions are also available via the Building and Sustaining a Business Model universal SMS channel, and for slightly more sophisticated The idea driving the model is that most businesses in the phones, a downloadable application offers additional func- agricultural value chain collect and deliver their own data; tionality. Users can even receive automated SMS alerts for Esoko will provide tools and a platform and co-opt busi- certain commodities in a given market (box 3.5). Because nesses to generate content for the platform. Esoko pays on anyone with a mobile phone may post offers to the website an incentive basis to acquire information, using targets and through SMS, smallholder farmers are able to reach a far bonuses. Their revenue-generation model is based on levels wider audience than they typically would. Esoko users also of subscriptions (bronze, silver, gold, platinum), each with are in a better position to negotiate with buyers owing to a different pricing structure and its own mix of content and their enhanced knowledge of prices in other markets. tools. Esoko offers training and strategy sessions on how to For a US$ 1 per month subscription (beginning in 2011), use the platform and can provide customer services for farmers automatically receive information on commodities, markets, and other topics of interest. In developing a model BOX 3.5: An Esoko Transaction for selling information to farmers, Esoko encountered a few challenges. Farmers are widely dispersed in the field and Here’s how it works: A farmer in northern Ghana is sell- hard to reach. It is also difficult to quantify the exact value ing 20 tonnes of millet. The farmer texts in SELL MILO that the service generates for farmers. 20MT to TradeNet’s international number, and that infor- mation is processed by the software and immediately Esoko provides additional functionality for other users, includ- published on the website. The same details are also ing organizations that would like to customize the technology redistributed to every other user that has signed up to for their needs. For example, paying subscribers can access receive alerts on millet sales in Ghana. Esoko’s supply chain tools, which allow harvest activities to Source: Quoted from Bartlett 2008. be tracked. Mark Davies (quoted in Magada 2009) believes this holistic approach, as opposed to simply providing price IC T IN A GR IC ULTUR E S E C T I O N 1 — OV E RVIE W OF ICT IN AGRIC U LTU R E: OPPORTUNITIES, A C C ES S , A ND C R OSS -CUTTING TH EM ES 61 information, is key: “While running TradeNet, we realised operate the hardware and work in the commodity mar- that there was a need for a platform to integrate the whole kets collecting prices and news. To support this activity, supply chain, not to just provide prices. . . .We’re missing the in addition to the tiered subscriptions mentioned above, point if we don’t integrate the whole industry.� Esoko pursues public-private partnerships (Donner 2009). Partnerships are key, with governments, donors, and the But this scale requires significant investment; whereas Esoko Networks, a group of affiliated companies, using Davis started the business with US$ 600,000 of personal and building upon the platform. Esoko demonstrates money and US$ 200,000 from donors, he has suggested that finding the right business model is not easy, but that nationwide rollouts require US$ 1 million in funding. donors and government have a role in supporting new The money goes toward new hardware and for staff to interventions. Topic Note 3.2: TWO TYPOLOGIES AND GENERAL PRINCIPLES FOR USING MOBILE PHONES IN AGRICULTURAL PROJECTS TRENDS AND ISSUES Typology 1: A Focus on Mobile Livelihood As governments, donors, NGOs, and private firms attempt to Services use this popular technology for development goals, research- Jonathan Donner, a researcher with the Technology for ers are developing frameworks to make sense of these ini- Emerging Markets Group at Microsoft Research India, has tiatives and help design new ones. The section that follows developed a framework that examines the various livelihood reviews two such typologies. The first focuses on the services services available to mobile phone users in the developing that operate through mobile phones to improve aspects of agri- world (Donner 2009) (table 3.1). His survey finds six types cultural livelihoods. The second focuses on the various forms of “mobile livelihood� services (mediated agricultural exten- that mobile applications might take to develop the agricultural sion, market information systems, virtual marketplaces, com- sector. Both of these approaches may be useful when consid- prehensive services, financial services, and direct livelihood ering programs to use mobile phones. This note also reviews support) and five possible effects (improving internal activi- principles for designing a program to use mobile phones in ties, adding market information, adding market participants, agriculture, based on what has been learned to date. bypassing middlemen, and starting businesses). Note that TABLE 3.1: The Impact of Mobile-Based Livelihood Services IMPROVE INTERNAL ADD MARKET ADD MARKET BYPASS START SERVICE ACTIVITIES INFORMATION PARTICIPANTS MIDDLEMAN BUSINESSES Mediated agricultural extension (e.g., Collecting and Exchange X X of Local Agricultural Content—CELAC, http://celac.or.ug/) Market information systems (e.g., Kenyan Agricultural Commodities X Exchange Program—KACE, http://www.kacekenya.co.ke/) Virtual marketplaces (e.g., Google Trader, http://www.google X X Sometimes .co.ug/africa/trader/home) Comprehensive services (e.g., Manobi or Esoko— http://www X X X Sometimes .manobi.net/worldwide/; http://www.esoko.com/) Financial services (e.g., M-PESA, http://www.safaricom.co.ke/index X X .php?id=250) Direct livelihood support (e.g., txteagle, http://txteagle.com/) X X Source: Adapted from Donner 2009. Note: For more information on M-PESA, see “M-PESA’s Pioneering Money Transfer Service�in Module 2; for txteagle, see “Txteagle Taps a Vast Underused Workforce� in Module 2. E C O N O M IC AND S E CT OR WORK 62 MODULE 3 — ANYTIME, ANYWHERE: MOBILE DEVICES AND SERVICES AND THEIR IMPACT ON AGRICULTURE AND RURAL DEVELOPMENT although many livelihood services are bound to have more already have information sources and learning opportunities, than one effect—it is perfectly plausible that a service that so it is best to avoid reinventing the wheel if a mobile inter- provides market information will also draw new participants vention will not significantly improve upon the experience. into the market and help farmers bypass intermediaries— table 3.1 emphasizes the main areas of impact. Mobiles are far from unitary, as box 3.3 shows, and an understanding of the platform’s strengths and limitations is essential. For example, while it is ubiquitous, SMS is limited Typology 2: A Focus on Mobile Applications for to 160 characters. Although mobile Internet is still limited in Agriculture scale and often confusing to users, it can be sophisticated Alternatively, Kerry McNamara has suggested four catego- and is spreading; in fact, some research has even shown ries for understanding the forms that mobile applications more impact from the Internet than mobile phones, so their may take to help the agricultural sector (Hellstrom 2010) convergence is an exciting opportunity (Goyal 2010). There (table 3.2). Mobile agricultural applications, in this frame- is always a risk that new technologies serve to blind the work, may (1) educate and raise awareness, (2) distribute development community to more tried and true methods, so price information, (3) collect data, and (4) track pests and considering how mobile phones fit with needs and existing diseases. practices is a key initial step. TABLE 3.2: Various Roles for Mobiles in Agriculture Engage in Participatory, Iterative Project Design GOAL METHOD Understanding local needs is a difficult task that can be Education and awareness Information provided via mobile phones made easier by directly involving communities in the design to farmers and extension agents about and implementation of interventions. In addition to surveys good practices, improved crop varieties, and pest or disease management. of global and regional activities (such as this sourcebook), on-the-ground analysis is needed. Partnerships with local Commodity prices and market Prices in regional markets to inform information decision making throughout the entire organizations, extensive fieldwork, and interactive design agricultural process. sessions offer ways to understand the subtle differences Data collection Applications that collect data from large between agricultural subsectors and regions. Trying to “do geographic regions. everything� has doomed projects, while initiatives that Pest and disease outbreak warning Send and receive data on outbreaks. start small and focused (such as M-PESA, which began and tracking with peer-to-peer money transfers) can evolve into diverse Source: Hellstrom 2010. offerings (purchases, credit, and savings). One example of a small, focused program comes from Chile, where a small cooperative receives critical information for production and PRINCIPLES FOR DESIGNING A PROGRAM USING marketing. MOBILES IN AGRICULTURE The use of mobile phones in agriculture, though relatively Development practitioners can also learn from software new, has already witnessed failure as well as success. What developers who practice the mantra, “release early and separates the two outcomes may often be unpredictable often,� meaning that “good enough� prototypes should be and locally nuanced factors, but a survey of what has been piloted and improved in a rapid feedback loop. The risk with learned indicates that a number of principles can improve the this practice is that it may confuse communities that may not chances of sustainable impact. understand the process, but if the goal of the project is to reach considerable scale, using small pilot and focus groups to improve earlier versions is a worthy practice. Understand Users and the Technology Time and again, interventions have failed to gain traction Bringing communities into the early stages of the project because users’ needs and practices were incompletely can also foster local ownership, a key component of sustain- understood. In technological interventions, this risk is even ability. This principle is closely aligned with the need to “go more of a concern. Practitioners need to think carefully about beyond the technology� and focus on people. For example, why mobiles are the technology of choice and consider a lack of cultural awareness almost caused Text to Change, a alternatives, from the cutting edge to the mundane. Farmers Dutch NGO working in Uganda, to derail an effort to provide IC T IN A GR IC ULTUR E S E C T I O N 1 — OV E RVIE W OF ICT IN AGRIC U LTU R E: OPPORTUNITIES, A C C ES S , A ND C R OSS -CUTTING TH EM ES 63 HIV/AIDS information via SMS. Only on the morning of the BOX 3.6: Kilimo Salama Demonstrates the program’s launch did the NGO realize that the SMS code Convergence of Mobile Phones and assigned to them was 666—locally known as “the devil’s Sophisticated Mobile Services number�—and had to scramble to receive a new number to avoid upsetting Christian partners and users.7 Kilimo Salama (“safe farming� in Kiswahili) is an inno- vative program operated by Safaricom (Kenya’s largest Mobiles, like other technologies, are not silver bullets, but instead MNO), Syngenta Foundation (the foundation established are tools that will be shaped by social conditions. Practitioners by the Swiss agribusiness), and UAP Insurance. The ini- attempting to integrate mobiles with agricultural communities tiative delivers crop insurance to smallholder farmers in need to design their programs for equitable access. rural Kenya through the use of mobile phones. Farmers insure their crops with Kilimo Salama when they pur- chase seed and fertilizer from registered vendors. The Identify Partners with the Appropriate Knowledge, vendors are equipped with a camera phone loaded with Collaborative Capacity, and Alignment of Goals special software. At the time of sale, the salesperson As the innovative practice summaries in this module indicate, takes a picture of a special barcode on the products, and it is unlikely that any one organization, whether an NGO, minis- an SMS is sent to the farmer’s phone confirming the try, donor, or private firm, will have all of the expertise required insurance policy. For their work, agents receive a com- to succeed in designing and implementing successful mobile mission. Pricing has changed, with the premium origi- phone interventions in agriculture. Partners should be chosen nally subsidized, but in mid-2011, farmers were paying a for their specialized knowledge, willingness to collaborate, and 10 percent insurance premium. alignment of goals. Special care should be taken at the very beginning of project planning to ensure that the key stakehold- The Kilimo Salama system relies on weather stations ers will work together positively. in each agricultural region to measure rainfall and other climate information. When conditions fall below histori- Projects must seek to leverage trusted intermediaries. One cal benchmarks for farming (indicating that crops will be example discussed in this module is Kilimo Salama, which lost and inputs wasted), the service automatically pays relies on the trusted M-PESA money transfer service and insured customers in that region, using the M-PESA agricultural input suppliers to offer weather insurance to mobile money service. farmers (box 3.6). Another is IFFCO Kisan Sanchar Limited. Kilimo Salama demonstrates the potential for mobile The partners behind this service (which provides market phones and services (such as mobile money) to deliver information and agricultural advisory services) are IFFCO, a sophisticated financial products to smallholders, and it well-known farmer’s cooperative organization that maintains underlines the importance of distribution channels and a presence in 98 percent of India’s villages, and Bharti Airtel, product reliability. Affordability and trust remain obsta- a large mobile network operator (MNO) (for details, see IPS cles, especially if farmers dispute the payouts from the “Long Experience in Farm Communities Benefits IFFCO system. Kisan Sanchar Limited� in Topic Note 2.4). Source: Author, based on IFC Advisory Services 2011. By their very nature, most agricultural services using mobile phones partner with at least one MNO. For the network operator, the services are a way to boost rural subscribers operates in rural areas where commercial banks have few or (an important source of growth) and decrease customer no physical branches and benefits from Zain’s vast interna- turnover. This objective does not necessarily mean that the tional One Network (see IPS “Zain Zap Promotes Borderless network operator has any interest in farmers’ livelihoods Mobile Commerce,� in Topic Note 2.3). Partnering with (although it may), and partners should be cognizant of poten- private firms, including MNOs and input suppliers, is often tially conflicting motivations. That said, operator buy-in can required for mobiles-for-agriculture interventions to endure. be a powerful benefit, especially through distribution and marketing. Zain Zap, the mobile international banking service, Ensure That the Technology Is Widely Accessible Mobile phones represent a great opportunity for agricultural 7 See . interventions because they are one of the most accessible E C O N O M IC AND S E CT OR WORK 64 MODULE 3 — ANYTIME, ANYWHERE: MOBILE DEVICES AND SERVICES AND THEIR IMPACT ON AGRICULTURE AND RURAL DEVELOPMENT information platforms available, although barriers do remain. continue for an extended term. It is essential to develop a They can take the form of illiteracy or prohibitive cost, or viable business plan from the very conception of a project they can be technical or cultural (image 3.2). Given the tenu- to use mobiles in agriculture. Such a plan requires a clear ous nature of smallholders’ livelihoods and the lack of social understanding of who will pay—the government, end users, safety nets, many smallholders are particularly risk averse. cooperatives, or a combination, for example—and how much They are unlikely to participate in a new initiative without sig- they are willing to pay for a service. Farmers are willing to pay nificant education, advertising, and local support. Even those for timely and contextual information, but different strategies who wish to use a mobile intervention may be frustrated if may be needed to encourage poorer farmers to use a service the program is not widely available. Nokia’s Life Tools appli- (such as payments per query rather than a long-term sub- cation is intentionally designed to be widely available on its scription). The Reuters Market Light service offers a range low-cost handsets and fill a gap in low-income communities of price and service formats to accommodate a wide range with a large latent demand for information. of clients. Innovation in technology is often less important than inno- IMAGE 3.2: Other Challenges, Like Inadequate vation in the business model; prepaid mobile airtime was Transport, Affects Mobile Phone Success arguably more important than low-cost devices in enabling mobile phones to spread. When Google introduced three mobile applications in Uganda for free, they gained sig- nificant traction, but when fees were introduced, usage dropped, indicating failure to accurately gauge the appeal of the service and willingness to pay (Kubzansky, Cooper, and Barbary 2011). Market-based solutions can be more sustainable, but donors and governments often remain important as anchor buyers or subsidizers (see IPS “Mobiles Are the Heart of Esoko’s Virtual Marketplace� in Topic Note 3.1). When interven- tions are not undertaken for profit, they can benefit from approaches commonly used in the private sector, such as Source: Mano Strauch, World Bank. advertising to stimulate demand, rigorous benchmarking, market segmentation, and documenting failures as well as Projects that are exclusive to one MNO or a specific type successes for internal and external learning. of phone may face implicit barriers to adoption. Open tech- nological standards and free and open-source software can be used to reach a wider audience and avoid lock-in. They Monitoring and Evaluation can do much to enable unanticipated user innovation. For Although mobile phones have had positive impacts on agri- example, individuals around the world save money through culture, a better understanding of these outcomes would “beeping� or intentionally missed calls that communicate help in designing new interventions. A recent review of predetermined messages without using expensive airtime. ICT-based interventions in agriculture suggests a number of Elsewhere, users send money through unofficial routes questions to address (Aker 2010b): using airtime transfers. Given flexibility and understand-  What is the impact of ICT on farmers’ knowledge, agri- ing, communities will provide innovative solutions to their cultural practices, and welfare? needs.  Are the observed changes due to the ICT or some- thing else? Sustainability Based on a Viable Business Plan  What is the causal mechanism behind the effect? Sustainable agricultural projects are key to long-term growth  How does the impact differ between both farmers and livelihood improvements, but often projects fail to and type of information provided? IC T IN A GR IC ULTUR E S E C T I O N 1 — OV E RVIE W OF ICT IN AGRIC U LTU R E: OPPORTUNITIES, A C C ES S , A ND C R OSS -CUTTING TH EM ES 65  What are the potential spillovers or unintended conse- mobile phones.8 The software, developed by DataDyne quences for participants and nonparticipants? (a nonprofit organization based in the United States),  Is the ICT-based approach cost-effective relative to organizes searchable content from the Internet into news other, more traditional, interventions? feeds (RSS) and then transmits that content to farmers  Do the results transfer to different regions and via SMS messages. The system was designed to work on contexts? the simple mobile phones sell for US$ 15–20 in Chile and operate effectively even over slow networks with intermit- tent connectivity. LESSONS LEARNED MIP solved the challenge of sending information from the Although mobile phones continue to evolve quite rapidly, Internet via SMS messages; the next challenge was to the evidence suggests that they can promote improved ensure that the content was valuable to the user. Because livelihoods through networking and informing previously text messages transmit a maximum of 160 characters, unconnected portions of the population. The evidence there is no guarantee that messages contain useful infor- comes from users’ own rapid grasp of the technology’s mation. Even when a system chooses relevant informa- potential (Kerala’s fishers using phones to seek optimal tion, the first 160 characters may not accurately convey its markets for their catch) and from planned efforts originating meaning. from commercial information providers and development practitioners (as in the market information and insurance programs described in the innovative practice summaries Starting Small: A Pilot with a Small Cooperative that follow). To test the system, a pilot project, DatAgro, was set up in early 2009 between DataDyne and an agricultural coopera- Improving agricultural productivity is one of the most press- tive in the Cachapoal Valley, two hours south of the capital, ing issues for developing regions. Although mobile phones Santiago. The cooperative, Coopeumo, has just under 350 are no silver bullet, their widespread availability and flex- small-scale farmer members, most of whom grow maize ibility position the technology as a necessary component and some other crops. Members’ coop dues covered the of sustainable improvements in agriculture. Coupled with cost of the new SMS system. There was no extra subscrip- corresponding innovation in existing social and institutional tion fee and no charge for the text messages (the current arrangements, mobile phones have the potential to make sig- cost of US$ 0.06 is borne by the coop). Training sessions nificant contributions. As mobile phones converge with other were held at the beginning of the project to teach farm- mobile devices such as netbooks and tablets, the opportuni- ers how to send and receive text messages. Most coop ties will proliferate. members are men, thus about 90 percent of those receiv- ing training were men. For donors, governments, NGOs, and private entities work- ing to promote better agricultural policies, current efforts Coopeumo farmers received weather, news, sports, and offer much to learn. Designing programs and initiatives in other information via SMS. The information came from sev- a careful, flexible manner will enable rural communities to eral sources. Two of the project’s partners, UNESCO and adopt and use new technologies and methods to improve Chile’s Foundation for Agricultural Innovation (FIA),9 created their lives. messages based on work already done but not yet shared with the community. Two national newspapers sent news to the system. Users could customize the feeds they sub- INNOVATIVE PRACTICE SUMMARY scribed to and could rate the messages they found the most Mobile Service Gives Local and Global Edge helpful. to Chilean Farmers In Chile, the Mobile Information Project (MIP) delivers 8 This summary is based on information from Cagley (2010) and personal communication with John Zoltner, DataDyne.org. targeted agricultural information from the web directly 9 UNESCO = the United Nations Educational, Scientific, and Cul- to farmers, using software to create news channels on tural Organization; FIA = Fundación para la Innovación Agraria. E C O N O M IC AND S E CT OR WORK 66 MODULE 3 — ANYTIME, ANYWHERE: MOBILE DEVICES AND SERVICES AND THEIR IMPACT ON AGRICULTURE AND RURAL DEVELOPMENT Impact: Local and Global Advantages the telecoms companies have to be paid to transmit the In less than a year, the DatAgro service proved popular. One messages. Coopeumo member, Hugo Tobar, reported that his entire The experience in Chile suggests that disseminating informa- crop for 2009 was saved by an SMS message that urged tion via simple mobile phones is a good way to reach farmers him to delay planting because of impending bad weather. in areas where Internet facilities are unlikely to be provided Torrential rain during the next week would have washed his in the near future. Refinements to the system should make seedlings away. it easier to provide relevant content to each individual, and a Ricardo Danessi, executive manager of Coopeumo, said, current challenge is to tailor the content automatically; when “Our farmers can now find information about supply information is mediated by a human editor, bottlenecks can prices, product prices, the weather, and what’s going on be introduced. in international markets. That’s important, because today, everything that goes on outside Chile also affects us. When there’s an excess of production in one place, the INNOVATIVE PRACTICE SUMMARY prices go down here. Or when there is a sudden disaster For Reuters Market Light, the Wider Network or catastrophe somewhere else, the prices improve here. of People Matters When demand goes up in China or India, the prices here While on a fellowship at Stanford University, a Reuters get better. Everything is related in this connected world, employee hit upon the idea of offering highly customizable and small-scale farmers aren’t left out of that reality� market information to farmers through the increasingly (quoted in Cagley 2010). ubiquitous platform of mobile phones. From this initial idea, the international news giant launched Reuters Market Light (RML) in 2007 to provide market prices, weather, and crop Sustaining the Gains and Scaling Up advisory services to farmers in India. This launch was pre- Farmers have stressed the importance of the informa- ceded by 18 months of market research, tests, and pilot tion they receive and the convenience of the MIP plat- programs to refine the idea and tailor it to the local context form. Since the close of the pilot project, Coopeumo has (LIRNEasia 2008). assumed responsibility for creating, sending, and paying for the SMS messages. The only ongoing cost to DataDyne To subscribe, a farmer calls a toll-free number to activate is the incremental cost of maintaining and continuing to the service in the local language and specify the crops and improve MIP. Developing the MIP platform, testing it in markets in which he or she has an interest. Throughout the field, and local implementation cost a little over US$ the subscription, farmers receive four to five SMS alerts 200,000. with relevant information throughout the day. According to RML’s managing director, Amit Mehra, the pilot farmers Looking to the future, DataDyne plans to expand the use greatly preferred automated messages instead of having to of MIP based on use of the successful mobile data col- ask for them. Initial studies show that farmers who receive lection tool, EpiSurveyor (http://www.episurveyor.org). the service are receiving 5–10 percent more income. (See EpiSurveyor, available via the Internet, can be used free of IPS “Impact of Immediate Market Information in Aisa and charge by everyone who wants to collect data, unless they Africa� in Topic Note 9.3 for additional details on farmers’ have very heavy needs or require new functions. After a gains through RML.) little more than a year, more than 2,500 organizations in more than 140 countries are using EpiSurveyor, 99 percent of them for free. The same model will be used for MIP. If Impact new functions are needed, DataDyne can tailor the system Today, the application is one of India’s largest market accordingly and charge a fee for doing so, but it will auto- information services, serving hundreds of thousands of matically make the new functions available for free to other paying customers in tens of thousands of villages. Via users. In the case of heavy data requirements, DataDyne SMS, it delivers highly personalized, professional informa- will charge a US$ 5,000 annual license fee. There will also tion to India’s farming community, covering more than be a charge related to the cost of SMS messages, because 250 crops, 1,000 markets, and 3,000 weather locations IC T IN A GR IC ULTUR E S E C T I O N 1 — OV E RVIE W OF ICT IN AGRIC U LTU R E: OPPORTUNITIES, A C C ES S , A ND C R OSS -CUTTING TH EM ES 67 IMAGE 3.3: The Reuters Market Light Interface Source: Medianama. across 13 Indian states in 8 local languages (Mehra 2010) voice messages so that illiterate farmers are able to use the (image 13.3). The impact is likely even larger than Reuters service. Best of all, the service is free and benefits from the can count due to the widespread sharing of informa- partnership of India’s largest MNO (Bharti Airtel), which views tion that takes place within informal farmer networks. the service as a way to attract new customers in rural areas. Additionally, RML today has hundreds of employees, many of whom are trained as dedicated price collectors in mar- According to Mr. Mehra, reaching economies of scale is kets throughout India. essential for profitability. Media reports suggest that RML had invested US$ 2 million by late 2009 and expected to break even within a few more years. In 2009, RML report- Continuing Competition for Clients edly crossed the US$ 1 million sales mark. Farmers seem Reuters Market Light has sought to reach as many cus- willing to pay for the service—indeed, they are paying for tomers as possible through a number of strategies. RML longer periods of service than they were before. Up to 2008, has attempted to avoid exclusive partnerships with MNOs, most farmers purchased quarterly installments of the ser- though in some cases it has found that telecommunications vice. Today, the half-year and one-year plans are becoming firms provide a strong value proposition (notably through more popular (Preethi 2009). It also partnered with Nokia sales reach and providing a subscriber catalog that could as an information supplier for Nokia’s Life Tools application. lessen customer turnover). To make it easy for unregistered There are plans to bring the service to Afghanistan and Africa users to try the service before committing to a subscription, (Reuters Market Light 2009). RML has set up sales offices through the postal network, local shops, input suppliers, and banks. Customers can Providing Customized Information Requires Wide obtain RML in basic SMS through prepaid scratch cards Network of People that give access to the service for a given amount of time— initially only 1 month, but now 3, 6, and 12 months. After RML and its competitors suffer from the high expense of much experimentation, pricing has settled at Rs 60, 175, collecting market information and maintaining sophisticated 350 and 650, respectively. (For details of the technology and technological infrastructure. RML sources information from business model, see IPS “First Mover Advantage Benefits various content providers and sorts, organizes, and personal- Reuters Market Light�in Topic Note 2.4 in Module 2.) izes it for dissemination. A significant portion of this informa- tion comes through partnerships with agricultural institutes. Although a leading example, RML is hardly a monopoly. It These institutes are typically government funded but lack competes with both traditional information services (radio, the means to disseminate the information. Students and market intermediaries, newspapers) and other services that researchers in these institutes contribute content relevant use mobile phones. IFFCO Kisan Sanchar Limited (IKSL) to RML, which includes it in their package and delivers it to offers similar market information for rural farmers but uses farmers (Preethi 2009). E C O N O M IC AND S E CT OR WORK 68 MODULE 3 — ANYTIME, ANYWHERE: MOBILE DEVICES AND SERVICES AND THEIR IMPACT ON AGRICULTURE AND RURAL DEVELOPMENT To process the information, RML employs over 300 office to create a rich ecosystem to deliver the services. Content staff in eight states. The teams are organized according to is divided into: content area and include a news division that scours media  Basic agriculture, at Rs 30 per month, provides tips sources for agricultural news (pest and disease reports, on technique and news. government programs, weather reports, and local news).  Premium agriculture, at Rs 60 per month, addition- The information is finely sorted by geography. Farmers are ally offers market prices and weather updates. informed if a particular market in a village is closed or if  Education, also Rs 30 rupee per month, provides a pest or disease could affect their specific crops (Preethi simple English courses and exam preparation ser- 2009). vices. For an additional Rs 30, the General Knowledge The importance of customized information is highly evident option provides daily world news. in RML’s operations. As much as technical acumen is impor-  Entertainment at Rs 30 per months provides regional tant in mobile phone interventions, RML shows that a wide news, astrological predictions, cricket news, and ring- network of people—in this case, price collectors, agricul- tone downloads. tural institutes, and other information providers—is another The agriculture service, available across 18 states, offers two essential ingredient. plans. The basic plan, at 30 rupees (Rs) per month, provides daily weather updates and agricultural news, advice, and tips. The premium plan, at Rs 60 per month, provides the closest INNOVATIVE PRACTICE SUMMARY market prices for three crops chosen by the subscriber, as Nokia Life Tools Uses Simple Technologies to Deliver New Functionality well as weather information, news, advice, and tips. Nokia Life Tools supports 11 Indian languages: Hindi, Malayalam, Nokia is famous for making the low-cost handsets that sit Kannada, Tamil, Telugu, Punjabi, Marathi, Bengali, Gujarati, in more pockets than the products of any other manufac- Oriya, and English. turer.10 More recently, the Finnish mobile phone maker has begun developing mobile applications for its phones, Because most subscribers are prepaid users who do not and low-income communities are one of its primary audi- have a contract, the charges are subtracted weekly. To facili- ences. The most notable of these efforts is Nokia Life tate this payment, Nokia has partnered with the MNO IDEA Tools, unveiled in mid-2009 for the Indian market and sub- Cellular. sequently expanded to other countries (China, Indonesia, and Nigeria) (O’Brien 2010). Nokia believes that hyperlocalization is key to the suc- cess of this service. The Indian application was launched Life Tools is aimed at rural, predominantly agricultural com- with nine local languages, and future expansions will munities of the developing world. It is available on a number of Nokia handsets that retail for much less than US$ 50, and IMAGE 3.4: The Agriculture Package in Nokia Life Tools despite the application’s rich graphic elements (image 3.4), it uses SMS to communicate, making it affordable and widely accessible. Additionally, because SMS can be delayed, users need not have perpetual network coverage. The application is a prime example of how simple technologies can be tweaked to bring about new functionality. In India, Nokia has collaborated with multiple partners across the Indian government and private enterprises, including Tata DOCOMO, MSAMB, Syngenta, Pearson, RML, and EnableM 10 The material for this case study was drawn primarily from Koh (2009). Source: Nokia. IC T IN A GR IC ULTUR E S E C T I O N 1 — OV E RVIE W OF ICT IN AGRIC U LTU R E: OPPORTUNITIES, A C C ES S , A ND C R OSS -CUTTING TH EM ES 69 reformulate Life Tools for the unique conditions of new Goyal. A. 2010. “Information, Direct Access to Farmers, and Rural countries and regions. Market Performance in Central India.� American Economic Journal: Applied Economics 2(3):22–45. The key lesson is that Nokia’s mobile application recognizes Gakuru, M., K. Winters, and F. 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IC T IN A GR IC ULTUR E S E C T I O N 1 — OV E RVIE W OF ICT IN AGRIC U LTU R E: OPPORTUNITIES, A C C ES S , A ND C R OSS -CUTTING TH EM ES 71 Module 4: EXTENDING THE BENEFITS: GENDER- EQUITABLE, ICT-ENABLED AGRICULTURAL DEVELOPMENT CRISTINA MANFRE (Cultural Practice, LLC) IN THIS MODULE Overview. Although information communication technology (ICT) provides powerful tools for spreading valuable agricul- tural information and thus boosting productivity and incomes, it is important for projects that use ICT to carefully consider gender equity during planning and implementation. This module discusses how socioeconomic and cultural factors can affect access to and use of ICTs and offers strategies for the equitable introduction of ICTs. Topic Note 4.1: Entry Points for ICT and Gender in Agriculture. After highlighting key gender differences and inequali- ties, this topic note discusses ways in which ICTs can help even the playing field in the agricultural sector. ICTs can benefit women directly, through greater access to information and services, or indirectly, by improving the efficiency and transparency of systems already in place, such as government regulatory bodies or supply chains.  Community Knowledge Worker Initiative in Uganda OVERVIEW  Asset inequality has been shown to have negative The resurgence of agriculture on the development agenda impacts on growth in the agriculture sector (Birdsall, has come with the recognition of the need to engage the Ross, and Sabot 1995; Deininger and Squire 1998; full range of actors to reduce food insecurity and poverty, Sabates-Wheeler 2004.). This includes differences in from men and women smallholder farmers to multinational men’s and women’s access to land, labor, inputs, and food corporations. There is now broad consensus that bol- human and financial capital. These inequalities reduce stering the participation and position of smallholder farm- the potential total gains in yields and output by an esti- ers in agriculture is key to economic growth in developing mated 20–30 percent and 2.5–4 percent, respectively countries. Smallholder farmers are not an undifferentiated (FAO 2011). group, and the process of their integration must account for  Women are important actors at multiple levels of the differences in their assets, knowledge, and capabilities the agricultural value chain as unpaid family workers, if the most gains are to be made. Specifically, investments wage workers, traders, and entrepreneurs. According in smallholder farmers and other stakeholders must account to recent estimates, women comprise 43 percent of for gender inequalities and the differences between men and the agricultural labor force worldwide. This percentage women that constrain growth and reduce opportunities for however, masks regional variations and differences improving the livelihoods and well-being of rural and urban across and within countries. For example, in Sub- poor populations. Saharan Africa and East Asia they make up 60 percent of the agricultural labor force (FAO 2011). Given this While both men and women contribute to the sector, they do high rate of participation, it is clear that harnessing so in different ways as a result of differences in their access women’s full potential would have a significant impact to productive resources, their beliefs and perceptions about on agricultural growth. appropriate work for them, and other factors that limit their  Abundant evidence shows that increasing women’s full participation. This observation is widely acknowledged access to income has beneficial human capital and supported by empirical evidence that underscores why development effects through investments in the addressing gender issues is important for inclusive agricul- health and education of children (Quisumbing 2003; tural development. Empirical evidence includes: Ranis, Stewart, and Ramires 2000; Smith et al. 2003). E C O N O M IC AND S E CT OR WORK 72 MODUL E 4 — E XT E NDING TH E BENEFITS : GEND ER -EQUITA BLE, ICT-ENA B LED A GR ICULTUR A L D EV ELOPM ENT Reducing the barriers that limit women’s access to BOX 4.1: Key Constraints Restricting Women’s Access income and supporting gender equality are therefore to ICTs important for improving well-being and reducing the nonmonetary dimensions of poverty.  Lack of financial resources to secure the use of ICTs In recent decades, ICT tools have been heralded for  Higher levels of technological and language illit- their ability to reduce transaction and information costs. eracy among women and girls Development programs are attracted to the potential ICTs  Norms that discourage women and girls from embody for bringing technology solutions to poverty reduc- using technology tion. The objective of this module is to explore the interplay  Lack of control over and ownership of technology between gender issues and ICT applications in agricultural Source: E-Agriculture and GenARDIS 2011. development. It considers the full range of ICT applica- tions—from well-established technologies, such as radio and television, to more recent innovations in mobile technologies and applications. Given the explicit focus of this module on performance in agricultural development depends on whether gender categories, it begins with a short overview of gender they are designed to accommodate men’s and women’s dif- issues in agriculture, which is followed by a discussion of ferent capabilities and opportunities. Differences in educa- how gender inequalities affect the applicability and use of tion and literacy between and among men and women will ICTs. The Topic Note explores how ICTs can address some limit the effectiveness of certain ICTs. Although the global of the key challenges men and women face in agriculture literacy rate for adult and young women has increased over and provides practitioners guidelines and recommendations. the last decade and stands at 79 percent and 87 percent The module concludes with an Innovative Practice Summary respectively, significant disparities persist at the regional that describes how the Community Knowledge Worker pro- level (image 4.1). In Sub-Saharan Africa and South-Central gram in Uganda is attempting to reach both men and women Asia, the gender gap in adult literacy ranges from 7 to farmers. 24 percentage points. Roughly 70 percent of young women and 79 percent of young men are literate in Africa (United Nations 2010, 45–47). With the proliferation of audio- and Gender Dimensions of ICTs video-based technologies, there are more alternatives to The advent of new ICTs and applications creates new oppor- literacy-dependent content and technology. The Sustainable tunities for men and women in agriculture. Nonetheless, Tree Crops Program in Ghana delivers training to cocoa challenges remain. ICTs do not inherently IMAGE 4.1: Levels of Literacy Affects Women’s Participation in reduce inequalities. The “digital divide� Agriculture Learning exists because men and women within and across developed and developing countries have different opportunities to use and access ICTs. Access and use of ICTs is determined by the availability of the physical infrastructure on which ICTs depend as well as socioeconomic factors such as knowledge and skills, which are often mediated by gender, class, and race. Generally, rural women in devel- oping countries are among those who have the least access to ICTs, a result of constraints (see box 4.1) that affect them with greater intensity than other groups are affected. The potential for ICTs to be effective in facilitating women’s entry into and Source: Ray Litlin, World Bank. IC T IN A GR IC ULTUR E S E C T I O N 1 — OV E RVIE W OF ICT IN AGRIC U LTU R E: OPPORTUNITIES, A C C ES S , A ND C R OSS -CUTTING TH EM ES 73 farmers using the Farmer Field School methodology and KEY CHALLENGES AND ENABLERS Video Viewing Clubs. Illiterate and semiliterate women Despite the clear advantages that exist for using ICT to farmers are the primary target for the video clubs. The increase and extend agricultural innovation and improve clubs host facilitated discussions that are complemented coordination among different stakeholders, two specific by a 10–15 minute video on a range of integrated crop and challenges reduce the potential for ICT applications to con- pest management topics. Thirty-two out of 56 video clubs tribute to gender-equitable agriculture development. First, were women-only clubs, and the remaining were mixed- smallholder farmers are often considered an undifferentiated sex groups (World Cocoa Foundation 2011; Chan 2010, group of beneficiaries, with the same needs and the same appendix). opportunities. Second, ICTs are assumed to be gender neu- tral, that men and women have the same ability to access, Greater integration of ICTs into information dissemination sys- use, and control ICTs. Combined, these challenges present tems has the potential to reduce information costs significantly a different landscape of the potential opportunities and con- for both public and private entities. Since men and women straints to using ICTs to enhance agricultural gains; one in are responsible for managing different crops and livestock and which gender plays a central role in determining how men undertake different agricultural tasks, the potential for ICTs to and women participate in agricultural activities, access ICTs, address gender issues in value chains can only be achieved if and derive benefits from agricultural growth. Therefore, prac- the content is tailored to provide information and services that titioners must carefully consider how to optimize the ben- are relevant to women and men. As an example of why this is efits of ICT in specific contexts where men and women may critical, extension services have failed to account for women’s have different opportunities and capabilities. The following information needs, focusing heavily on tasks and products strategies and enablers focus on overcoming the challenges dominated by men (FAO, IFAD, and ILO 2010). A better apprecia- associated with using ICT in agriculture, with a specific focus tion of the types of information needed is required. In addition, on the gender implications involved. content for applications should be developed in local languages and use a variety of media, including text, audio, and video. Conduct a gender analysis to identify opportunities on how ICTs can enhance current practices. The analy- ICT use in value chains must account for norms that limit sis should describe where and how men and women par- women’s access to, use of, and control over ICTs. Women ticipate in the specific value chain or agricultural activity. may not have the same control as men over the radio dial, It should capture what information and services men and mobile phones, or the television, which can impede their women farmers need and how they are currently meeting ability to use these technologies for their own purposes. In those needs. It should also assess what ICTs are already in Uganda, rural women form listening groups to gather for spe- use and the type of access men and women have to them cial radio programs produced by and for women (WB, FAO, (direct or mediated). Sex-disaggregated data on education and IFAD 2009). Resources to use ICTs can also be a con- and income, as well as attitudes toward technology use straint for some women. Recent research on mobile phone should also be collected to help identify the most appropri- use, however, suggests that rural women will divert income ate ICT application. away from other uses to pay for phones (GSMA 2010). This indicates that women value the benefits of mobile phones Develop appropriate content to meet the needs of and suggests that using phones as a platform for delivering women and men farmers. Women farmers’ needs and other extension and services could yield greater results. activities are often overlooked in the design of extension service and delivery. Their on-farm activities can differ from ICTs cannot solve all the gender-related disadvantages men’s by crop and livestock. Women and men take part in women and men face in value chain development or in other different production, processing, and marketing activities agricultural activities, but they can alleviate challenges that even when they are working in the same value chain. As are intensified by the constraints on women’s time and a result, women and men farmers do not always share the mobility. Women may not be able to frequent public Internet same information needs. For ICT applications to improve the cafés, but mobile phones can provide an alternative means productivity of women and men farmers, it is necessary to of gathering and exchanging information on market prices. ensure that appropriate content is developed for them. Short message service (SMS) technology allows this infor- mation to be sent directly to women with mobile phones Consider using a range of ICTs. While the inclination without requiring them to travel or interrupt activities. may be to find ways of integrating the most cutting-edge E C O N O M IC AND S E CT OR WORK 74 MODUL E 4 — E XT E NDING TH E BENEFITS : GEND ER -EQUITA BLE, ICT-ENA B LED A GR ICULTUR A L D EV ELOPM ENT technology into value chains, practitioners should recog- ensure that payment is distributed to reward the man or nize the infrastructure constraints as well as gender-based woman responsible for the labor. constraints that can limit the effectiveness of these tech- nologies. Programs need to identify what ICTs are most Identify employment opportunities for women with appropriate for overcoming specific constraints and must agricultural-related ICT service providers. The potential avoid the temptation to design programs around ICTs. for women to find employment with agricultural-related ICT Using the radio arguably remains one of the most effective service providers should not be overlooked. Much of the means of reaching farmers in the field because the infra- literature reviewed for this module outlined the benefits of structure already exists. Reports indicate that combined ICT applications for farmers, buyers, or the value chain as ICT programming—using radio and mobile phone, might a whole. Little research exists that examines the potential provide new opportunities for women (see IPS “Farm for creating new ICT-related employment opportunities for Radio International Involves Men and Women Farmers� in men or women in agriculture. However, the research sug- Module 6). Although there can be disputes over control of gests at least two areas of opportunity for women. First, the radio, programming can be designed to interest both women can be employed as call center consultants and men and women farmers. operators, for example, with M-Kilimo, delivering agricul- tural information to farmers. This may be a particularly Use ICTs to complement existing information channels. attractive option for women agricultural extension officers Men and women farmers are already exchanging informa- who find it challenging to travel to remote districts to meet tion. Often through word-of-mouth, farmers share farming with farmers. Second, rural women should be recruited and practices, experiences with different inputs, preparation of trained at the village-level to act as information intermedi- different crops for consumption, and so on. Women espe- aries for other farmers (see IPS “Community Knowledge cially rely on these channels because their time and mobil- Worker Initiative in Uganda�). ity constraints often limit their exposure to new information providers. ICTs can support and enhance these informa- Design two-way ICT programs to collect and dissemi- tion channels by providing access to expertise and more nate information. The transmission of information through up-to-date information. In Uganda, the Women of Uganda ICTs must consider not only “pushing out,� but also “pulling Network (http://www.wougnet.org) relies on the strength in� information. In gathering data on farmers, it is critical to of locally developed information channels to increase the ensure that the data being collected are sex-disaggregated. audience for its services. Women’s groups are given a This includes sex-disaggregated data to fill long-standing mobile phone and a radio cassette player that are used to gaps in information on land holdings, productivity, and listen to local agricultural radio shows, call extension offi- labor force participation. Although increasing the volume of cers, or share information between groups. Information agricultural data is important, a real innovation would be to is disseminated in the local language and the groups are make sure that the data are collected separately for men and encouraged to spread the word to other women farmers women so that the data could be used to improve our under- through word-of-mouth. The program has been successful standing of the gender-based constraints and opportunities in part because it worked within channels that were familiar in agriculture. Establishing mechanisms for men and women to women; in this case, the radio and extension officers to become cocreators of knowledge products will enhance (GSMA 2010). understanding of innovation occurring at the local level or for capturing men’s and women’s climate adaption and mitiga- Develop direct relationships with men and women farm- tion strategies. ers. The most recent ICT innovations will fail to bring women into agricultural programs if leaders and practitioners are not Develop gender-equitable national or regional ICT pol- intentional about engaging women directly. Buyers, exten- icy. The gender dimensions of rural infrastructure and the sion agents, input suppliers, and other service providers enabling environment are also important to consider; ICTs must reward the appropriate individuals for their participation can only impact women’s lives if infrastructure reaches them in the value chain. Because ICTs reduce overall transaction and appropriate policies and programs are in place to address cost for firms, this can allow firms to invest more in devel- poverty and gender issues in accessing and using ICTs. oping relationships directly with their suppliers. Firms can Box 4.2 provides an example of policy recommendations for contract men and women separately and, more importantly, equitable rural infrastructure development. IC T IN A GR IC ULTUR E S E C T I O N 1 — OV E RVIE W OF ICT IN AGRIC U LTU R E: OPPORTUNITIES, A C C ES S , A ND C R OSS -CUTTING TH EM ES 75 BOX 4.2: Policy Recommendations for Gender-Aware Universal Access and Rural Development 1. Improve and expand rural infrastructure by focusing on public shared access facilities, with special focus on wireless technologies and electrical power sources. Policy efforts should make sure infrastructure extends into rural and remote areas. 2. Invest in and promote shared access for rural communities. Community-based approaches can overcome barriers to individual ownership and provide the setting for additional training programs. 3. Promote and support the development of local content in local languages. Local language content will improve the accessibility and inclusiveness of ICT applications. It can also serve as an opportunity to capture and record local practices and knowledge. 4. Support adult literacy programs in rural areas. Although many ICTs make use of audio and video to over- come illiteracy, ongoing support for adult literacy remains an important issue to address. 5. Promote and facilitate the establishment of public-private partnerships in the implementation of rural projects. As the overview module revealed, both public and private actors are integrating a range of ICTs in agri- cultural value chains (see Module 1). Collaboration between them can reduce costs and help extend the benefits to a greater number of individuals. Source: Adapted from Association for Progressive Communications 2010. To pic Note 4.1: ENTRY POINTS FOR ICT AND GENDER IN AGRICULTURE TRENDS AND ISSUES land it is often of smaller size and lesser quality. Furthermore, For actors within the agriculture sector to equitably imple- access to land facilitates access to other inputs, producer ment ICT solutions, it is critical that they understand the basic associations, and contract farming opportunities. For example, issues surrounding gender-related inequity within the sector. women’s formal participation in contract farming is mixed and This topic note reviews key gender issues (for a thorough is constrained by lack of access to land and financial resources treatment of these issues, see the Gender in Agriculture (Schneider and Gugerty 2010). As a result, it varies from one Sourcebook, http://worldbank.org/genderinag) and discusses location to another. Research by Masakure and Henson (2005, ways in which ICTs can be used to address these issues. cited in Schneider and Gugerty 2010) found that in Zimbabwe, 61 percent of contract farmers in vegetables were women. According to Dolan (2001), women made up only 10 percent of Gender Differences and Inequalities in Agriculture farmers in the fresh fruit and vegetable sectors in Kenya. As the following sections illustrate, gender disparities in the agriculture sector are prevalent and often quantifiable. These Even when women have access or user rights to land, their disparities tend to arise from a combination of socioeco- access to labor, inputs, information, and training is less than nomic and cultural factors. men’s. Women have fewer resources to hire labor compared to men, who have greater financial resources and are able Gender Inequalities in Access to Productive Resources to mobilize the labor of their spouses and other family mem- Relative to men, women generally have less access to land, bers. Women are often left out of agricultural extension and labor, information, education and training, and inputs. Intra- training programs because men are the socially recognized household dynamics and social and legal institutions affect farmers even when they are not the principal manager of access to and accumulation of these resources by men and a farm. Globally, only an estimated 5 percent of agricultural women. Access to land and secure property rights are critical to extension resources are directed toward women (FAO increasing agricultural productivity. Women’s ownership of land 2011). A 2008 study found that women in Vietnam made up lags behind men’s around the world, and when they do hold 25 percent of an animal husbandry training program and just E C O N O M IC AND S E CT OR WORK 76 MODUL E 4 — E XT E NDING TH E BENEFITS : GEND ER -EQUITA BLE, ICT-ENA B LED A GR ICULTUR A L D EV ELOPM ENT 10 percent of crop cultivation training (Kabeer 2008, cited in be spent. While women often have control over the small FAO, IFAD, and ILO 2010). In Senegal, a 1998/1999 census amounts of income they generate through local sale of food revealed that men plot managers received extension ser- and other microenterprises, larger sums of money are often vices three times more than women plot managers (ibid.). controlled or can be appropriated by men. On smallholder farms, married women and daughters work as unpaid family Women’s Mobility and Time Constraints laborers with the expectation that income derived from the Social norms that place the responsibility for productive and sale of crops will return to the household. For example, a 1993 reproductive activities on women create time and mobility study of the Kenyan tea sector found that marital conflicts constraints that limit their ability to participate in other activi- increased when women did not have the access they had ties. The disproportionate distribution of reproductive tasks in expected to the income they earned for the household (Von particular mean that women have less time to invest in train- Bulow and Sorensen 1993 cited in Schneider and Gugerty ing and capacity building opportunities (image 4.2). Women 2010). Also in Kenya, women supplied 72 percent of the labor in India spend 354 minutes a day, compared to 36 minutes by inputs in French beans but received only 38 percent of the men on household activities including cooking and caring for income (Dolan 2001). This means they have few incentives to children (Budlender 2009). In Tanzania, women spend 270 participate in agricultural activities. Not receiving their fair share minutes and men 54 minutes on daily tasks (ibid). In com- of income impedes their ability to invest in upgrading strate- parison to their urban counterparts, rural women spend even gies that would improve their performance in value chains and more time in activities such as collecting water and fetching also reduces their ability to access risk management instru- firewood because they have less access to basic services. ments, through the purchase of insurance or accumulation of These activities translate into less time to invest in network- assets. Furthermore, unequal bargaining power and control ing, communicating with buyers, and developing market over resources in the household limits the positive impact of skills to further their productive activities. This also limits integrating smallholder women farmers into value chains. time available to learn about and become familiar with ICTs. How ICT Can Improve Women’s Access to Agriculture Women’s Lack of Access to Income Services and Agribusiness Women’s participation in agricultural supply chains is not If approached properly, ICT can improve women’s ability to act always commensurate with the benefits they derive from effectively and productively in agriculture. New applications their labor. Gender norms often set expectations about who and cheaper devices have created opportunities for women controls income and the decision making over how it will to engage in agriculture in ways previously unavailable to them. The following section highlights these opportunities. IMAGE 4.2: Women Often Integrate Domestic Roles with Others Facilitating Women’s Access to Agricultural Information, Market Prices, and Services Whether it is a radio program, a video, a text message, or a phone call, one of the most important contributions of ICTs to agricultural development is the ability to disseminate critical informa- tion to farmers through a diversity of channels. Real-time and cost-effective information on weather, market prices, diseases and pests, and services allows farmers, especially women farmers who may not otherwise have access to this type of information, to make more informed decisions about land preparation, planting, harvesting, and marketing. ICTs can help increase Source: John Issac, World Bank. women’s access to information and IC T IN A GR IC ULTUR E S E C T I O N 1 — OV E RVIE W OF ICT IN AGRIC U LTU R E: OPPORTUNITIES, A C C ES S , A ND C R OSS -CUTTING TH EM ES 77 services which can in turn close gender gaps in yields and 2010). Organic farming requires the intensive management of productivity. information about agricultural production to meet certification standards and is therefore well suited for ICT use. The project Kenya’s largest call center and business processing opera- helps women use ICTs for business management and market- tor, KenCall, developed the Kenya Farmer Helpline known as ing. It teaches participants how to create an e-mail address, “M-Kilimo� (http://www.m-kilimo.com/), with support from the how to access information on markets and prices for their Rockefeller Foundation, to improve the transfer of knowledge products, how to enter financial and agricultural data about to farmers. The service provides an interactive alternative to their vegetable production, and how to market their products. agricultural information services delivery via mobile phones. Instead of receiving messages via SMS, farmers can talk to Improving Coordination Between Women Farmers a real person to get agricultural expertise and information and Other Actors in the Value Chain to help them make informed decisions on land preparation, As the previous examples have made clear, ICTs can facilitate planting, pest management, and marketing. Farmers receive greater communication between farmers and other service pro- information in English, Swahili, or other local languages. In viders, like extension agents. They reduce the time and coor- its first 18 months of operation, the program reached 25,000 dination challenges between different actors, allowing farmers farmers. An estimated 43 percent of callers are women farm- to receive better information on product specifications and vol- ers (GSMA 2010). umes, coordinate transport, and deliver goods at times when Collaboration between Bharti Airtel and Indian Farmer’s they can secure the best prices. ICTs can also improve the Fertiliser Co-operative (IFFCO) led to the development of a functioning of producer groups, recording financial accounts, similar program in India. The IFFCO Kisan Sanchar Ltd. Agri registration, and management processes—but women will Helpline aims to provide information, inputs, and services in only benefit from these efficiency gains if they can access the real time through affordable mobile communication. Farmers associations and are also trained to use ICTs (see Module 8 on can purchase a “Green SIM� card that allows them to receive farmers organizations). For women, ICTs that reduce the need five free voicemail messages daily on a range of agricultural to travel to speak with an input supplier, buyer, or transporter topics. In addition, the service provides a helpline farmers helps overcome their time and mobility constraints. can call to ask questions. Although women reportedly make up a number of the listeners of the daily messages, they are Enhancing Transparency in Governance, Business only 13 percent of direct users (Pshenichnaya 2011). The Registration, and Land Administration majority of SIM card holders are men. (See also IPS “Long A number of different modules in this Sourcebook describe Experience in Farm Communities Benefits IFFCO Kisan the advantages of integrating ICTs into governance and Sanchar Limited� in Module 2.) administrative procedures in the agriculture sector. (See, for example, Module 13 and Module 14.) Improving the timeli- Also in India, the Self Employed Women’s Association (http:// ness, accuracy, and transparency of these processes are www.sewaict.org) provides current and future commodity among the key advantages of ICTs. These same benefits prices, which allow members to make more informed deci- can be applied to support gender-equitable objectives. More sions about when and where to sell their produce. Women accurate and transparent record keeping can identify the with mobile phones can receive SMS messages directly, gender gaps in land administration and provide information to while women without mobile phones can visit a computer- advocacy groups supporting women’s land rights For women based village notice board that also posts the prices. To traders and entrepreneurs, increasing the efficiency of busi- overcome illiteracy constraints, the association is piloting an ness registration and customs facilitation can ease time bur- interactive voice response system that would provide the dens and may also reduce opportunities for corruption. same information using speech recognition software. Initial results from the pilot indicate that over 20,000 women are using the system (GSMA 2010). Contributing to the Collection of Sex-Disaggregated Agricultural Data Knowing & Growing, a collaboration between Networked The lack of sex-disaggregated agricultural data is a frequently Intelligence for Development and the Jamaica Organic cited constraint to understanding women’s contributions to Agriculture Movement, offers training for women producers and benefits from the agriculture sector. Agricultural census in the English-speaking Caribbean on how to grow organic data in many countries are not sex-disaggregated, and donor- vegetables and use ICTs to manage their farms (Tandon funded agricultural development programs have been slow E C O N O M IC AND S E CT OR WORK 78 MODUL E 4 — E XT E NDING TH E BENEFITS : GEND ER -EQUITA BLE, ICT-ENA B LED A GR ICULTUR A L D EV ELOPM ENT to recognize the importance of assessing gender-differenti- Some of the most impressive innovations are occurring ated results. ICT applications alone will not motivate change in the mobile money and mobile banking fields. These in the behavior of these institutions, but they can ease the applications are helping rural and underserved populations burden of gathering and recording sex-disaggregated data on obtain financial services that allow them to weather emer- farmers, suppliers, buyers, and other stakeholders. Whether gencies and risks associated with jobs and harvest loss obtained through the use of AgriManagr software or by (Plyler, Haas, and Nagarajan 2010). The most well-known registering farmers when they call into M-Kilimo, these data of these services is M-PESA (see IPS “M-PESA Pioneering provide more information about the needs, capabilities, pro- Money Transfer Service� in Module 2), a mobile phone- ductivity, and earnings of farmers, both men and women. based service for sending and storing money offered by Safaricom in Kenya. Other mobile phone service provid- Improving sex-disaggregated data offers additional benefits ers, like Zain and MTN, have replicated these services on to farmers. As described in Module 10 on ICT applications their networks. for building inclusive supply chains, AgriManagr’s records include a history of previous transactions and earnings, The importance of these technologies for women is quickly which serves as a proxy of the farmer’s creditworthiness. becoming clear. The number of women m-Pesa subscrib- This information acts as a type of credit history and collateral ers in Kenya rose from 38 percent of users in 2008 to 44 that can facilitate access to loans and credit. Establishing a percent in 2009 (Jack 2010). Women are found among the recorded history of women’s farming experience and credit- rural receivers of transfers of regular sums of cash that worthiness may go a long way in increasing their access to act as a source of income or lump sums to pay for school credit and other financial services, especially since they often fees or inputs (Morawczynski and Pickens 2009). One of lack other forms of collateral, such as land. the advantages of m-Pesa and other similar services is that they allow women to receive transfers of cash without a Improving Women’s Control Over Income and Access bank account, or needing to travel to the bank or the post to Financial Services office. Among the most valued effects of m-Pesa, women report the ability to accumulate cash and keep it secure, Women’s lack of access to income is a significant constraint presumably from other family members, neighbors, or on their participation and productivity in agriculture. Without others. access to and control over income, women are unable to accumulate lump sums to pay for inputs and services or invest Opportunity International is adding another layer to improv- in upgrading activities. Moreover, when women contribute to ing women’s secure access to income. Using smartcards agricultural activities without seeing the income invested in and biometric fingerprint technology, clients in developing the household, they lack the incentives to improve their posi- countries, globally of whom 84 percent are women, are tion in agricultural value chains (image 4.3). able to open a bank account without formal identification IMAGE 4.3: Women Can Play a Significant Role in (Opportunity International 2011). Clients receive a smartcard Acquiring Family Income that is associated with their fingerprint which allows only them to access the banking services. This technology is complemented by an expansion of kiosks, ATMs, vans, and handheld point-of-sale devices that increase the mobility and availability of banking services in rural areas. INNOVATIVE PRACTICE SUMMARY Community Knowledge Worker Initiative in Uganda It is easy to understate the impact mobile technology has had on our world. Mobile phones and the growth of tech- nology applications associated with them have changed Source: Curt Carnemark, World Bank. the way we communicate with others, stay informed, IC T IN A GR IC ULTUR E S E C T I O N 1 — OV E RVIE W OF ICT IN AGRIC U LTU R E: OPPORTUNITIES, A C C ES S , A ND C R OSS -CUTTING TH EM ES 79 and network with colleagues, friends, and peers. More This Innovative Practice Summary focuses on the Commun- importantly, their impact has not been limited to users ity Knowledge Worker initiative (http://www.grameen in developed countries. Mobile phones are in the hands foundation.applab.org/ckw/section/index) implemented of the young and old, men and women, urban activists, by Grameen Foundation in Uganda. A pilot phase for the and rural farmers in developing and developed countries. project occurred between December 2008 and August The expectation is that the number of subscribers, espe- 2009, and much of the information in this summary draws cially women subscribers, is set to increase. Emerging on lessons learned from that period.1 The project was research is exploring the links between mobile phones and implemented with support from the Bill and Melinda Gates economic growth, and finding some interesting connec- Foundation (BMGF) and in collaboration with MTN-Uganda, tions (box 4.3) (see also Module 3 for more details on the the International Institute of Tropical Agriculture (IITA), impacts of mobile phones). and Uganda’s National Agricultural Research Organization (NARO). A number of other organizations supported tech- nology development, farmer organization, and other com- BOX 4.3: Mobile Phones and Economic Growth ponents of the project. After the pilot phase, the project  A 2007 report by Deloitte found a 10% increase received a four-year follow-on grant from BMGF to scale in mobile phone penetration is linked to a 1.2% operations to the rest of the country. increase in GDP in low- and middle-income countries. Program Objective and Description  In India, 3.6 million jobs were created, directly The Community Knowledge Worker initiative aims to build a and indirectly, in the mobile phone industry. The cross-country network of village-level information interme- industry is expected to continue to add a million diaries that deliver agricultural information to smallholder jobs annually. farmers through mobile technology. The program targets  Mobile phones contributed to a 62% and 59% smallholder men and women farmers who live on less than increase in profits in South Africa and Egypt, US$ 2 a day. It develops mobile services and applications respectively. that Community Knowledge Workers (CKWs) use to provide Source: GSMA 2010. smallholder farmers with actionable and real-time agricul- tural information. Farmers can receive agricultural tips and advice, weather forecasts, market prices, an input supplier According to research conducted by GSMA (2010), there are directory, and detailed farming information on crops and 1.25 billion people in low- and middle-income countries that livestock. live in areas with mobile network coverage but who do not The program identifies, recruits, and trains community own mobile phones. Women were found to be less likely to members to act as trusted information intermediaries for own a mobile phone than a man, with the incidence being farmers. In the pilot phase, 38 CKWs were recruited and higher in Africa (23 percent), the Middle East (24 percent), trained. CKWs provided on average 15 services to farmers and South Asia (37 percent). The study found that among per week and responded to more than 8,000 queries on women in low- and middle-income countries, 26 percent organic agricultural techniques for bananas and coffee, mar- could benefit from mobile communications but do not, com- ket prices, location and contact information for input dealers, pared to 17 percent of men. This means that an additional and banana disease control. Multiple mobile applications 750 million women and 500 million men potential mobile were deployed for accessing and disseminating informa- phone subscribers exist. While the market potential for tion to farmers (see IPS “Community Knowledge Workers expanding mobile phones in developing countries is there, in Uganda Link Farmers and Experts to Cope with Risk� in it is important to understand from a development perspec- Module 11 for complete list). tive how closing the mobile phone gap translates into better outcomes for men and women in terms of income genera- tion, poverty reduction, and improved well-being. One such avenue is by using mobile phones to reduce gender gaps in 1 This section was developed using Grameen Foundation 2011a performance in agricultural value chains. and Grameen Foundation 2011b. E C O N O M IC AND S E CT OR WORK 80 MODUL E 4 — E XT E NDING TH E BENEFITS : GEND ER -EQUITA BLE, ICT-ENA B LED A GR ICULTUR A L D EV ELOPM ENT A second line of action was data collection. CKWs were becoming CKWs and tailor the information for women farm- trained on survey techniques to collect information for the ers’ needs. Uganda Commodity Exchange, the World Food Program, IITA, and NARO. Over 6,000 surveys were conducted on top- Women were found to face higher entry barriers to ics ranging from smallholder bulking and marketing behavior becoming CKWs than men. First, although relying on part- to banana disease incidence. Demographic and baseline data ners to identify and recruit potential CKWs was found to on farmer households was also collected and weekly cus- be fairly successful, the process was not without its com- tomer satisfaction surveys were conducted. plications. The more decentralized the process, the more political it became, especially with local extension offices. These partners found it more challenging to identify poten- Gender Approach tial women CKWs. Women were also less exposed to the The program committed to ensuring that both men and nominating organizations, which suggested the project women are represented among the CKWs and farmer should think about engaging more women’s organizations beneficiaries. A desire for greater participation by women or other partners that have a greater link to women in the pushed the designers to aim for one-third of CKW nomi- community. nees to be women. The criteria for selecting CKWs included experience in community outreach, being a trusted resi- Relative to men, women have lower education and are dent of the area, literacy, and fluency in English. The initial less likely to be fluent in English, which meant that finding recruitment process did not consider differences in men’s women who met the minimum criteria posed a challenge. and women’s ability to meet these criteria, although it Moreover, women’s higher labor demands, both in the field was acknowledged later that relative to men, women have and in the household, meant they had less time to dedicate lower education levels and are less likely to be fluent in to trainings and to meet with farmers. Although CKWs put English. The project is therefore exploring ways of deliver- in an average of 10 hours of work per week, the pilot found ing agricultural information through voice commands and that women CKWs incurred greater costs both in terms of call centers to allow women and men with lower literacy time and money. Women CKWs had to juggle their CKW levels to become CKWs. To facilitate women’s entry into duties with their household and farm responsibilities, adding the network, the project also provided childcare at training extra time to their day, especially when they had to travel to sessions to alleviate certain time constraints and household conduct surveys. They also incurred financial costs because responsibilities. they hired labor to manage the household or farm activities in their absence. Some women also hired men to ride the The follow-on project developed a more thorough gender bike they were given to conduct outreach and survey activi- and social equity plan. This includes conducting a gender ties while they rode on the back. Finally, some women were and social assessment; a capacity-building plan for staff, found to have less control over the mobile devices than CKWs, and farmer beneficiaries; a policy and advocacy their male counterparts. They had to share the airtime they plan; and a monitoring framework. The plan aims to equip received from the project with their husbands, who were the Grameen Foundation with the tools necessary to not CKWs. implement a gender equitable project, identify like-minded partners to further these goals, and monitor the progress Nonetheless, preliminary research reveals that recruiting of its actions on meeting specific gender-related goals and women CKWs will be important for the program to meet objectives. its goal of reaching women farmers. The program is find- ing that women farmers are more likely to seek advice if the CKW is a woman. Sixty-three percent of women farm- Benefits and Impact ers are receiving their information from a woman CKW. Although the pilot project operated for a short period of Furthermore, women farmers were more likely to return time, there are indications that with greater attention to to a woman CKW than a man CKW (Hahn 2010). Finally, gender issues, the follow-on project could bring significant despite the greater constraints facing women CKWs, there benefits to both men and women. To achieve this, the was no notable difference in the performance of men and project would need to address the barriers women face in women CKWs. IC T IN A GR IC ULTUR E S E C T I O N 1 — OV E RVIE W OF ICT IN AGRIC U LTU R E: OPPORTUNITIES, A C C ES S , A ND C R OSS -CUTTING TH EM ES 81 Lessons Learned and Wider IMAGE 4.4: ICT Often Requires Additional Inputs to Be Effective Applicability to Value Chains and Agricultural Extension The CKW project was not designed to alleviate the constraints of a specific value chain, nor was it introduced by an agroprocessing firm. Nonetheless, it could easily have been designed, for example, to procure passion fruit from small- holders for a processing company. The CKW project’s focus on improv- ing access to information relieves a common bottleneck in agricultural value chains—and a pervasive con- straint for women farmers. Lessons learned from this experience have wider applicability to using ICTs to Source: Ray Witlin, World Bank. address gender issues in a range of agricultural value chains: The social and gender contexts matter. Ensuring that ICTs phones into the hands of every man and woman farmer support inclusive agricultural value chains is as much about for them to benefit from the services the mobiles provide. identifying appropriate technology uses as it is about under- The CKW project demonstrates how designing a program standing the context in which they are going to be applied. built on mediated access to ICTs can be effective when As the CKW project discovered, the recruitment process was it is embedded in the social context. Identifying appropri- hampered not only by local power structures but by structural ate leaders to become CKWs can be tricky, but when it is gender inequalities that resulted in fewer women meeting done well, it can overcome several different gender issues. the basic education requirements. Mediated access to ICTs using community leaders can overcome the financial constraints that limit women’s abil- ICT applications have limits. Some problems cannot be ity to purchase their own mobile phones and create issues solved with ICTs (image 4.4). The CKW project identified around control of technology when women have to share strategies to overcome the differences in men’s and wom- devices with spouses. en’s literacy by using video and audio, but addressing local It is important to engage women beyond the farm. While power structures must be addressed through other avenues. it is important to ensure that women farmers receive agricul- For this, the CKW project realized it needed to engage wom- tural information that can help close agricultural productivity en’s groups and other organizations that tap into women’s gaps, it is equally important to identify ways of supporting networks. A project can increase women’s information about their participation in other ways. Like many of us who learn fertilizers, for example, but may have to find other solutions on the job, women can use the farm skills they acquire to to ensure they actually receive them. Recognizing that not all move into related activities, such as information service gender inequalities have an ICT solution is important. This is providers or software developers. This project set a goal to ultimately why gender-based constraints in the value chain recruit women CKWs and found that this helped attract more need to be identified prior to assessing where and how ICTs women to request services from the CKWs. Expanding the can address specific constraints. opportunities for women to participate in the project not only Opportunities for mediated or direct access to ICTs as end-receivers of information but also as service providers must be identified. It is not necessary to put mobile led to better outcomes all around. E C O N O M IC AND S E CT OR WORK 82 MODUL E 4 — E XT E NDING TH E BENEFITS : GEND ER -EQUITA BLE, ICT-ENA B LED A GR ICULTUR A L D EV ELOPM ENT REFERENCES AND FURTHER READING KenCall. http://www.kencall.com/index.php/site/kenya_farmers _helpline/. 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GSMA Development Fund and Cherie Blair Foundation for Women. 2010. “Women and Mobile: A Global Opportunity.� http://www World Bank, Food and Agriculture Organization, and International .cherieblairfoundation.org/uploads/pdf/women_and_mobile_a_ Fund for Agricultural Development. 2009. Gender in Agriculture global_opportunity.pdf. Sourcebook. Washington, D.C.: World Bank. Available at http:// worldbank.org/genderinag. Hahn, Jason. 2010. “Engendering the Grameen Foundation’s Work in Uganda.� BMGF Market Access and Farmer Productivity World Cocoa Foundation. 2011. “Sustainable Tree Crops Program— Online Community. Posted December 15. Ghana.� http://www.worldcocoafoundation.org/what-we-do/ current-programs/STCPGhana_Summary.asp. Jack, Billy. 2010. “The Adoption and Impact of M-PESA: A First Look at Some New Data.� GSMA Mobile Money for the Unbanked Blog. October 29. http://mmublog.org/blog/the-adoption-and- impact-of-m-pesa-a-first-look-at-some-new-data/. IC T IN A GR IC ULTUR E SECTION 2 Enhancing Productivity on the Farm S E C T I O N 2 — E NHANCING P RODUCT IVIT Y O N TH E FA RM 85 Module 5: INCREASING CROP, LIVESTOCK, AND FISHERY PRODUCTIVITY THROUGH ICT EIJA PEHU (World Bank), CORY BELDEN (World Bank), and SUVRANIL MAJUMDAR (World Bank), with input from TEEMU JANTUNEN (FM-International Oy FINNMAP) IN THIS MODULE Overview. How can farmers and governments use ICTs to increase agricultural productivity? At the local level, farmers can use ICTs to match cropping practices to climatic trends, use inputs and resources environmentally and sustainably, and cope with productivity threats. At the national level, public officials can adjust policies to reflect the data collected with ICTs, predict food supplies, and target social programs or promote yield technologies. Integrating ICT into national programs, creating a policy environment conducive for ICT investment, and designing digital systems that are compatible and common can help improve access for users, but social and financial challenges remain. Powerful yet inexpensive tools (and the financial support and training to use them) are not always available for small-scale producers in most devel- oping countries, although some are being developed and piloted. Conducting impact studies and sharing pilot project information can focus and speed development of such ICTs. The productivity goals and technologies used to meet them must match the IT capacity in the focus location. Topic Note 5.1: Achieving Good Farming Practices through Improved Soil, Nutrient, and Land Management. New ICTs help to characterize field conditions, sometimes at a very fine level of detail, and help farmers improve soil and land productivity. Correcting past damages and ensuring future yields will require farmers, governments, and development partners to mitigate the effects of climate change and environmental degradation. Significant, national progress with some of these technologies will require appropriate legal and regulatory frameworks, monitoring systems, and liability, access, and property rights laws and regulations, such as regulations on carbon limits.  Seeing-Is-Believing Project Improves Precision Farming  Improving Nitrogen Fertilization in Mexico  Monitoring Livestock to Prevent Pasture Damage Topic Note 5.2: Preventing Yield Losses through Proper Planning and Early Warning Systems. ICTs have consider- able potential to help even small-scale producers prevent losses after investments have been made by identifying and controlling pests and diseases, receiving timely weather information, and improving resource use. At the same time, ICTs allow governments and development partners to better monitor farm productivity, make more accurate projections, and plan better for the future. ICTs should be used to form two-way communication networks that gather and use local knowledge. Advances in ICT are best suited to helping farmers improve their management of one or two farm compo- nents at a time. Development partners and governments need to prioritize which yield technologies or agricultural strate- gies to introduce. Incentives for partnering with the private sector in large-scale ICT projects may enable the investment to reach smallholders. Taking stock of the technical capacity in rural areas will clarify infrastructure needs.  Radio Frequency Identification to Prevent and Treat Cattle Disease in Botswana  Digital Orthophoto Quads Form a Database for the Dominican Republic  Using Landsat to Assess Irrigation Systems in Mali E C O N O M IC AND S E CT OR WORK 86 MODU LE 5 — INC R EA S ING C R OP, LIV ES TOCK , A ND FISH ERY PROD UC TIV ITY TH R OUGH IC T OVERVIEW countries, has stagnated in developing countries. Several Agriculture is a vital sector for the sustained growth of regions, particularly East Asia, have seen rice yields decline by developing countries, especially agriculture-based countries 10 percent owing to climate change. The factors contributing such as those in sub-Saharan Africa. Equally important, a to low productivity are vast, including the coevolution of pests significant portion of the world’s population—86 percent of and pathogens, poor infrastructure, soil loss and degradation, rural inhabitants—still depends on agriculture for employ- waterlogging and salinity, the impact of climate change, lack ment and sustenance (World Bank 2007). Demand for food of storage facilities, and weak markets. Low investments in is increasing, too (box 5.1). The Food and Agricultural Policy agricultural research have reduced the scope for innovative Research Institute (FAPRI) estimates that an additional 6 thinking and technological development that could address million hectares of maize and 4 million hectares of wheat these contributing factors and improve productivity. plus a 12 percent increase in global maize and wheat yields Despite the dim outlook on meeting global food demand will be needed to meet demand for cereals alone in the in a sustainable manner, successful social, economic, and next decade (Edgerton 2009). Demand for meat is expand- technological developments have resolved productivity and ing as incomes rise, creating competition for land and other population issues in the past and may hold some hope for resources. Increasingly unstable weather and temperatures the future. For example, over the past 40 years, annual global require adaptive agronomic techniques to meet the demand. cereal production has grown from 420 million to 1.176 million tons (FAO 2000). In the 20th century, yields in the United The average maize yield per hectare in wealthy countries like States rose from 1.6 tons per hectare to 9.5 tons per hectare Canada is three times higher than the average maize yield in (Edgerton 2009). Similarly large increases occurred around low-income countries (FAO 2008). Growth in yields of rice, the world from the mid-1980s to early 2000s, when cereal the primary staple for a significant number of developing yields rose by more than 50 percent (World Bank 2007). BOX 5.1: The Food Security Challenge The lack of food. Increasing agricultural productivity and access to food are the primary development goals of the 21st century. Demand for food has reached new heights, and predictions of future demand are discouraging. Although growth in global demand for cereals will slow in the coming 40 years, demand in sub-Saharan Africa will balloon by as much as 2.6 percent per year.a The food-insecure population in sub-Saharan Africa is also expected to increase by up to 32 percent by 2020, whereas food insecurity is projected to decline in Latin America and Asia.b Overall, the world will need 70–100 percent more food by 2050, when the population increases to 9 billion.c The lack of nutrients. The lack of food is not the only problem. Almost one billion people were undernourished in 2010, and the lack of nutritious food has serious, long-term consequences for physical and mental health. More than one in seven of the world’s people do not receive enough protein and carbohydrates in their daily diets. These people constitute 16 percent of the developing country population.d The rising prices. Even with projected reductions in food insecurity, price spikes could keep staple food out of the reach of poor people. The 2008 price spikes led to starvation in many countries, hitting the net food importers—typically the poorest countries—the hardest. Ethiopia, Malawi, Tanzania, and Uganda experienced maize prices that were twice as high as in the pre- vious year. In Kenya and Mozambique, prices rose by 50–85 percent, according to the United States Department of Agriculture. Sharp and unexpected price spikes can provoke riots and political instability, aggravating an already precarious food situation. FAO recently predicted that the total costs of food imports would reach a near-record level in 2010, roughly US$ 1 trillion.e The changing climate. Climate change has made the challenges of food security and rising prices even more stark. Continued release of greenhouse gases increases the likelihood of unpredictable weather and temperatures. The severe 2010 droughts and fires in Russia, Ukraine, and Kazakhstan raised wheat prices substantially, leading to grain embargos in multiple countries. Russia’s wheat exports fell by 13 million metric tons in one year.e Pakistan’s floods are another warn- ing of the serious climate changes facing developing countries. The loss of soil nutrients that can accompany climatic extremes makes agricultural land less productive and adds to food insecurity. This prospect is ominous, considering the consistent drop in cereal yields over the last decade.f Source: Authors; (a) Rosegrant et al. 2006; (b) Shapouri et al. 2010; (c) World Bank 2007; (d) FAO 2009; (e) FAO 2010a; (f) Raloff 2010. IC T IN A GR IC ULTUR E S E C T I O N 2 — E NHANCING P RODUCT IVIT Y O N TH E FA RM 87 Agricultural productivity rose around the world because more Nonetheless, land can be used more intensively as well as land was cultivated and more land was cultivated more inten- more sustainably than in previous years, under innovative sively. Most of the gains were made through intensification. farming practices like precision farming, integrated pest man- Agricultural land expanded by only 11 percent between 1961 agement, agroforestry, and aquaculture (Burney, Davis, and and 2007 (FAO 2009), but between 1960 and 2000, genetic Lobella 2010). Sustainable land intensification, in which yields improvement and agronomic practices contributed to 78 per- rise but negative environmental impacts are curbed, provides cent of the increase in production (Lal 2010). a potential answer to food security and poverty reduction chal- lenges. The sobering consideration, however, is that this type Bringing more land into production is infeasible, not only of intensification cannot occur unless 1.5 billion farmers— because of the growing number of competing uses for land 85 percent of whom farm less than two hectares—obtain and but because of the environmental and social costs involved. use these and other new technologies (World Bank 2007). The drive for agricultural land has often resulted in deforesta- tion, reduced biodiversity, and provoked other forms of envi- If the goal is to achieve sustainable increases in the global ronmental degradation (Balmford, Green, and Scharleman food supply and economic growth, it is important to ask who 2005). It has also removed livelihood opportunities for some is responsible for producing food and commodities. Equally communities and elevated greenhouse gas emissions crucial, it is important to ask if they have access to technology, (Millennium Ecosystem Assessment 2005). the knowledge to use it, and the purchasing power to acquire it (Pretty et al. 2006). The world as a whole, all regions, and Given these constraints, development partners and govern- all nations depend on farm households to provide food and ments alike continually seek ways to raise crop yields with- by 2050 the world will ask farm households to supply double out using additional land. Raising yield per unit of land was the current amount of food. Today, the farmers that the globe observed during the Green Revolution of the 1960s and depends on are primarily smallholders with little access to 1970s, when the use of new cultivars (shorter, higher-yielding technology, limited knowledge, and few financial resources. varieties of wheat and rice) and improved practices (such as Notably, 43 percent are women (FAO 2011). Box 5.2 expands the use of fertilizer and irrigation) significantly increased crop on why gender is a critical consideration in designing and yields throughout most of Latin America and Asia. A similar implementing ICT for agriculture productivity. Green Revolution never arrived in sub-Saharan Africa but is sorely needed, given that almost all of the arable land is being Given that the future of food depends to such a great extent cultivated (Govereh, Nyoro, and Jayne 1999). on small-scale agriculture, governments and development BOX 5.2: Gender in Agricultural Productivity Exploring how gender disparities affect agricultural productivity is at the forefront of the development agenda. Women play sig- nificant and essential roles in agriculture in most developing countries. Their knowledge of local agrobiodiversity and conserva- tion practices makes them prime assets in the sustainable intensification of agriculture. Women are also responsible for process- ing most crop and animal products and are often more involved than their male counterparts in high-value production. In addition, females play the chief role in care-taking, making them essential to household nutrition and children’s (especially girls’) education. It is widely accepted that women invest more regularly, and to a greater extent than men, in the well-being of future genera- tions. These responsibilities add to a burdensome workload that involves time-consuming activities like fetching water and fuel. Despite women’s key contributions to agriculture and rural development, they face major challenges in accessing inputs like land, improved tools, and financial services. Cultural, social, and political barriers prevent women from using their assets effectively in the field. Women are much less likely than men to purchase fertilizer or machinery. Women also have lower incomes compared to men: They receive smaller salaries in formal positions, earn less from their livestock, and are typically involved in seasonal, part-time work, if any.a As a result, their productivity is minimized and below that of male smallholders. This situation represents a major challenge to increasing yields, because the majority of the world’s smallholders are female (75 percent in sub-Saharan Africa). Increasing agricultural productivity requires greater attention to gender dif- ferences and women in general. FAO asserts that if women had better access to resources, they could increase yields by 20–30 percent.a Development institutions should use ICT to address these issues—and of course make certain that women can access ICTs in the first place. Source: Authors; (a) FAO 2011. E C O N O M IC AND S E CT OR WORK 88 MODU LE 5 — INC R EA S ING C R OP, LIV ES TOCK , A ND FISH ERY PROD UC TIV ITY TH R OUGH IC T partners are focusing on how to increase productivity in use biophysical technologies appropriately (for example, nitro- sustainable ways through new technologies that smallhold- gen sensors can help to determine the correct fertilizer dose). ers can use. Irrigation management, biotechnologies, pest management and eradication, soil assessment, improved Similarly, governments or development partners may know nutrient and land management, improved market access, that farmers are using new yield-enhancing technologies and innovative storage facilities are all strategies for increas- but may not have the capacity to understand their impacts. ing smallholders’ agricultural productivity and improving Data-mining technologies, decision-support systems, and their access to markets, but the challenge lies in ensuring modeling software that can clarify the impacts and outputs of that smallholders can obtain and use them. ICT provides an yield-enhancing technologies are among the most promising incredible opportunity to reach farmers with the technical means of linking productivity and ICTs. information they require to increase yields. This module describes how farmers and governments can use ICTs in their strategies to increase agricultural produc- Linking Technology for Agricultural Productivity with ICTs tivity. The applications are quite broad: ICT can be used to This module discusses two sets of technologies and the links monitor pest thresholds in integrated pest management, pro- between them: vide relevant and timely information and agricultural services,  Yield technologies, like improved seed, crops map agrobiodiversity in multiple-cropping systems, forecast developed through biotechnology, tractors, pesticide, disasters, and predict yields. Crop losses diminish as farmers fertilizer, and irrigation systems. receive relevant and timely information on pests and climate  Information and communication technologies, warnings through SMS technology. like geographical information systems (GIS), wireless sensor networks, data mediation software, and short Just as important, information can (and should) go both message service (SMS). ways: Farmers can alert local governments or other relevant actors about serious crop developments like disease symp- Though they often work symbiotically at the farm level, and toms. This information makes it possible to avoid disasters though both are often required to achieve the kinds of develop- more effectively and improves economic management, both ment goals discussed in this module, the differences between of which are crucial for adapting to climate change. them need to be understood. Figure 5.1 helps to clarify them. ICT can also lead to more optimal use of inputs. Increasing When farmers have access to biophysical and other yield- producers’ knowledge of how to use and manage water, equip- enhancing technologies, frequently they do not know how ment, improved seed, fertilizer, and pesticide has improved the to use them effectively to address their productivity chal- intensification of farm practices around the world. In the long lenges (for example, they may have fertilizer but not know the run, and after collecting and analyzing multisite, multiyear data, optimal amount to apply). ICT can fill this gap in knowledge. ICT can be used to match cultivars to appropriate environments, Global positioning systems (GPSs), radios, mobile phones, increase the understanding of genotype-by-environment inter- digital soil maps, and other ICTs give farmers information to actions, and adapt cropping strategies to the changing climate. FIGURE 5.1: Defining the Relationship Between ICTs and Yield Technologies New technologies (Tractors, seed, pest management, biotechnology) ICTs ICTs (GIS, GPS, radio, wireless, cameras) (Data mining, SMS, decision-support systems) Source: Authors. IC T IN A GR IC ULTUR E S E C T I O N 2 — E NHANCING P RODUCT IVIT Y O N TH E FA RM 89 Each of these applications increases the profitability of agri-  Global positioning system (GPS) is a satellite-based culture, reduces transaction costs, facilitates climate change positioning and navigation system with three basic adaptation, and improves livelihoods for the rural poor. components: satellites that orbit the earth, control and monitoring stations on the earth, and the GPS receiv- Strategies to increase yields (including strategies to avoid yield ers owned by users. GPS receivers pick up signals losses) include initiatives like soil nutrient assessments, weather from the satellites, including precise orbital informa- forecasting, and crop or animal protection. The ICTs used to tion (latitude, longitude, and ellipsoidal GPS altitude) enhance these strategies are discussed in the topic notes. of a given object or location, as well as the time. GPSs can function in any weather and are free for public use Topic Note 5.1, “Achieving Good Farm Practices through (GPS.gov n.d.; GARMIN n.d.). Improved Soil, Nutrient, and Land Management,� focuses on  Satellite imagery is an image of Earth taken from soil testing technologies and tools that characterize field con- satellites in orbit. There are four types of satel- ditions, sometimes at a very fine level of detail. These tech- lite imagery: spatial (size of surface area); spectral nologies help farmers apply inputs appropriately and encour- (wavelength interval); temporal (amount of time); age the use of sustainable, profitable farming practices. and radiometric (levels of brightness)—which Topic Note 5.2, “Preventing Yield Losses through Proper capture a variety of variables about a given area of Planning and Early Warning Systems,� focuses on how varying size. The resolution (in meters) of these ICTs can be used to identify and control pests and diseases, images depends on the satellite system used and improve access to timely weather information, and improve its distance from Earth; weather can interfere mainly the design and management of irrigation systems. with satellite systems utilizing visible wavelengths of light. The cost of the technology depends on the Various examples and innovative practice summaries are satellite system used, on whether new or archive included; it should be noted that most of these practice imagery is purchased, and on possible georeferenc- summaries come from pilot programs in Africa, where many ing to a coordinate system. studies and projects are currently underway. Discussions of  Aerial photography and orthophoto mosaic. An lessons learned (covering cross-cutting themes, challenges, aerial photo is an image (once a photograph, now a and key enablers) conclude each note. Finally, the broad ICTs digital image) of the ground taken from an airplane, discussed in this module fall into three categories. They are helicopter, or radio-controlled aircraft at a given altitude. briefly defined in the sections that follow.1 Aerial images are presented as an orthophoto mosaic that is an alternative to a map. These images are higher Remote Sensing Technologies: Raw Data Collection in resolution (deci-meter) than satellite images, proving The first type of ICT that improves productivity includes tools useful for those who want more details of the terrain that collect agricultural data: such as crop conditions or land use. In addition, modern  Geographical information systems (GIS) collect digital aerial photography is georeferenced—that is, geographic data through computer hardware and each point has geographical coordinates, whereas sat- software to capture, store, update, and display all ellite imagery requires georeferencing to be geographi- forms of geographically referenced information by cally accurate and compatible with other geographi- matching coordinates and time to other variables. Data cal data (for example, in GIS) (T. Jantunen, personal sets formed by GIS constitute “layers� of informa- communication). tion (for example, on topography, population size, or  Laser scanning, or light detection and ranging agricultural household income) that can be merged (LiDAR), is an active airborne sensor using a set of and analyzed to establish relationships and produce laser beams to measure distance from an aircraft to maps or charts that visualize geographical traits (GIS features on the ground. Airplanes and helicopters .com n.d.). can be used for laser scanning. The data from laser scanning are three-dimensional at very high accuracy, 1 This is not a comprehensive list of all of technologies discussed and they also allow ground elevation under the tree in the module; nor is it a comprehensive list of all ICTs used canopy to be measured. The elevation accuracy of to increase agricultural productivity. The technologies reviewed here are the best known and most applicable to all yield tech- laser scanning data is much better than aerial photog- nologies or agricultural strategies. raphy, which makes laser scanning useful for accurate E C O N O M IC AND S E CT OR WORK 90 MODU LE 5 — INC R EA S ING C R OP, LIV ES TOCK , A ND FISH ERY PROD UC TIV ITY TH R OUGH IC T topographic mapping where elevation is critical. The  WiFi. Wireless local area network that allows various data can also be used to measure forest attributes devices to connect to the Internet remotely. such as the height and density of trees and thus  Knowledge management system. Electronic the volume (aboveground biomass) of the forest system that provides relevant information as it is (T. Jantunen, personal communication). requested. It should be noted that extension agents and advisory pro- Information Management Technologies: Making Sense grams are essential to disseminate knowledge about the of the Data ICTs discussed in this module, but this issue is not discussed The raw data collected above are fairly useless without ana- in detail here; see Module 6. lytical tools, both human and inanimate:  Spatial modeling (among other models). Closely related to spatial analysis or statistics, models KEY CHALLENGES AND ENABLERS are an attempt to simulate real-world conditions Increasing smallholder productivity is one the greatest and explore systems using their geographic, tasks in this century. Although the dimensions of the chal- geometric, or topological properties. GIS (which lenge are huge (growing populations, growing demand can also perform analysis), among other ICTs, has for food, rising poverty, economic stagnation, worsening increased opportunities to create models that pre- environmental degradation, and climate change), the grow- dict occurrences like yield growth and ecosystem ing number and sophistication of ICTs offers some hope degradation. of raising agricultural productivity, even in smallholders’  Data mining is the extraction of stories or pat- fields. Variable rate technology, GIS, GPS, satellite imag- terns from large amounts of data. Data mining can ery, and other data collection technologies have increased find four major patterns: clustering (discovering the information available about soil health, weather con- groups), classification (forming a structure), regres- ditions, and disease outbreaks, making very site-specific sion (finding a function), and associations (finding farming possible. The key to using these technologies to relationships). These analyses help to make sense of boost productivity is to remember that complementary agricultural data collected by remote sensors (Palace technologies are needed: Data analysis technologies (such 1996). as data mining or mediation software) and information  Data mediation is the process of taking many dif- dissemination technologies (such as mobile phones and ferent data sets to produce a single, coherent set radio) are essential to reaching smallholders effectively. of information. Data mediation software organizes Dissemination also includes the crucial human component: different types of data (such as hourly versus daily) Extension agents and farmers themselves must transmit and synthesizes different approaches to classifica- and share knowledge. tion (for example, the use of different classifica- tion vocabulary), helping to mediate differences As noted, productivity can be increased by expanding the between data sources—particularly those on the land available for agriculture or by making the land already in Internet. use more productive. Given current global circumstances, it seems that the second option is more likely to close the pro- ductivity gap and meet demand. In conjunction with technolo- Dissemination Tools: Getting the Results to the gies developed to raise yields, the use of ICTs such as those Stakeholders discussed in this module may do just that. Mainstreaming After analysis, the results must reach those who need to the use of ICTs in agriculture will also enable them to be used react to the findings, using tools like: more effectively. Integrating ICT into national programs, cre-  SMS. Text options that allow interaction between ating a policy environment conducive for ICT investment, fixed-line and mobile phones. and designing digital systems that are compatible and com-  Radio. transmission of information through electro- mon can help improve access for users. Conducting impact magnetic waves with low frequencies. studies and sharing pilot project information is also critical to IC T IN A GR IC ULTUR E S E C T I O N 2 — E NHANCING P RODUCT IVIT Y O N TH E FA RM 91 success with ICTs, as more specific lessons and impacts are and regions need to understand their potential uses to learned (IICD 2006). increase agricultural productivity. These stakeholders must learn how to tailor ICT solutions to macroeconomic needs In closing, it is important to emphasize that the benefits as well as local agricultural bottlenecks, while exploring how of ICT can be realized on multiple levels. As ICT capacities current infrastructure can harness relevant and appropriate expand, local farmers and communities as well as nations technologies. Topic Note 5.1: ACHIEVING GOOD FARMING PRACTICES THROUGH IMPROVED SOIL, NUTRIENT, AND LAND MANAGEMENT TRENDS AND ISSUES ASSESSING SOIL PROPERTIES FOR CLIMATE- RESILIENT AGRICULTURE Residue removal, tillage, overuse of pesticides and fertilizers, lack of crop diversity, overgrazing, overexploitation of natural Accurate soil analyses and improved farming practices are resources, and deforestation have led to unhealthy soils and needed urgently because productivity gains are highest yearly reductions in crop output. Greenhouse gases worsen in healthy soils and where pesticide, fertilizer, tools, and the situation. Changes in atmospheric temperatures (rising in machinery are used properly. Instruments for mapping and most developing countries) reduce crop performance. Above analyzing soil properties have proliferated in the last decade, 30°C, food and fiber crops develop at a faster rate, leaving increasing farmers’ knowledge about the soils on their farms less time for nutrient assimilation, biomass accumulation, and the need for climate-resilient agricultural practices. The and growth (Qaderi and Reid 2009). With lower yields and following section discusses these technologies and their continued soil mismanagement, economic growth slows associated challenges in broad terms. Subsections discuss drastically. This outcome is seen most vividly in countries innovative technologies specifically related to nitrogen and like Rwanda, Tanzania, Mozambique, and Niger, where costs carbon, two essential chemical components for successful associated with depletion of soil nutrients are estimated to soil conservation and climate change mitigation. account for 12–25 percent of the agricultural share of GDP (Drechsel et al. 2001). Digital soil maps are the most promising applications for visu- alizing soil properties and the gravity of soil nutrient deple- tion in a particular area.2 The International Working Group on Good farming practices maximize chances of a good harvest. Digital Soil Mapping (WG-DSM) defines digital soil mapping In the past, conventional farming practices treated entire as “the creation and the population of a geographically refer- farms as homogeneous units even though they are often vari- enced soil database generated at a given resolution by using able in productive potential. This view is changing as technol- field and laboratory observation methods coupled with envi- ogy allows producers to measure soil nutrient status, crop ronmental data through quantitative relationships� (Rossiter potential, pasture health, and water-use efficiency at specific 2004). A variety of technologies, including satellite remote sites within a field. ICTs like digital soil maps provide extensive sensors and cameras, can be used to survey soil and collect soil information that can be stored and accessed online. GPS, data to create digital soil maps. satellite imagery, remote sensors, and aerial images help to assess soil and land variations, and mobile applications and These technologies collect soil information faster than the Internet can disseminate the information quickly. With this methods that require scientists to take soil samples from array of ICTs, precision farming can be employed to optimize crop and livestock management. Until now, however, these techniques have been concentrated in highly mechanized, 2 For a diverse set of soil maps and data, see FAO, http://www.fao large-scale agriculture in industrialized countries. .org/climatechange/54273/en/). E C O N O M IC AND S E CT OR WORK 92 MODU LE 5 — INCR EAS ING C R OP, LIV ESTOCK , A ND FISH ERY PROD UC TIV ITY TH R OUGH IC T the field. In the latter methods, 80 percent of the work on Digital soil maps give practitioners a good picture of soil fertil- soil mapping is dedicated to soil identification and boundary ity, vulnerability, and potential. Statistically testing soil maps mapping, and only 20 percent of the time spent in the field against other data on human or policy variables (like demo- is left to gather data on more complex and equally impor- graphics, land administration, farming practices, and climatic tant topographical features, such as water-holding capacity changes) allows researchers and others to explore causes of (Manchanda, Kudrat, and Tiwari 2002). Innovative data col- soil damage and forms of restoration. lection technologies allow researchers to focus on a variety of soil features (box 5.3). At a national or regional level, models created from digital soil maps can be used to improve the selection of crops Practitioners can take the soil data collected from the technol- and varieties (based on which crops and varieties can ogies described in box 5.3 and use statistical methods, GIS, withstand stressful soil conditions). They can also be and soil inference systems to form “predictive soil maps. � used in early warning systems (predicting crop failure, These maps provide information on a soil’s capacity to provide for example), giving policy makers more time to react to ecosystem services (such as its capacity to infiltrate water, shortfalls in domestic and export markets. In addition, fine- produce crops, or store carbon), geographical representations resolution soil maps collected from a number of regions could of soil constraints (such as aluminum toxicity, carbon deficit, enable climatologists, hydrologists, and crop modelers to or subsoil restrictions), and a baseline for detecting subse- more accurately predict the effects of climate change or new quent changes and assessing their impact (AfSIS 2009). technologies on food production and environmental health. After soil data are collected, analyzed, and reflected in digital BOX 5.3: Using Remote Sensors and Similar Tools soil maps, results need to be shared with policy makers, to Measure Soil Properties scientists, and especially farmers, who would otherwise not have such detailed information on soil fertility in their A number of ICTs can be used to measure soil properties respective farming communities. Recent developments in for creating digital soil maps. Through near infrared and ICT increase the cost-effectiveness of soil maps: The spread short-wave infrared sensors, satellites measure spectral of mobile phones and Internet access can transfer relevant reflectance in soils on the ground. Different materials soil information even to remote locations. Collaborating with reflect and absorb solar radiation at a variety of wave- extension staff, farmers, agrodealers, and others, develop- lengths (see the figure). As a result, remote sensors can ment institutions can generate integrated soil fertility man- measure soil color, texture (sand, silt, and clay), organic agement schemes that improve a wide range of farming matter, moisture, salinity, and absorption processes by practices. Box 5.4 explains how these results can be applied. detecting and observing the solar radiation reflected (orbit sensing). Reflectance changes depending on the soil’s contents; for example, reflectance is low in areas Challenges in Soil Mapping with low silt content.a This technology gives researchers an accurate assessment of soil properties to use in GIS Although technological developments have improved and computer modeling for digital soil maps. access to digital soil maps, major technological and eco- nomic challenges remain to be addressed in soil science and development institutions. Broadly speaking, the impacts Sun Satellites and outcomes of using digital soil maps in smallholders’ fields have not been captured. Soil assessment techniques certainly contribute to the knowledge of production poten- tial, but the transformative effects of this knowledge (such as the adoption of new practices) have not been tested empirically. Another technical challenge is that some digital soil maps cannot be used in quantitative studies or in mod- els of food production or carbon management. Such stud- Soil Water Trees Buildings Crops ies generally require information on the functional proper- ties of soils, such as available water capacity, permeability, Source: Authors, adapted from http://www.crisp.nus.edu.sg/~research/ tutorial/optical.htm and Hoffer 1978. and nutrient supply, which many mapping procedures do not capture. Finally, individual soil map units are shown as IC T IN AGR IC ULTUR E S E C T I O N 2 — E NHANCING P RODUCT IVIT Y O N TH E FA RM 93 BOX 5.4: Collecting African Soil Data Over Time to small-scale farming in most developing countries, although Understand Soil Degradation Trends they are being developed and piloted. Even where technolo- gies are free to the public (like online satellite images), the The African Soil Information System (AfSIS) Project, led resolution is too low to capture soil characteristics on individ- by the International Center for Tropical Agriculture (CIAT), ual plots. Without accurate, affordable soil analysis technolo- collects data that will help address food insecurity and gies, resource-poor farmers are unlikely to adopt sustainable environmental degradation in sub-Saharan Africa. AfSIS and resource-optimizing farming practices. These practices takes advantage of recent developments in ICT—digital are often more expensive in the short term and are typically soil mapping, remote sensing, statistics, and soil fertility more labor intensive. Finally, disseminating knowledge about management—to analyze alternatives for protecting and soil management and farming practices is challenging. Soil rehabilitating soil. The project also tests a variety of farm- science is complex. Soil restoration activities vary based on a ing techniques in an effort to discover the most effective diverse set of properties and the agroecological system. Even methods to suit a wide range of conditions and situa- digital soil maps that create opportunities for soil assessment tions. The soil map website and mobile networks help to at the local level will require major dissemination and training ensure that the data collected can reach the complete efforts by extension staff and other stakeholders. spectrum of people involved in farming in Africa. One objective of the AfSIS research, therefore, is to These challenges are being overcome as technologies develop a baseline—an overview against which future advance. For example, GlobalSoilMap.net (along with others) results can be compared—using standardized tests and is compiling data on digital soil properties around the world procedures. By applying an agreed process of sampling into a comprehensive global map, providing access to a con- and analysis, scientists will build a comprehensive pic- sistent set of soil functional properties that define soil depth, ture of soil health and degradation in an area of sub- water storage, permeability, fertility, and carbon (information Saharan Africa covering 42 countries and more than needed for more quantitative studies). Placing maps online 18 million square kilometers. helps address some of the challenges related to dissemina- tion and smallholder relevance. GlobalSoilMap.net can be It is well known that farmers in Africa typically use little used in a variety of ways to suit a range of purposes: users fertilizer compared with farmers in the rest of the world. can view and manipulate the data online (for example, they One important initiative in AfSIS investigates methods can compare soil patterns with satellite imagery or land-use farmers can use to improve the fertility of their soils. The maps) or compose and print local maps by combining several trials compare the effectiveness of different fertilizers sources of online data (soil, climate, terrain, and infrastruc- used on a range of soils, the rate of fertilizer application, ture, among others). Development partners, soil scientists, and the integration of leguminous crops in rotations. and governments then have a firm basis for formulating poli- AfSIS information will also be used in a wider interna- cies on land use and can share this information with farmers, tional effort to produce a digital map of the world’s soil so that they can make management decisions such as how resources (the Global Digital Soil Properties Map Initiative). much fertilizer to apply. Scientists from soil information and agricultural develop- ment institutes in Mexico, Canada, and the United States work with the AfSIS team to produce the global map. NITROGEN MANAGEMENT Source: AfSIS 2009; ICT Update, “Farming From the Ground Up: Scien- In addition to digital soil maps, which are useful over larger tists Use the Latest Technology to Produce a Digital Soil Map of Africa,� April 29, 2010 (http://ictupdate.cta.int/en/Feature-Articles/Farming-from- areas, nitrogen-sensor technologies are used to manage the-ground-up, accessed July 2011). nutrients and prevent the overuse or underuse of fertilizer at the level of a single field and crop. Ineffective use of nitrogen fertilizers can limit crop biomass production and diminish car- discrete polygons with definite boundaries. The data used bon content in the soil. Conversely, optimal nutrient manage- in polygon maps are difficult to integrate with other forms ment raises yields, improves soil health (including soil carbon of data, which are grid-based (like satellite images and digi- storage capacity), and maximizes the cost-benefit ratio. An tal elevation models) (Hartemink et al. 2010) especially important consideration for smallholders is that reduced or more accurately timed fertilizer applications Social and financial challenges remain as well. Detailed yet can lower the cost of investing in fertilizer (see “Improving inexpensive soil analysis tools are not widely available for Nitrogen Fertilization in Mexico�). E C O N O M IC AND S E CT OR WORK 94 MODU LE 5 — INC R EA S ING C R OP, LIV ES TOCK , A ND FISH ERY PROD UC TIV ITY TH R OUGH IC T A key component of soil management is to maintain appro- developed by the same company, is another example of priate amounts of nitrogen in the soil to optimize crop sensory technology for nitrogen. This portable device, using growth and yields. Under certain weather conditions and no subsidiary equipment, measures the chlorophyll content in farming practices, nitrogen applied as fertilizer, which is the leaves of cereal and potato plants to monitor the need for highly soluble, can be lost from the soil. Successful nitro- nitrogen. N-tester is being piloted with high-value, nitrogen- gen management delivers enough nitrogen to the crop to demanding crops in a range of countries throughout northern optimize yield and profitability while minimizing losses to Europe, southern Africa, and North America. water and air. The timing, rate, and method of fertilizer application largely determine this optimization (Scharf and The tools used for nitrogen-sensor technology have similar Lory 2006). Over the years, agronomists have established challenges to those of digital soil technology. Databases and how much nitrogen various crops require. Using these information support systems have been established to raise measures, along with data collected from digital soil maps awareness and disseminate information to smallholders, and other soil data, farmers can apply the right amount of but widespread access is limited by the extent of network nitrogen at the optimal time to maximize crop performance. infrastructure and costs. Increasing the opportunity for com- munication among various stakeholders involved in farming Farmers in developed countries use technologies that measure (such as input dealers and extension agents) could improve nitrogen levels and determine rates of fertilizer application. the spread of information. Evidence shows that sensors like the Yara N-Sensor (http:// www.yara.co.uk/fertilizer/index.aspx) which measures light SOIL CARBON SEQUESTRATION IN AGRICULTURE reflectance from vegetation and adjusts fertilizer application accordingly, can increase yields by up to 10 percent over stan- The amount of organic carbon present in soil depends on water dard farm practices while reducing fertilizer costs and minimiz- availability, soil type, and other features. A primary factor affect- ing environmental losses (image 5.1). N-tester, a technology ing the soil’s carbon content is agriculture. Soil carbon in forests, crop land, or grazing pastures increases or decreases depend- ing on inputs that are applied, rates of deforestation, and farm- ing practices. In recent decades, producers’ poor land manage- IMAGE 5.1: Nitrogen-Sensor Technology ment practices have reduced soil carbon content. When soils are tilled, organic matter previously protected from microbial action decomposes rapidly and accelerates erosion and degra- dation. Improved farming practices like leaving crop residues in the field after harvest and no-till (where seed is planted without plowing) maintain soil carbon at higher levels (Lal et al. 2004),3 but these practices are not widespread. No-till is prac- ticed on only 5 percent of the globe’s cultivated land (Derpsch and Benites 2003). The overwhelming majority of vulnerable regions are those with lower organic carbon pools (figure 5.2). High levels of soil organic carbon are crucial to agricultural productivity and environmental conservation. Studies found that increasing the pool of soil organic carbon by 1 x 109 picograms of carbon per hectare can boost yields 20–70 kilo- grams per hectare in wheat, 10–50 kilograms per hectare in rice crops, and 10–20 kilograms per hectare in bean crops (Lal 2010). Despite rapid depletion of soil organic carbon, projections show that carbon can be restored to about 60–70 percent of natural levels. A calculation relevant to developing countries and poor producers is that they could grow up to 3 These practices incur some costs, especially in the short term. More fertilizer may be needed before soil organic carbon increases. Similarly, crop residues that are used for fuel or feed Source: Yara International ASA 2004. will no longer be available (Lal et al. 2004). IC T IN A GR IC ULTUR E S E C T I O N 2 — E NHANCING P RODUCT IVIT Y O N TH E FA RM 95 FIGURE 5.2: Organic Carbon, Percent in Subsoils Source: FAO. 40 million tons of additional food grain if they increased soil in agricultural land. The variability of sequestration is huge: carbon by only 1 ton per hectare. This productivity increase observed rates of sequestration range from 0 to 150 kilograms would be complemented by reductions in climate change of carbon per hectare in dry climates and 100 to 1,000 kilograms and GHG emissions (World Bank 2010a). of carbon per hectare in humid areas (Lal 2004). This immense variability implies that monitoring and verification technologies For these reasons, increasing soil carbon in farmers’ fields, are essential to carbon sequestration efforts, especially those especially smallholders’ fields, is integral to agricultural sus- that result in financial exchanges, like carbon markets. ICTs tainability and productivity. Soil carbon sequestration, or the are currently used to measure soil carbon sequestration for process of transferring carbon dioxide from the atmosphere large land spans. Digital soil maps are created (either through into the soil through crop residues and other organic solids remote sensors, satellite images, or models) to measure and (like mulch), is one technique to restore carbon levels in soils. monitor changes in carbon content. In-field assessment meth- This transfer helps offset emissions from fossil fuel combus- ods, neutron-scattering techniques, and satellite normalized tion and other carbon-emitting activities while enhancing difference vegetation indexes (which use different tools to soil quality, water-holding capacity, and long-term agronomic measure carbon pools from afar), as well as microwave sen- productivity (World Bank 2010a). Carbon sequestration can sors like JERS or ERSSAR, can measure soil carbon and other be accomplished through farming practices and land man- chemical components in the soil. Computer-based models are agement systems that add high amounts of biomass to soil also employed to predict soil carbon content (Lal 2010). Most while enhancing soil fauna activity. of these methods and technologies, along with free satellite Various technologies have been developed in recent years to data (such as that available through Landsat), are not detailed measure, monitor, and verify carbon content and sequestration enough for small-farm monitoring. E C O N O M IC AND S E CT OR WORK 96 MODU LE 5 — INC R EA S ING C R OP, LIV ES TOCK , A ND FISH ERY PROD UC TIV ITY TH R OUGH IC T Despite the growth in sensor and information technologies for their ability to participate in simple soil restoration and conser- carbon sequestration and restoration, significant barriers pre- vation techniques. Recent World Bank projects have shown vent smallholders from being included in efforts to monitor and that robust, clear, and cost-effective accounting methods that increase carbon sequestration. They include the poor develop- outline how carbon is measured and quantified are essential ment of carbon markets to date, especially in agriculture, and if projects designed for smallholders are to function well, as the continuing problem of developing methods that smallhold- is transparency in monitoring to assure farmers’ participation ers can truly access and afford. See the discussion below. (World Bank 2010a). In the future, development institutions can focus attention on reducing costs of ICT for soil car- bon (using coarse-to-medium resolution satellite imagery) Poor Carbon Market Development, Especially in Agriculture (Smukler and Palm 2009), improving land rights and enforce- Carbon markets were designed to provide incentives for ability (which will help regulate carbon trade), and determin- carbon sequestration and good farming practices. Since ing how financial incentives might be created (for example, 2002, developed countries and firms (primarily in Europe) through local carbon markets or payment for ecosystem have traded carbon credits (Lal 2004). Trading carbon cred- services) to ensure that smallholders can participate (box 5.5) its can encourage firms and farmers to increase soil carbon (World Bank 2010a). content and switch to more environmentally conservative systems. Despite major strides in carbon market develop- ment, serious challenges remain. A variety of economic and scientific factors make it difficult to set prices for carbon BOX 5.5: Rewarding Farmers for Carbon Sequestration credits, and assessing the biological and ecological rela- in Kenya tionship between carbon storage and climate change is even more daunting (Lal 2010; World Bank 2010a). Even The Kenya Agricultural Carbon Project is one of the first more important, agriculture and livestock are not included examples of a soil carbon project that not only addresses routinely in global carbon emissions treaties, which reduce issues like food security and climate change but also even large firms’ incentives to participate in carbon seques- provides financial assistance to rural dwellers. Kenya is tration. The Clean Development Mechanism of the Kyoto a prime candidate for carbon sequestration. Agriculture Protocol does not include land management, which prohib- contributes to over 50 percent of gross domestic prod- its carbon in agricultural soils from being traded in the Kyoto uct and one-third of the country’s population lives on compliance market (World Bank 2010a). Current efforts to ecologically fragile arid land. include agriculture in carbon trade institutions and policies Funded by the World Bank and designed by the Swedish will create financial incentives for governments, firms, and Cooperative Center-Vi Agroforestry, the project, located in farmers in developing countries to use soil carbon seques- Western and Nyanza Provinces, addresses most issues tration technologies. faced on arid land. On approximately 45,000 hectares of land, farmers adopt good practices that result in carbon Accessibility and Affordability of the Technology sequestration. These practices are expected to generate for the Poor 60,000 tons of carbon dioxide each year, increase yields, and allow smallholder farmers to access the carbon mar- Beyond poorly functioning carbon markets, other technical ket and achieve supplemental income through payment and social barriers prevent smallholders from adopting prac- of environmental services. Extension agents disseminate tices that increase soil carbon levels. As noted, the ICTs used technical knowledge, monitor and account for carbon to monitor, report, plan, and verify the amount of carbon sequestered, and build capacity in farmers’ organizations. sequestered are not appropriate for small farms. Monitoring sequestration is easiest when the potential is large, or around Once carbon is sequestered, the credits will be sold to 100,000 carbon tons (Bajtes 2001). This limitation is a major the World Bank’s BioCarbon Fund. Project developers challenge to carbon sequestration, given that “90 percent of expect that improved practices will result in an additional the potential for carbon capture can be found in the develop- US$ 350,000 in 2011 for the communities involved. The ing world, where land managers are largely poor farmers on project also promotes improved carbon management small plots of land� (Smukler and Palm 2009:1). policies and strategies that improve agriculture produc- tivity and sustainability at the national level. Most available ICT not only inhibits smallholders from partici- Source: World Bank Ghana Office 2010; World Bank 2010d. pating in carbon markets (or their development) but reduces IC T IN A GR IC ULTUR E S E C T I O N 2 — E NHANCING P RODUCT IVIT Y O N TH E FA RM 97 PERFECTING THE FARM THROUGH PRECISION raw data to a base station in the network, which transmits the AGRICULTURE data to a central computer that performs analysis and extracts Site-specific information that allows producers to make man- meaningful information. The base station acts as a door to the agement decisions about discrete areas of the field is called Internet (typically a local area network), providing operators precision farming or precision agriculture. Determining soil with remote access to the WSN’s data (Dargie and Zimmerling and crop conditions to improve whole-farm efficiency—while 2007). Because the networks can have multiple sensory minimizing impacts on wildlife and the environment—is the devices, the data can contain information on soil, climate, crux of precision farming. It has been used successfully in chemicals, and other relevant subjects. The wide application many developed countries and has the potential to change of WSNs allows them to be used not only in managing agricul- agriculture dramatically in this century. ture but in testing water quality, managing disasters, detecting volcanic activity, and conducting environmental evaluations. A variety of tools can be used in precision agriculture. GPS, satellites, sensors, and aerial images can help to assess These networks have several key features. First, WSNs have variation in a given field. Farmers can match input applica- both active and passive sensors. Active sensors release a tions and agronomic practices with information received from signal to detect a physical phenomenon like seismic activity these ICTs. Precision agriculture has been applied to many and radar. Passive sensors, which transform a physical phe- types of agricultural produce (hay, pasture, fruit, and cereals, nomenon into electrical energy, can detect a vast array of phe- for example) and to fisheries under many different climatic nomena, including temperature, humidity, light, oxygen, and conditions. Many of these efforts have been limited to large- chemicals (Dargie and Zimmerling 2007). Once sensors (for scale farming because of the significant investment required, example, temperature and soil moisture) are selected, node but applications under smallholders’ conditions are gaining locations are needed. Node density in developing countries visibility. Remote sensors, sonar-based technology, and other should be scarce to better guarantee network connectivity for ICTs can also improve aquaculture and livestock production. each node, reduce maintenance, and improve the network’s reliability (though it will limit field-mapping techniques). In addi- Essentially precision farming provides a framework of infor- tion, because low-income countries often experience poor mation for farmers to make management and production network and telecommunications connectivity, nodes will decisions. It can answer questions pertaining to land prepa- often require a “buffer,� where data can be rerouted or stored ration (including tillage depth and type, residue management in another node if connection to the base station fails. If an and organic matter, and reductions in soil compaction); seed active node fails to transmit data to the base, the network will (planting date and rotation, density and planting depth, culti- “wake up� the closest neighboring buffer node (Kabashi et al. var selection); fertilizer (nitrogen, phosphorous, potassium, 2009), providing a “multihop transmission� (see figure 5.3 for and other nutrients, as well as pH additives, application a basic illustration of the process). methods, and seasonal conditions); harvest (dates, moisture content, and crop quality); and animals and fisheries (pasture The design and implementation of WSNs requires a number management, animal tracking, and school identification). of important features. The nodes should monitor the field(s) continuously and for a significant period—it is best if main- Precision Farming through Wireless Sensor Networks tenance is not required for at least one cropping season (or Consistent advances in microsensing, smaller devices, and 4–6 months). The nodes should cover a wide area, be small wireless communication (Kabashi et al. 2009) have resulted to prevent animal and human interference (like stealing), and in new comprehensive technologies that offer even more tolerate harsh environmental conditions like monsoons and consistent and reliable systems for smallholders and policy extreme heat. Self-organization is also important: The net- makers alike. Wireless sensor networks (WSNs), which com- work should automatically detect removed or newly arrived bine many kinds of sensory data in one location, are some of nodes and adapt the messaging route (Depienne 2007). the most innovative technologies available for farming and WSNs offer extensive benefits to farmers producing plants agricultural planning. With the right components, these net- and animals. Agriculturalists can detect problems at an early works can form knowledge management systems, research stage and use more precise applications of fertilizer, water, and databases, and response systems that can guide local com- pesticide. Pastoralists can use WSN to monitor grazing land munities and governments in agricultural development. productivity. Placing wireless nodes in pastures allows farm- A WSN is a group of small sensing devices, or nodes, that ers to move animals according to environmental indicators like capture data in a given location. These nodes then send the soil moisture (see image 5.2 and IPS “Monitoring Livestock to E C O N O M IC AND S E CT OR WORK 98 MODU LE 5 — INC R EA S ING C R OP, LIV ES TOCK , A ND FISH ERY PROD UC TIV ITY TH R OUGH IC T FIGURE 5.3: Wireless Sensor Network (WSN), IMAGE 5.2: WSN Can Help Monitor the Quality of Distributed Collection Architecture Pastures DRK GPRS Server/KMS GPRS Source: Curt Carnemark, World Bank. produced can be used to improve crop management strat- Bluetooth egies and even develop knowledge management systems where best practices, crop disease identification, and planting techniques can be disseminated to smallholders. It is impor- tant to note, however, that although battery-operated nodes can function in areas with low power connections, changing WSN batteries in remote areas may prove difficult. Sleep settings and well-designed energy-conserving hardware can help pre- vent frequent battery changes (Dargie and Zimmerling 2007). Source: Kabashi et al. 2009. Wireless sensors can also be used in aquaculture. Though Note: DRK = Distributed Resource Kits GPRS = General packet radio service; KMS = Knowledge Management System. concentrated in developed countries, the use of underwa- ter wireless sensors has great major potential for develop- Prevent Pasture Damage� in Topic Note 5.1). WSNs can also be ing countries. Real-time information is crucial to effective used to manage irrigation and even to measure water quality. and profitable aquaculture. Akvasmart (see http://www .akvagroup.com), a Norwegian firm specializing in commer- Governments and development partners also benefit financially cial fish farming, uses a wide variety of ICT tools, including from WSNs. The technology is fairly cheap; some units cost sensors. Sensor systems can monitor oxygen, tidal current, as little as US$ 100 (Dargie and Zimmerling 2007). Developing temperature levels, fish behaviors, and water conditions. countries often experience power deficiencies, but nodes that Interestingly, Doppler pellet sensors with a built-in camera can operate on batteries and alternative energy sources do not need detect uneaten food in fish cages (figure 5.5). With this infor- electricity. Data are collected more easily. Whereas traditional mation, signals from the sensors can stop the feeding, allow- methods of collecting agricultural data for national planning ing for more specific care and feed purchase. The sensors can rely on occasional data logging by human operators, WSNs also adapt to the accurate feeding rate of the fish over time. can collect continuous data with minimal human interaction. Even though some ICTs like mobile phones or transceivers can Wireless sensors in water, just like those on land, can be cou- collect information faster in the field, they often have trouble pled with other cameras for more precise readings. Akvasmart cooperating with other software or Internet servers (Fukatsu offers a video image system called the Vicass Biomass et al. 2004). WSNs integrate the Internet into the software, Estimator that measures the height and length of the fish in making the data more user friendly and accessible. the pond. These figures can be used to estimate the weight of the fish. Other camera systems can be placed at the surface Data organization is vital to the output of WSN as well as or underwater. Monochrome cameras monitor the feeding other remote technologies. If countries want to use WSN process by “looking up� from the bottom. Color cameras can data to construct yield models or predict climate shifts, mak- monitor feeding and inspect the pond or cages and surround- ing sense of the data is pertinent to the design. The data ing environment. Remote access cameras can tilt, zoom, and IC T IN A GR IC ULTUR E S E C T I O N 2 — E NHANCING P RODUCT IVIT Y O N TH E FA RM 99 FIGURE 5.5: Akvasmart Doppler Pellet Sensor Network Doppler Pellet Sensor flow chart: Doppler CSU AkvaControl Feed System Source: Akvasmart (http://www.akvasmart.com/index.cfm?id=205626). Note: CSU = Cage Sensor Unit. pan according to the interest of the fish farmer. Each of these Agricultural information is typically captured spatially, making camera and wireless sensor systems can be accessed from a it more convenient to handle on a regional scale. GIS technol- personal computer and in some cases the Internet, where the ogy is promising because it allows for a more specific focus. data are collected. Variable rate technology has helped to identify weed infesta- tions and water stress in areas where crop pest levels are high, which improves targeting of chemical applications and Precision Farming through Satellite Technologies reduces waste associated with conventional blanket spraying Precision farming through satellite technology utilizes three (Munyua 2007). In addition to the potential productivity gains technologies: GPS (which can position a tractor within and cost savings, precision farming through satellite technol- a few feet in the field), GIS (which can capture, manage, ogy enables governments to study how agricultural practices and analyze spatial data relating to crop productivity and affect the ecosystem and develop better regulations. field inputs), and variable rate technology (which provides site-specific, “on-the-fly� estimates of field inputs for Once data are collected through GIS, scientists can interpret the site-specific application). The three ICTs combined provide images and analyze the soil and crop conditions to achieve bet- information that allows producers to apply inputs, such as ter results. Although satellite imagery cannot detect soil quality fertilizer and insecticide, precisely where they are needed directly like sensors can, it can record soil properties like light (figure 5.6). reflections and color. As crops start growing, precise pictures of the crops are captured more efficiently. The condition of the fully grown plants can then provide a clearer picture of the qual- FIGURE 5.6: Precision Farming through Satellite ity of the crops and what they require for successful harvest. Technologies Based on soil and crop conditions, farmers can estimate the precise amounts of seed, pesticide, and fertilizer they need, organize the distribution of inputs, plan which crops to plant Satellites in which areas, and make new investments. Knowing the size and shape of fields can also help rural communities plan for GPS + GIS future developments and investments like mechanization. Small, fragmented, or awkwardly shaped fields are difficult to work with a tractor or even animals. Above a certain minimum field size, it becomes cost-effective to use a tractor. Precision Automated machine farming provided through satellite imagery can determine this threshold before a community invests in new equipment. If an Large farming area area is suitable for mechanization, the benefits can be exten- sive. A GPS system that controlled tractor steering in Sudan Source: Adapted from GIS Development Net. cut planting time on the farm by 60 percent (Munyua 2007). E C O N O M IC AND S E CT OR WORK 100 MODU LE 5 — INC R EA S ING C R OP, LIV ES TOCK , A ND FISH ERY PROD UC TIV ITY TH R OUGH IC T Precision farming must also rely on an information dissemi- future yields, however, will require farmers, governments, nation process. Many rural areas in developing countries are and development partners to mitigate the effects of climate isolated from sources of new agricultural information; not change and environmental degradation on soils. With the surprisingly, farmers in these areas use few modern technol- expanding reach of ICTs, achieving this goal is more likely ogies. ICT is beginning to play an important role in providing in both developed and developing countries, but challenges advisory services in real time to farmers, which helps them remain in using ICTs to improving soil and land health. They plan and manage production, postharvest activities, and are discussed in the following paragraphs, along with some marketing more efficiently (see Module 9). Online informa- means of preventing or overcoming them. tion, consultation, and land suitability maps with web-based systems can play an important role in improving and updating To begin with, these technologies are relatively new even knowledge for producer organizations. in developed countries, and their potential is just being realized in developing countries. National awareness of the Management and information-sharing tools are also neces- importance and benefits of soil fertility takes time to develop. sary for effective precision farming based on satellite tech- As with carbon sequestration, ICTs to improve and maintain nologies. RiceCheck and the online knowledge bank at the the fertility and productivity of land will require new legisla- International Rice Research Institute (IRRI) (http://irri.org/ tion and policies outlining their use and providing incentives knowledge/training/knowledge-bank) are two of the most to achieve their benefits. Appropriate legal and regulatory advanced knowledge management tools in rice production frameworks, monitoring and verification systems, and liabil- today. Collecting, analyzing, and sharing information on ity, access, and property rights laws and regulations, such as individual plots has been difficult, but through RiceCheck, regulations on carbon limits in some countries, are necessary farmers can now monitor crops, have an online group meet- to make significant, national progress. Though not all technol- ings (often with agronomists), and compare their yields to ogies require such stringent legal frameworks, government regional benchmarks for high yields (for a description of involvement—specifically at the national policy level—often these benefits in Malaysia, see box 5.6) Through IRRI’s site, raises the visibility and adoption rates for new ICTs. connected farmers can also make a checklist for their daily activities and review plans for the entire growing season. Testing methods for soils vary and are still in development. For this reason, results are not always reliable and may be difficult to harmonize. Continued research—particularly in poor coun- LESSONS LEARNED tries where research is typically limited—will help to address This Topic Note primarily reviews soil and land productivity, these challenges. Developing countries also lack the financial particularly for the planning and preplanting stages of the footing and human capital to use expensive technologies that production cycle. Correcting past damages and ensuring require reliable operation and maintenance, even more so in harsh conditions. Strategic and long-term investments are needed to sustain improvements in soil and land productivity, BOX 5.6: Web-Based GIS for Paddy Precision Farming, especially if they are used in rural areas, where farmers who Malaysia may be required to maintain the ICTs have little time to do so. In Malaysia, an interactive, web-based GIS provides Farmers may not have a contemporary perspective on the information for precision farming and mapping in the environment because they have received little new informa- Sawah Sempadan rice-growing area in Tanjung Karang, tion. They may not have access to the country’s environ- Selangor (Che’Ya et al. 2009). The system allows farmers mental regulations (for example, prohibiting the burning of to access information about rice cultivation in their area. charcoal) or export requirements (such as limits on pesticide Because it uses open-source software, the system is residues). Extension education and campaigns through ICTs cost-effective for users. Farmers can print variable rate like radio will help farmers to make decisions related to envi- fertilizer application maps and historical data about yield ronmental policies and strategies. per paddy lot in previous seasons. This helps farmers analyze and reflect on the best strategy for the coming Despite the benefits of soil technologies, smallholders have growing season. Farmers can share information, espe- limited access to credit to use them. Even if they have access cially on fertilizer recommendations. A web presence to soil maps or nitrogen estimates, their adoption or adjust- also allows policy makers to access rice information. ment rates might be low. The inputs required to change prac- tices are often out of reach in poor rural areas. New credit IC T IN A GR IC ULTUR E S E C T I O N 2 — E NHANCING P RODUCT IVIT Y O N TH E FA RM 101 insurance schemes or financial rewards (like carbon markets) stage. When the ICRISAT team acquires a very high resolu- may reduce these monetary concerns. tion image (VHRI), they use computer software to enhance it, adding extra layers of information, and analyze data that Soil ICTs are not only new but complex. Farmers will require would be useful to farmers, such as variations in soil fertil- training and education to learn how to use them. Electronic ity, land size, and shape. Although a single VHRI image education (e-learning) is an option, but infrastructure must costs US$ 1,000–1,500, this method of analysis is often still be considered. In some cases, technologies function well cheaper than visiting every individual farmer’s field to collect with low bandwidth (WSNs are one example), but in others samples. Partnering with local NGOs and extension officers, they do not (the RiceCheck web interface is an example). The the SIBWA team visits the project sites to verify their find- productivity goals and the technologies used to meet them ings with the farmers. ICRISAT further analyzes the images must match the IT capacity in the focus location. using feedback from field research to build a database that they can use to develop an accurate map of each farm. Finally, the lack of institutional capacity poses other challenges for increasing soil and land productivity. Governments that want SIBWA partners translate the soil and image information into to incorporate the use of carbon markets or digital soil maps local languages and take the detailed maps back to individual into agricultural policy will have to make major adjustments farmers, who can use them to plan and manage their crops and investments in human resource capacity. Development for the coming season (image 5.3). The maps show areas of partners like the World Bank can support some of these efforts. low or high fertility inside each field. With an overview of soil and crop conditions, farmers can organize the distribution of fertilizer throughout their fields and estimate which crops will produce the highest yields. The SIBWA team works with the INNOVATIVE PRACTICE SUMMARY Seeing-Is-Believing Project Improves Precision farmers to determine the area of each field, making it easier Farming for farmers to calculate the amounts of seed, pesticide, and fertilizer required for each field. Small-scale farmers in West Africa are experiencing unpre- dictable changes in their agricultural land. Soils are infertile in Another advantage of VHRI is that it shows the direction of fur- many areas, reducing agricultural productivity and spurring fear rows on the field and areas where farmers can plow along the and uncertainty about future livelihoods among farmers. In the contour lines of the land. Using this imagery, farmers monitor past few years, many West African farmers have abandoned whether they were following the contour lines accurately and their land, which had been in their families for generations. efficiently to reduce soil erosion. SIBWA also involved local NGOs specialized in technology and extension services in It is imperative that smallholders obtain the knowledge about each community to help farmers make use of the data. changing soil and crop patterns that can help them manage their farms. The Seeing-is-Believing West Africa (SIBWA) IMAGE 5.3: Farmers Learn to Use Images of Their Project has been assisting farmers with accurate satellite Farms to Improve Productivity and information and imagery of their farm fields to help them Resource Management improve their agricultural practices. In June 2009, SIBWA started working with six farming communities in this region—three in Mali and one each in Ghana, Burkina Faso, and Niger. SIBWA is funded by the Bill and Melinda Gates Foundation through AGCommons, with supplementary funding from the United States Agency for Internal Development and Germany’s Federal Ministry for Economic Cooperation and Development (CODE-WA project). Led by scientists at the International Crops Research Institute for the Semi-Arid Tropics (ICRISAT), the SIBWA team pro- vided farmers with very high resolution satellite images (such as those on displayed on Google Earth) of their land. To get a more precise picture of soil fertility, scientists can analyze the images when the crops are at their peak growth Source: Work funded by AgCommons a program executed by the CGIAR. E C O N O M IC AND S E CT OR WORK 102 MODU LE 5 — INC R EA S ING C R OP, LIV ES TOCK , A ND FISH ERY PROD UC TIV ITY TH R OUGH IC T Data from projects like SIBWA can be used to develop growth crops (I. Ortiz-Monasterio, personal communication). Though and yield models by various means. Some rely on computer the cost of the diagnosis is expensive for smallholders, they simulation and include weather-related variables; others are needed significantly less fertilizer to maintain yields. Farmers statistical estimation models based on multiple regression who did not use the sensor applied 219 kilograms of nitro- equations. While no single model has proven satisfactory in gen per hectare for yields of 6.92 tons per hectare; those all conditions, both low- and high-resolution imagery have who used the sensor applied as little as 158 kilograms of benefits extending beyond the decisions of individual farm- nitrogen per hectare for yields of 6.91 tons per hectare. For ers. Low-resolution yield prediction can benefit food import- a 100-hectare farm, these savings add up to approximately ers and exporters as well as international and government US$ 7,500 per harvest (CIMMYT 2007). agencies concerned with global markets and prices. In this The technology not only reduces costs but reduces environ- regard, data collected from imagery in localized projects will mental damage: Nitrogen that washes into the ocean or local be useful in years to come. Although it remains too early to streams can harm ecosystems. CIMMYT is now working on analyze the impacts of SIBWA, the team expects that the a prototype pocket sensor that costs US$ 100–200, which farmers will use the data when planning for the new growing would facilitate more affordable nitrogen testing services for season (Traoré 2010; ICRISAT 2010). farmers in developing countries (I. Ortiz-Monasterio, personal communication). INNOVATIVE PRACTICE SUMMARY Improving Nitrogen Fertilization in Mexico INNOVATIVE PRACTICE SUMMARY The International Maize and Wheat Improvement Center Monitoring Livestock to Prevent Pasture Damage (CIMMYT) recently piloted a nitrogen sensor on 174 wheat Animal production in Australia traditionally required animals plots in Mexico’s Yaqui Valley, in collaboration with the State of to be restrained to a particular location. The cost of installing Sonora, Oklahoma State University, and Stanford University fences and maintaining them constitutes around 30 percent (image 5.4). A handheld device with an infrared sensor cap- of the cost of rearing one animal. Controlling animal location tures light to measure biomass and red wavelengths to mea- implies that farmers need to know about pasture conditions, sure chlorophyll content. These two measures determine because overgrazing leads to land erosion and nutrient deple- how much nitrogen a plant requires and thus the appropriate tion. With this in mind, researchers implemented a static and amount of fertilizer to apply (CIMMYT 2005). mobile node and camera network to remotely monitor the In Sonora, farmer-advisors purchase the sensors for US$ condition of grass throughout a field.4 Using solar panels, 5,000 and charge 7 pesos per hectare to diagnose farmers’ which generate much higher energy outputs compared to what is needed, the team observed soil moisture, greenness level, grass height, and grass coverage. IMAGE 5.4: Infrared Sensor Technology Increases the Cost-Efficiency of Nitrogen Fertilizer Consisting of an Atmega 128 microcontroller at 8 MHz, a Applications in Yaqui Valley Nordic NRF903 radio transceiver with a bit rate of 76.8 kilobits per second, a temperature sensor, and a soil moisture sensor, the commercially available static node (ECH20 capacitance- based) takes readings every minute with a ±2 percent error rate. Pictures of the pasture, troughs, and gates help to guide herdsmen in cattle movement. Additional mobile nodes con- nect directly to the cattle (around their necks). These nodes measure the livestock’s speed and turning rate, which improves tracking capacity. With these two technologies, scientists can build generic models of herd movement so that herdsmen can better manage resources in smaller pastures. Though the technol- ogy is focused on developed countries, these ICTs hold great potential for developing countries. Source: Iván Ortiz-Monasterio, CIMMYT. 4 This section draws on Wark et al. (2007). IC T IN A GR IC ULTUR E S E C T I O N 2 — E NHANCING P RODUCT IVIT Y O N TH E FA RM 103 Topic Note 5.2: PREVENTING YIELD LOSSES THROUGH PROPER PLANNING AND EARLY WARNING SYSTEMS TRENDS AND ISSUES more efficiently use the total amount of pesticides employed in ICTs can help to prevent and reduce losses in crops through crop protection. Farmers often are unaware of or cannot accu- well-planned investments and disaster warnings or time- rately assess plant diseases, which may reduce agricultural pro- sensitive alerts. Water management and disease or pest ductivity and raise costs if pesticides are overused. Concerns prevention are crucial to increased productivity. Advances in for animal health are similar. Herdsmen and fishermen spend ICTs such as GPS, GIS, mediation software, mobile phones, resources and time treating sick animals or identifying disease and satellite imagery have improved smallholders’ ability to outbreaks. Using a variety of ICTs, producers can better identify, adjust farm strategies and reduce risk. At the same time, track, and protect their crops, animals, and livelihoods. these advances allow governments and development part- One example involves fishing communities, which face major ners to better monitor farm productivity, make more accurate challenges in both wild and managed fisheries. They can use projections, and plan better for the future. ICTs to prevent fish diseases and protect local fishing grounds Water is a primary topic in this thematic note. Although water from unwanted visitors. Illegal, unregulated, and unreported is scarce and is becoming more so due to climate change, fishing poses serious obstacles to sustaining fish production. many water resources in developing countries are simply not Tools like GPS and mobile phones help fishers and govern- exploited. In fact, the vulnerability facing agriculturalists in ments locate poachers and report abuse (image 5.5). The South most of Africa is not the result of more variable rainfall but of Pacific Forum Fisheries Agency, for example, now has a vessel failure to access the water that is available. Only 2–3 percent monitoring system, which observes fishing grounds throughout of Africa’s water is used (Woodhouse 2009). Despite current the area, identifying and fining illegal fishers. The Sustainable efforts to tap water resources and adapt to climate change, Fisheries Livelihoods Program has helped Guinean fishing competition for water for household and industrial use will communities perform similar policing: local fisherman used steer water away from agriculture over the next few years in hand-held GPSs to calculate the position of poachers and then almost 60 percent of the world’s most vulnerable countries radio them to the coastguard. Benefits of these technologies (Ruttan 2002). Weather data, along with improved irrigation improve productivity indirectly by protecting the fish population. management and system engineering, are more important In Guinea, for example, incursions by industrial criminal vessels than ever. went down from 450 to 81 after just two years (FAO 2007). This note also discusses disease and pest control. Pests and Protecting farm animals from disease and other ailments also pathogens continually evolve, making it particularly difficult improves through ICT (see IPS “Radio Frequency Identification for small-scale farmers to increase productivity. Without inputs like pesticides and the knowledge to use them cor- IMAGE 5.5: Mobile Applications Help to Monitor rectly, pests and diseases reduce global harvests by upwards and Protect Fishers of 30 percent for maize, rice, and potatoes (Oerke 2006). ICTs like mobile phones and radio frequency identification technology are making it easier for farmers to know which diseases or pests to watch for and how to handle them if they are found. Pest eradication takes national and collective efforts. With ICTs, governments find it easier to reduce crop losses from flies or rodents and livestock losses from dis- ease like bovine spongiform encephalopathy (less formally known as “mad-cow disease�). PREVENTING DISEASE AND PEST DAMAGE Plant protection is important to save crops from diseases and pests. Increasingly, ICTs are used to help farmers reduce or Source: Edwin Huffman, World Bank. E C O N O M IC AND S E CT OR WORK 104 MODU LE 5 — INC R EA S ING C R OP, LIV ES TOCK , A ND FISH ERY PROD UC TIV ITY TH R OUGH IC T to Prevent and Treat Cattle Disease in Botswana� in Topic Note BOX 5.7: Crowdsourcing Prevents Cassava Losses 5.2). Sensors and other remote technologies can be implanted in Tanzania in an animal, providing herdsman with the exact location, health, and situation for livestock like cows, pigs, or sheep. In Tanzania’s Lake Zone, farmers from 10 districts who In addition to enabling easier identification and tracking, in the participate in the Digital Early Warning Network have future, some instruments may offer animal response systems. been trained to recognize symptoms of cassava mosaic disease and cassava brown streak disease. Armed with ICT is now being used in integrated pest management systems mobile phones, farmers “crowdsource� or send out to improve farm management in a variety of ways. The Low monthly text messages to researchers about disease Frequency Array Project (http://www.lofar.org) piloted in the incidence and receive disease control advice in return. Netherlands uses sensors to monitor and treat potato crops at When more than 10 percent of the members of a group risk for the fungus Phytophthora infestans, which causes late spot a disease that was not present previously or has blight. Because the development of late blight depends heavily increased in prevalence, the project team visits the area on climatic conditions (OECD 2009), capturing climatic condi- to verify the information and advise farmers what to do. tions like humidity and leaf temperature can help farmers pre- Each group of farmers—60 overall—is given a topped- vent onset of the disease by optimizing fungicide applications up phone card to text researchers. They meet monthly when climatic conditions warrant it. The project used three to discuss observations and send the text messages. instruments: sensor nodes, a server, and a decision support The network is part of the Great Lakes Cassava Initiative, system. One hundred and fifty sensor nodes, called TNodes, which aims to improve the livelihoods of more than a send soil information every 10 minutes through a TinyOS oper- million farmers in six countries of the Great Lakes region ating system to the server where data are stored (Baggio 2004). by tackling issues that affect cassava yields. Users can access this information directly, or receive texts or Source: Ogodo 2009. emails from the linking decision support system (LOFAR n.d.). The decision support system gathers information from the server along with other meteorological data from weather sta- tions to produce maps of the temperature distribution within to pest phenology models for 22 insects, 2 diseases, and 2 fields. The system sends alerts to the farmer that identify the crop species (Bajwa and Kogan n.d.). Pest alerts and control patches of land most susceptible to the fungus. techniques are announced and shared through social media like Twitter and email subscriptions. Similar alerts can be car- Information technologies are vital for disseminating crop ried out through SMS in developing countries (box 5.7). protection advice, but “crowdsourcing,� (using ICTs to lever- age widespread collaboration) can prevent diseases from spreading in the first place. If sufficient numbers of farmers WEATHER FORECASTING can text information on potential crop disease symptoms to Since 2000, new ICTs have given farmers and partners bet- researchers and receive appropriate disease control advice, ter opportunities to manage climate risk. WSNs and satellite researchers can also track and potentially forestall epidem- images capture raw data that can be transformed into informa- ics. If farmers or cooperatives have access to the Internet, tion useful for agriculturalists, helping them optimize decisions online bulletin boards or mailing lists can spread informa- related to choosing crops (based on water requirements), plant- tion on disease incidence quickly. Online decision support ing (timing and planting density), buying inputs, and applying fer- systems5 that link data to possible action, such as the one tilizer. Climate information can also improve insurance markets. used in the Low Frequency Array Agro Project, are becom- ing more popular because clients require minimal software, Remote sensors are presently the chief source of climate which reduces management and distribution costs. data. FAO’s Global Information and Early Warning System on Food and Agriculture tracks data and trends related Additionally, it is useful to link weather information to pest or dis- to food security, price risks, and natural disasters. FAO ease development over time. The Pacific Northwest Integrated analysts monitor climate conditions and changes around Pest Management website through Oregon State University the world using four satellites—FAO’s ARTEMIS (Africa (http://oregonstate.edu/dept/nurspest/) collects temperature Real Time Environmental Monitoring Information System), and precipitation data from 380 weather stations and links it Europe’s METEOSAT, the United States’ NOAA (National Oceanic and Atmospheric Administration), and Japan’s 5 See http://www.dssresources.com. GMS (Geostationary Meteorological Satellite). Every 10 IC T IN A GR IC ULTUR E S E C T I O N 2 — E NHANCING P RODUCT IVIT Y O N TH E FA RM 105 IMAGE 5.6: Satellite Image of Vegetation Changes from 1998 to 2004 (Red Indicates Decreasing Vegetation and Green Indicates an Increase) Source: FAO (http://www.fao.org/giews/english/spot4/sea/index.htm). days, ARTEMIS and METEOSTAT provide images that help losses to frost and pests in their orchards. Prior to the proj- to estimate rainfall for Africa. FAO maintains a database of ect, producers could not obtain weather information on time these images from the past two decades, which provides to cope with conditions that might harm their orchards. (See an opportunity to monitor significant changes in weather the IPS, “Weather Forecasting Reduces Agricultural Risk in over time (image 5.6). GMS produces similar information for Turkey,� in Topic Note 3.1.) Southeast Asia as well as information on crop densities at BOX 5.8: Modeling India’s Groundnut Yield through the subnational level (FAO 2010b). Beyond reflecting past Climate Information trends and predicting future ones, these satellites and others can provide up-to-date forecasts for farmers. These satellite In India, rainfed agriculture supports more than 60 per- images and others are free on FAO’s website. cent of the population. In the semiarid Anantapur region, rain typically falls from May to November, yet it varies This proliferation of weather information has made mediation significantly from week to week, resulting in frequent software extremely relevant to the productivity discussion. wet and dry spells. If a dry spell occurs at a critical plant- For example, MetBroker (http://www.agmodel.org/projects/ ing stage, groundnut yields decrease significantly. metbroker.html), software that pulls weather data from vari- ous sources and “hides� the differences between them, is Attempting to identify the most promising planting times, run on a computer permanently connected to the Internet. researchers used the PNUTGRO model to simulate From 5,000 stations from 14 databases in 7 countries, groundnut growth and yield. The model included veg- MetBroker averages forecasting data and makes it consis- etative and reproductive development, carbon balance, tent (Laurenson, Otuka, and Ninomiya 2001). This approach nitrogen balance, and water balance. The team collected has two benefits: Researchers and modelers can access climate data from the Anantapur Agriculture Research data from various harmonized sources for growth prediction Station, which has maintained records since 1962. Using models, and farmers can receive accurate real-time weather maximum and minimum temperatures, radiation, and information to make farming decisions. Clients—whether rainfall data over three decades, they found that the period farmers or modelers—can request a wide array of climate- between July 15 and August 10 is associated with very related information from MetBroker, including rainfall predic- high yields. Even more important, planting in two addi- tion, air temperature, solar radiation, soil temperature, and tional periods was also associated with high productivity, leaf wetness (Laurenson, Otuka, and Ninomiya 2001). Some suggesting that missing the earlier planting time does not mobile technologies permit farmers to access MetBroker mean that yields will be low for the entire season. and request information on weather conditions for a certain Like all models, this one is limited: it cannot be used to region, specific stations, and for a restricted period, even assess the profits or risks associated with management with low bandwidth. MetBroker provides an option for sum- strategies in times of crisis (like the El Niño weather pat- marizing data as well; users can opt to receive daily tempera- tern). Nonetheless, analysis of yields associated with differ- tures instead of hourly ones or receive expert summaries of ent climatic conditions can help to improve farming strate- weather information instead of complete data sets. gies for specific seasons and raise red flags for potential weather disasters after investments have been made. Another weather forecasting service, this one in Turkey, Source: Gadgil, Seshagiri Rao, and Narahari Rao 2002. relies on simple SMS information to help farmers prevent E C O N O M IC AND S E CT OR WORK 106 MODU LE 5 — INC R EA S ING C R OP, LIV ES TOCK , A ND FISH ERY PROD UC TIV ITY TH R OUGH IC T Mediation software was also essential for modeling ground- service online, he or she can request information and specify nut yields in India (box 5.8). Among other things, the models the method to receive it (via text, email, or recorded voice can help identify the best times to plant to evade drought. message). Eventually, the service will offer climatic informa- tion in Spanish, making it easier for native Spanish speakers Other forms of electronic weather information have potential to make interpretations and decisions (Lester 2010). In the to increase productivity, primarily by reducing risk. Many of future, similar ICTs can be used in rural areas of developing these systems are being tested in OECD countries. eWarn- countries. ing (http://www.landbrugsinfo.dk/Planteavl/Sider/pl_11_543 .aspx) was created through PlanteInfo (www.planteinfo.dk), a Danish initiative supporting decision making in national IRRIGATION MANAGEMENT plant production. eWarning provides farmers with real-time Major water resource constraints and climate change make weather information sourced by the AgriMeteorological it increasingly important for developing countries to develop Information System and Danish Meteorological Institute. In sound water-use policies and well-functioning, well-managed this particular system, weather information, including precipi- irrigation systems. Innovative water management systems tation and temperature, is divided into 10-square-kilometer and ICTs are helping to improve water use and expand inten- plots to provide farmers with specific climatic details on sive irrigation facilities. Though the number of technologies specific plots. for irrigation is vast, this section focuses on remote sensors, satellite imagery, and GPS cameras. Each of these technolo- In eWarning and other systems, farmers request information gies helps to connect the farmers to irrigation infrastructure through SMS in two forms. Push-type messages are regular, and guide governments in designing and implementing irriga- automatic updates obtained through a user subscription. Pull- tion strategies. type messages are sent only when a user requests them. When the user sends a letter (like “P�) in a message, the ICTs help address some of the challenges inherent in creat- eWarning system will respond with information on precipita- ing and sustaining irrigation systems in rural areas. The func- tion for the user’s geographical location. Surveys show that tion of water-user associations and their productivity improve the push-type message is most popular, providing farmers through ICTs like mobile phones and personal device applica- with an hourly forecast up to four times per day (Jensen and tions PDAs), which increase the quality and frequency of pro- Thysen 2003). ducers’ communication and interaction. Sharing information about emergency maintenance problems, entitlement rights, A Yakima software firm, in partnership with Washington State and management schedules is facilitated through ICT, which University, is customizing a weather website for specific allows real-time responses even between users from distant locations to provide weather alerts to farmers in the United communities. States. These alerts include frost warnings, wind speed with recommendations for pesticide spraying, and information Digital orthophoto quads (DOQs), a feature of GIS, are on disease outbreaks. After a farmer has registered for the digital maps that combine the geometric information of a IMAGE 5.7: Two Examples of Digital Orthophoto Quads Source: United States Geological Survey. IC T IN A GR IC ULTUR E S E C T I O N 2 — E NHANCING P RODUCT IVIT Y O N TH E FA RM 107 regular map with the detail of an aerial photograph (Neale Mali (see IPS “Using Landsat to Assess Irrigation Systems 2003) (image 5.7). DOQs provide spatial illustration of ter- in Mali� in Topic Note 5.2). This irrigation scheme, one of rain, including elevation and property boundaries, which can the largest is West Africa, produces 40 percent of Mali’s rice help delineate irrigation canals and drainage systems. Given crop and is key to national food security. the high and increasing value of rural land, it is worth noting that the resolution and georeferencing possibilities of most An equally intriguing ICT for irrigation management, specifi- satellite remote sensing systems are not yet adequate to cally for monitoring the construction of irrigation systems, is demarcate property accurately. Nonetheless, achieving GPS cameras. The cameras are relatively cheap and user greater accuracy and confidence in property boundaries is friendly; when a project worker photographs infrastructure, essential to limit the land disputes that ensure when new the camera records the date, time, longitude, and latitude irrigation schemes are designed and built. DOQs can help automatically. to achieve this higher level of resolution, but sometimes Afghanistan’s national Emergency Irrigation Rehabilitation at higher costs than other high-resolution imagery. (See Project (funded by the World Bank) was delayed owing to IPS “Digital Orthophoto Quads Form a Database for the increases in conflict in certain regions, but now GPS cam- Dominican Republic� in Topic Note 5.2.) eras provide “remote supervision.� As the irrigation project LiDAR (laser scanning) is a new technology for obtaining a unfolds, water users can photograph the construction pro- highly detailed digital terrain model or, if equipped with an cess to make contractors more accountable and prevent aerial camera, for topographic mapping. A digital terrain financial resources form being wasted. Users can report model is basically a digital representation of an area’s ter- infrastructure problems to the government without needing rain on a GIS that provides accurate position and elevation to travel through potentially dangerous regions. coordinates. It is compatible with other digital spatial data, Project workers have photographed over 650 locations is more accurate, and has a higher resolution than satellite where irrigation construction projects are being imple- images. Elevations can be accurate within 5 centimeters, mented. These photos, which are emailed or delivered by but accuracy typically is closer to 10 or 20 centimeters. In hand to ministry offices, serve as the baseline for progress comparison, digital aerial cameras only provide only about a (World Bank 2010b). A crucial point is that the technol- 20-centimeter horizontal resolution. ogy also enhances the participatory process, which may Because of its detailed imagery, a digital terrain model can improve user associations’ productivity once the irrigation be used for meticulous engineering designs such as those system is complete. for roads, drainage, gravity-fed irrigation works, and deten- tion reservoirs. These models can also be used more broadly to manage land and water (for example, in flood control). LESSONS LEARNED When combined through GIS with other data such as soil This note has described the many ways that ICTs enable real- types, these models can help to identify areas with potential time adjustments in agricultural practices to prevent losses slope instability and erosion, which are important for reduc- after investments have been made. These technologies also ing soil degradation and its negative impact on soil fertility. have considerable potential to help small-scale producers At the field level, digital terrain models can monitor and use scarce resources—water, nutrients, and others. Greater improve areas affected by waterlogging or flooding. Overall certainty about the weather, access to water, and disease laser scanning has considerable potential for planning irriga- outbreaks can lead to better decisions and higher productiv- tion schemes, designing infrastructure, managing irrigation ity. These ICTs also face important challenges, however, and operations, and modeling. Laser scanning is most useful for a number of considerations are important in improving their large areas because the aerial operation is expensive. The effectiveness, especially for smallholders. cost of laser scanning also depends on the accuracy of the data required, location of the area of interest, and level of Strategies to improve agricultural practices change dra- the data products (such as GIS layers). matically over time, just as strategies to manage irrigation have evolved from a nationally operated to user-operated Satellite data can also prove useful in managing irrigation model. ICTs aimed at preventing crop or livestock losses schemes, such as the enormous Office du Niger scheme in must adapt in line with these strategies so that users E C O N O M IC AND S E CT OR WORK 108 MODU LE 5 — INC R EA S ING C R OP, LIV ES TOCK , A ND FISH ERY PROD UC TIV ITY TH R OUGH IC T receive current information, communicated in the most technologies can help achieve economies of scale to reduce cost-effective way. costs (IICD 2006). Local knowledge is critical to improving smallholders’ pro- Just as they can be overwhelmed with too much new infor- ductivity. ICT not only creates opportunities to disseminate mation, farmers can be overwhelmed with new technology information but offers ways of capturing local expertise. Vast and become reluctant to use it. Advances in ICT are best differences in ecological and agronomic conditions make suited to helping farmers improve their management of one farmers’ knowledge indispensable. ICTs should be used to or two farm components at a time. Development partners form two-way communication networks, ensuring that local and governments need to prioritize which yield technologies knowledge is acquired and utilized. or agricultural strategies they would like to introduce and use ICTs to disseminate them to a broad population. The collective action problem is quite apparent in relation to the technologies described here. Water management and Limited financial resources are also a potential limitation to disease control require hundreds or even thousands of farm- using these technologies. Large agricultural firms and small- ers to perform the same tasks in unison. By strengthening holders alike need to control agricultural water, diseases, or information sharing, ICTs like mobile phones will increase pests. Incentives for the private sector to partner with gov- the potential for collective action. Self-policing may also be ernment in large-scale ICT projects may enable the invest- crucial to the technology’s success. ment to reach smallholders as well. ICTs to disseminate information like weather forecasts must match capacity in the focus area. Some phones handle INNOVATIVE PRACTICE SUMMARY complex messaging; others do not. Local ICTs may need to Radio Frequency Identification to Prevent and improve before some preventive technologies can work in Treat Cattle Disease in Botswana developing countries. Taking stock of the technical capacity Implemented by Inala Identification Control (IIC) in South in rural areas will clarify infrastructure needs. Africa, the Livestock Identification Trace-Back System in Gender is an important consideration when using ICTs to Botswana is one of the largest and more innovative forms prevent crop loss. Women are often already involved in main- of ICT for animal husbandry, involving over 300 million cat- taining water resources (for domestic and agricultural use) in tle.6 The system, which uses radio-frequency identification their families. Involving them in water management or pest (RFID), serves many purposes, including meeting beef import control projects increases their time to attend to other impor- requirements for the European Union (EU), the destination tant activities like education and generating income. It also for 80–90 percent of Botswana’s beef exports. The system often results in more effective management. also improves veterinary services and livestock health. Timing is a major concern in weather, water, disease, or pest A bolus with a unique ID number and a transponder is ICT. If information is sent too late, farmers may not have time inserted into each animal’s rumen. In the field, 300 fixed to adjust their farming strategy. If information arrives too readers scan cattle ID numbers and relay information to data- early, farmers may make changes that prove unnecessary or bases in 46 district offices. The bolus collects information even damaging. that allows both herdsmen and the government to monitor new registrations, look for possible disease outbreaks, iden- Information must be relevant and clear. Too much text or tify lost or stolen cattle, track weight gain, and plan for animal scientific data can conceal the message and cause confu- treatments. The database also provides the opportunity to sion. Only the most appropriate and contextually-based monitor trends over time. information (like forecasts) and updates should be provided. By continually interacting with farmers and monitoring their Technology like this offers many benefits. The bolus is safe responses to information, project managers can clarify which for animals, protected from criminal tampering, and can information needs to be sent and which does not. be recycled, which keeps costs low. The bolus also saves time: Ear-tags, the traditional form of identification, required Keeping information current is expensive. Collaborating with various agencies and creating common systems and 6 This section draws on Burger (2004). IC T IN A GR IC ULTUR E S E C T I O N 2 — E NHANCING P RODUCT IVIT Y O N TH E FA RM 109 herdsmen or veterinarians to handpick cows through a INNOVATIVE PRACTICE SUMMARY lengthy process. This system speeds up the identification Using Landsat to Assess Irrigation process. Herdsmen can optimize feeding schedules, select Systems in Mali certain bulls for breeding programs, and keep updated health The Office du Niger, a vast irrigation scheme dating to the records, which improves productivity directly by reducing 1920s in Mali, delivers water from the Niger River to approxi- susceptibility to disease and planning for yields. mately 80,000 hectares of rice fields The irrigation scheme is divided into five administrative zones, each responsible its own water management. The scheme’s senior staff use data INNOVATIVE PRACTICE SUMMARY from Landsat (which uses sensors to record reflected and Digital Orthophoto Quads Form a Database emitted energy from Earth) and other sensory data (including for the Dominican Republic air temperature and humidity) to analyze cropping intensity, Digital orthophoto quads (DOQs) can do much more than asses water productivity, and monitor equity in water distri- provide digital maps. By tracking the photos, it is possible bution.8 The data are also used to compare the productivity to create water databases that are crucial to the success of of fields at the head (beginning) of the water source with the irrigation. The databases can provide real-time information on productivity of the fields at the tail (the most distant point heavily and sparsely irrigated locations, statistics on water from the water source). use (and subsequently water users), drainage problems, and even salinity issues. Landsat has the ability to “see� a variety of colors as well as near-infrared, mid-infrared, and thermal infrared light, which This kind of database featured in a program to improve helps to distinguish differences between land plots or water users’ management of irrigation systems (PROMASIR) in sources. Initial results from Landsat images revealed critical Dominican Republic in partnership with the Inter-American similarities and differences between administrative zones Development Bank and Utah State University.7 By combining that irrigation managers can use to determine and address DOQs with other information (such as information on prop- the causes of yield variation (for example, low yields in fields erty ownership), the database enables water users to search near the tail). To gain even greater clarity on why irrigation for other water users, observe property boundaries, review may succeed or fail in a given location, remote sensing and monthly crop and water statistics, or obtain estimates of irri- GIS images such as those used in Mali can be coupled with gation water demand in certain areas. Users have access to other statistics like administrative boundaries, crop data, and more accurate information to use when updating their infra- poverty levels in GIS maps. structure as well as more insight into potential maintenance problems (such as a system breakdown upstream). Assigning water rights and water fees are also easier with databases. REFERENCES AND FURTHER READING In areas with greater demand, prices can be expected to rise. AfSIS (Africa Soil Information Service). 2009. Digital Soil Mapping. Finally, a system like this can also prevents conflicts over http://www.africasoils.net/methods/dsm, accessed November water, because all users have access to the same factual 2010. information, such as price information and plot size. Baggio, A. 2004. “Wireless sensor networks in precision agricul- ture.� Swedish Institute of Computer Science, http://www. 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IC T IN A GR IC ULTUR E S E C T I O N 2 — E NHANCING P RODUCT IVIT Y O N TH E FA RM 113 Module 6: ICTS AS ENABLERS OF AGRICULTURAL INNOVATION SYSTEMS STEPHEN RUDGARD (FAO), PETER BALLANTYNE (ILRI), RICCARDO DEL CASTELLO (FAO), PHILIP EDGE (Consultant), MAY HANI (FAO), AJIT MARU (GFAR), ESTIBALITZ MORRAS (FAO), KARIN NICHTERLEIN (FAO), ENRICA PORCARI (CGIAR), SOPHIE TREINEN (FAO), Topic Note 6.3: VENKATRAMAN BALAJI (Commonwealth of Learning) and K. BALASUBRAMANIAN (Commonwealth of Learning) IN THIS MODULE Overview. Research, extension, and advisory services are some of the most knowledge-intensive elements of agricul- tural innovation systems. They are also among the heaviest users of information communication technologies (ICTs). This module introduces ICT developments in the wider innovation and knowledge systems as well as explores drivers of ICT use in research and extension. Topic Note 6.1: ICT in the Agricultural Research Process. This section spans the entire agricultural research process from engaging partners and stakeholders, through data collection and analysis, collaboration and knowledge access, publishing and dissemination, to feedback and interactions with rural and other end-user communities. In each of these areas, ICTs are making agricultural research more effective.  Advances in ICTs Increase the Utility of African Sites for Testing Varieties  KAINet Kenya Knowledge Network Anchored in Partnerships and Collaboration Topic Note 6.2: Using ICT in Extension and Advisory Services. This note looks at ways ICTs are helping transform extension, including the emergence of public and private innovators and startups with business models built around ICT- enabled advisory services. It examines how traditional and new ICTs are being used to reach rural communities, enable the creation and sharing of rural communities’ own knowledge, and support connections of rural communities to mar- kets, institutions, and other sources of information and advice.  Farm Radio International Involves Men and Women Farmers  E-Extension in the USA and Philippines  TECA Uganda Exchange Group Offers Practical Advice for Smallholders  Participatory Video and Internet Complement Extension in India Topic Note 6.3: E-learning as a Component of Agricultural Innovation Systems. Learning through ICTs can provide fresh approaches that are learner-centric, which engages producers and their communities in designing and implement- ing the learning experience. It can also make it easier to maintain quality by supporting feedback mechanisms and ensur- ing appropriate accreditation and certification processes. This note also explores some of the adaptations and strategies required for e-learning to succeed in rural areas of developing countries.  Lifelong Learning for Farmers in Tamil Nadu  Innovative E-Learning for Farmers through Collaboration and Multi-Modal Outreach OVERVIEW and farmers plant it. The problems with this approach have The traditional approach to fostering innovation in agriculture been widely acknowledged. It can encourage research is often described as linear: Researchers develop an inno- and extension to act independently of one another and of vation such as a disease-resistant wheat variety, extension farmers, to the extent that each group becomes relatively services advise farmers through demonstrations and other isolated. A linear approach can exclude other stakeholders methods that a more disease-resistant variety is available, in the agricultural sector such as universities, agribusiness, E C O N O M IC AND S E CT OR WORK 114 MOD ULE 6 — ICTS A S ENA B LER S OF A GR ICULTUR A L INNOVATION S Y S TEM S traders, and nongovernmental and civil society organizations. connects millions of rural people to sources of information. It does not reflect the many well-documented ways that agri- In both cases, ICTs empower individuals and institutions to cultural innovation actually occurs, such as experimentation create, access, and use knowledge and to communicate in by individual farmers, informal networking among farm com- unprecedented ways. In agricultural extension and education, munities, private sector participation, collaboration among from universities to farmers’ fields, ICTs facilitate learning. extension workers interested in a particular idea, collabora- tion between researchers and farmers, and the adaptation by ICT-Enabled Tools all of these actors of knowledge and practices from domains outside agriculture. As ICTs have developed and become more pervasive, they have become more relevant in agricultural innovation sys- A few decades ago, practitioners began to use the concept tems. The most pertinent developments for research, exten- of innovation systems to explain noteworthy economic per- sion, and e-learning are reviewed briefly below. formance driven by a strong orientation to innovation in some developed countries.1 An innovation system can be defined First and foremost, the increased pervasiveness of telecom- as “a network of organizations, enterprises, and individu- munication networks has enabled ICT to reach rural areas. als focused on bringing new products, new processes, and Technologies that have long been applicable to poor agricul- new forms of organization into economic use, together with tural communities have not been effective simply because the institutions and policies that affect their behavior and they are difficult to get into the hands of rural users. Expanded performance� (World Bank 2006). This thinking recognizes telecommunications networks have increased the speed, that interactions of people and ideas catalyze innovation and reliability, and accuracy of information exchange—through that innovation consists of generating, accessing, and put- text, voice, and applications—between farmers and other ting knowledge into use (Hall 2006). It also recognizes the stakeholders. Low-bandwidth networks have also started importance of institutions and policy in fostering innovation. to trickle into rural areas in developing countries, creating opportunities for farmers to connect with extension work- ers, agribusiness, researchers, and each other. For example, ICTs and Agricultural Innovation Systems telecommunications networks have facilitated e-learning by ICTs appear ideally suited to the task of enhanced interaction liberating it from the classroom and from the need for the because they can expand communication, cooperation, and user to invest in anything other than a mobile phone. Power ultimately innovation among the growing array of actors in lines and power sources critical for the regular use of and agriculture. ICTs, especially mobile phones, can and do drive upkeep of ICTs also continue to expand. (See Module 2 for participatory communication, including communication from more information on the growth of this infrastructure.) those on the margins of traditional research-extension pro- cesses, and they are often the key instruments that organiza- Second, cloud computing services have immense potential tions use to deliver services to larger numbers of rural people to improve agricultural innovation systems. The advantage of than they could reach before. ICTs are fundamental to the cloud computing is that it offers pooled and elastic resources business models of the “infomediaries� and “brokers,� pub- on demand over the Internet (Porcari 2009). More specifi- lic and private—extension agents, consultants, companies cally, cloud computing has been described as “a model for contracting farmers, and others—emerging to broker advice, enabling convenient, on-demand network access to a shared knowledge, collaboration, and interaction among groups and pool of configurable computing resources (e.g., networks, communities throughout the agricultural sector. servers, storage, applications, and services) that can be rapidly provisioned and released with minimal management Numerous electronic tools increase interaction among the effort or service provider interaction� (Mell and Grance actors involved in agriculture. On a macro level, e-Science 2009). Over the past few years, these services have created (e-Research) draws on increasingly connected and extensive opportunities for data sharing initiatives that were once pro- digital infrastructure to facilitate collaboration and knowledge hibitively expensive for most institutions to explore, let alone exchange nationally, regionally, and globally. On a micro students conducting master’s or doctoral research. They level, m-Agriculture, powered by increasingly affordable have also eased the data collection and aggregation process, mobile digital devices such as phones, laptops, and sensors, which is critical for research, extension, and education. For example, a website such as Amazon Web Services can 1 See Freeman (1987) and Lundvall (1992). be used to acquire a Windows or Linux server by specifying IC T IN A GR IC ULTUR E S E C T I O N 2 — E NHANCING P RODUCT IVIT Y O N TH E FA RM 115 how much processor, bandwidth, and storage capacity are BOX 6.2: Social Media Support Research Project needed. The required resource is made available immedi- Review and Reporting ately over the Internet, and the cost is based on how long the server is used. Cloud computing’s elasticity and variable The System-wide Livestock Program of the capacity make it possible to process very large datasets, Consultative Group for International Agricultural which can also be shared with anybody with adequate con- Research uses social tools to capture, record, and nectivity (box 6.1). share discussions at its project review and planning meetings. A wiki was used to plan and report on meetings. A pre-meeting survey among participants BOX 6.1: Datasets on Amazon Web Services was conducted using SurveyMonkey. Scientists in remote locations were brought in using the “webex� Public Data Sets are a centralized repository on Amazon Internet conferencing system. During the meeting, all Web Services (AWS) for public data that can be seam- the resources prepared and shared were published lessly integrated into AWS cloud-based applications. online. The results of the intense “internal� small AWS hosts the datasets at no charge for the community. group discussions were recorded on video and shared As for all AWS services, users pay only for the comput- on the project website. A key feature is the use of ing and storage they use for their own applications. social “reporting� to share information that normally remains internal and closed. Previously, large datasets such as those in the Human Genome Project and United States Census required Similarly, the Fodder Adoption Project organized an end- hours or days to locate, download, customize, and of-project meeting for project participants from Ethiopia, analyze. Now anyone can access these data from their Syria, and Vietnam to draw lessons and share results. Amazon Elastic Compute Cloud (Amazon EC2) and The organizers used web tools to document and share start their computations within minutes. Users can all the notes, contributions, and discussions at the meet- also leverage the entire AWS ecosystem to collabo- ing. By the end of the meeting, the wiki contained the rate easily with other AWS users. For example, users essence of the workshop report (http://fodder-adoption- can produce or use prebuilt server images with tools project.wikispaces.com/Final+Workshop). Video inter- and applications to analyze the data sets. Users can views recorded the group discussions (usually this tacit also discuss best practices and solutions in the dedi- knowledge is lost) and a series of blog posts shared the cated Public Data Sets forum (http://aws.amazon.com/ meeting “live� with wider audiences. publicdatasets/). In these cases, web applications directly contribute to Source: Authors. research meeting organization, reporting, and dissemi- nation. The tools are free or inexpensive. They require Internet connectivity (at a high speed if video is part of Third, the movement toward open access and public the package), some digital skills among meeting organiz- involvement through online or mobile tools also favors ers and participants, a willingness among participants to agricultural innovation, not only in research institutions but embrace an extended digital toolkit and workflows, and more broadly among all participants in an innovation system. an open attitude to sharing “internal� discussions more Governments, organizations, and even the private sector broadly. Source: Author; see also http://vslp.org and http://fodderadoption are sharing data and reports with the public and one another .wordpress.com. through ICT. As ICT has alleviated the difficulties inherent in interactions among people in dispersed locations, knowl- edge sharing and multistakeholder engagement are widely acknowledged to have increased. Research can involve Note 6.3, make it much easier to develop and transmit con- more expert opinion and diversity (box 6.2). Advisory ser- tent for e-learning programs. vices can tap a much wider range of current expertise and provide advice in a much more targeted way to those who Finally, new forms of knowledge brokering have been made need it. With Internet access, e-learning can occur even possible through ICT (image 6.1). Knowledge brokering in the absence of a formal distance education program, has always been an integral part of agricultural innovation and web platforms such as agropedia, discussed in Topic systems (box 6.3). The creation and passing of information E C O N O M IC AND S E CT OR WORK 116 MOD ULE 6 — ICTS A S ENA B LER S OF A GR ICULTUR A L INNOVATION S Y S TEM S IMAGE 6.1: Specialized Knowledge on Farm Practices Can Result successful than the involvement of in Profitable Enterprise public services with their very broad mandates, but until recently the high costs of such services limited private advisory initiatives. An issue that policy makers need to examine, however, is how public advisory ser- vices and other forms of knowledge brokering will meet the needs of rural people who are not linked into the innovation system through ICT, either because they cannot access it or do not yet know how to use it effectively. KEY CHALLENGES AND ENABLERS Source: Dominic Sonsoni, World Bank. The topic notes and innovative prac- tice summaries in this module dem- between farmers and extension agents, farmers and onstrate the potential for ICTs to enable agricultural innova- researchers, and researchers and extension agencies, among tion systems to develop and function more effectively, but others, is critical to innovation and increased productivity enormous challenges in pursuing this agenda remain. Two through adoption of better farming practices and technolo- key enablers—policy change and collective action (among gies. Knowledge brokering is becoming a specialization— research institutions, extension agents, governments, and sometimes a profitable one. farmers)—are critical to using ICTs such as mobile phones and the Internet in agriculture and enabling the many rela- On a more basic level, as digital literacy and the availability tively small, scattered innovations in the agricultural sector of ICTs increase, farmers, traders, and others in developing to add up to major impacts. Policy change can spur develop- countries are offering information services for a small fee. ment of the underlying infrastructure for ICT-enabled informa- This private activity can widen the availability of informa- tion sharing, and collective action, facilitated by digital tools, tion in rural areas and reduce pressure on public extension can push the agricultural agenda forward. agents, who are charged with getting timely and locally relevant information to farmers. Private sector involve- Just as roads are essential for rural development, digital ment in advisory services has almost always been more connectivity is becoming essential for research, extension, BOX 6.3: Innovation Brokers at the Heart of Networking and Communication in Agricultural Information Systems Innovation brokers are teams of specialists that combine a strong background in agricultural science with knowledge of business, marketing, and/or the creation of innovation networks. Innovation brokers support linkages among actors in the agricultural innovation system and help farmer organizations and private firms manage projects. They teach courses on the management of innovation, assess the actors’ innovation capabilities, propose actions to strengthen them, and may facilitate the implementation of the recommendations. Innovation brokers may also help governments and donors to develop their own innovation capabilities and to explore new instruments to foster innovation. NGOs, specialized ser- vice providers, or public organizations (including research or educational institutions) can play this role. Klerkx, Hall, and Leeuwis have concluded that “innovation brokerage roles are likely to become relevant in emerging economies and that public or donor investment in innovation brokerage may be needed to overcome inherent tensions regarding the neutral- ity and funding of such players in the innovation system.� Source: Adapted from World Bank 2012 and Klerkx, Hall, and Leeuwis 2009. IC T IN A GR IC ULTUR E S E C T I O N 2 — E NHANCING P RODUCT IVIT Y O N TH E FA RM 117 and e-learning. Connectivity does not depend on national feedback systems and accountability. ICTs can help people policy alone; it is affected even by the policies prevailing to learn the interactive skills (collaborating and negotiating, in an institution. Researchers may want to disseminate for example) that have proven critical in effective innovation results more widely and increase their usefulness, for systems, and they can help them to acquire agricultural and example, but they can be inhibited by institutional informa- technical skills as well. tion technology (IT) and intellectual property policies that limit opportunities to tap into the open access movement.2 Building research networks, data repositories, and expert If national research systems do not digitize their research query systems and engaging in large data collection efforts results and create repositories for them, other organiza- require effective management and collaboration. In addition tions are limited in their ability to access and share find- to committing resources, the right climate and culture must ings in a wider network. Extension programs, other agri- be created, including at senior management level, for collab- cultural services, and producers suffer the consequences. orative planning, knowledge sharing, communication, cross- Appropriate institutional policies and general e-readiness functional teams, and critical review of current information are essential to build innovation cultures where ICTs thrive and communication systems. and are put to good use. ICTs are also fundamental to enabling advisory services to Even if all farmers in poor countries own phones, however, fulfill their primary role in an agricultural innovation system, this connectivity will not ensure that extension agents and which is to serve as a central node for knowledge sharing and researchers will listen to what farmers have to say and adapt innovation brokering (including brokering new partnerships). their programs accordingly. Nor will it guarantee that farmers The nature of farmer engagement, two-way communication, can use any knowledge they may obtain; as Topic Note 6.3 information requirements, and the complexity of extension indicates, farmers learn best when the information is care- networks all make the design of advisory service programs fully targeted to their needs and when multiple stakeholders critical to their ultimate success. In designing advisory pro- provide incentives for learning (for example, in the form of a grams that use ICTs, the basic requirements for developing mobile phone for learning any time and any place, and a bank an ICT service must be considered, including ICT policy, rural loan to put their new knowledge to use). Investments in agri- connectivity, and user fees; the information and communi- cultural innovation systems give particular attention to building cation needs of potential stakeholders; functional linkages; the capacity to innovate (especially the capacity to share and existing communication channels and knowledge sources; use knowledge) and to the enabling environment that fosters lessons related to previous information dissemination and innovation. networking efforts; farm diversity; and demographic, politi- cal, and environmental demands (image 6.2). ICTs to facilitate communication and engage many stakeholders are fundamental to such IMAGE 6.2: ICT Must Be Complemented by Other Inputs Like an approach. Much stronger farmer repre- Improved Seedlings sentation and influence are also needed in the forums where research and program pri- orities are determined. Specific reforms and incentives are needed for service providers to become more accountable to clients, and ICTs can make a difference by strengthening 2 They may also be limited by inadequate poli- cies on intellectual property. The urge to pro- tect research results can be strong, especially if they represent a potential source of income for impoverished national research programs. Many public organizations, lacking expertise in intellectual property management and protec- tion, opt for the most restrictive policy on infor- mation sharing, even though they recognize that it is detrimental to innovation (see World Bank 2012, Modules 6 and 7). Source: Dominic Sansoni, World Bank. E C O N O M IC AND S E CT OR WORK 118 MOD ULE 6 — ICTS A S ENA B LER S OF A GR ICULTUR A L INNOVATION S Y S TEM S Given that agricultural innovation systems are generally quite equipment) as well as staff capabilities (in software development, complex and diverse, it is often challenging to identify who has IT understanding) in line departments, local government offices, been excluded or which targets have been missed. As agri- or research centers are two critical prerequisites to implement- cultural innovation systems become more digitally engaged, ing effective technical services. Public-private partnerships can there are growing opportunities to use ICTs to monitor them, be forged, particularly for commercially oriented extension or track the interventions of numerous stakeholders in multiple e-learning (see IPS “Lifelong Learning for Farmers in Tamil Nadu� processes, and evaluate innovation system performance in Topic Note 6.3), to improve telecommunications infrastructure, more effectively. Good monitoring and evaluation design, identify sustainable business models, and aid in capacity building effective use of the data collected, and emerging analysis, and training. Box 6.4 reviews areas that require attention when reporting, and visualization tools yield better insights into using ICT in agricultural innovation systems (AIS). what agricultural innovation systems produce, who uses and benefits from the products of innovation systems, and where the challenges are. ORGANIZATION OF THIS MODULE Finally, not all of the ICTs available for agricultural informa- This module focuses specifically on how ICT can be used tion systems will work in rural areas. Analyzing the technical in three major, interrelated components of agricultural inno- capacity (infrastructure, connectivity, accessibility, affordability, vation systems, especially to build innovation capacity and BOX 6.4: Key Considerations When Using ICT in AIS Policies. Generate or adapt institutional and national strategies and policies to make the introduction of ICT innovations more frequent and more effective. Institutions. Adapt organizational structures at all levels to accommodate changes in ICT systems and information man- agement processes, develop new incentive structures to encourage all innovation actors to contribute novel outputs or to stimulate collaboration, and develop innovative business models, particularly where they relate to mobile devices and telecommunications. Individuals. Develop and diversify the skills and competencies of all stakeholders in applying ICTs for innovation. Invest in the skills of new intermediaries, such as innovation brokers, who specialize in linking actors and resources to foster innovation and often rely on ICTs to do so. Content. Stimulate open access to the increasing volume of outputs of agricultural research so that all can benefit. Develop and comply with coherent standards that continue to improve the interoperability and exchange of data among stakeholders. Processes. Use ICTs to facilitate and open up inclusive multi-actor processes in which knowledge flows and can be put to use by different stakeholders. Facilitation will be needed at various levels to bridge divides and gaps in access to ICTs and in institutional strength. Technologies. Invest in greater connectivity, data and information generation and handling capacity, hardware, software, and improved human-computer interfaces that have been purposefully designed to enable innovation. Ensure that rural ICT infrastructure and connectivity are enhanced. Specific actions are needed to overcome barriers to technology use, such as culture, language, and gender. A recurring challenge is the fast-moving pace of change and development in the technologies. Monitoring and evaluation. Develop new and improved tools and approaches to assess information and knowledge interventions more effectively. Capacities. Invest in the technical and organizational capacities of individuals and institutions so they appreciate and use ICTs as tools to enhance knowledge creation, transformation, and innovation. These capacities are more than just techni- cal; appropriate mindsets and incentives are essential to encourage information and knowledge to flow. Source: Authors. IC T IN A GR IC ULTUR E S E C T I O N 2 — E NHANCING P RODUCT IVIT Y O N TH E FA RM 119 foster an environment in which innovation occurs more employee traveling among villages to deliver technologies to readily: research and knowledge sharing systems, advisory farmers. This note is organized around broad functions of ICTs services, and e-learning. Each of these components is dis- in supporting this new notion of advisory services: the need to cussed in a topic note. provide localized, customized, and highly accessible informa- tion; the need to archive and provide reference information Topic Note 6.1 focuses on the use of ICTs in research for for a wide array of actors in the sector (from fertilizer applica- agricultural development. Investments in infrastructure and tion rates to quality standards for food processors and export- digital research collaboration, along with rapid developments ers); the need to facilitate networks (local, regional, global) in mobile devices and connectivity in rural areas, are chang- for collaborative, interdisciplinary approaches to problem solv- ing information and knowledge flows. This note focuses on ing and research diversification through shared knowledge general research processes rather than specific applications, bases, online forums, and collaborative spaces; and the need describing how ICTs are altering research collaboration and data to empower and “give voice� to rural communities. collection, analysis, storage, and dissemination. For example, the note describes efforts by individuals and research organi- Topic Note 6.3 focuses on electronic learning, especially its zations to make formal and informal research outputs (peer- potential for building capacity in extension providers and in reviewed journal articles and unpublished literature) freely and producers. E-learning potentially enables any actor in the openly available on the Internet using low-cost technologies. innovation system to reach large numbers of producers, involving them as partners and adult learners in designing Topic Note 6.2 describes how ICTs are benefiting agricultural and implementing the learning experience. The use of ICTs extension and advisory services. Many countries are reas- such as mobile phones makes it possible for learning to occur sessing the organization, mandates, and partnerships of without classrooms or fixed schedules, although face-to-face their agricultural advisory services to reach farmers and other interaction and incentives for using the new knowledge are clients more effectively. “Extension� is no longer a public important for e-learning to succeed. Topic Note 6.1: ICT IN THE AGRICULTURAL RESEARCH PROCESS TRENDS AND ISSUES ICTs are becoming integral to the mechanics of the research This note discusses the entry points for ICT to be used in agri- process. They are also associated with the collaborative con- cultural research for development. Agricultural research is a key text in which the research process unfolds, and they are critical part of any innovation system. As with other components of an to the communication and accessibility of the data, informa- innovation system, in agricultural research successful innova- tion, and knowledge that researchers and their partners create. tion depends on a number of variables. Particularly important These technologies offer new potential to developing country variables are the partnerships surrounding the research pro- institutions, national research centers, and networks to par- cess, the level of accountability shared by the partners, and ticipate in a worldwide digital knowledge economy (Kirsop, the purpose, quality, and intensity of the research in which the Arunchalam, and Chan 2007). Open repositories and Web partners are concerned. 2.0 tools create opportunities for the more digitally connected In dramatic and well-documented ways, the effects of stakeholder groups in research agencies and academia to gener- ICT have permeated the agricultural research process ate, capture, store, analyze, and share virtually the entire range and the partnerships that define, sustain, and direct it of research content, such as theses, data, images, researcher toward development goals. For example, ICTs are mak- profiles, and so on. These technologies have also created more ing agricultural research more inclusive and at the same informal ways of communicating research outputs. time more focused on development goals, because they change how, where, and to whom information flows. Information can flow in many directions; it can be highly COLLABORATING IN THE RESEARCH PROCESS dispersed and accessible, and it can be highly targeted, The need for collaboration cuts across the entire research location specific, and location aware (Ballantyne, Maru, process, from the conceptualization of a research program and Porcari 2010). to the application of the results. In agricultural research for E C O N O M IC AND S E CT OR WORK 120 MOD ULE 6 — ICTS A S ENA B LER S OF A GR ICULTUR A L INNOVATION S Y S TEM S BOX 6.5: ICTs Engage Stakeholders in Formulating an Ambitious Research Program In the summer of 2010, four international agricultural research centers in the Consultative Group for International Agricultural Research came together with partners to develop an innovative, inclusive research program on livestock and fish. Before the program could be developed, a very wide range of stakeholders (governments, funders, extension, research, the private sector) participated in extensive consultations, not only in person but online. Their efforts were supported by a wiki to enable documents and other resources to be shared in a transparent, efficient, and cost-effective manner; a blog where assumptions and questions were posed and comments received; and several online surveys developed using the SurveyMonkey tool. The process and documentation were fully open. All documents, presentations, and interviews were publicly available. Fostering broad and deep engagement among numerous stakeholders to develop a very large research program is not a simple or brief task. For this particular program, the e-consultation began in July 2010 and consisted of eight rounds of questions, each focused on a different aspect of the proposed research. The initial proposal emerged after five rounds of consultation, each including a survey (a series of statements with which participants were invited to agree or disagree) and an opportunity to submit open-ended comments. Three more phases of the e-consultation followed in February 2011. During this time, revisions to the initial proposal based on an external review were shared and tested in public through the e-consultation forum. Between July 2010 and March 2011, the various e-consultation tools and resources were viewed more than 25,000 times. The organizers received 465 comments and other feedback on questions and surveys. The consultations raised a number of concerns and suggestions that were instrumental in strengthening the proposed program throughout its development. Source: Program proposal (http://livestockfish.wordpress.com). development, for example, priorities are often based on the small-scale farmers’ fields (see IPS “Advances in ICTs Increase needs of small-scale farmers with very limited resources. the Utility of African Sites to Test Varieties� in this topic note). ICTs are making it easier for research organizations to link In Tanzania, researchers have added to their capacity to track with these stakeholders and document and understand their and monitor the development of cassava mosaic disease and needs, thus enhancing the relevance and effectiveness of cassava brown streak disease because ICTs offer a means their research. ICTs also make it possible to consult a much of cooperating with the distant farming communities whose wider and more dispersed network of stakeholders (such as crops represent the front lines in these pandemics (box 6.6). producer groups, technical experts, private sector, research administrators, and policy makers) prior to developing a Communication in agricultural research is traditionally dominated research program (box 6.5). by a focus on the dissemination of “end-results�—by publish- ing journal articles or otherwise reporting on results. To make An integral part of “who to include in the collaborative research research more relevant, open, and accessible, ICTs are used in process� is “where to do the research.� The local nature of some organizations to enhance knowledge sharing much earlier agriculture, from the environment’s effect on crops and biodi- in the research process, during program formulation, design, and versity or the social and cultural norms that influence the agri- as part of ongoing planning and review (box 6.7). Increasingly, cultural sector (for example, in one location women are quite researchers are using digital social media tools, which are easy active as small-scale farmers and traders; in another, they never to access and use, to extend and open up communication and work alone in the field and are forbidden from selling produce to knowledge sharing throughout the research process. strangers), suggests that it is usually necessary to pick locations appropriate to the locale in which the results are to be applied. To disseminate information on such approaches and tools, the Consultative Group for International Agricultural Here again, ICTs have proven quite useful making these links. Research (CGIAR) has assembled a Knowledge Sharing For example, in developing new varieties with specific traits Toolkit (http://www.kstoolkit.org) in conjunction with FAO, needed by small-scale farmers (such as drought tolerance or the KM4Dev Community, and UNICEF. The toolkit consists resistance to a particular disease), plant breeders have relied of knowledge sharing tools and methods to promote col- for years on ICTs to collect, analyze, and validate data to iden- laboration through each stage of the research project cycle. tify field testing sites that are representative of conditions in Online tools include collaboration platforms, wikis, blogs, IC T IN A GR IC ULTUR E S E C T I O N 2 — E NHANCING P RODUCT IVIT Y O N TH E FA RM 121 BOX 6.6: Rural Tanzanians Update Researchers on Spreading Cassava Diseases Pandemics of cassava mosaic disease and cassava brown streak disease are reaching East and Central Africa. The costs of sending researchers to monitor disease development are high. Yearly visits have barely kept pace with these spread- ing diseases, yet early warnings of new outbreaks and greater community involvement in their control would consider- ably slow their progress through Africa. The Digital Early Warning Network (DEWN) provided training and mobile phones to farmers in northwestern Tanzania so that they could recognize symptoms of the two diseases and text their findings to researchers. Information obtained from farmers was used to generate maps. One of the most significant findings was that brown streak disease reported by farmers was confirmed by researchers’ visits to two districts where it had not previously been reported. This finding allowed project teams to concentrate disease mitigation efforts on these areas. DEWN has provided an innovative, informative, and relatively cheap means of involving communities in monitoring and maintaining the health of their crops. Research has been enriched and cost-effectively extended through greater connec- tivity with the voices and knowledge of farming communities. DEWN was primarily piloted by the Lake Zone Agricultural Research Institute in Tanzania with the International Institute of Tropical Agriculture. Source: Adapted from http://r4dreview.org/2011/04/dewn-a-novel-surveillance-system/. photo sharing, podcasting, Google documents, discussion ure 6.1 illustrates how the CGIAR ICT-KM Program (http:// forums, intranets, content management systems and instant ictkm.cgiar.org) perceives the relationship between the messaging. Each tool is described, with links to relevant research cycle and different knowledge sharing and collabo- resources and suggestions for use, on the website. Fig- ration tools highlighted above. FIGURE 6.1: Knowledge Sharing and Collaboration Tools in the Research Cycle How can ICTs support this? –Providing many more channels for information to How can ICTs support this? flow to target groups that –Providing ways for more are appropriate for them people to provide information/priorities/needs Disseminating from the ground and Identifying influence this research research priorities results/products How can ICTs support this? –Providing ways to include more voices in M&E M&E and to make it a How can ICTs support wider learning process Developing this? Planning research results –Providing ways for research into outputs more people to be involved in and contribute to this How can ICTs support this? process –Providing ways for co- creation, collaboration Carrying out and feedback on research development of products despite different geographical locations How can ICTs support this? –Providing ways for people to be involved and share information Source: Manning-Thomas 2009. Note: M&E = monitoring and evaluation. E C O N O M IC AND S E CT OR WORK 122 MOD ULE 6 — ICTS A S ENA B LER S OF A GR ICULTUR A L INNOVATION S Y S TEM S BOX 6.7: Web-Based Tools Facilitate Research COLLECTING AND ANALYZING RESEARCH DATA Collaboration ICT is widely used to collect data, with the choice of technol- ogy depending on the kind of data needed. Surveys can be The last few years have seen the emergence of many administered electronically. Information from online research web-based collaboration tools and approaches, fre- collaboration can be recorded and analyzed using a variety quently described as “Web 2.0� or “social media.� The of ICT tools. Mobile devices of all kinds record research key features of such tools are that they are web-based, data—smartphones, mobile phones using short messag- free or very low cost, and very easy to use; they encour- ing service (SMS) text messages, personal data assistants age interactions between people; and they offer ways (PDAs), Global Positioning System (GPS) units, and specially to integrate different types of information from different designed equipment to measure indicators of soil nutrient perspectives. levels, among others. Electromagnetic and photographic These tools are used by the Nile Basin Development data are recorded by sensors in satellites and aircraft and on Challenge (http://www.nilebdc.org) in Ethiopia. This ini- the ground. Small transmitters are used to collect, store, and tiative is funded by the CGIAR Challenge Program on send data, including data from radio-frequency identification Water and Food to work with numerous national part- (RFID) tags (Munyua 2007). ners and a group of international centers to improve the resilience of rural livelihoods in the Ethiopian highlands. Mobile technology has also created opportunities for Web-based applications are used in the project to sup- crowdsourcing farmers. Rather than perform data collec- port interaction and sharing among the project team tion by hand or through paper surveys, researchers can members and to communicate messages to wider audi- collect data through SMS. Data on pest outbreaks, for ences and stakeholders: example, can be recorded by asking farmers to text infor- mation to a premium number. Scientists and governments  The project has a shared wiki space where project are able to monitor farming activities and local problems members document activities and plans. This remotely and to predict regional and national challenges space has been used, for example, to share meet- with greater certainty. SMS and other mobile devices have ing agendas and reports, discuss issues, and share also eased data entry. Paper surveys, which require enor- files. mous amounts of labor after the initial data are collected,  The project has a private conversation space on are being replaced with devices connected to software Yammer (https://www.yammer.com/), a social packages that automatically transfer the data to databases networking site for corporate purposes, where and statistical programs. iFormBuilder is an innovative project members share updates, questions, and application that collects rural survey data (http://www announcements. .iformbuilder.com).  The project has a DSpace (http://www.dspace.org/) document repository where all public reports and In addition to collecting primary data, researchers often resources from the projects are indexed and made rely on secondary data to complete their analyses. For accessible. example, several organizations offer archival geographic  A blog is used as a website with regular stories information system (GIS) data, including remote sensing and updates from the project. data, at increasingly better resolutions and sometimes  Updates and news are spread across social net- free of charge.3 Other organizations (public and private) working sites like Facebook and Twitter. offer data sequences of crop genomes. In the future, as biotechnology and agriculture increasingly overlap, results  The project uses social media tools like Flickr to of nanotechnology applications in agricultural production share photos, slideshare to publish presentations and food processing and packaging4 will increasingly be and posters online, and Blip.tv to publish video and film. 3 See Stanford University’s Library and Academic Informa- Such a web-based approach also requires complemen- tion Resources (“Websites for Digital GIS Data,� http://library tary face-to-face, print, and offline tools and approaches .stanford.edu/depts/gis/web.html) and the CGIAR Consortium to really engage with the rural communities “on the for Spatial Information (“What is CGIAR-CSI?� http://csi.cgiar .org/WhtIsCGIAR_CSI.asp). ground.� 4 For examples related to nanotechnology, see the National Source: Author; see also http://www.nilebdc.org/. Institute of Food and Agriculture (http://www.nifa.usda.gov/ nanotechnology.cfm). IC T IN A GR IC ULTUR E S E C T I O N 2 — E NHANCING P RODUCT IVIT Y O N TH E FA RM 123 collected and shared through the ICT (Interagency Working MAKING DATA AND INFORMATION ACCESSIBLE Group on Manufacturing R&D, Committee on Technology, A primary output of the research process is knowledge, typi- National Science and Technology Council 2008). cally encapsulated in reports, manuals, articles, maps, data files, and interactive video and audio media. The transition The use of ICT to analyze research data appears virtually from print to digital information formats is one of the most universal, although some research systems are limited by striking transformations in agricultural research. New storage the infrastructure and applications available to them. Options technology, particularly the availability of storage in the cloud, range from custom software developed for a particular is making the storage and sharing of data and other informa- research project or organization to more generic packages tion far less expensive. such as GenStat Discovery Edition (http://www.vsni.co.uk/ software/genstat-discovery/), a version of the widely used Organizing and providing access to its information and data GenStat software for statistical analysis that is available free resources are among the most useful investments that an of charge to noncommercial users in developing countries. agricultural research institution can make. Complete, easy to access, open repositories or archives of research outputs are One chief impediment to the wider use of analytical software in becoming a standard to which research institutes aspire. The research for development is the lack of funding. The 13th edition concept is based on the use of free software such as DSpace of GenStat costs about US$ 330, for instance, but other soft- (http://www.dspace.org/) or ePrints (http://www.eprints.org/) ware, especially for sophisticated genomic and proteomic analy- that allows an organization to set up a repository of its docu- ses, may be even more costly, especially for public research ments and outputs. These repositories allow content to be programs in developing countries. Reducing the costs of ICTs uploaded and made accessible in full; they also allow the for data analysis is critical in enabling poorer institutions to par- metadata to be harvested and shared using open standards. ticipate more fully and meaningfully in the innovation system. As the collections grow, they become permanently acces- Some of the most innovative current uses of ICT in data sible indices of an institution’s research and nodes in a glob- analysis are in modeling, simulation, visualization, and cloud ally searchable knowledge base for agriculture. computing (do Prado, Barreto Luiz, and Chaib Filho 2010; Li Alongside these repositories, many related specialized and Zhao 2010; Hori, Kawashima, and Yamazaki 2010).5 For systems focus on, for example, theses or academic learn- instance, ICTs are vital for developing models of crop perfor- ing materials, specific subject areas (aquaculture, forestry, mance in environments where yields are reduced by climate and so on), or national aggregations of data from different stress and increasing climatic variability. Such models offer sources. Parallel systems facilitate the curation, sharing, and an important means of evaluating the potential for new cul- sometimes analysis of data in various forms (box 6.8). All of tivars to adapt to climate stress and climate change and to these systems build on basic connectivity and ICT infrastruc- assess food import needs and export potential. ture, both within institutions and outside them through the Another example involves researchers at the Medical adoption of applications that enable global sharing and aggre- College of Wisconsin Biotechnology and Bioengineering gation, harvesting, and distributed management of data. Center in Milwaukee, who recently developed free tools for analyzing virtual proteomics data (“Cloud Computing Lowers BOX 6.8: Dataverse: An Open Application for Storing Cost of Protein Research,� 2009). The tools are used in and Analyzing Data combination with other free software and Amazon’s cloud computing service, giving researchers access to consider- Dataverse is an open application to publish, share, refer- ably more computing power than they may have at their own ence, extract, and analyze research data. It makes data institutions. Proteomics—the study of proteins expressed by available to others and allows them to replicate work an organism—has numerous applications in plant breeding by other researchers. Developed by the Institute for research, such as improving the understanding of how plants Quantitative Social Science at Harvard University, the respond to disease—but until recently few research institu- software can be freely downloaded for local use, or data tions in developing countries have been able to afford the ICT can be hosted by the project. Dataverse is used by the infrastructure to analyze proteomics data. International Food Policy Research Institute to archive and make its data accessible, for example. 5 For examples related to geospatial, precision, and sensor technolo- Source: Authors; see also http://thedata.org/home and http://dvn gies, see the National Institute of Food and Agriculture (http://www .iq.harvard.edu/dvn/dv/IFPRI. .nifa.usda.gov/ProgViewRelated.cfm?prnum=16198&lkid=4). E C O N O M IC AND S E CT OR WORK 124 MOD ULE 6 — ICTS A S ENA B LER S OF A GR ICULTUR A L INNOVATION S Y S TEM S A number of examples of data storage and sharing follow, research centers of the CGIAR and their partners, is an exten- and many more could be cited. They are similar in several sive collection of information about the genetic resources ways. First, they use open standards and common taxono- conserved by SINGER members. These collections hold mies that allow metadata to be shared across organizations more than half a million samples of the world’s major food and systems. Second, they are often based on free or low- crops, forage crops, and forest species and are an essential cost specialized applications provided by third parties. Third, resource for plant breeding and biodiversity conservation they depend on the distributed actions of organizations and worldwide. initiatives that are working toward common objectives and are committed to making information and data widely acces- National Approaches, Pioneered and Partnered sible through the Internet. Fourth, they have chosen to use with Ministries systems that not only store content but curate and index The Government of India in partnership with the World Bank content in ways that add value to this public good. Finally, began funding the National Agricultural Innovation Project they all rely on increasing (remote) storage and connectivity (NAIP) in India in 2006 (http://www.naip.icar.org.in/index capacities. .html). Led by the Indian Council of Agricultural Research, this six-year project aims to quicken the pace of agricultural Research institutes and other agricultural entities participat- development by exploring and applying agricultural innova- ing in research projects or dissemination projects usually tion in collaboration with a variety of public and private select a single approach to organize their research electroni- stakeholders. NAIP has established over 50 research alli- cally. These forms of organization include subject, national, ances between public organizations, commercial enterprise, regional, institutional, and crowdsourcing approaches or and farmers, focusing applied research initiatives on tech- a variety therein. Selecting a manner in which to orga- nological innovation in poor rural areas. The project and its nize repositories is critical to its user and management partnerships have led to a wide expansion in stakeholder friendliness. engagement, more frequent monitoring and evaluation of technological outcomes, and improved knowledge brokering. Subject Approaches Avano (http://www.ifremer.fr/avano/) harvests electronic The project component most relevant to this module focuses resources related to the marine and aquatic sciences. It pro- on the management of change and information in the vides access to almost 300,000 resources from almost 300 national agricultural research service. This component seeks repositories and other archives worldwide. It is operated by a to strengthen the use of ICT for research and technological group of information professionals who agreed to use open innovation, increase public awareness of ICT, experiment repositories and standards and to allow their IMAGE 6.3: Open Access to Genetic Information Can Improve Yields resources to be harvested. Worldwide The Global Forest Information System (GFIS, http://www.gfis.net) is a collaborative initia- tive that allows forest-related information to be shared easily through a single gateway. GFIS is an open system to which information providers, using agreed information exchange standards, may contribute content. Similar to Avano, GFIS is organized by the global forest community. It depends on the adoption of open tools and content by its many collabora- tors. It uses RSS (really simple syndication) as the primary device to aggregate and re-pres- ent content acquired from different sources. The System-wide Information Network for Genetic Resources (SINGER, http://singer .cgiar.org), developed by the agricultural Source: Edwin Huffman, World Bank. IC T IN A GR IC ULTUR E S E C T I O N 2 — E NHANCING P RODUCT IVIT Y O N TH E FA RM 125 with e-learning models, and open opportunities for stake- Asia-Pacific region.7 ENRAP worked in the area of knowledge holder collaboration and exchange using electronic tools and networking and Internet applications at the local, national, web platforms. The project has connected over 300 institu- and international levels. tions on the web, working toward building an enormous ICT network for agricultural research and dissemination. The The project, which ended in 2010, was designed to bring the project is also developing a central portal for the network, benefits of global information resources to IFAD-supported which will serve as the platform for knowledge building and rural development projects in Asia and the Pacific. It aimed to sharing. This central portal will maintain 42 open-sourced increase effective use of the Internet and electronic commu- and subscription-based agricultural libraries. Formal links nication by project staff and, ultimately, by project communi- between libraries in the national research system and other ties. The project focused especially on methods and practical agricultural libraries will be forged. This project component solutions to foster participation at the grassroots level. Local also includes virtual classroom development (source: http:// electronic newsletters, agricultural market information dis- www.naip.icar.org.in/index.html). semination, and shared electronic libraries are examples of ENRAP-supported activities. Brazil’s national agricultural research system, EMBRAPA (the Brazilian Agricultural Research Corporation), recently The first phase of ENRAP began with an emphasis on ICTs, contributed 470,000 bibliographic records to WorldCat, “the but subsequent phases focused more on the knowledge/ world’s largest library catalog� (http://www.worldcat.org/), content that needed to be shared. Attention was given to reflecting the scale and publishing power of this research building capacities in knowledge production, especially the system. EMBRAPA also maintains substantial repositories use of digital video as a supplement and alternative to writ- of its research outputs in full text: The ALICE repository ten documentation of project experiences. (http://www.alice.cnptia.embrapa.br/) provides full access to formal research outputs in the form of book chapters, Institutional Approaches articles in indexed journals, articles in proceedings, theses In Chile, the digital library of the Fundación para la Innovación and dissertations, technical notes, and so on. This resource Agraria (Foundation for Agricultural Innovation) (http:// is complemented by the Infoteca-e (http://www.infoteca bibliotecadigital.innovacionagraria.cl/) incorporates new ICTs .cnptia.embrapa.br/), which collects and provides access to manage and diffuse public information. It assembles infor- to more practical information on technologies produced by mation on all the reports and publications, photos, videos, EMBRAPA. This information is intended for farmers, exten- and presentations produced by the foundation. sionists, agricultural technicians, students and teachers from rural schools, cooperatives, and others concerned relatively In 2009, the International Livestock Research Institute (ILRI) directly with agricultural production. set up an open repository of its research outputs (http:// mahider.ilri.org). ILRI used free DSpace software to develop In Jordan, the National Center of Agricultural Research and the repository, and in the first 18 months, some 4,500 outputs Extension, the Ministry of Agriculture, and FAO have joined were included in the service. Since the system uses open forces to set up a National Agricultural Information System standards, the contents are harvested across the Internet portal (http://nais-jordan.gov.jo/Pages/Index.aspx?CMSId=8) and can be reused in other services—Google Scholar, the that provides updates and news as well as access to full-text CGIAR Virtual Library, FAO’s AGRIS (http://agris.fao.org), and reports and publications. so on. The same platform is being used to develop a shared service across several CGIAR centers and initiatives. Regional Approaches In Uganda, Makerere University has established a “scholarly Similar in concept in that it seeks to link local project actors, digital library� (http://dspace.mak.ac.ug/) with the full text the International Fund for Agricultural Development (IFAD) of reports and theses, including those of its agriculture and in Asia joined with the International Development Research veterinary sciences faculties. Centre to use ICTs to support learning and networking across a number of IFAD-supported development projects. ENRAP A final example comes from the International Crops Research (http://www.enrap.org)6 was formed to promote knowledge Institute for the Semi-Arid Tropics (ICRISAT). ICRISAT conducts sharing and networking between IFAD projects located in the 7 Similar projects exist in Africa, Latin America, and the Middle 6 Originally Electronic Networking for Rural Asia Pacific. East. E C O N O M IC AND S E CT OR WORK 126 MOD ULE 6 — ICTS A S ENA B LER S OF A GR ICULTUR A L INNOVATION S Y S TEM S genomics research to enhance the efficiency and effectiveness Such open collaboration is possible only because of the of crop improvement. In the course of this work, it learned Internet and the way it allows distributed systems for the that the rate-limiting step in genomics was no longer data gen- aggregation, review, and dissemination of knowledge and, eration but the speed at which data were captured, validated, most important, the active support of a large community analyzed, and turned into useful knowledge. ICRISAT initiated (Hoffmann 2008). Tools like this one are a form of “expert its Global Theme on Biotechnology, a program that focuses on crowdsourcing� online. building and sharing the ICT tools to accelerate these stages of research. The program develops information systems for data Crowdsourcing through ICT can also be effective in research capture, storage, retrieval, and dissemination. projects that involve rural inhabitants. Asking farmers to send information via mobile phone can be an effective way of The program also develops software based on open-source gathering data with reduced costs and labor. In areas where technologies; this software is all in the public domain (http:// mobile phones are ubiquitous, it also allows for increased www.icrisat.org/bt-software-downloads.htm). Applications participation from a variety of farmers or farmer groups. have been downloaded several hundred times by users from other institutions. For example, a Library Information BOX 6.9: Mendeley: ICT to Expand the Literature Base Management System (LIMS) facilitates molecular genotyp- ing through modules that make it possible to track samples, Mendeley is a free online reference manager and aca- schedule jobs, generate reports, and perform other tasks. demic social network through which researchers orga- LIMS has been adopted by other research facilities and cus- nize their research, collaborate with others, and discover tomized by a private sector partner. Information is shared the latest research in their areas. With Internet connec- through ICRISAT’s Integrated Crop Resources Information tivity, scientists can manage their personal research System (ICRIS). Available on the Internet with password- profiles and presence and co-create a literature base protected access, the database provides genotype, marker, on a subject or around an event. For example, research- and phenotype information. An integrated decision support ers at the International Food Policy Research Institute system, iMAS, has also been developed to facilitate marker- have started to use this service to collate, share, and assisted plant breeding by integrating freely available quality track research information around specific projects and software needed for designing experiments, mapping quan- events, such as the 2011 conference on agriculture, titative trait loci,8 and providing decision guidelines to help nutrition, and health (http://2020conference.ifpri.info/ users interpret results. knowledge-fair/literature-hub). Source: Authors; see also http://www.mendeley.com/. Crowdsourcing Approaches Researchers and others are not just sitting back and wait- ing for others to provide tools to share data and information. Preferential Access Schemes for Research in Developing Researchers with access to the Internet are making their Countries own specialized literature bases available online (box 6.9). Despite increases in Internet access and connectivity, They are also assembling them into quite sophisticated developing-country researchers continue to face barriers in resources that become new research products in their own gaining access to scientific publications and literature. This right. An example is WikiGenes (http://www.wikigenes.org). is particularly significant for journal articles and other publi- This collaborative knowledge resource for the life sciences cations published through commercial channels where sub- is based on the general wiki idea but employs specifically scriptions are required. developed technology to serve as a rigorous scientific tool. The project provides a platform for the scientific community In recent years, commercial publishers have begun to provide to collect, communicate, and evaluate knowledge about free or inexpensive access to some developing countries through genes, chemicals, diseases, and other biomedical concepts initiatives like AGORA (Access to Global Online Research in in a bottom-up process. Agriculture, http://www.aginternetwork.org/), which provides free or very low-cost access to 2,400 journals on food, agricul- 8 A preliminary step in identifying and sequencing the genes ture, and related sciences to institutions in 107 countries (image related to variations in physical characteristics of an organism 6.4); PERI (the Programme for the Enhancement of Research arising from the interactions of multiple genes and/or interac- tions between genes and the environment in which they are Information, http://www.inasp.info/peri/), which supports the expressed. efforts of developing-country institutions to get together in IC T IN A GR IC ULTUR E S E C T I O N 2 — E NHANCING P RODUCT IVIT Y O N TH E FA RM 127 IMAGE 6.4: AGORA Provides Access to Agricultural Research Literature investments in information literacy are needed to maximize the use of these tools. Scientists may rely on their traditional information- seeking strategies and remain unaware of new electronic resources. Their parent organizations need to encourage the use of e-resources and provide appropriate bandwidth and training. Gaining Access to Private Sector Innovation and Research Initiatives like CIARD (box 6.10) are important to make publicly funded research results accessible (see image 6.5). It is quite another challenge to gain access to the results of research financed by private companies, which in total spend more on research than the public sector. Because companies operate for profit and need to recover their R&D invest- ment, they seek intellectual property rights for their innovations, which typically prevent pub- Source: A screenshot of the AGORA homepage. lic access and, at times, collaboration. consortia to pay for heavily discounted subscriptions; and TEEAL Some systems permit research results from private firms to (The Essential Electronic Agricultural Library, http://www.teeal. be shared. Innovations covered by patent rights allow the org/), which provides a package of content that institutions can patent holder 20 years to exploit the commercial potential of run on their own networks. the patented innovation, in exchange for publicly disclosing the innovation in a patent database. This practice is meant to Although Internet connectivity gives scientists access to enable other researchers to build on the initial innovation. The the resources provided, evidence shows that significant largest searchable patent databases include PATENTSCOPE BOX 6.10: Driving Developing County Access: The CIARD Initiative Public knowledge and research results have limited impact on agricultural and rural development when they are not easily or widely accessible. The Coherence in Information for Agricultural Research for Development (CIARD, http://www.ciard .net/) initiative, pioneered by FAO, the Global Forum on Agricultural Research, the CGIAR, and other partner organizations, aims to change this by increasing the awareness of how new ICTs and associated institutional changes expand options to manage and present information differently and economically. CIARD’s vision, “to make public domain agricultural research information and knowledge truly accessible to all,� reflects the transformational effects of ICT in agricultural development. CIARD partners coordinate their efforts, promote common formats for information sharing and exchange, and adopt open information systems approaches. CIARD projects, like KAINet in Kenya, focus on three priority areas:  Making content accessible through open content, open systems, and common international standards.  Empowering individuals with awareness and skills and encouraging institutions to be self-sufficient through owner- ship of their information.  Advocating better investments through policies that improve access to information, coordinated approaches, and evidence of benefits. The explanation and the routes for implementation of the CIARD agenda as a whole are available at the CIARD website and in print. Source: http://www.ciard.net/. E C O N O M IC AND S E CT OR WORK 128 MOD ULE 6 — ICTS A S ENA B LER S OF A GR ICULTUR A L INNOVATION S Y S TEM S IMAGE 6.5: Accessing Private Sector Research Could Have Wide essential to the delivery of today’s research. Impacts on Poor Agriculture Lessons learned in using these technologies for agricultural research are summarized here; the discussion also highlights the key enablers for designing and implementing ICT-enriched research initiatives. First, ensure that each researcher has basic levels of e-literacy and ICT access. It is critical to convince managers and funders that ICTs are “basic� to research, not just desirable add-ons. Beyond the level of the individual scientist or researcher, many opportunities for using ICT in research require significant insti- tutional investments to have a real impact on research itself or the targets of research. The lack of systematic investment in ICTs by research institutions and their funders often Source: Jonathon Ernst, World Bank. holds researchers back from adopting and using ICTs (FARA 2009; Balaji 2009; GCARD from the World Intellectual Property Organization, with close 2009; RUFORUM 2009; Karanja 2006; Kashorda and Waema to 2 million international patent applications (http://www 2009; and UNCTAD 2010). Like funding for agricultural .wipo.int/pctdb/en/). The United States Patent Office data- research more generally, investments in ICT for agricultural base (http://patft.uspto.gov/) and esp@cenet, the European research are vital to increase and should be at the forefront of Patent Office database, offer 60 million patent documents the agricultural research discussion. Thinking carefully about from over 80 countries. For a recent review of patent data- how ICT might contribute to research projects is critical to bases, see http://patentlibrarian.blogspot.com/2010/02/ tapping the wide range of opportunities available throughout patent-database-review.html; for a more general discussion the research process. of IP and related issues in agricultural research, see the work of the CGIAR Systemwide Program on Collective Action and Unfortunately, beyond the use of ICTs for everyday commu- Property Rights (CAPRI, http://www.capri.cgiar.org/). nication and Internet access, research institutions may offer few incentives to undertake ICT-enabled research that devi- Initiatives like the African Agriculture Technology Foundation ates from traditional paths and uses newer ICTs, especially if (http://www.aatf-africa.org/), the International Service for that research involves gaining access to proprietary informa- the Acquisition of Agri-biotech Applications (http://www tion and ICT tools (or even paying fees for ICT services). This .isaaa.org/), and Public Intellectual Property Resources for lack of incentives represents a major challenge to using ICT Agriculture enable developing countries to maximize access for agricultural research, especially in rural areas where dif- to promising technologies and innovations developed by the ficulties like the lack of electricity and weak telecommunica- private sector. Such efforts are built on smart access to rel- tions connections abound. evant developments in the private sector, insights into local research interests, and brokering between the various parties. As for open access to research products, low investment in technical infrastructure, in sustaining research capacity, and in research itself have left many countries on the margins of global digital society and innovation, most notably in sub- LESSONS LEARNED Saharan Africa (RUFORUM 2009; Karanja 2006; Kashorda and Increasingly, ICTs such as computers, mobile phones, other Waema 2009). Their marginalization renders them less aware devices, and e-mail are standard tools of the trade for individ- of and able to adopt the international standards and meth- ual researchers, scientists, and the people they work with. odologies required to participate in open digital information As part of a personal research toolkit or dashboard, ICTs are sharing. In this context, the efforts made by organizations to IC T IN A GR IC ULTUR E S E C T I O N 2 — E NHANCING P RODUCT IVIT Y O N TH E FA RM 129 overcome institutional inertia, join together, and develop col- Africa Trial Sites (http://africats.org/) is a portal that enables lective and accessible research information repositories and national and international research organizations to elec- services are immensely important. Although each institution tronically pool their extensive information on trial sites and will have its own priorities and constraints, all can subscribe provides numerous tools (based on ICT advances in bioin- to common approaches. formatics, GIS, and data management) that help farmers, plant breeders, and agronomists to evaluate new varieties An additional major challenge in research is for organiza- more efficiently in the field and gain more useful data from tions and individuals to truly grasp the emerging possibilities field trials. For some time much of the data from field trials— and be willing to use them. One aspect of this challenge is representing an enormous investment of research resources awareness: Which of all the possible tools and investments over several decades—resided on the shelves of research will work best, and where? Who has the skills to make them institutions and was difficult to assemble, analyze on a large work? What “fallout,� positive and negative, will the organi- scale, and put to use. zation experience if they are used? What is the best portfolio of ICT-related investments for my particular set of individual, Users can search the website for trial sites and data by coun- project, or institutional goals and challenges? The use of new try, design trials to evaluate cultivars, obtain tools to manage ICTs is also a risky and change-making business. Just adopt- trials (from developing a budget to estimating water stress ing a new tool can trigger major changes in workflows, pro- during the growing season), analyze trial data, view results of cedures, processes, culture, and hierarchy that force a wider spatial analyses, examine data on an interactive Google map, assessment of business processes. Legacy IT systems as and report results online. They can also rank varieties and well as institutional processes and power relations are often add comments about their performance at a given site. The threatened. website allows the analysis of climate data for any point in Africa as well as climate similarity comparisons between trial Finally, moving beyond “ICT-assisted and connected� sites and other areas of Africa. Finally, the site includes links research to “ICT-enabled and transformed innovation� is to resources such as websites of the participating centers, a challenge for even the smartest, best-funded scientific from which anyone can request seed from breeders and institute. A research organization that has been transformed genebank curators. through ICT needs people and leadership with skills to develop a vision for e-research and align ICT investments to The combination of African trial site data and interactive data research and innovation processes, ensure that staff acquire analysis tools has made valuable information much more the necessary skills, redesign institutional processes, adopt widely available and useful for the agricultural research, open standards and access to knowledge, change staff mind- development, and extension community. Results for culti- sets, give staff access to ICT toolsets, invest in technological vars tested in Africa are rarely available online. Participants’ infrastructure and networks, and innovate and experiment— data will significantly expand knowledge of which cultivars among other needs. Devising and developing the optimal are suited to which environments (especially environments ICT investment portfolio for a national research institute or subject to stress from diseases, pests, or environmental network is a major challenge. factors). International agricultural research centers are begin- ning to use the trial sites in a climate adaptation research program, drawing in national partners, and they are using INNOVATIVE PRACTICE SUMMARY Africats.org to standardize their trial site information. Advances in ICTs Increase the Utility of African Sites for Testing Varieties Widespread use of higher-yielding and stress-resistant variet- INNOVATIVE PRACTICE SUMMARY ies throughout Africa has been frustrated by the variability KAINet Kenya Knowledge Network Anchored in of African growing conditions, the difficulty of selecting Partnerships and Collaboration appropriate sites to test new cultivars, and the challenges The Kenya Agricultural Information Network (KAINet, http:// of matching new cultivars to suitable growing environments www.kainet.or.ke) project, supported by FAO, encourages across the continent. Innovations may be tested, but they and assists Kenyan agricultural organizations to capture and are not tested in ways that make it more likely that they will share information in a series of repositories. The network, be useful to farmers, so they are not adopted. launched in 2009 and supported by the Ministry of Agriculture, E C O N O M IC AND S E CT OR WORK 130 MOD ULE 6 — ICTS A S ENA B LER S OF A GR ICULTUR A L INNOVATION S Y S TEM S provides training and support. The network’s website allows Experiences with KAINet have been carefully documented. researchers to query the resources of all member institu- Among the lessons and enabling factors that emerged, tions at once. The repositories include around 4,000 full-text piloting the network with a limited number of national digital documents generated by the institutions, with around institutions allowed the partners to learn and devise work- 40,000 metadata records that conform to international coher- able solutions before expanding the network. The man- ence standards to facilitate access and sharing. The network agement and steering committees played important roles is guided by a national stakeholder forum, a board of trust- in promoting the network, involving the management of ees, and a network management committee. partner institutions in its development, and guiding project activities. Linking the project to the priorities and plans of Like the thematic services Avano and GFIS mentioned partner institutions added credibility to KAINet, ensuring earlier, KAINet relies on distributed action by different orga- that it would enhance existing work and not remain an iso- nizations, their compliance with standards, and sufficient lated initiative. The initial planning and partnership-building connectivity for the harvesting and virtual querying of the phase was critical for success, because it provided an databases. The collaboration between national institutions understanding of the institutions’ information and commu- and international partners ensured the effective use of nication management needs and helped partners develop national resources and leveraged knowledge of interna- a basis for collaboration. tional best practices. The development of adequate capacities in information and An important aspect of KAINet is that it is integrated into communication management (including physical infrastruc- national and institutional policies and strategies. Its outputs ture) was essential to develop open repositories, and these and resources, such as the institutional and national reposi- capacities should preferably be built early in a networking tories of agricultural information, complement national and project. Because networking contacts were the basis of global initiatives aimed at sharing information. Its training collaboration and project operations, telephone and e-mail programs support the development of human capacity in groups were essential for constant communication among information and communication management. partners. Topic Note 6.2: USING ICT IN EXTENSION AND ADVISORY SERVICES TRENDS AND ISSUES a traditional, top-down, technology-driven extension system Rural people must be able to respond productively to the into one that is more pluralistic, decentralized, farmer led, opportunities and challenges of economic and technological and market driven (and thus more effective within the inno- change, including those that can improve agricultural pro- vation system). Part of the role of ICTs is to contribute to ductivity and food security. Innovation is more successful the many reforms that are urgently needed to empower and when producers can communicate with and be heard by support small-scale farmers as developing countries seek to their peers, local authorities, and institutions. Producers also respond successfully to food security, market development, require relevant knowledge and information, including tech- and climate change challenges (Christoplos 2010). nical, scientific, economic, social, and cultural information. To be useful, that information must be available to users in In the context of rural advisory services that support inno- appropriate languages and formats. At the same time, it must vation, ICTs have four broad functions. First, they need to be current and communicated through appropriate channels. deliver or provide access to information. They should address the need for localized and customized information—adapted This topic note outlines key issues involved in using ICTs to rural users in a comprehensible format and appropriate to convey demands for rural advisory services and deliver language—to give small-scale producers as well as providers those services effectively. Although there is convincing of advisory services adequate, timely access to technical and evidence that ICTs can revitalize research-extension interac- marketing information, as well as information or support on tions in ways that respond to farmers’ demands, the use of new technologies and good farming practices (image 6.6). It ICTs is merely one element in the wider transformation of is not just a matter of getting information out. A key aim is to IC T IN A GR IC ULTUR E S E C T I O N 2 — E NHANCING P RODUCT IVIT Y O N TH E FA RM 131 IMAGE 6.6: Matching ICT to the Diverse Needs ICTs to improve access to technologies and knowledge in of Farmers Is Critical their rural advisory services, by means of rural telecenters, community knowledge workers, online networks, and vari- ous types of forums. They also need to focus on ways to empower rural communities to connect with one another, not just to the outside world. Facilitating linkages between mar- ket actors, extension, and smallholders along value chains is also essential. Fourth, ICTs need to empower rural communities. ICTs should help farming communities “gain a voice� so that they can convey their needs and demands, negotiate better deals with other actors in value chains, and generally get practical benefits from the services intended for them (and otherwise avoid being exploited). A key element is to use ICTs to give rural people the skills and tools to tell their own stories, in their own words and languages, in ways that reach and influ- ence others (see Module 8 on farmer organizations for addi- tional information on ICT and collective action). Throughout the developing world, ICTs are being integrated into classic rural advisory services, through radio, SMS, televi- sion, video, Internet, libraries, the media, and mobile services. Source: Neil Palmer, CIAT. Advice and information provided via ICTs is becoming more varied, covering specific technologies and practices; climate change mitigation and adaptation; disaster management; early give rural people the facilities and skills to find the informa- warning of drought, floods, and diseases; price information; tion and answers they need. political empowerment; natural resource management; pro- duction efficiency; and market access. It is not a one-way flow: Second, they need to organize the knowledge base. ICTs ICTs open up new channels for farmers to document and share should help document and store information for future use. experiences with each other and with experts (IICD 2006). In many cases, information and knowledge on technologies and good practices is available only in hard copy or in peo- Some of the likely trends in the use of ICTs for rural advisory ple’s heads, and data are incomplete, scarce, or inaccurate. services over the coming years include (Ballantyne 2009) Local and indigenous knowledge is often transmitted orally,  Many advisory services will be privatized as the agricul- records are often unavailable, and information is dispersed tural sector becomes more commercial, as other actors only to nearby family and friends. As with research, all this step into this arena, and as clients are willing to pay.9 knowledge needs to be documented and organized for reuse. The challenge is evident from the scattered nature of the information, its multiple “formats,� and the general lack 9 As discussed in Module 3 of the Agricultural Innovation Systems Investment Sourcebook (World Bank 2012): “The private sector of attention to documentation and learning in this area. While increasingly finances extension services for specific objectives researchers are rewarded for publishing, extension workers, and/or value chains. Contracting public extension workers for specific tasks is a common practice among NGOs as well as advisors, and farmers are motivated to deliver “practical� specific commodity development programs, such as the pro- results; documentation is only a potential by-product. gram for cashew production in Mozambique. Some export com- modity chains finance extension services through a government- Third, ICTs need to connect people and networks. ICTs can instituted export levy, as in Mozambique and Tanzania. The pri- vate sector also finances extension services directly, as is the facilitate networking—locally, regionally, and globally—thus case with large tobacco companies in Malawi and Mozambique. leading to collaborative and interdisciplinary approaches Many of these arrangements are in transition to become sys- to problem solving and research based on shared knowl- tems of cost-sharing with farmers, first by assuring effective demand for relatively costly services and eventually by having edge and collaboration (Nyirenda-Jere 2010). Many NGOs, farmers fully finance extension services, as a complement to research organizations, and national ministries have used services they already provide one another (F2F extension).� E C O N O M IC AND S E CT OR WORK 132 MOD ULE 6 — ICTS A S ENA B LER S OF A GR ICULTUR A L INNOVATION S Y S TEM S Some services—for small-scale producers and natural practical strategies for integrating farmers’ demands into resource management, for example, which excite less advisory services and give an idea of their relative strengths interest from commercial providers—will continue as and weaknesses. The examples and practice summaries also public services. illustrate some of the social and economic outcomes that can  ICTs, including devices and software, will become arise when ICTs support the wider webs of communication more available, much cheaper, and more affordable or that characterize effective innovation systems. even cost-free (open-source software is one example), even in rural areas. ICTS FOR EXTENSION AND ADVISORY SERVICES  Connectivity will become more pervasive and more ICT has great potential to transform the way public extension is mobile. More devices will be “smart� and capable of organized and delivered—including interactions with farmers. It performing multiple operations. is also an entry point for nontraditional actors who see advisory  Farmers and rural communities will be regarded as services as an area of intervention and for giving greater empha- much less “passive� consumers of advice and infor- sis to subjects traditionally deficient in extension services. ICT mation; through ICTs as well as other developments, can also increase women’s access to advisory services. they are becoming active participants in formal rural knowledge and innovation systems. Some developing countries have moved quickly to enable  Traditional public advisory services will be challenged farmers to interact in real time (or close to it) with advisory ser- and bypassed by the emergence of new actors with vices through ICT. Until ICTs offered farmers a channel for com- alternative ICT-based business models. Increasingly, municating directly with distant technicians and experts, many these new actors rely on ICTs to provide their com- farmers could wait months or years for an extension worker to parative advantage. To be relevant and competitive provide technical advice, and often that advice did not address in such situations, public extension services need to their immediate concerns (image 6.7). The following examples reinvent or transform themselves, with strategic use highlight some of the ICT applications that advisory services of ICTs as part of the change process. have used to improve their interactions and technical knowl-  There will be much experimentation and innovation by edge sharing with farmers in developing countries. These governments, NGOs, the private sector, and new info- applications include web services like “ask the expert,� mobile mediaries to develop and test ICT-based services and messaging for advice, radio programs to disseminate techni- business models to better reach or engage with rural cal information, and video. Many of these endeavors are fairly communities. The challenge will be to scale these out new, limiting practitioners’ ability to analyze their effectiveness. to reach specific target groups or broad groups of marginal communities. IMAGE 6.7: Timely Advisory Services Improve the Effectiveness of Other Technologies The more complex and dynamic interactions characteristic of innovation systems, includ- ing the interactions fostered through ICT, will require new skills, both technical and entre- preneurial, to be acquired by farmers as well as advisory service providers (Swanson and Rajalahti 2010). In some instances, ICTs them- selves can enable farmers and service provid- ers to attain these skills; in others, special capacity-building efforts will be needed. This discussion is beyond the scope of this topic note, but helpful information is available (see World Bank 2012, especially Module 4). In the remainder of this note, the discussion of ICTs in advisory services contains examples and innovative practice summaries that illustrate Source: Thomas Sennett, World Bank. IC T IN A GR IC ULTUR E S E C T I O N 2 — E NHANCING P RODUCT IVIT Y O N TH E FA RM 133 Informing the Extension Agent disseminate information to improve the livelihoods of small- Two recent projects improve extension agents’ ability to holder farmers. The idea was to extend the reach of central- respond to farmers’ needs by improving the quality and rel- ized expertise and transmit farmers’ concerns more clearly. evance of information available to both groups. The first was Via mobile phones, CKWs provide information on three-day launched in Egypt and the second in Uganda. weather forecasts, seasonal forecasts, good farming and husbandry practices, input supplies, and markets. The Egypt launched a Virtual Extension and Research Com- subject matter for each of these topics comes from expert munication Network (VERCON) in 2000 to develop and partner institutions like the Uganda National Agro-Inputs strengthen links among the research and extension compo- Dealers’ Association and Uganda’s National Agricultural nents of the national agricultural knowledge and information Research Organisation. system. By improving research-extension linkages, the initia- tive aimed to improve advisory services for Egyptian farmers, Early findings indicate that women and poorer farmers are especially resource-poor farmers (see http://www.fao.org/ frequent users of the service and that farmers generally act sd/2001/KN1007_en.htm). on the information they receive. Even so, CKWs require intensive training in mobile technologies, agricultural infor- VERCON-Egypt introduced and tested several innovative mation, survey techniques, and business skills to be effec- communication tools. One of the most useful tools is the tive.10 (For more detailed information on this initiative, see Farmers’ Problems Database, created explicitly to address IPS “Community Knowledge Worker Initiative in Uganda� in farmer’s problems. The web interface enables extension Module 4 and “Community Knowledge Workers in Uganda agents to pose questions on behalf of farmers seeking Link Farmers and Experts to Cope with Risk� in Module 11.) solutions to agricultural problems; they can also examine answers to questions already posed to researchers. Content Using Radio and Video to Reach Rural Farmers is classified into four main categories of problems: produc- tion, administration, environment, and marketing. Among the various communications media available, even the most novel and technically sophisticated alternatives, The online database and tracking system enable farmers’ radio remains the most pervasive, inexpensive, popular, and questions to flow from provincial extension centers to the socioculturally appropriate means of communication in many national extension directorate and research system. Farmers parts of the developing world. Radio is still the only medium approach extension centers with problems, and if they cannot for disseminating information rapidly to large and remote audi- be solved using online resources such as extension bulletins ences, including critical information about markets, weather, or agricultural expert systems, the extension agent develops crops, livestock production, and natural resource protection. a full description of the problem and his/her proposed solu- Video has also made substantial impact in convincing farm- tion, which is forwarded to a specialized researcher who pro- ers to try new technologies; its images and demonstrations vides advice to address it (Beltagy et al. 2009). The problems make information easier to understand and apply. and solutions are added to the online database to assist other users of the network who face similar problems. Rural radio is distinctive from urban radio and most national radio networks in that it is directed specifically to a rural audi- Aside from addressing farmers’ problems, the system ence and its distinctive information needs, often including provides valuable information to track farmers’ problems, authentic stories and experiences from communities and suc- including their incidence and significance. The system makes cessful farmers. Rural radio can motivate farmers, promote the farmers’ problems more visible and quantifiable for research exchange of views, and draw their attention to new agricultural planners, and chronic problems can be addressed in research production ideas and techniques. Communities actively plan projects. Since 2006, over 10,000 problems and their solu- the production of broadcasts, making them an expression of tions accumulated in the interactive database, and over community life and concerns rather than treating communi- 26,000 farmers benefited from the system (FAO 2008). ties as passive listeners. (For examples, see box 6.11 and IPS “Farm Radio International� in this topic note.) In Uganda, the Grameen Foundation’s Community Knowledge Worker Initiative established a distributed 10 See http://www.grameenfoundation.applab.org/applab-blog/2010/ network of intermediaries, called Community Knowledge 05/20/community-knowledge-worker-pilot-report-and-program- Workers (CKWs), who used mobile devices to collect and launch/. E C O N O M IC AND S E CT OR WORK 134 MOD ULE 6 — ICTS A S ENA B LER S OF A GR ICULTUR A L INNOVATION S Y S TEM S BOX 6.11: Rural Radio Lets Listeners Speak should be a participatory needs assessment to evaluate not only the material needs of communities that will benefit from A villager’s story, recorded in a rural radio program about the project but the perceptions, expectations, and commit- bushfires: ments that community members can bring to the initiative. My uncle once told me how a bushfire burnt his Radio overcomes some of the most challenging issues field: “That bushfire was angry—it charged like a related to using ICT in advisory services: herd of elephants, destroying everything! Even  Accessibility. Radios are relatively cheap to produce came near to our home!� and distribute and do not need electricity or special I said, “Don’t be scared. With the right words, a skills to operate. They can also be shared by groups of good hunter can stop a herd of charging elephants. listeners. It should be mentioned, however, that a key We too can stop bushfires with the right words.� challenge to reaching female farmers through radio is ownership. Often men own the radio and choose “What words?� the programs to listen to, which may not be relevant for women farmers. Radio programs should target “Let’s unite.� women (although ensuring women’s access to radios “Let’s unite?� in the household may not be so easy).  Literacy and language barriers. Radio requires no “If the entire village gets organized to fight bushfires, reading and speaks the language of the community it you’ll never be afraid of bushfires again!� intends to reach. Rural radio programs serve a variety of purposes,  Geographic coverage. Radio can easily and simulta- such as promoting an anti-bushfire campaign in Chad. neously reach large numbers of isolated communities Whether produced at the local, regional, or national level, over vast geographic areas. such radio programs are most effective when made  Local focus. Radio can focus on local issues in with audience participation, in local languages, and tak- local languages. The United Nations Development ing into account cultural traditions. Rural radio program- Programme notes that in Latin America, for example, ming, besides spreading agricultural information, can most radio programs are locally or nationally produced, fulfill other important functions: It can stimulate a regu- whereas only 30 percent of television programming lar discussion and debate among the people involved in comes from the region. agricultural development, provide a forum where rural communities can express their views, and can even be New ICT has benefited radio by offering better and cheaper a powerful means of investigation for decision-makers, means of recording, mixing, editing, and transmitting (for exam- helping them to approach local agricultural development ple, the digital audio recorder, audio editing on computers, and in appropriate ways. the electronic transmittal of sound programs as attachments) (image 6.8). Development practitioners increasingly recognize Source: FAO n.d. the potential for combining radio with new Internet-based ICTs, given that the new ICTs are still limited in some areas by the lack of telecommunications infrastructure and reach only a Rural radio producers must know the rudiments of agricul- small number of people in developing countries. ture, be familiar with farmers’ agricultural problems, and have a good general understanding of rural life to ensure that their Like radio, video has the advantage of attracting people’s programming is relevant to their audience. Production teams curiosity, and it appears to be an especially convincing are taught to work with farmers and, to the extent possible, medium when it captures familiar people or situations (as organize broadcasts directly from the field in open-air gather- does local participation in radio broadcasts). Advances in ICT ings in which entire villages or communities participate. have made video much easier and less costly to produce and disseminate. Like radio, video does not demand literacy, and Program content is generated through participatory discus- it suits the narrative culture that prevails in most develop- sions with community representatives and presented in ing countries. Images can make it easier for viewers with languages and formats to which the audience relates socially little education to understand complex topics. An additional and culturally. For every rural radio project, the starting point benefit is that video can foster social cohesion in agricultural IC T IN A GR IC ULTUR E S E C T I O N 2 — E NHANCING P RODUCT IVIT Y O N TH E FA RM 135 IMAGE 6.8: New Technologies Have Allowed for More Innovative of the video format and began to use more Radio Programs visual aids in its work with women. The fact that the videos showcased women’s exper- tise and innovation convinced some male researchers that they should work more with women farmers. Giving a voice to women and other marginalized groups in this manner and involving them in the development and dissemination of agricultural technology may be an effective means of promoting greater social inclusion. To see the rice videos, visit Africa Rice Center (http://www.warda.org/ warda/guide-video.asp). Making Information Accessible through Mobile Phones and Internet Colombia’s Ministry of Agriculture and Rural Development, in collaboration with partners, facilitates AGRONET, the National Agricultural Source: Farm Radio International. Information and Communication Network of Colombia (www.agronet.gov.co). AGRONET communities by featuring the actions and voices of marginal- is a network of agricultural information providers that have ized groups (Lie and Mandler 2009). adopted a common platform to standardize and integrate resources to offer value-added information and communica- Through videos developed in collaboration with farmers, the tion services for the agricultural sector using modern and Africa Rice Center (http://www.africarice.org/) has widely dis- traditional ICTs. seminated information about rice productivity and marketing opportunities (van Mele, Wanvoeke, and Zossou 2010). The To send relevant information to producers, AGRONET Africa Rice videos stimulate learning and experimentation in develops user profiles based on a needs assessment and rice production from field to market. A series of 11 videos in users’ particular productive activities. AGRONET introduces more than 30 African languages on producing, processing, new methods and improved workflows to provide content and marketing rice were produced and widely shared with systemically and takes advantage of mobile technologies to local radio stations and farmer organizations across Africa. reach a growing number of rural users. Through SMS, pro- These videos have reached more than 500 organizations and ducers receive updates on AGRONET’s platform, including probably hundreds of thousands of farmers; it is likely that changes in its databases and other news and events perti- they continue to be copied and distributed more widely, but nent to agriculture. The ministry plans to expand the service this spontaneous diffusion and any resulting innovation are to reach 160,000 producers in 2011 with context-specific difficult to monitor and evaluate. information on agricultural markets, inputs and supplies, weather alerts, and other subjects. Over the medium term, The videos appear to have had a tangible impact on the AGRONET plans to provide a greater wealth of content and livelihoods of rural women. Because the videos featured information services to producers by adding capacity in digi- women, they reached more women, who were more likely tal television. to apply what they learned (Africa Rice Center 2009). For example, women who saw the video on parboiling rice The government’s efforts to reduce the digital divide improved their parboiling techniques and marketed their through public-private partnerships and growing broadband rice through new outlets. Others developed a better rela- penetration in rural municipalities catalyzed the develop- tionship with the NGO that showed the video, formed ment of AGRONET’s innovative, value-added information producer groups, and gained assistance from the NGO in services. An assessment by Colombia’s e-Government obtaining credit to purchase inputs for improving rice pro- Program ranked the ministry first in online information duction. The NGO, in turn, recognized the effectiveness provision. E C O N O M IC AND S E CT OR WORK 136 MOD ULE 6 — ICTS A S ENA B LER S OF A GR ICULTUR A L INNOVATION S Y S TEM S In Uganda, ARENET (Agricultural Research Extension Using ICT to Share and Elicit Local Knowledge Network) is a web portal (http://www.arenet.or.ug/index Many organizations and governments see ICTs as tools that .php) created to strengthen the links between the National bring information and modernity to rural areas. They help Agricultural Research System and the National Agricultural get messages “out.� Undoubtedly they extend the reach of Advisory Services program and its related extension service extension and advisory services, but they can become one- providers. The portal provides access to practical and tech- way pipelines, pushing information to uninterested commu- nical agricultural information from national and international nities. A more inclusive approach uses ICTs to empower rural sources. Users can post questions and problems through the people to document their own knowledge so it can be shared system to experts at research institutes and in local govern- with other communities and with extension. This empow- ment, and ARENET makes it possible for farming communi- ering approach is more challenging as it depends on the ties, researchers, extension agents, and the private sector to capacities of the communities and their willingness to share communicate among themselves and to share their knowl- their knowledge. For their part, proponents of the approach edge and experience. The site uses English but may include must be willing to use ICTs to enable changes that cannot other local languages in the future. be defined before the work is underway. The approach will involve some loss of control and very probably unexpected The question-and-answer module of the website is divided impacts. into categories such as livestock, agricultural engineering, and forestry, and it lists the most viewed and recently People will use a system for sharing information, including posted questions. There is also a page from which various agricultural information, if the content is adapted to local technical publications can be downloaded. Questioners are needs, sourced appropriately, and presented suitably. In advised that their query should receive an answer within Costa Rica, a national team conducted a participatory rural three days. The discussion forum section is not yet opera- communication appraisal in selected regions to engage tional. Like many Internet information sites at present, this farmer organizations in sharing their knowledge. In the site will be more valuable for large-scale farmers than for Brunca region, for example, livestock production dominates smallholders. agriculture, and farmers identified livestock diseases as an important concern. One participant, a woman farmer, was Plans are well advanced for an ambitious ICT platform famous for her knowledge of how to cure sick cows. The to improve Uganda’s research capabilities and the way organization decided that the best way to document her it delivers extension services. The National Agricultural knowledge was to film her. The videos could be shown at Advisory Services and the National Agricultural Research the local livestock auction and remain available digitally on Organisation will be supported by this program, which, the national PLATICAR (“talk�) web platform.11 among other things, will allow feedback from farmer orga- nizations and other users of the services. One important In other regions where the participatory method was used, aim is to change the culture of the research organizations it elicited information and knowledge on other themes. to one of accountability, transparency, and competence. Farmer organizations producing tuber crops decided to pre- This transformation should have obvious benefits to the pare radio programs that were broadcast and then archived clients. in PLATICAR. For rice producers, information sheets were developed on each of many rice varieties in Costa Rica. ICTS THAT PRESERVE FARMERS’ KNOWLEDGE The participatory approach that led to the choice of the most ICTs—some of which, like radio, have been available for knowledgeable person was the innovation that enabled farm- some time, and others, such as digital video, which are rela- ers to recognize that their own local and traditional knowledge tively new to rural areas—bring farmers’ views and voices was most appropriate for their needs. The innovative decision into agricultural advisory and research services. ICTs are was to select the best medium for sharing this knowledge, invaluable for eliciting and preserving local knowledge, such as well as the place and time where it would be shared most as knowledge of the medicinal traits of plants or traditional effectively. The fact that the information is digitally preserved erosion control practices. The following sections illustrate how rural people in a range of settings have benefited from 11 Plataforma de Tecnología, Información y Comunicación Agropec- and enriched advisory services through greater participation uaria y Rural (Platform for Agricultural and Rural Information and and knowledge sharing mediated by ICTs. Communication). IC T IN A GR IC ULTUR E S E C T I O N 2 — E NHANCING P RODUCT IVIT Y O N TH E FA RM 137 means that it can be archived and available IMAGE 6.9: Farmer-Led Documentation Processes Can Use Digital through PLATICAR. The team that led the Tools in Place of Paper participatory process was the key enabler, because it built trust among stakeholders and brokered the sharing of personal knowledge that could benefit the whole group. Documenting and Mobilizing Indigenous Knowledge A related information-sharing effort docu- ments indigenous knowledge (image 6.9). As experienced farmers migrate to urban areas, as the local farming population ages, or as climate change and social upheavals uproot agricultural communities, much knowledge can be lost. This knowledge is worth preserv- ing simply for its cultural value, but it is also instrumental in aiding researchers and exten- Source: Charlotte Kesl, World Bank. sion workers to develop and adapt technology and practices for local conditions (and could help communi- and Knowledge Sharing.12 Farmer-led documentation is ties recover from natural disasters and conflicts). defined as an empowering process in which local communi- ties take the lead role in the documentation process. The In Bolivia, the CARENAS project started in 2003 in the results are used by community members for learning within Department of Santa Cruz to strengthen rural communica- the community (internal learning) and exchange between tion for sustainable natural resource management and rural communities (horizontal sharing) and communities, develop- development. Representatives of municipalities, farmer asso- ment agents, and policymakers (vertical sharing).13 This pro- ciations, and NGOs participated in intensive training for one cess of engaging with farmers to document their knowledge month in communication methods and techniques, the use and experiences showed that a “people-led development of ICTs, and the production and use of multimedia materials process does not only help increase yields or conserve the in the field. The 21 people who passed the course became local biodiversity; it can also help farmers to get access to local audiovisual specialists, who engaged in a participatory the resources they need and can contribute to strengthening process with advisory service workers and farm communities local organizations, networks, and alliances. Most important to elicit farmers’ traditional knowledge and integrate it with of all, it leads to empowerment.� technical knowledge. Based on this interaction, the audiovi- sual specialists produced draft videos, which were validated through focus group discussions, interviews, and farmer- extension meetings. The videos were then shown to the ICTS TO MONITOR AND EVALUATE AGRICULTURAL INTERVENTIONS communities and, after participatory evaluation, final versions were produced. They were distributed to 25 communities in Monitoring and evaluating outcomes of research results (such 11 municipalities (see http://www.fao.org/tc/tcdm/italy/op_ as new varieties and management practices), the construc- bol034_en.asp?lang=en). The videos, which demonstrated tion of agricultural infrastructure (often involving contractors), such techniques as repairing drainage ditches using nets and or the impacts from extension programs or new technolo- vegetative cover, recycling organic waste, and building com- gies in a decentralized rural setting can greatly benefit from post latrines, eventually formed part of a training package con- sisting of printed guides for trainers and booklets for farmers. 12 See http://www.misereor.org/fileadmin/redaktion/MISEREOR_ Strengthening_people-led_development.pdf. In South Asia, in an effort to increase their impact, organi- 13 The farmer-led documentation approach was promoted by Par- ticipatory Ecological Land Use Management (PELUM), Promot- zations working with rural communities in Bangladesh and ing Local Innovations (PROLINNOVA), and OXFAM Novib. See India embarked on a process of Farmer Led Documentation www.prolinnova.net/fld.php. E C O N O M IC AND S E CT OR WORK 138 MOD ULE 6 — ICTS A S ENA B LER S OF A GR ICULTUR A L INNOVATION S Y S TEM S ICT. ICT can transform monitoring and evaluation, which are place in Niger and in India. In both locations, rural organiza- often afterthoughts in agricultural interventions because of tions established community-based information centers with the difficulties associated with analyzing impact. Monitoring international support. The focus was on helping rural com- and evaluation are expensive (entailing the costs of traveling, munities anticipate drought and to help them develop and producing materials, hiring experts, analyzing data), especially arrive at decisions that can mitigate the impact of drought for poorly resourced public agencies. It is often a challenge to when it occurs. measure impact accurately because so many variables can- not be controlled (including unanticipated changes in weather, In the VASAT initiative, a blend of remote sensing and agro- conflict, natural disasters, or community or farmer health). meteorology techniques was used to develop highly localized, ICT can address some of these challenges by reducing the village-by-village forecasts of drought vulnerability. These paper trail, increasing farmers’ responses (and the diversity of forecasts were presented as simple color-coded maps of the respondents), improving remote observation, and expanding locality (a cluster of adjoining villages). Red/amber indicated data accuracy. (See also Module 13 on governance.) severe vulnerability to drought (including drinking water scar- city), whereas green indicated that business as usual could continue. Yellow indicated that the village needed to give Monitoring and Evaluating Agricultural Interventions attention to altering their cropping pattern and pay attention and Research to fodder supplies. Developed for the coming season from India has pioneered the use of ICT in many agricultural global and regional rainfall forecasts, these maps and a set interventions and is often at the forefront of technological of recommended actions are shared with rural communities innovation for smallholder farming. To track research being through the information centers. Every village has at least one conducted in India, the Indian Agricultural Statistics Research individual who is trained in reading the vulnerability maps. Institute developed the Project Information and Management System for the Indian Council of Agricultural Research. The Analyses of the effects of this intervention reveal that after data management system was created to prevent duplication two seasons, a large number of individuals started to use the between research projects, monitor research initiatives and color-coded maps as reliable information resources. In 2009 their progress more effectively, evaluate research outcomes, in India, a particularly serious drought was forecast at the and contribute to smoother management processes. By micro level although not at the aggregate level. Rural fami- generating online software, the Indian Council of Agricultural lies prepared for the anticipated drought by storing fodder Research has the ability to monitor and evaluate research and not sowing water-intensive crops such as rice. Through projects at national and state levels simultaneously. Users these actions, they mitigated the effects of the ensuing involved in research projects can upload information on new drought, which was serious, lasting more than halfway into projects and update information as the project moves for- the season. Using ICT to monitor weather patterns as well as ward. Users can also browse through projects, which helps farmers’ responses helps VASAT determine the correlation to spur innovation and creative thinking while preventing between the two. In this intervention, it was significant that overlap. Research directors and managers can then manage women were key actors in absorbing and relaying informa- and monitor agricultural interventions and research remotely tion about vulnerability to drought. They were also meticulous and with fewer costs. In addition, the management system data providers for experts to refine or correct the vulnerability can hold research data and final reports. For more informa- forecasts. tion on how the system works, visit the tutorial at http:// pimsicar.iasri.res.in/. Pajat (http://www.pajatman.com/), a company founded in 2009 and financed by the Finnish Funding Agency for In another project, which monitored drought vulnerability, Technology and Innovation among others, has also pioneered local participants played key roles in validating and evaluat- ICT for monitoring and evaluation. The POIMapper, using GPS- ing the effectiveness of the information provided. The Virtual enabled mobile phones, can collect data and photos with digi- Academy for the Semi Arid Tropics (VASAT) (http://www tized links to location. Numeric or text data can be uploaded .icrisat.org/vasat) uses components such as PC-equipped to a central database through cellular or bandwidth networks. rural information centers, community radio, and mobile tele- Data collected for a particular intervention can be mapped on phony in conjunction with human-centered efforts to antici- a computer; multiple datasets can be layered to create more pate and monitor the effect of drought at the micro level. informative maps. This tool can be used to monitor a variety of Since 2005–06, activities under this initiative have taken projects, including projects to develop infrastructure such as IC T IN A GR IC ULTUR E S E C T I O N 2 — E NHANCING P RODUCT IVIT Y O N TH E FA RM 139 wells or to manage forests (see the forestry module). It may services. These lessons and their potential solutions are dis- also be used to monitor the effects of agricultural interven- cussed below. tions by mapping data on increases or declines in crop yields or frequencies of livestock disease. (See IPS “PoiMapper in Because advisory services are one of the most direct lines to Kenya� for more information in Module 15.) poor farmers, it is critical to determine the main objective of services and the most appropriate ways to use ICT to meet In Africa, organizations have used mobile phones to collect them. If the primary aim is to get information to farmers, information from farmers about how they can improve their then multiple channels and media should be used to reach programs, as illustrated in box 6.12. many groups. The quality and relevance of the content/advice to be provided is also important, as is the level of community “connectivity� to the providers’ messages. Conversely, if the BOX 6.12: Mobile Phones as Tools for Farmer Surveys aim is to maximize farmer-to-farmer documentation and shar- and Feedback ing, then the emphasis is likely to be much more on capacity building and issues of culture, language, and various forms Voice of the Farmer (VoF) is a pilot project testing a of literacy. structured approach to obtain broad-based, low-cost, and frequent feedback from farmers in Kenya, Tanzania, The technological component of an ICT for advisory services and Uganda, using mobile phone technology. The pilot should be developed locally, in collaboration with users, and was conducted between January 2010 and March 2011 drawing on local, national, and international content as appro- by Synovate Panafrica, with funding from the Bill and priate. Attention should be focused on what the technology Melinda Gates Foundation. needs to deliver, not its capabilities. The approach was designed to help organizations collect a steady supply of empirical, actionable data more rap- During implementation, the roles and responsibilities of the idly and cost-effectively. Feedback from target constitu- various actors need to be defined. Accountability improves encies enables organizations to assess whether they when participants are aware of what is expected from them need to change their activities and approach to better in terms of their roles and their commitments of human meet their constituents’ needs. In the shortest possible and financial resources and time. This clarity is especially time, findings can be available to participating organiza- important for national advisory services, where stakeholders tions through an online portal. are diverse and systems are decentralized. Regular face-to- face meetings are also crucial to capitalize on information How has VoF been used? Some organizations used exchange and stimulate new ways of working together and VoF data to monitor progress in implementing projects. sharing lessons learned. Others used the surveys to help guide the content of products they planned to develop. One organization Any technology used for advisory services must be user- used VoF to get a better idea of how to focus its monitor- friendly, accessible, and serve farmers’ needs quickly and ing and evaluation surveys. Another used VoF primarily sufficiently. Trust, useful information and knowledge, and for quick marketing surveys to receive timely feedback appropriate support are critical to user sustainability. Part of on new products and services. Experience with the pilot ensuring sustainability is engaging in proper prior analysis project indicates that VoF has potential as an efficient, and involvement of end users. These steps will help provid- low-cost solution meeting a number of needs in private, ers determine whether the users can pay for the service and, public, and civil society organizations. if so, how much; understand the culture surrounding the use Source: Authors; see also http://www.synovate.com/contact/africa/. of technology in a given location; identify social and political challenges that may arise during implementation; and deter- mine what kinds of applications will serve users best based on their agrarian activities. LESSONS LEARNED Despite the benefits of using ICT in agricultural advisory and Special efforts have to be made to guarantee that both men extension services, many challenges remain. Lessons from and women participate in and benefit from information and the examples herein and Innovative Practice Summaries are communications for advisory services. The opportunities relevant to many projects that use ICT to improve advisory offered by information technologies can significantly enhance E C O N O M IC AND S E CT OR WORK 140 MOD ULE 6 — ICTS A S ENA B LER S OF A GR ICULTUR A L INNOVATION S Y S TEM S information provision to rural women in developing countries. IMAGE 6.10: Women Can More Easily Participate in Without equal access to information, women are at a disad- Rural Radio Interviews vantage in making informed choices about what to produce and when to sell their products. While ICT certainly improves these circumstances, availability of an ICT device does not necessarily imply equitable access. More often than not, ICT devices (radios, phones) remain under the control of men, preventing women from tapping knowledge and information relevant to their needs. Gender-disaggregated data, moni- toring, evaluation, and better targeting will improve these outcomes. INNOVATIVE PRACTICE SUMMARY Farm Radio International Involves Men and Women Farmers Radio is used to spread knowledge of improved farming and land Source: Farm Radio International. management practices, but farmers do not necessarily adopt them. Farm Radio International, a Canadian NGO funded by the Bill and Melinda Gates Foundation, has created a new model of included in the broadcasts and participatory aspects of the radio broadcasting that seeks to overcome some of these chal- programs, improving their visibility and importance in the lenges to adoption. local agricultural supply chain. Farm Radio International partners with 360 radio stations Empirical evidence of impact, which is currently lacking for in 39 African countries and reaches more than 200 million many applications of ICTs in agriculture, is available for the smallholders in more than 100 African languages. It offers Participatory Radio Campaigns. In 90 communities across a number of services but primarily develops Participatory five countries, about 4,500 farm households (1,988 women Radio Campaigns, theme-based radio programs that con- and 2,452 men in total) were randomly selected and sur- tinue for four to six months. Themes range from livestock veyed through questionnaires. Key informant interviews husbandry to farmer innovation, soil conservation, and and site observations were also used to assess overall issues specific to rural women (such as maternal health, impact. The communities were split into three categories: farm implements designed for women, and women’s land (1) communities that participated actively in broadcasts and rights).14 program design, (2) communities that listened to broadcasts without active participation, and (3) control communities (or The most innovative aspect of the Participatory Radio those that did not have network radio signals to listen to the Campaigns is the broad base of farmer participation. First, programs). men and women farmers help to develop the scripts, and a number of communities are invited to participate dur- Thirty-six percent of active listening communities adopted ing implementation and evaluation (image 6.10). Second, improved farming practices, and 21 percent of passive lis- programs are broadcast on a consistent schedule to keep tening communities adopted. Women from active listening farmers engaged. Third, Participatory Radio Campaigns communities were much more likely to adopt the practices feature voice response systems and call-in options that covered in the radio programs (almost as likely as male have proven remarkably successful in retaining listeners. listeners) than women in passive listening communities. The information elicited in this way helps extension staff These adoption rates are higher than those from many and local NGOs identify the challenges, understand the per- other radio programs, demonstrating that participatory spectives, and gain the knowledge associated with a given radio is more effective than programs that do not engage community or area. Finally, women farmers are regularly farmers directly. More men than women listen to and have access to radio programs (table 6.1), although when women have no radio in the household, they access radio 14 See http://farmradio.org/english/radio-scripts/gender.asp. elsewhere. IC T IN A GR IC ULTUR E S E C T I O N 2 — E NHANCING P RODUCT IVIT Y O N TH E FA RM 141 TABLE 6.1: Radio Access and Frequency of Listening Extension System and complements and reinforces other in the Household (%) extension activities. MEN WOMEN Through the Internet, eXtension provides 24/7 access to Radios in the household 84 68 objective, science-based information from land-grant uni- Access to radio (both inside and outside of the home) 96 89 versities and partners. One of eXtension’s most notable Frequency of listening (at least once/week) 95 86 features is “Ask an Expert,� which puts people in touch Source: Farm Radio International Participatory Radio Campaign Evaluation with experts in universities across the country. In addition Report 2011 (unpublished). to those resources, eXtension’s communities of practice connect extension professionals throughout the country to Participatory Radio Campaigns take approximately 12–18 collaborate in developing new content and web services. months to design, distribute, and evaluate. For themed pack- eXtension has transformed extension’s traditional teaching ages, costs range from US$ 25,000–50,000. For the whole role by offering a wide range of virtual learning and skill- process, including training and assessment, costs can range development activities and events on its website. Through from US$ 80,000 to US$ 200,000, depending on the country social networks and media (including blogs), the communi- and other factors. To put these figures into perspective, it ties of practice expand the reach of extension and engage is useful to know that if a campaign reaches 1 million farm with new users. families, the cost lies somewhere between US$ 0.08 and The eXtension websites are a useful resource for those seek- US$ 0.20 per listening family. Given the adoption rates cited ing to develop similar programs in other countries. They offer earlier, costs per adopter range from US$ 0.20 to US$ 1.00. a wealth of information on the approach and the tools used These costs are relatively small in light of the relatively high (http://www.extension.org and http://about.extension.org). adoption rates and resulting productivity increases. Philippines: ICTs Power Advisory Service for INNOVATIVE PRACTICE SUMMARY Agriculture, Fisheries, and Natural Resources E-Extension in the USA and Philippines The Philippines launched its e-Extension Program in This summary looks at how electronic advisory services are December 2007. The lead organization—the Agricultural being implemented in the United States and the Philippines. Training Institute—relies on collaboration with various organi- Both programs use ICTs to increase the expertise available zational units within the Department of Agriculture. The goal in the national advisory service and transmit that expertise to of e-Extension is to integrate and harmonize ICT-based deliv- a much larger audience—while learning from that audience ery of advisory services for agriculture, fisheries, and natural in the process. resources and to use its network of institutions to provide a more efficient alternative to a traditional extension system. e-Extension can be thought of as an electronic, interactive United States: ICTs to Co-Create and Deliver Extension bridge where farmers, fishers, and other stakeholders meet and Educational Knowledge and interact to enhance the productivity, profitability, and In 2001, the United States government decided to trans- global competitiveness of the agricultural sector. The benefits form the way its Cooperative Extension System fulfilled of the approach are expected to include empowered stake- its mission through technology. The program that became holders, who have alternative means of acquiring new knowl- known as “eXtension� was approved as a national initiative edge and skills related to farming and fishing technologies; in 2004 and fully launched in 2007. By definition, eXtension reduced costs of education and training; more optimal use of is the product of new and emerging technologies. The pro- resources; enhanced delivery of programs and services; and gram aims to become a national, Internet-based informa- an organized repository of information, harmonized across tion and education network; provide accurate, up-to-date related initiatives. information for use anytime, anywhere; use technology and new organizational processes such as communities The main program components are e-Learning and e-Farming; of practice; enhance the accessibility, quality, breadth, an e-Trading component is available as well. e-Learning courses and depth of information provided to the public; foster col- are available online and can also be delivered to small groups. laboration within the Cooperative Extension System; and Blended courses offer computer-based instruction backstopped reduce duplication. It is an integral part of the Cooperative with field activities and face-to-face interaction between E C O N O M IC AND S E CT OR WORK 142 MOD ULE 6 — ICTS A S ENA B LER S OF A GR ICULTUR A L INNOVATION S Y S TEM S learners and experts. Learners also have the opportunity research, the private sector, farmer groups, government, and to interact through online discussion forums. Online they universities (including some student members). also have access to a wide array of free digital resources to increase the knowledge gained through coursework and Since its establishment, the group has had very positive feed- obtain additional information to make decisions about their back. Members have shared their experiences and created agricultural enterprises. Media for school radio programs are their own informal networks. An active group facilitator, fully available as well. The e-Learning courses are designed to be dedicated to the group, has been central to its success. The highly interactive. Photos, video, games, and puzzles also facilitator must increase awareness of the platform among help to sustain interest. potential users, bring individuals together and identify their common interests, initiate discussions, motivate members e-Farming uses ICTs to deliver farm and business advisory to contribute, identify experts, and provide technical assis- services. It provides technical assistance to farmers to tance. The facilitator needs support from IT as well as con- increase the profitability of their enterprises and facilitates tacts who can gain visibility for the platform. Although TECA the exchange of information among traders and investors in is designed as an online forum, personal gatherings proved agriculture and fisheries. Its Farmers’ Contact Center caters essential to establish a vibrant online community (the kind to farmers’ concerns through voice, text, e-mail, and other of interaction will require funding for meetings, phone calls, online communication formats such as instant messaging transport, and other items that facilitate personal interaction). and online forums. Another major lesson is that students are a very important and active group of participants; introducing them to the idea e-Trading is a service for online trading and for information of knowledge management, is a key asset for their future on market trends, investments, market prices, inventories of work in agriculture. producers and suppliers, and other information, initially avail- able through the PhilAgribiz Centers of the Department of Agriculture. For more information, see http://e-extension.gov .ph/ and http://www.ati.da.gov.ph/. INNOVATIVE PRACTICE SUMMARY Participatory Video and Internet Complement Extension in India INNOVATIVE PRACTICE SUMMARY Digital Green (http://www.digitalgreen.org/) started with the TECA Uganda Exchange Group Offers Practical support of Microsoft Research in India. It disseminates tar- Advice for Smallholders geted agricultural information to small-scale and marginal farmers in India through digital video. The system includes a The TECA web platform (http://www.fao.org/teca/) includes database of digital videos produced by farmers and experts. online resources, discussion forums, and query/response The topics vary, and they are sequenced in ways that enable services that offer practical information on technologies and farmers progressively to become better farmers. Unlike practices that will help small-scale producers. The platform, some systems that expect ICT alone to deliver useful knowl- which is a medium for FAO technical units, partners, and edge to marginal farmers, Digital Green works with existing, projects to document and share successful technologies and people-based extension systems to amplify their effective- good practices, is also a tool that supports further develop- ness. The videos provide a point of focus, but it is people ment, testing, adaptation, sharing, and adoption of technolo- and social dynamics that ultimately make Digital Green work. gies for small-scale farmers. Local social networks are tapped to connect farmers with The central TECA platform on the FAO server permits infor- experts; the thrill of appearing “on TV� motivates farmers. mation sharing at the global level in English, French, and Although Digital Green requires the support of a grassroots- Spanish. A local version on the partner organization’s server level extension system and other partners, it is effective contains modules provided by FAO for information sharing because its content is relevant and it maintains a local pres- and exchange within a national agricultural innovation sys- ence. This local presence makes it possible to connect with tem; the modules can be adapted to local languages and farmers on a sustained basis. Key aspects of the model specific information needs. For example, the TECA Uganda include the following: Exchange Group, piloted in 2010, currently has more than 300  Digital video. Digital Green relies on recent advances in members from public and private advisory services, NGOs, digital videography, including low-cost camcorders and IC T IN A GR IC ULTUR E S E C T I O N 2 — E NHANCING P RODUCT IVIT Y O N TH E FA RM 143 PC solutions for editing digital video, which have greatly limited infrastructure and financial resources. High- reduced the costs of developing local video content. bandwidth Internet connections are not necessary,  Mediation. Videotaped demonstrations are not a com- since one option for receiving the video content is plete extension solution. They lack the interactivity DVD. that is the hallmark of good extension. Digital Green  Feedback. By enabling anyone to be a content pro- relies on a local facilitator, whose role is to pause or ducer and consumer, Digital Green gives even isolated repeat video to engage the audience in discussion and communities a voice. Other types of audio- and video- capture farmers’ feedback. based mechanisms are used to support reporting and  Partnerships. Digital Green emphasizes the develop- to build trust among virtual communities of participants. ment and delivery of digital content to improve the cost-effectiveness of organizations involved in agricul- The Digital Green approach is underpinned by various tech- tural research and/or extension. As noted, the goal is nological innovations (http://www.digitalgreen.org/tech). For to strengthen existing institutions and groups, not to example, its COCO (Connect Online, Connect Offline) soft- create new ones. ware supports data tracking for organizations with sizable  Community-based content. Content must be field operations, even where Internet service is intermittent relevant to local conditions (crops, climates, soils, and/or poor. COCO, a standalone application in the Internet farming practices, and so on). The use of video browser, requires no additional desktop software installation provides opportunities to customize materials. When or maintenance. It has an open-source, customizable frame- videos feature farmers’ fellow villagers, farmers often work and can be used without support from professional IT instantly connect with the message. Digital Green has or engineering staff. Digital Green’s Analytics System pro- an open model to disseminate content, so it is freely vides day-to-day business intelligence on field operations, available to everyone to use. performance targets, and basic measures of returns on  Beyond connectivity. To be successful and sustain- investment relevant to an organization (see http://analytics able, Digital Green operates in environments with .digitalgreen.org). Topic Note 6. 3: E-LEARNING AS A COMPONENT OF AGRICULTURAL INNOVATION SYSTEMS TRENDS AND ISSUES With the advent of radio, ICTs opened new channels for learn- Learning—formal and informal—is central to all innovation ing that proliferated rapidly as the range of ICTs expanded systems, including those for agriculture, and in sustaining the to include computers, the Internet and their applications capacity to innovate over the long term. Formal learning con- (CD-ROMs, e-mail, websites, multimedia, and so forth). sists of specific courses of study of varied length and complex- Learning delivered through the newer ICTs was termed ity in the educational system. This system develops the skilled “e-learning,� and its potential to facilitate “distance learning� experts who contribute to agricultural innovation (the varied and “distance education� (instruction and learning outside research disciplines and areas of technical expertise, innovation the traditional classroom setting) was recognized immedi- brokers, as well as developers of food processing systems and ately (image 6.11). standards, financial and risk management instruments, rural The World Bank defines e-learning as “the use of electronic infrastructure, IT systems—the list is as extensive as the agri- technologies to deliver, facilitate, and enhance both formal cultural innovation system is comprehensive). Outside of this and informal learning and knowledge sharing at any time, context, informal learning occurs through the varied interactions any place, and at any pace.�15 E-learning can widen the in an agricultural innovation system and is particularly important inclusiveness of the agricultural innovation system by bring- in agricultural extension (FAO 2003). The role of agricultural edu- ing elements of traditional learning and mentoring to a wider cation and training in an innovation system is discussed in detail in Module 2 of World Bank (2012). This topic note focuses on the role of e-learning, particularly in extension interactions. 15 See http://go.worldbank.org/3IVXTNIW20. E C O N O M IC AND S E CT OR WORK 144 MOD ULE 6 — ICTS A S ENA B LER S OF A GR ICULTUR A L INNOVATION S Y S TEM S IMAGE 6.11: E-learning Creates Opportunities for Rural Participation needed. E-learning originated in a postindus- trial setting among a relatively well-educated population with reasonably good infrastructure for accessing digital services. Investments in digital content for e-learning were an agreed priority that resulted in the development of a host of advanced platforms and applications for learners and facilitators/teachers. The innovative practice summaries in this topic note indicate some of the adaptations and strat- egies required for e-learning to succeed in rural areas of developing countries, especially com- munities with limited literacy (digital and oth- erwise) and access to digital resources. Both examples come from India. The first summary describes an e-learning initiative in which farm- ers use mobile phones to gain specific skills that enable them to benefit more substantially Source: Curt Carnemark, World Bank. from services such as commercial banking and extension advice. The second describes the audience and further empowering people through learning development of a web-based platform called agropedia for communities. storing and sharing agricultural information in a range of for- mats and languages. The platform, which incorporates Web In theory, e-learning enables governments, agricultural advisory 2.0 elements such as wikis, blogs, and commentary spaces, services, NGOs, farmer organizations, private companies—in provides much-needed content for e-learning for farmers fact, any actor in the innovation system—to reach large num- and extension workers. Through these features and multiple bers of producers. Content can be updated quickly and accom- access points (including mobile phones and landlines), the plat- modate rapidly changing needs. E-learning can also provide form connects researchers, extension personnel, and farmers fresh approaches that are learner-centric, engaging producers in various information-sharing and e-learning activities. and their communities as partners and adult learners in design- ing and implementing the learning experience. In addition, e-learning can make it easier to maintain quality by supporting LESSONS LEARNED feedback mechanisms and ensuring appropriate accreditation The experiences summarized here offer important social and certification processes. and technical perspectives on e-learning for rural people These qualities make e-learning especially attractive to and extension workers in developing countries. ICTs can extension, especially for expanding extension workers’ and facilitate a learner-centric process if they are adapted care- farmers’ knowledge and skills. Efforts in extension education fully to the particular social, economic, and political con- have long been challenged by the use of a formal didactic text (including constraints on learners’ time and travel). framework that expects students to fit with the established A multistakeholder partnership is essential for promoting courses (Kroma 2003). Public sector extension has suffered learning among the farming community through ICTs, and from declining investments, the high proportion of farmers in agricultural institutions need to produce more extension- relation to trained extension workers, and the need to incor- oriented digital content. Content for e-learning must be highly porate adult learning strategies and indigenous knowledge granular for rapid uptake and must be linked to specific learn- into their activities (World Bank 2012). ing outcomes. E-learning does not require the complex online workflows associated with standard learning management ICTs (and e-learning) may make it possible to surmount some systems, but a priority in promoting e-learning in agricultural of these barriers to effective extension training and outreach innovation systems is to build ICT capacity in personnel at all in developing countries, but significant adaptations will be levels of agricultural education, training, and extension. IC T IN A GR IC ULTUR E S E C T I O N 2 — E NHANCING P RODUCT IVIT Y O N TH E FA RM 145 Finally, ICTs and virtual interactions are not sufficient to ICT companies. In addition to using ICTs to build capacity, form cohesive learning communities. Peer-to-peer contact financial institutions can use them to reduce the transaction significantly improves learning, and mobile phones can costs of lending. Integrating these functions can improve provide useful support. In the lifelong learning for farmers the likelihood that the L3F process will be replicable and initiative, for example, mobilization, social capital, and social sustainable. networking played a major role. The use of ICTs for learn- ing influenced development outcomes because the learning Integrating Mobile Phone-Based Learning and Credit experience was tailored to women’s cognitive social capital for Women Livestock Producers and reinforced by links with commercial banks. VIDIYAL, an Indian NGO, uses L3F to promote community banking among 5,000 women organized into self-help groups (SHGs). During 2008, nearly 300 women from the SHGs became partners and decided to build their capacity through INNOVATIVE PRACTICE SUMMARY open and distance learning related to various aspects of Lifelong Learning for Farmers in Tamil Nadu sheep and goat production. As poor laborers, most of the Lifelong Learning for Farmers (L3F) (http://www.col.org/ women felt that attending classes or watching multimedia progServ/programmes/livelihoods/L3farmers/Pages/default materials restricted their ability to work and attend to house- .aspx) is an application of Open and Distance Learning hold chores. They asked VIDIYAL and COL to explore the use for Development by Commonwealth of Learning (COL) in of mobile phone as a learning tool, because they would not Commonwealth countries (Balasubramanian and Daniel 2010). need to be confined to any particular place or time during the Banks, universities, and marketing agencies are the partners learning process. in the L3F initiative. Using open and distance learning and ICT, the initiative aims to strengthen the self-directed learning pro- Through face-to-face and computer-based learning, COL cess among men and women in the farming community and and VIDIYAL encouraged the women to develop a business create linkages between various stakeholders. The objective proposal for rearing sheep and goats. They developed a busi- is to facilitate the enhancement of skills and knowledge of ness proposal in which each member would obtain credit for farmers in partnership with financial institutions and research buying nine female goats, one buck, and one mobile phone. institutions. L3F is based on the following premises: The local bank agreed to the proposal and sanctioned a loan  Unexploitative, mutually reinforcing contractual of US$ 270,000. The credit and the legal ownership of the relationships between rural producers and the assets are in the names of the participating women. formal public and private sector will promote rural The 300 women bought simple mobile phones, and VIDIYAL entrepreneurship. entered an agreement with IKSL, one of India’s major  Learning and extension can be a self-sustaining mobile network operators, to send audio messages to the process in which secondary stakeholders support women’s phones free of charge and enable free calls among L3F within a win-win framework. For instance, by group members. The company felt that this strategy would blending rural credit with appropriate capacity build- enhance its mobile service in the long run. ing, rural credit will perform much better in terms of productivity, returns, and nonperforming asset VIDIYAL and some of the participating women were trained levels. Such gains will lead financial institutions to in developing audio content for mobile phone-based learn- support L3F. ing (image 6.12). Learning materials are prepared within the  Capacity building will also enlarge the market for broad principles of open and distance learning to meet learn- bank credit among small-scale and marginal farm- ers’ time and geographical constraints. VIDIYAL developed ers and among other marginalized groups of the the materials in consultation with the Tamil Nadu Veterinary rural poor, particularly women. Modern ICTs can and Animal Sciences University and contextualized them to play a major role in supporting capacity building, the local culture and dialects. which in turn would enhance the market for such technologies. The learning materials convey information in granular fashion— in short, concise messages. Three to five audio messages are The rural poor stand to gain in this process, along with the sent to participating women every day. Each message runs for participating financial institutions, research institutions, and 60 seconds. E C O N O M IC AND S E CT OR WORK 146 MOD ULE 6 — ICTS A S ENA B LER S OF A GR ICULTUR A L INNOVATION S Y S TEM S IMAGE 6.12: Women Use Mobile Phones to Learn between all of these groups. A consortium of agricultural and Better Goat Production Techniques veterinary universities supports the farmers’ and women’s groups in developing business plans and providing learning materials on seed, animals, and other subjects. The women’s association assesses the problems in a particular area, aggre- gates the queries, and sends them through video e-mails to the universities. Designated professors in the universi- ties provide answers through video e-mails that are stored in a digital library for farmers and others to access easily. Similarly, the FAQ system used in mobile phone-based learn- ing is linked to the universities, research institutions, and extension organizations. In this learning process, information flows both ways as farm- ers contribute their informal learning and tacit knowledge to the other partners. Through mobile phones and computers, the students and researchers interact with SHG mem- bers (farmers and women) to understand their indigenous knowledge. SHG members participate in university research by managing research plots, providing data, and in analyz- ing results. Undergraduate and graduate students undergo field training under the supervision of the women farmers. Universities use the distance learning materials developed by women’s groups and farmer groups as reference materi- als for diploma courses in agriculture and horticulture. Source: Commonwealth of Learning. The social capital and capacity building accumulated through Women preferred to receive the messages in the mornings L3F and the interaction it induces have led to some inter- while going to work or performing their household tasks—for esting results. Around 5,000 women and men are involved example, while grazing the livestock. The women reported in structured learning courses through mobile phone. that they learned and practiced the messages and recorded During 2009–11, commercial banks extended approximately them in their diaries. Illiterate women sought the help of US$ 1 million in credit to 2,000 L3F participants. Over the literate family members to record the messages. Most of same period, the total turnover of the supported enterprises the respondents’ families supported their learning objective, was US$ 3.14 million. The higher rate of credit repayment which benefited the entire family by expanding their knowl- among L3F participants encourages support from the banks edge base in relation to small livestock production. (COL 2010). Studies by COL indicate that the quality of the sheep and goat enterprises operated by L3F participants is Other multimedia learning materials were shown during significantly better than those of nonparticipants in the same SHG meetings and telecast through local satellite channels region (Balasubramanian and Daniel 2010). run by the SHGs. Once a week, SHG members met and shared experiences. The horizontal and vertical transfer of Learning through Interactive Voice Educational System knowledge has encouraged self-directed learning among the Recognizing the potential of mobile phone-based learning, members (Balasubramanian, Umar, and Kanwar 2010). COL asked the University of British Columbia to develop an audio-based Learning Management System and Learning Preliminary Impacts Content Management System. The university created An important contribution of L3F is that is establishes links a prototype called Learning through Interactive Voice between research and education institutions, extension orga- Educational System, which not only enables audio-based nizations, and the primary stakeholders. The participatory learning materials to be automated but helps process preparation of learning materials fosters intensive interaction the tests, feedback, and responses through appropriate IC T IN A GR IC ULTUR E S E C T I O N 2 — E NHANCING P RODUCT IVIT Y O N TH E FA RM 147 databases (Vuong et al. 2010). This system should improve overcoming a serious challenge in using ICTs for develop- quality assessment and certification in an informal learning ment. Agropedia is already linked to the principal website environment. of the Indian Council of Agricultural Research (http://www .icar.org.in). INNOVATIVE PRACTICE SUMMARY Agricultural extension workers can use the agropedia plat- Innovative E-Learning for Farmers through form to create their own groups of contact farmers or peers, Collaboration and Multi-Modal Outreach facilitating e-learning. These groups can be sent timed SMS/ The apparent limited availability of digital content relating to text messages and voice messages, enabling specific inter- agricultural extension reduces the opportunity to build sus- est groups to receive specific messages and not broadcasts. tainable, digitally mediated services that bring new benefits A farmer or a practitioner in the field can raise a query via to farmers and increase the reach of extension personnel voice or text. A virtual call center built into agropedia receives (for example, see Balaji 2009). This gap could be overcome the query and passes it to appropriate extension workers and by developing a content aggregation system that receives experts. In this way, trust and/or interest-based messaging and provides information in multiple modes, especially networks can be formed and sustained. through the Internet and voice/text messaging on mobile Agropedia is an example of how a highly integrated plat- phones. form can use multiple approaches to connect a spectrum Such information could be generated using standard valida- of stakeholders, including research experts validating tion procedures in research and education or captured from information, extension personnel in farm research stations transactions (such as query response services involving and in the field, and farmers. Field-based producers do farmers and experts). The same arrangement could pro- not need computers to connect to experts and extension vide additional training support to field-based stakeholders personnel. Farmers with advanced practical knowledge in agriculture, especially farmers. The core principle here is and skills are in a position to share their tips and mes- multi-modality in access to information and training/learning sages with a much wider community and can participate support services. in discussions related to validation of particular pieces of information. The Consortium for Agricultural Knowledge Agropedia has the equivalent of about 10,000 pages of mate- Management: Resources for E-Learning rial on 10 important crops in four languages and has close A key initiative under the World Bank-funded National to 2,000 registered expert users. During two cultivation Agricultural Innovation Project in India is the Consortium seasons in 2009–10, the consortium organized mobile phone for Agricultural Knowledge Management, which has been contacts with about 27,000 farmers in four language regions active since 2008. The initiative is built around an advanced and conducted 2.2 million SMS/voice transactions through online content aggregation system called agropedia 687 specific messages. Analysis revealed that farmers in (http://agropedia.net), which delivers and exchanges infor- general prefer voice as the transaction medium and that the mation through a web portal and mobile phone networks preferred length of voice messages is about 36 seconds accessible to phones with limited or no data capability. maximum. Agropedia also provides a subsidiary platform to support online learning for agricultural extension (http://www The consortium is continuing into its second phase. An .agrilore.org). analysis of costs and efforts in the first phase (January 2009 to September 2010) revealed that university-based Agropedia was designed to overcome the paucity of use- extension personnel could participate in the second phase ful agricultural extension information in the web space. without requiring additional staff. Since mobile phone and Online discussions can be set up to support queries or vali- platform-hosting costs are low in India compared to the rest dation. The platform incorporates Web 2.0 elements such of the world, the analysis concluded that the effort can be as wikis, blogs, and commentary spaces and receives mainstreamed as a regular activity in a typical agricultural uni- material in digital formats including text, still images, versity. The serious challenge is to strengthen ICT capacity audio, and video. A highly targeted search engine allows among specialists and personnel at all levels, ranging from users to search for content in multiple Indian languages, researchers to field-level extension workers. E C O N O M IC AND S E CT OR WORK 148 MOD ULE 6 — ICTS A S ENA B LER S OF A GR ICULTUR A L INNOVATION S Y S TEM S Adapting the E-Learning Approach for Farmers crop variety, and so forth). With the same number of exten- An important activity for the consortium is to use e-learning sion personnel, more problems could be resolved in the methods to help farmers adapt their crop management prac- field owing to the improved skills that women interlocutors tices to cope with drought. This activity was pursued by the mastered through e-learning. Key granules with photos were Adarsha Mahila Samaikhya (AMS), a community-based, all- translated by the activists into the local language (Telugu) and women federation of microcredit groups (south central India) issued as pamphlets for distribution among the interested and ICRISAT, which led the agropedia consortium in 2008–10. farmers. Over a period of two years, 15 of 30 trained activists The AMS has a membership of about 7,400 women (June received higher-level recognition in the form of certificates 2011); almost 70 percent come from households that are from the Indian National Virtual Academy for Rural Prosperity. below the official poverty line. Taking this experience into account, agropedia designers ICRISAT helped the AMS set up the basic infrastructure con- developed a repository of agricultural learning objects for necting the AMS rural operations hub to the Internet, using use in extension (http://www.agrilore.org). Three open and a low-cost landline. A number of AMS activists were trained distance learning institutions—Indira Gandhi National Open in IT. ICRISAT research scholars functioned as trainers and University, Maharashtra State Open University, and the Open remotely supported extension-related queries from farmers. and Distance Learning Directorate of Tamil Nadu Agricultural The scholars escalated queries to senior scientists of ICRISAT University are populating this repository with about 500 if needed. Several AMS women activists were trained in the granules relating to horticulture. They use this information to basics of reporting problems related to crop cultivation, using deliver certificate-oriented learning services to 5,000 farmers a blend of online/e-learning and direct contact. in three linguistic regions. 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UNCTAD (United Nations Conference on Trade and Development). 2010. “Technology and Innovation Report 2010: Enhancing Food IC T IN A GR IC ULTUR E S E C T I O N 2 — E NHANCING P RODUCT IVIT Y O N TH E FA RM 151 Module 7: BROADENING SMALLHOLDERS’ ACCESS TO FINANCIAL SERVICES THROUGH ICT HENRY BAGAZONZYA (World Bank), ZAID SAFDAR (World Bank), and SOHAM SEN (World Bank) Overview. Four kinds of financial services help farmers to achieve their economic goals: credit savings, transfer and payment facilities, and insurance. The major prerequisites for using information communication technologies (ICTs) to deliver these services in rural areas are robust national financial systems (for example, with national payment systems, credit bureaus, ATM switches, central platforms for microfinance) and the infrastructure that allows electronic financial transactions between institutions and individuals. Factors that are critical for ICTs to expand financial services in rural areas are a supportive economic policy and regulatory framework; appropriate financial and nonfinancial products; and mechanisms, processes, and technology applications that can deliver products and services, improve transparency and accountability, reduce costs, and become self-sustaining. Topic Note 7.1: The Use of ICT-enabled Financial Services in the Rural Sector. New channels for deliver- ing financial services (facilitated by ICTs), new players, and greater competition enable service providers to offer a larger suite of financial products and services and acquire better financial information, some of which is useful to government regulation and policy development. A number of nonbank institutions have developed innovative approaches to financ- ing agriculture, enabled by or integrated with ICTs, including mobile financial services, branchless banking, ATMs, and smartcards.  Linking Conditional Cash Transfers and Rural Finance in Brazil  RFID Facilitates Insurance and Credit for India’s Livestock Producers Topic Note 7.2: Policy Strategies and Regulatory Issues for ICT-enabled Rural Financial Services. Often governments lag in introducing the policies and regulations needed to extend cost-effective financial services throughout the economy, including underserved rural areas. To design supportive policies, provide the necessary infra- structure, and provide appropriate, affordable financial products meeting local needs, governments must explore partner- ships with the private sector and rural communities. In turn, governments can devise and implement policies that give rural communities and private enterprises incentives to participate in the rural financial sector.  Kenya’s DrumNet Links Farmers, Markets, and Financial Service Providers  A Common Platform Delivers Financial Services to Rural India OVERVIEW FIGURE 7.1: Smallholder Farmers Are the Largest Smallholder farmers are the world’s largest group of Group of Working-Age Poor working-age poor (figure 7.1). Much of the world’s food 6.8b supply will continue to depend on their efforts, yet a lack 610m Smallholder of financial services often stymies their attempts to make farmers productivity-enhancing investments and to smooth their People consumption between periods of plenty and scarcity. living on 370m Casual laborers <$2/day: Capital-constrained farmers minimize risk instead of maxi- mizing returns (for example, by investing in high-quality Young & 1.0b 300m Low-wage elderly salaried seed and fertilizer or growing what is most profitable) 180m Micro-entrepreneurs Working (Trivelli and Venero 2007). Box 7.1 summarizes the four 1.6b age 100m Unemployed 80m Fishermen/pastoral kinds of financial services that farmers need to achieve Source: Mas 2010b. their economic goals. E C O N O M IC AND S E CT OR WORK 152 MODUL E 7 — B R O A D ENING S MA LLH OLD ERS ’ A C C ES S TO FINA NC IA L S ERV IC ES TH R OUGH IC T BOX 7.1: Farmers Require Four Kinds of Financial pose challenges of inventory assessment and management, Services and collateral substitutes based on warehouse receipts or returns from future crops are unavailable in many countries.  Credit, in the form of loans, personal loans, salary Farmers also have a special need for financial products with a loans, overdraft facilities, or credit lines, is often time horizon extending over multiple crop cycles. used as working capital at the beginning of the growing season to purchase inputs and prepare This module explores how innovative mechanisms and land. They also need capital to invest in equipment technologies are used in specific situations in different such as tractors or drip irrigation and to harvest, countries to help rural dwellers—mainly farmers, whose process, market, and transport their produce. It is businesses do not readily receive financial support—obtain important to distinguish between short-term loans, the financial services listed above from commercial banks which microfinance institutions usually provide, and other providers. Some of these technologies are and the long-term financial services required for already used in microfinance institutions in urban and peri- agricultural and livestock enterprises. urban areas. Important to note, the ICTs discussed in this  Savings may be in the form of current accounts, module are gender neutral; they are enablers and should savings accounts, or fixed or time deposits. be used in contexts where both men and women can Famers have a significant need for savings, participate. because their income is seasonally tied to the har- Major prerequisites for using ICTs in financial services for vest, and for much of the year they rely on savings agriculture are robust national financial systems and the to smooth consumption. infrastructure that allows electronic financial transactions  Transfer and payment facilities allow for local between institutions and individuals. Two types of infra- and international money transfers, remittances, structure and related services facilitate electronic transac- government transfers, and check clearing. tions and are vital for extending financial services to rural  Insurance may cover crops and livestock as well areas. as human life and health. Source: Author, based on CGAP and IFAD 2006:6 and Nair and Fissha The first is ICT infrastructure, such as high-speed Internet 2010. and mobile phones, available at affordable prices. This infrastructure is the backbone of electronic financial transac- tions. The second is financial infrastructure, which includes ICTs have now created the potential to deliver a greater diver- national payment systems, credit bureaus, ATM switches, sity of financial products to greater numbers of rural clients or central platforms for microfinance institutions. Financial than conventional financial service providers have been able infrastructure enables financial service and technology ser- to reach. ICTs can also enhance the government’s capacity vice providers, as well as other providers vital for the integrity to monitor and evaluate financial services provided to rural and stability of the financial system, to connect and perform clients and design effective financial policies and regulations transactions in real time. for the rural sector. For example, financial infrastructure makes it possible for A number of agents in rural areas—such as government customers of one bank to use the ATM of a different bank departments, commercial banks, microfinance institutions, or conduct a transaction (such as writing checks or wiring traders, telecommunications companies, community-based money) with customers of a different bank. It also channels organizations, families, and friends—provide financial ser- financial information (such as the creditworthiness of a new vices, which can include credit, savings, insurance, trans- customer) to financial institutions. fers, and payments. Even so, tailoring and providing financial services for small-scale farmers remains challenging. Rural These services and infrastructure do not benefit merely one clients differ from the typical clients of financial service operator or financial service provider; they cater to the entire providers. They are located in remote and often sparsely rural and financial sector. For this reason, their provision is populated areas, and they rarely possess the sorts of physi- often initially regarded as a task for government, although cal or financial assets that financial institutions customarily in reality they can be (and often should be) provided by the accept as collateral. Typical rural assets, such as livestock, private sector alone or in partnership with government. IC T IN A GR IC ULTUR E S E C T I O N 2 — E NHANCING P RODUCT IVIT Y O N TH E FA RM 153 CURRENT ACCESS TO FINANCIAL SERVICES banks constitute more than 75 percent of all rural branches of IN RURAL AREAS financial institutions worldwide; in comparison, microfinance Across developing countries, in urban and rural areas, access institutions account for less than 3 percent. Microfinance to and use of formal finance remains very low in general. The institutions and cooperatives may situate a larger share of financial access data in figures 7.2 and 7.3 are not specific their branches in rural areas—41 percent and 43 percent, to farmers, but they serve as a good proxy, showing that respectively (figure 7.4)—but their absolute total country rural reach is a smaller proportion of total reach. Agriculture reach is limited (figure 7.2). in particular has been underserved; for example, commer- The supply of financial products and services in rural areas will cial lending to agriculture is 1 percent of all lending in Africa remain a challenge until financial institutions can reduce the (Campaigne and Rausch 2010). Often, as a result of poor high operating costs associated with catering to rural clients; access to formal sources of finance, farmers are left to bor- however, as this module indicates, ICT applications have row at very expensive rates from informal money lenders. demonstrated considerable promise in doing so. The next Commercial banks remain the dominant formal institutions section briefly describes the factors that have proven critical providing finance to farmers (figures 7.5 and 7.6). Commercial to using ICTs successfully to expand the range of financial services in rural areas. The topic notes that follow provide FIGURE 7.2: Low Access to Financial Institutions Access to Financial Services FIGURE 7.4: Access Is Worse for Farmers (median per 100,000 adults) % of Branches in Rural and Urban Areas 100 Branches Cooperatives 80 ATMs Microfinance 60 institutions State institutions 40 Commercial banks 20 0% 20% 40% 60% 80% 100% 0 Urban Rural A A P A C C EN SA EC EA SS LA Source: CGAP and World Bank 2010. HI M Source: CGAP and World Bank 2010. FIGURE 7.3: Low Utilization of Financial Services FIGURE 7.5: Commercial Banks Are Main Players Access to Commercial Banks % of Rural Branches by Institution (median per 1,000 adults) 1% 2500 15% 3% Deposit Accounts 2000 5% Loan Accounts 1500 1000 78% 500 Commercial banks State institutions Microfinance Institutions Cooperatives 0 (MFIs) A Other A P A C C EN SA EC EA SS LA HI M Source: CGAP and World Bank 2010. Source: CGAP and World Bank 2010. E C O N O M IC AND S E CT OR WORK 154 MODUL E 7 — B R O A D ENING S MA LLH OLD ERS ’ A C C ES S TO FINA NC IA L S ERV IC ES TH R OUGH IC T greater detail on ICT-enabled interventions in rural finance Agricultural policies may act to suppress private sector (Topic Note 7.1) and explore policy and regulatory issues that development, including the development of private financial either positively or negatively influence the expansion of the services. Governments often use state-owned enterprises frontier for rural finance (Topic Note 7.2). to intervene in agricultural product pricing to reduce price fluctuations and provide a floor price, for example. Such Both topic notes contain summaries of innovative practices interventions can be very costly, are often ineffective, and that demonstrate how ICT is being used in specific settings preempt development of both insurance and storage mar- to expand financial services while reducing transaction costs kets. Farmers will not hedge their production if there is a and information asymmetries. These approaches are cer- floor price. Since producers have little incentive to store tainly not conclusive (because the ICT is extremely dynamic crops if they do not expect prices to rise over time, the and constantly changing), yet they provide an indication of market for storage facilities (and therefore the emergence alternatives that practitioners can consider when designing of a warehouse receipt system and other mechanisms for projects to improve rural access to financial services in a vari- managing risk) will be suppressed if these price movements ety of situations, given the right policy and legal environment. are prevented by government intervention. In sum, the policy environment that enables markets for financial services to develop is one in which minimal govern- KEY CHALLENGES AND ENABLERS ment interventions are carried out on a commercial basis, Expanding access to rural finance is challenging, and needs which allows markets to function freely. This restraint will, to be looked at as a process that includes a combination of in turn, provide an opportunity for financiers to provide cost- factors, including a supportive economic policy and regulatory effective and appropriate financial services without being framework; appropriate financial and nonfinancial products; encumbered by the government. It will also allow the provi- and mechanisms, processes, and technology applications sion of increased risk management services and ultimately that can deliver products and services, improve transparency lead to greater availability of financial services. and accountability, and reduce costs. Any proposed technol- ogy solution should be self-sustaining, with a clear plan for generating revenue and financing, or it will eventually prove Legal and Regulatory Environments: Enforcing impossible to sustain and replicate elsewhere. The techno- Contractual Obligations logical applications described in the topic notes meet these The largest risk to sustainable financing for agriculture is criteria. This section reviews the lessons from implementing often attributed to inherent business risks or the inability of those applications as well as the enablers that different play- financial institutions to design profitable financial products ers can take to ensure that using ICT to help farmers access for the rural population. Yet interventionist government poli- to finance is achievable in the long-term. cies, such as subsidized interest rates, forgiveness of debt, and failure to enforce appropriate rules and regulations can immensely limit the effectiveness of an ICT-enabled product Federal Economic Policy that could have made finance accessible to a large number Financial markets resemble other markets in that direct gov- of people. Conversely, an enabling environment and legal ernment involvement can crowd out private participation. This framework, enforcement of regulations, and supportive rural problem has been perennial in developing countries’ rural infrastructure eventually lead to lower but sustainable inter- credit markets, where government agricultural banks offering est rates by reducing transaction costs and risks and increas- subsidized credit were almost ubiquitous. Their presence cre- ing competition. All of these outcomes go a long way toward ated a “chicken-and-egg� problem: Governments were reluc- making a sustainable access to finance a reality. tant to withdraw from these markets because there was no private sector presence, but the private sector was reluctant to enter when, in addition to other obstacles to rural lending, gov- Infrastructure Costs and Shared Platforms ernment competition was a constant threat. In recognition of Technology solutions require an investment that can be this problem, a new generation of government agencies was costly and difficult to justify when implementation is risky, designed to coexist with—or even “crowd in�—the private as is typically the case with technology. Investments in sector by filling niches or resolving market failures by operat- technology can be leveraged by financial intermediaries and ing on a more commercial basis than their predecessors. others within a community to provide additional services on IC T IN A GR IC ULTUR E S E C T I O N 2 — E NHANCING P RODUCT IVIT Y O N TH E FA RM 155 the same platform, however. Sharing infrastructure such as Borrowers will need to be educated about new, ICT-enabled power, telecommunication, data networks, hosting, applica- instruments for risk management and insurance. There are tion support, or data management drives down the cost of many ways that organizations and producers can manage technology, making it affordable to deliver financial products risk, and they should learn to select the correct tool or com- and services to rural areas (see IPS “Passive Infrastructure- bination of tools that most efficiently and cost effectively sharing in Nigeria� in Module 3). match their risk. This idea of leveraging infrastructure can also be considered Finally, governments will, in some cases, require assistance in the development of warehouses for collateral-based sys- in capacity building or creating an appropriate legal or regula- tems, weather stations for the development of index-based tory framework. Such assistance may include, for example, rainfall insurance, and physical infrastructure to facilitate support in drafting appropriate legislation and regulations. improved functioning of the supply chain. Investments in Variations in the regulation of ICT infrastructure for making infrastructure that can be leveraged but require a high initial cash transfers and providing other financial services have investment require the participation of both the public and had a considerable impact on the kinds of services eventually the private sector to ensure ownership on both sides. provided in rural areas (see “Topic Note 2.3: Mobile Money Moves to Rural Areas�). Technical Assistance and Capacity Building Building the capacity to use and adapt ICTs to facilitate finan- Organizational Culture cial services is important not only for the staff of banks and A dynamic organizational culture allows staff to innovate— financial service providers but for borrowers and, in some by using new technology, for example—and ensures the cases, for governments. Capacity building for staff increases sustainability of financial innovation. For example, Bolsa the chances of innovation and success in extending financing. Familia (see IPS “Linking Conditional Cash Transfers and Capacity building is also important for borrowers. In a number Rural Finance in Brazil�) involves organizations that train staff of cases reviewed in the topic notes, particularly the cases well, provide innovative tools for the job, and create dynamic involving institutions or agencies other than banks, techni- environments with appropriate incentives to motivate staff cal assistance was one of the core components of success. to work closely with clients. Management’s participation is Likewise, capacity building that focused on maximizing the crucial, particularly for the development and implementation impact of credit through improvements in product quality was of an ICT-for-finance program. Other case studies (such as essential to successful management of supply chain financing DrumNet) underscore the benefits of empowerment. People in Kenya (see IPS “Kenya’s DrumNet Links Farmers, Markets, with a stake in a business expend many efforts to make the and Financial Service Providers� in Topic Note 7.2). business work. Topic Note 7.1: THE USE OF ICT-ENABLED FINANCIAL SERVICES IN THE RURAL SECTOR TRENDS AND ISSUES traditional relationships and service capacities in the rural ICT introduces new channels for delivering financial prod- finance ecosystem. (As noted, Topic Note 2.3 looks at how ucts and services to the rural sector, and it has the potential ICT infrastructure enables this expansion.) to reach farmers, intermediaries, entrepreneurs, and rural dwellers more directly than traditional brick-and-mortar Interventions using ICT can introduce new players and bank branches or microfinance offices. These new channels lead to greater competition in the rural financial sector. enable financial service providers to offer a larger suite of Institutions or agencies that are not banks (nonbanks) may financial products and services and acquire better financial start providing rural financial services. Since the early 2000s, information, some of which is useful to governments as they a number of nonbank institutions have developed innovative oversee, regulate, and develop policy for the agricultural and approaches to financing agriculture. They have sometimes rural sectors. Figure 7.6 illustrates how ICT expands the adapted microfinance concepts to provide agricultural E C O N O M IC AND S E CT OR WORK 156 MODUL E 7 — B R O A D ENING S MA LLH OLD ERS ’ A C C ES S TO FINA NC IA L S ERV IC ES TH R OUGH IC T FIGURE 7.6: ICT and the Rural Finance Ecosystem Financial Service Financial Rural Sector Providers Instruments Government Traditional Suppliers Credit Retailers Savings Commercial banks Wholesalers Insurance Microfinance Farmers institutions Intermediaries Other financial ICT-Enabled service providers Mobile finance Entrepreneurs Mobile operators Branchless banking Rural dwellers ATMs Smart cards Source: Author. finance, used good banking practices, and above all, drawn information, and keep records of clients’ creditwor- on knowledge of agriculture and ICT to enter and succeed thiness. In this way, branchless banking deepens in this market. Many of these new approaches show great financial inclusion throughout rural areas. promise, but no single approach will work for all situations.  ATMs. Though ATMs are often associated with debit Rather, organizations have the most success when they cards or smartcards, ATMs can serve as cash- are not dogmatic, apply innovative and comprehensive risk- dispensing machines in tandem with branchless bank- management strategies and tools, and retain the ability to ing, mobile financial services, and other ICT-enabled perform credit analyses of their intended rural clients without financial products. The availability of ATMs in rural political interference. areas can place cash-exchange points within reach.  Smartcards. Though not entirely in the category of Nonbanks and banks can provide these ICT-enabled financial ICT, smartcards (or stored-value cards) are an alternate services for the rural sector: means of providing services when mobile financial  Mobile financial services. Given the pervasiveness services are not readily available. Pre-paid cards, debit of mobile phones in developing countries, financial cards, or credit cards provide payment and credit facili- service providers can use them to reach clients in rural ties to rural clients. Stored-value cards have historically areas and provide a broad array of financial products assumed some level of literacy (in particular, the ability and services, including credit, insurance, payments, to sign for a transaction), but the advent of smartcards and deposits. Financial service providers can tailor that use biometric devices eliminates the challenges financial products offered through mobile phones to associated with literacy barriers. rural needs.  Branchless banking. Field agents, equipped with As discussed, financial services rely on the availability of mobile phones or point-of-sale devices, can serve as underlying financial and ICT infrastructure, such as pay- mobile branches. Agents can provide financial ser- ment systems, credit bureaus, central ATM switches, vices to smallholders, take deposits, provide financial central financial platforms, mobile telephony, mobile data IC T IN A GR IC ULTUR E S E C T I O N 2 — E NHANCING P RODUCT IVIT Y O N TH E FA RM 157 services, and Internet in rural areas. Governments have to Cost and Operational Efficiency work with the private sector to ensure that the underlying Financial service providers have reduced transaction costs infrastructure is in place and extended to rural areas. (For using electronic payment systems, branchless banking, and a discussion of how various governments have done so, other ICT-enabled services. Because these services are avail- see Module 2.) able to farmers via handheld devices or loan officers based in the field, they obviate the need to visit a bank branch to conduct basic transactions (box 7.3). EXAMPLES AND LESSONS LEARNED Aside from reducing operating costs, the use of ICT within The following examples highlight successful ICT-enabled financial institutions or government can also improve opera- interventions selected from a wide range of similar inter- tional efficiency, create public platforms for smaller organiza- ventions implemented in developing countries. They tions to use, and develop management capacity. demonstrate that rural and agricultural finance can be profitable without high government subsidies and discuss the lessons learned in the course of implementing the BOX 7.3: In Rural Kenya and South Africa, ICT interventions. Applications Reduce the Cost of Financial Services Availability and Transparency of Financial Services Kenya: M-PESA. The leader in mobile payments is ICT can make financial services more readily available in rural Safaricom’s M-PESA, a short messaging service (SMS)- areas through mobile phones, Internet, point-of-sale devices, based money transfer system that allows individuals to and field agents (box 7.2). Electronic banking makes it pos- deposit, send, and withdraw funds using cell phones. sible to provide financial services in places that rural clients M-PESA has grown rapidly to reach approximately 38 visit routinely, such as markets and post offices. Electronic percent of Kenya’s adult population. The M-PESA model conditional cash transfers also make it easier for rural pov- has been copied with little modification worldwide.a erty reduction programs to reach specific beneficiaries (see Kenyans use M-PESA to deposit money with a regis- IPS “Linking Conditional Cash Transfers and Rural Finance in tered agent or phone vendor. The agent then credits the Brazil�). Because transactions are conducted electronically phone account. Users can send between 100 Kenyan using ICT, they promote transparency, accountability, and shillings (US$ 1.5) and 35,000 K Sh (US$ 530) via text financial discipline among all account holders, whether they message to a recipient. The recipient obtains the cash are in farming, business, or government. from a Safaricom agent by entering a password and showing personal identification. South Africa: Wizzit. In South Africa, First National BOX 7.2: ICT Increases the Availability of Rural Finance Bank partnered with a mobile phone provider, Mobile in South Africa Telephone Networks (MTN), to provide services to cli- ents who had no bank accounts but wanted to send Through its A-Card, South Africa’s uBank (previously and receive money via cell phone. The service, called Teba Bank) (http://www.tebabank.co.za/index.php) Wizzit (http://www.wizzit.co.za/), has enabled 500,000 offers affordable and accessible financial services to South Africans to send and receive money from rela- communities, especially in rural areas, that were previ- tives, pay for goods and services, check balances, and ously denied access. The card is used with a point-of-sale settle utility bills. Previously South Africans often paid device that enables customers to access a transactional couriers the equivalent of US$ 30–50 to deliver cash banking account. The primary banking products and ser- to relatives. Now such transactions cost only US$ 0.50 vices include standard savings and credit accounts and a through mobile bank networks. The greatest impact is in facility by which state social grants are deposited directly rural areas, where 80 percent of farmers still lack back into a customer’s bank account. The United Kingdom’s accounts. Wizzit accounts, unlike regular bank accounts, Department for International Development, ShopRite, do not expire if customers do not use them regularly, and Checkers partner with uBank in this project. which is critical for seasonal activities like agriculture.b Source: Cracknell 2004. Source: Author; (a) Jack and Suri 2009:6; (b) Kimani 2008. E C O N O M IC AND S E CT OR WORK 158 MODUL E 7 — B R O A D ENING S MA LLH OLD ERS ’ A C C ES S TO FINA NC IA L S ERV IC ES TH R OUGH IC T The need for ICT-based government services becomes more BOX 7.5: Financial Service Providers in the United important as the financial sector expands and the sophistica- States and Mozambique Use ICT to Improve tion and complexity of financial products grows (box 7.4). The Risk Management availability of a common information technology (IT) platform enables government at all levels (municipal, state, federal) to United States. In the United States, Sevak Solutions obtain accurate information about the availability and afford- and Financial Ideas are piloting technology that allows ability of financial services in rural areas, financial well-being credit decisions for microfinance clients to be made of financial service providers, indebtedness of citizens, and electronically, increasing transparency between lenders related information. This information enables policy makers and and lendees. Initial tests will be carried out with United regulators to make appropriate decisions with respect to the States military personnel and their families, some of rural financial sector. ICT can make information gathering and whom experience financial distress caused by limited monitoring and evaluation possible on a real-time basis. financial literacy and predatory “pay-day� lenders (http:// www.sevaksolutions.org/prototypes/finideas.html). A Governments require information systems for their own man- similar idea could be useful in developing countries, par- agement and operations with respect to making policy and ticularly as farmers and rural citizens gain further access regulating the rural financial sector. Such information systems to loans and credit. can be linked with financial infrastructure (such as payment Mozambique. The Banco Oportunidade (a microfinance systems) and applications that can reach most rural clients. bank) introduced its Client Relationship Management (CRM) system, a web- and cloud-based system that BOX 7.4: Increased Operational Efficiency in Africa assists with processing and monitoring loans and is through ICT accessible to loan officers, managers, and country and regional teams. The CRM uses data from land mapping IBM and CARE: The Africa Financial Grid. IBM and and farmer and crop profiling conducted with agricul- CARE are designing the Africa Financial Grid, a shared tural clients to process loan applications electronically, financial service and infrastructure model that will, for taking into account the standard data and farmer, crop, example, help microfinance providers reduce their oper- and national limits. After a loan is approved, the CRM ating costs, streamline lending processes, scale up, and sends the data to the bank’s accounting system and integrate their services with other resources such as assists in loan disbursement, monitoring, and recovery, credit bureaus, financial institutions, and international providing real-time information. The CRM has a personal payment networks. The Africa Financial Grid will even- dashboard, specific to each bank team member, which tually link with telecommunications providers to enable allows inputting and monitoring related to the team customers to repay loans or carry out money transfers member’s specific line management and process con- via mobile phones or other devices. trol responsibilities. Ghana: E-Zwich payment system. The Bank of Ghana Source: Sevak Solutions 2008; Management Reports for Banco Opor- tunidade in Mozambique. has rolled out a national payment and settlement sys- tem in the form of an electronic clearinghouse for all banking and financial institutions called e-Zwich (http:// the market and clients and improve their ability to expand www.ghipss.net/e-zwich). The Bank of Ghana also lending. (See IPS “RFID Facilitates Insurance and Credit for issued a biometric smartcard, which is a very secure India’s Livestock Producers� for more detail on the impor- way of paying for goods and services. tance of ICT in managing lending risks.) Source: IBM 2007; B&FT 2010. Authentication Improved Risk Management Using a variety of technologies, ICT can help financial ser- Through ICT, financial institutions and intermediaries can vice providers and government authenticate individuals, better manage the risk involved in increased lending, espe- inventories, and assets in rural areas (box 7.6). For example, cially in lending to lower-income and rural clients (box 7.5). biometric technology captures and stores information that is Credit bureaus and collateral registries can equip financial unique to every person, such as fingerprints, retina scans, or service providers with better financial information about facial images. Its increasing availability and decreasing cost IC T IN A GR IC ULTUR E S E C T I O N 2 — E NHANCING P RODUCT IVIT Y O N TH E FA RM 159 has made it useful in developing countries, where it limits Disseminating Information identity theft and facilitates the development of credit mar- ICTs are perhaps best known for their capacity to dissemi- kets. The ability to track individuals in a credible way over nate information. Online videos, television, and community time provides incentives to individuals to repay loans and radio can improve farmers’ financial literacy by informing reduces the risks faced by lenders. Financial service provid- them about the benefits and risks of credit and various bank- ers can use biometric tools to provide services to individuals ing transactions. At basic rural Internet kiosks, farmers can who may not have a national identity card or never learned acquire accurate financial information, such as market prices, to sign their names. (See IPS “Using Biometrics to Provide to improve productivity and sales. Rural Services� in Module 13.) Similarly, radio frequency identification (RFID) can count and track livestock, harvests, and inputs, among other things. Global positioning system Conclusion (GPS), satellite data, and weather-based electronic sensors These brief examples provide some idea of innovative, on- can collect data necessary to create and price crop insurance the-ground initiatives that have brought financial services policies, particularly index insurance programs. to rural areas. All of these initiatives hold promise but face challenges which, in the end, may not enable them to be BOX 7.6: Using ICT to Identify Financial Service Clients scaled up or replicated. Even so, they demonstrate that it is in Africa and South Asia possible to provide financing for agriculture on a sustainable basis and at a reasonable cost. Many of these initiatives are Malawi: Biometric technology in rural credit mar- based on the premise that the policy environment will allow kets. In 2009, 3,200 smallholder paprika farmers in such innovations to flourish. Malawi who had applied for loans to purchase agricul- tural inputs were randomly assigned to a control and The next sections of this topic note explore two innova- treatment group. The treatment group was electroni- tive practices in greater detail. The first one, Brazil’s Bolsa cally fingerprinted and told that their fingerprints would Familia, uses an IT platform to extend financial services to be stored and used to validate their eligibility for future people who have been excluded from using them. The sec- loans. Repayment rates rose by 40 percent in the treat- ond one, a livestock insurance and credit scheme in India, ment group. The increased rate of repayment and the uses RFID technology to reduce the risk inherent in providing resulting savings from avoiding default could justify the these services to poor producers. costs of deploying an IT system to collect fingerprints for all loan applicants. Kenya: Kilimo Salama. The Kilimo Salama index insur- INNOVATIVE PRACTICE SUMMARY ance scheme uses weather indicators as a proxy for loss Linking Conditional Cash Transfers and Rural of inputs. The insurer collects premiums and distributes Finance in Brazil payouts via mobile phone, which reduces assessment A 2009 study found that governments worldwide transfer and administrative costs. Kilimo Salama also employs cash to more than 170 million poor people through social a “pay-as-you-plant� sales model, in which insurance protection programs providing cash allowances, health policies are sold for each input purchased. benefits, and pensions (Pickens, Porteous, and Rotman India: Biometric ATMs. ICICI and the Government 2009). The number would be much higher if government of India launched an initiative in 2004 to offer banking wage payments were included. In comparison, an estimated services to people who earned less than US$ 40 per 99 million people access microfinance loans, but few of month (http://www.icicibank.com/). The service relied these payments advance the goal of rural financial inclusion. on biometric ATMs (based on fingerprint scans) and Three-quarters of government-to-person (G2P) payments biometric smartcards that do not require personal iden- are delivered in ways that do not allow people to store the tification numbers, which can be forgotten or stolen. payments until they need the money, transfer the money to The ATMs cost 5 percent of what these wage-earners others, or access them easily (from the perspective of cost have been accustomed to pay at kiosks offering similar and distance). services. ICT creates a significant opportunity to exploit the synergy Source: Giné 2010 for Malawi; Ogodo 2010 for Kenya; ICICI Bank 2001 for India. between G2P payments and financial inclusion. The reason- ing is that if the government were to facilitate development E C O N O M IC AND S E CT OR WORK 160 MODUL E 7 — B R O A D ENING S MA LLH OLD ERS ’ A C C ES S TO FINA NC IA L S ERV IC ES TH R OUGH IC T of the required infrastructure, institutional capacity, and Bolsa Familia: The Applications and Their Impact literacy to deliver government payments into basic savings Of the programs just mentioned, Brazil’s Bolsa Familia accounts that poor recipients could access easily, those program is exceptional in its scale and impact. Created in accounts might also be used to channel a wider array of 2004, the program consists of monthly cash transfers to financial services to the same segment—a segment that cur- poor households with children or pregnant women as well as rently has little or no access to such services. unconditional transfers to extremely poor households (Anna Fruttero, World Bank, personal communication). In 2007, the While three-quarters of G2P payments have not yet program reached 12.4 million households—one-quarter of exploited this opportunity, some governments are using the country’s population. ICTs to reduce the transaction and administrative costs of implementing government transfer program that also Of the 13 million Bolsa Familia family recipients, 3.84 percent serve as vehicles for financial inclusion. Examples include withdraw benefits using their electronic benefit card at one Brazil’s Bolsa Familia (“family allowance�) program, imple- of 13,000 lottery kiosks, correspondents, or point-of-sale mented through Caixa Economica (http://www.caixa.gov. terminals belonging to merchants acting as agents of Caixa br/Voce/Social/Transferencia/bolsa_familia/index.asp); Economica, the bank that holds the grant delivery contract Colombia’s ACCION Social (http://www.accionsocial.gov.co/ (figure 7.7). In 2004, when cards were first issued to Bolsa portal/default.aspx); Kenya’s Hunger Safety Net Program, Familia recipients, only 24 percent of customers said that through Bankable Frontier Associates (http://www.hsnp. using the card was “easy� or “very easy,� but one year or.ke/index.php?option=com_content&view=article&id=81: later, the number has risen to 96 percent (Pickens, Porteous ending-hunger&catid=38:fp-items); Mexico’s Oportunidades and Rotman 2009; Anna Fruttero, World Bank, personal program, implemented through McKinsey and BANEFSI communication). (http://www.oportunidades.gob.mx/Portal/); Peru’s Juntos (“together�) program (http://www.juntos.gob.pe/); and South The electronic benefit cards did not quite constitute finan- Africa’s Department of Social Development (http://www cial inclusion because the value of the cards had to be used .dsd.gov.za/) (Rotman 2010b). The Government of India within three months or it would expire. Nor was the value on has used the Financial Inclusion Network and Operations the card easily transferable. In response, Caixa Economica platform to deliver social transfers as well (see IPS “RFID decided to migrate the Bolsa Familia recipients from the elec- Facilitates Insurance and Credit for India’s Livestock tronic benefit card to a Conta Caixa Facile (“easy account�), Producers�). a financially inclusive account that includes a Visa-branded FIGURE 7.7: Channels for Financial Inclusion for Bolsa Familia Beneficiaries 80 68% 70 60 50 Percent 40 30 20 16% 12% 10 5% 0 POS ATM Lottery Correspondents kiosks Source: Pickens, Porteous, and Rotman 2009. Note: POS = point of sale. IC T IN A GR IC ULTUR E S E C T I O N 2 — E NHANCING P RODUCT IVIT Y O N TH E FA RM 161 debit card. As of October 2009, the bank had converted Monitoring the whereabouts and health of livestock poses 2 million recipients to the Conta Caixa Facile. Caixa also has a significant challenge for both farmers and financial institu- experimented with offering insurance to Conta Caixa Facile tions. Insurance companies must be able to validate reports holders, is considering microloans, and has developed a of livestock losses to avoid the moral hazard problems (the financial literacy program for new account holders. false claims) that plague insurance delivery and drive up the cost of insurance for all farmers. Most livestock move around to graze and are therefore susceptible to injury, theft, Two Key Enablers, One Key Lesson starvation (when drought reduces foliage and pastures), and Though G2P recipients often have limited schooling and little drowning in floods. Monitoring animal health is even more exposure to banking, these limitations have not prevented important when animals are concentrated in intensive pro- them from using electronic infrastructure as long as the ser- duction facilities where the risk of disease is high. vices match their needs. In Brazil, two key enablers fostered success with electronic transfers through Bolsa Familia. First, Traditional livestock monitoring is cumbersome and expen- the value of the Conta Caixa Facile is significantly enhanced sive. Farmers must hire or use family labor to herd, pasture, by a wide national network of over 20,000 contact points or otherwise keep track of animals to keep them safe. Banks formed by Brazil’s preexisting financial infrastructure of and insurance companies need to spend time and money to ATMs, bank branches, and point-of-sale-equipped merchants find and identify individual animals to verify reported losses who handle deposits and withdrawals. Second, government or take possession if owners have defaulted on loans. policy favoring cash transfer programs such as Bolsa Familia drives the growth of the Conta Caixa Facile. The key lesson is The use of RFID technology has reduced the cost of monitor- that a government transfer program can indeed be a vehicle ing livestock. RFID uses electromagnetic waves to exchange or instrument for financial inclusion. data between a terminal and an electronic tag attached to an object that enables identification and tracking (image 7.1). At a minimum, most RFID tags have an antenna for receiv- INNOVATIVE PRACTICE SUMMARY ing and transmitting the signal and an integrated circuit for RFID Facilitates Insurance and Credit for India’s performing specialized functions such as monitoring animals’ Livestock Producers location, heart rates, or temperatures and storing and pro- cessing information on animal weights, feeding histories, and Worldwide, 60 percent of rural households are estimated to immunizations. The tags can be read by terminals or readers own livestock (including cattle, goats, pigs, sheep, poultry, honeybees, and even silkworms) and to earn 10 percent of their income from products such as meat, milk, cheese, eggs, honey, raw silk, wool, hides, and skins (FAO 2009:34). Livestock perform numerous vital IMAGE 7.1: RFID Can Be Used to Track Cattle and Manage Herds functions. They are a savings mechanism, a form of insurance, collateral for loans, a source of food security, an aid to farm opera- tions, a means of recycling waste products, and form of controlling insects and weeds, and a powerful source of opportunities for women to earn income (which promotes gender equality) (FAO 2009:33). For this reason, livestock constitute some of the most important assets of rural house- holds. Their loss through theft, disease, or drought can push households into poverty or deepen the distress of already impov- erished households. Insurance products piloted in Mongolia, Kenya, and India seek to mitigate the risk of such losses. Source: Curt Carnamark, World Bank. E C O N O M IC AND S E CT OR WORK 162 MODUL E 7 — B R O A D ENING S MA LLH OLD ERS ’ A C C ES S TO FINA NC IA L S ERV IC ES TH R OUGH IC T from several meters away and beyond the line of sight of the policy issuance system. PKGFS and DNE, which manages reader. The readers can be used to access the stored informa- the RFID technology and health services, must verify that tion or place additional information on the chip. the producer does indeed own the animals he or she wishes to insure and that the animals are healthy. Once this infor- The technology allows farmers to better manage their herds mation is verified, PKGFS collects the premium (PKGFS can and enables farmers, banks, or insurers to locate animals. issue a loan for the premium if necessary) and the producer’s RFID tags have become 99.9 percent reliable and have information and transmits it to HDFC Ergo, which activates dropped in price. Prices vary by location, but a basic RFID the policy, usually in less than three days (IFMR Trust 2008). chip costs approximately US$ 0.15, whereas readers can range from one hundred to several thousand dollars, depend- Once a policy is issued, DNE registers the insured animals ing on their sophistication (RFID Journal 2010). at the farm, tags them, and records their vital information in a computer database. Then DNE begins regular check- ups to ensure that insured animals remain in good health. A Business Model for Delivering Cattle Insurance Veterinarians update the computer database every time they in India perform a checkup. In entering this information, they must India is the world’s largest milk producer, but only 7 percent scan the RFID tag of each animal to collect the unique ID num- of India’s cattle are estimated to be insured (Economic Times ber which must be entered into the database along with the lat- 2009). Insurance would not only protect producers from est health update. This procedure prevents veterinarians from losses but improve their ability to obtain loans to increase avoiding farm visits and entering false data into the system.1 If their herds, because commercial banks are more willing to an animal should die, DNE agents verify the death and notify lend toward the purchase of insured cattle. PKGFS, which connects to HDFC Ergo to ensure payout. In September 2009, several institutions in India teamed up to offer cattle insurance to farmers in two districts of the Key Enablers southern state of Tamil Nadu. The Institute for Financial One key enabler was leadership in coordinating important Management and Research (IFMR) Trust, a private trust that stakeholders. The partnership between the bank/insurer has pioneered financial inclusion efforts, joined HDFC Ergo, a (HDFC Ergo), a logistics organization (DNE), a rural finan- commercial bank that provides insurance, and Dairy Network cial institution (PKGFS), and a coordinating group (IFMR Enterprise (DNE), a supply chain and logistics organization, Trust) was critical for ICT-enabled insurance to promote to design and deliver the new insurance product, which has financial inclusion.2 The leadership demonstrated by IFMR several unique features. Trust in assuming a coordinating role cannot be overstated. Elsewhere, such a role might also be performed by govern- First, the insurance is cheaper than other insurance offerings, ment or a public financial institution. with a premium of 2.9 percent of the insured value—typically 10,000–20,000 Rupees (Rs) or US$ 200–400, compared to A second key enabler was the Internet and communications the typical premium of about 4.5 percent. Second, the time infrastructure. The PKGFS customer management system needed to issue a policy or indemnity payment is only 72 connected to HDFC Ergo requires Internet and communi- hours, compared to the norm of 15 days or more. Third, the cations infrastructure. Such infrastructure is increasingly insurance policy provides access to preventative veterinary accessible in India. According to the World Bank’s World services and medicine through DNE to maintain the health Development Indicators, teledensity—a measure of tele- of insured animals. Finally, insured animals are tracked using phone access—is 60 percent (though 100 percent in urban RFID chips in ear tags. The tags cost Rs 60 (US$ 1.20) (stan- areas and 20 percent in rural areas), and 670 million people dard metal tags cost US$ 0.30). in the country subscribe to a mobile phone service. India has 4.5 Internet users per 100 people, double the number for the Policies are sold through the Pudhuaaru Kshetriya Gramin average least-developed country (though less than one-third Financial Services (PKGFS), which has 25 branches serving of the average for low-and middle-income countries). 135 villages in the two remote districts where the new prod- uct is being piloted. Each branch has three agents who serve approximately 2,000 households. Policies can be issued 1 If services other than routine preventive care are required, the producer must pay for them on top of the insurance cost. rapidly because the PKGFS customer management system 2 This arrangement resembles the arrangements in another suc- is connected in real time and integrated with HDFC Ergo’s cessful program, DrumNet in Kenya. IC T IN A GR IC ULTUR E S E C T I O N 2 — E NHANCING P RODUCT IVIT Y O N TH E FA RM 163 Growth and Lessons a national or regional identification system is probably neces- Since its launch in 2009 in Tamil Nadu, the program has sary for commercial banks to become sufficiently confident to expanded to the states of Uttrakhand and Orissa. The mortal- extend financial services to the poor to buy livestock. ity rate of cows has improved with the provision of preven- Several factors appear to limit adoption. Given insurance tive care, especially deworming drugs and vaccinations. companies’ propensity to renege on contracts, producers lack Despite this initial success, two issues remain to be resolved: confidence that indemnities will actually be paid. Producers moral hazard issues and low adoption. With regard to moral haz- also seem to be confused by the livestock insurance product ard, it appears that RFID tags can be removed far too easily from compared to a cheaper personal accident insurance product animals’ ears, and without a national or even regional animal offered by PKGFS. Where efforts have been made to explain tracking system, it is possible to have duplicate tags. Australia’s the difference, a higher rate of adoption has been observed National Livestock Identification System tracks all animals, each (Gupta 2010). The key lesson is that technology cannot sub- of which has two RFID chips (one in the ear, one in the diges- stitute for human capacity. In determining whether insurance tive system). The point is that RFID technology alone may not products—even efficient, ICT-enabled products—will suc- resolve moral hazard problems. Using two tags may help, but ceed in a given area, practitioners must consider the prevail- the key lesson is that an institutional framework in the form of ing basic literacy and financial literacy rates. Topic Note 7.2: POLICY STRATEGIES AND REGULATORY ISSUES FOR ICT-ENABLED RURAL FINANCIAL SERVICES TRENDS AND ISSUES organizations is in Sri Lanka, which has 600 distance learning As noted, a diverse group of stakeholders is involved in centers and e-libraries that penetrate deeply into rural and providing financial services to rural dwellers. To design sup- remote areas, cover 22 of 24 districts in all nine provinces, portive policies, provide the necessary infrastructure, and and link more than 70,000 underserved users to markets and provide appropriate, affordable financial products based on information essential to their livelihoods.3 At the telecenter assessments of local needs, governments must explore in Bakalacia, users include farmers checking market prices, partnerships with the private sector and rural communities. entrepreneurs marketing their businesses, community lead- In turn, governments can devise and implement policies that ers searching for information on how to improve community give rural communities and private enterprises incentives to livelihoods, mothers seeking first aid and connecting to hos- participate in the rural financial sector. pitals and doctors in the capital city, children and students interested in learning, and citizens communicating online, For example, the Government of India promoted rural digi- requesting government services, or doing word-processing, tal services by partnering with the private sector to set up printing, and copying. Surveys indicate a user satisfaction village kiosks with IT infrastructure. The kiosks offered a rate of 96 percent. An estimated 48 percent of users are single window for providing government services electroni- women; 82 percent are youths up to 25 years of age. These cally at the village level (for example, issuing land records telecenters can also be used for financial services, like point- to farmers). The kiosks improved citizens’ experience in of-sale terminals. dealing with government, because they reduced the time needed for officials to respond to citizens’ requests. They also created a village database that could be used to reach LESSONS LEARNED more citizens. Financial service providers could potentially Financing smallholder agriculture is a complex undertaking, use this infrastructure to follow up on clients from the easily thwarted by regulatory impediments to the devel- village. opment of new products or service delivery channels. For Another example of effective public-private partnerships 3 This section draws on unpublished information from World Bank between government and ICT providers and community Implementation support missions. E C O N O M IC AND S E CT OR WORK 164 MODUL E 7 — B R O A D ENING S MA LLH OLD ERS ’ A C C ES S TO FINA NC IA L S ERV IC ES TH R OUGH IC T example, some potential financial service delivery chan- financial services throughout the economy, including under- nels, such as agency arrangements that operate outside served rural areas. physical branch offices, are not yet allowed in most coun- tries in Africa and in most of Asia. Regulatory support for The two innovative practice summaries that follow demon- such arrangements may be needed to alleviate the per- strate the importance of public policy and regulatory frame- ception of risk associated with financing agriculture and works in stimulating the use of ICTs to improve rural financial livestock production. Agents can be based closer to rural systems and services. The first summary describes how ICT communities at a fraction of the cost of brick-and-mortar minimizes information asymmetries and links farmers directly banks. From this vantage point, they can assess the risk to markets and to finance. It demonstrates how risk can be associated with lending to farmers better than banks or managed at the three operational levels of the financial service microfinance institutions. Agents can address the scale provider, market operator, and farmer. The second summary issues associated with providing financial services in rural offers another example of the benefits that accrue from a areas, such as the small size of most transactions. common ICT platform to support rural banking in India. The lack of an appropriate regulatory framework also ham- pers the development of warehouse receipts as an electronic INNOVATIVE PRACTICE SUMMARY financial instrument.4 Many countries do not recognize Kenya’s DrumNet Links Farmers, Markets, warehouse receipts as a transferrable financing instrument, and Financial Service Providers even though this product can facilitate smallholders’ access Small-scale farmers struggle to obtain agricultural loans to finance and, at the same time, improve the quality of even where they have good access to commercial banks. produce, which is often dictated by warehouse managers. Commercial banks are reluctant to lend to them, recogniz- Policies and enabling legislation would provide for the estab- ing the severe barriers and risks these farmers face in suc- lishment of a central registry for warehouse receipts as a title cessfully producing a crop, marketing it, and repaying loans. document used by banks to grant loans. Warehouse receipts Smallholders face risks in transporting produce to markets, held by banks would be included as liquid assets under the finding buyers there, and earning the value they expected definition of the national banking act. A fund would be estab- at planting. This risk not only introduces uncertainty in their lished to collect acess from warehouses to indemnify receipt income stream but, as noted, inhibits their ability to obtain holders in the event of a loss. Coherent industry standards the credit to make the productivity and quality improvements and certification regulations would be introduced. that will break the cycle of poverty. Many ICT-enabled applications described in this module (and Much of the risk in accessing markets can be mitigated, and sourcebook) require an enabling legal and regulatory environ- farmers’ access to credit can be improved, if farmers can ment. In many countries, point-of-sale devices, m-banking, forge better links with agribusiness buyers such as domestic and other innovative applications have yet to be introduced supermarkets, agroprocessors, or (further along the supply because the corresponding regulations have not been intro- chain) exporters. When such links are weak, buyers also duced, despite evidence that they can extend cost-effective face problems in sourcing sufficient produce of the quality demanded by supermarkets or food processors. Farmers 4 Warehouse receipts are not covered in depth by this module often do not know that the market is willing to pay a high because of the limited ICT used. Nonetheless, the basics for price for certain products that meet certain quality standards; establishing warehouse receipts as a financing mechanism are not normally addressed, and as a result, some interventions do even if they do know, they lack the financing to switch to a not succeed. In addition to proper legal frameworks that protect new and more profitable crop or the knowledge to achieve all parties, there must also be a critical mass of farmers’ orga- the desired level of quality. nizations that can bring produce to the warehouse. The com- mercial banks and other service providers must be brought into the design from the very beginning, and there must be interest Better links between farmers and buyers would help to from the private sector to participate in the operations of the overcome these obstacles, but they are difficult to form. scheme. Warehouse receipt mechanisms also often lack the long-term objective of linking the scheme to the overall com- Mistrust between farmers and buyers runs deep. Buyers fail modity exchange system, which would then encourage small- to honor purchasing agreements or do not pay the agreed scale farmers to participate. Warehouse receipts can be useful price at harvest. Farmers abandon purchasing agreements with the proper frameworks and implementation, however. The Uganda Commodity Exchange warehouse receipt mechanisms, and sell their produce to another buyer or on the spot mar- for example, is working well for smallholders. ket if they can get a more favorable price. Aside from these IC T IN A GR IC ULTUR E S E C T I O N 2 — E NHANCING P RODUCT IVIT Y O N TH E FA RM 165 problems, the practical aspects of working with large num- have a vital role in doing so. ICTs such as mobile phones, bers of small-scale farmers—organizing them, negotiating smartcards, and management information systems facilitate prices, sharing information, and managing their agronomic communication between the parties and help to manage the activities—are daunting for agribusinesses. Even if they administrative challenges of tracking large numbers of small- were easy to resolve, agribusinesses still lack the core capa- holders, delivering loans cost-effectively, ensuring that funds bilities and often the resources to extend financing to all of are properly used, and collecting payments. those farmers. Links with Key Players The less risk exposure a client presents, however, the more banks are willing to lend. If farmers can demonstrate that an DrumNet recognized that it could not improve financing for agribusiness is willing to purchase what they will produce, a farmers without linkages with financial intermediaries and bank will be much more amenable to financing the purchase buyers (DrumNet 2007). In 2008, DrumNet began a pilot of inputs and labor for production. The challenge for the bank program in the sunflower subsector to facilitate partner- is then limited to the transaction costs of disbursing funds, ships that would give smallholders access to finance and ensuring the loans are used for their stated purpose, collect- improve efficiency throughout the supply chain. The agri- ing payments, and bearing the exposure to weather risks business buyer, Bidco, was the largest manufacturer of (unless there is crop insurance). vegetable oils, fats, margarines, and protein concentrates in East Africa and needed a steady supply of sunflower seed. DrumNet is a project of PRIDE AFRICA, a nonprofit that The financial institution was Equity Bank (also involved with has promoted the spread of microfinance across the conti- to M-PESA, discussed earlier). Farmers were recruited to nent since 1988. Created in Kenya in 2002, DrumNet was grow sunflower instead of their typical crop. Two additional designed to provide market, information, and financial ser- players proved important to the partnership. Input suppli- vices to smallholders, and it has evolved a sophisticated ers had to agree to sell products to farmers on credit and technology platform to deliver these services. The project receive payment from Equity Bank instead of cash directly illustrates that it is possible for a third party to coordinate and from farmers. AgriTrade recruited farmers and managed link farmers, buyers, financial intermediaries, and operations sunflower production, harvest, and collection. The benefits managers to deliver financing to small farmers, and that ICTs foreseen from their collaboration are depicted in figure 7.8. FIGURE 7.8: Benefits to Stakeholders in DrumNet’s Sunflower Supply Chain Partnerships More demand for products Producers Grew under structured contracts without credit burden (fixed price) with buyers Aware of producer needs, so can Access to credit and cashless/ more easily manage stocks transparent transactions UM DR T Input retailers NE Equity bank Markets • Finance • Information Increased, more predictable, and Lent to previously nonaccessible higher-quality supply without clientele; increased deposit base cumbersome field mobilization Reduced overall cost and risk Reduced time and cost involved Bidco involved in agricultural lending in producer payment Source: Adapted from PRIDE AFRICA n.d. E C O N O M IC AND S E CT OR WORK 166 MODUL E 7 — B R O A D ENING S MA LLH OLD ERS ’ A C C ES S TO FINA NC IA L S ERV IC ES TH R OUGH IC T FIGURE 7.9: Flow of Goods, Information, and Money in DrumNet’s Sunflower Supply Chain Partnerships Farmer groups Input retailer Buyer Collection point UM DR T Bank NE Legend: Flow of farm input loan Flow of produce payment Flow of produce Flow of farm inputs Source: Adapted from PRIDE AFRICA n.d. Services and Revenues 25 percent of the value of the input loans and acts as security DrumNet negotiated the contracts that brought these par- for them (DrumNet 2009). ties together and managed the flow of information and financial transactions among them (figure 7.9). Through this arrangement, farmers received credit for inputs from ICT Applications Equity Bank upon signing a fixed-price contract with Bidco. DrumNet provides the ICT platform through which all To ensure that the loans would be used for their stated pur- financial transactions and communications take place. The pose, farmers received no cash from Equity Bank. Instead, platform includes mobile phones, SMS, and email to enable through another agreement facilitated by DrumNet, Equity the parties to do business. All payments from buyers pass pays input retailers directly for materials purchased by through DrumNet accounts at the bank. farmers on credit. When the produce is delivered to Bidco, Bidco pays farmers through DrumNet, which first deducts Information is transmitted up and down the supply chain dur- the cost of the loan and transfers it to Equity Bank. The ing the crop cycle primarily via SMS. Bidco is informed about remainder is sent to the farmer’s account with Equity Bank the area planted to estimate production and plans accord- (Campaigne and Rausch 2010). DrumNet earns revenue for ingly. The processor monitors crop progress and passes on this service. important crop management information to farmers. Input retailers are updated on which products to stock at what Farmer groups (typically consisting of 20–100 farmers in time, and producers learn about collection dates and loca- the same area) open an account with Equity Bank through tions long before harvest. which all payments are made. Individual farmers can be paid in cash, but cash is withdrawn from the bank at the group The input retailers, trained in basic record keeping for level to reduce transaction costs. Each member is required DrumNet, submit virtual receipts to DrumNet via mobile to contribute to a Transaction Insurance Fund, which is phone and receive payments into their bank accounts in IC T IN A GR IC ULTUR E S E C T I O N 2 — E NHANCING P RODUCT IVIT Y O N TH E FA RM 167 two-week cycles through the DrumNet system. Equity Bank harvest was completed. The complex arrangement between is shielded from these many small transactions, as it simply farmers, buyers, banks, and retailers certainly allows farmers opens a single line of credit in DrumNet’s Master Account, to obtain credit, reduces defaults, and increases trust. Yet the receiving regular principal and interest payments from relationship remains extremely fragile. It is still susceptible to DrumNet from this revolving account. DrumNet’s manage- mistrust. Side-selling by farmers, scams from input retailers, ment information system provides the internal controls to buyers reneging on agreements, and hidden fees from the track and report on compliance throughout the process. It bank all erode trust and undermine the relationships. Such also retains data to establish user and credit ratings. problems occur more often at the beginning of the process. As the partners come to understand each other’s operations and develop trust, the problems should lessen. As noted, Key Enablers efficiency in service delivery is one way to mitigate some of A key enabler is the partnerships between Equity Bank, these risks. Bidco, input suppliers, and farmers that enabled the system to work. ICT plays a significant role in sustaining the trust The partnership is also susceptible to problems arising from and confidence that make these relationships work. It pro- typical production risks such as drought or floods. After vides the visibility, communication, and speedy transactions the first year, when one region of sunflower growers was that bind partners together for their common benefit. The affected by drought (McCormack 2009), the issue of loan DrumNet system allows the various partners to be in touch repayment became contentious. Would Equity Bank allow constantly, reducing the potential for misunderstanding an additional year to repay? Should DrumNet require a higher and unilateral decision making. Each partner can view the security deposit from farmers? Failure to reach agreement actions of the other partners. If there is no rainfall, Bidco on such flashpoints before a partnership is implemented can knows to downgrade production plans, Equity Bank knows unravel hard-won cooperation. and can begin to work with farmers to make refinancing arrangements, and so on. Collaboration replaces confron- tation. The speed of payment permitted through DrumNet is also central to maintaining sound relationships. Farmers INNOVATIVE PRACTICE SUMMARY note that they get paid in days rather than months, as was A Common Platform Delivers Financial Services customary. The same can be said for the retailer and bank or to Rural India the buyer and bank. In India, the Financial Inclusion Network and Operations (FINO), an Indian technology company, and ICICI Bank As the previous paragraph implies, a second key enabler have used ICT to facilitate remote bank transactions and was infrastructure. DrumNet’s ICT platform relies on dramatically reduce the costs of serving rural areas. Using mobile phones and Internet. Based on the World Bank’s smartcards and point-of-sale devices connected to a cen- World Development Indicators, it appears that Kenya’s tralized ICT platform, FINO has overcome the traditional infrastructure for both technologies is above average com- problems of low volumes and values of transactions in rural pared to that of other developing countries in sub-Saharan areas. Africa. Kenya has wireless coverage across 77 percent of its territory (the average for developing countries in sub- ICT Application and Business Model Saharan Africa is 75 percent) and 42.1 mobile subscrip- tions per 100 people (compared to 33.3 in developing In partnership with IBM and i-Flex (now Oracle), FINO countries in sub-Saharan Africa). Similarly, Kenya has 8.7 developed a remote transaction system that uses a small Internet users per 100 people compared to 6.5 for sub- biometric point-of-sale device, in combination with a Saharan Africa. biometric smartcard, to authenticate users and conduct transactions (figure 7.10). Transaction data are sent over the Internet to a core banking system that houses the Outcomes and Lessons data and allows for analysis. Besides the obvious benefit More than 2,000 smallholders participate in the sunflower of allowing remote transactions, the service provides the pilot. Several lessons have become apparent since the first ability to uniquely identify customers and record their E C O N O M IC AND S E CT OR WORK 168 MODUL E 7 — B R O A D ENING S MA LLH OLD ERS ’ A C C ES S TO FINA NC IA L S ERV IC ES TH R OUGH IC T FIGURE 7.10: Other ICTs Used by the Financial Inclusion Network and Operations Wireless point-of-sale device Customer smartcard Receipt generation slot Jane Doe Fingerprint scanner 9000 0001 0736 1728 Slot to insert operator Encrypted storage of or customer card account & customer information Source: FINO and author. transactions over time. The transaction history for each loans and cattle insurance combined in a single product (India customer can be used to provide credit bureau services Knowledge@Wharton 2010). to mainstream banks and allow them to lend to qualified borrowers in whom they have confidence (Business Line Profit Margin and Cost Structure 2006). FINO earns approximately US$ 0.10 for each transaction. A similar transaction costs US$ 1.00 at a bank and about An Extended Agent Network US$ 0.40 cents at an ATM (Rotman 2010a). The com- FINO employs over 10,000 agents, 95 percent of whom pany had turnover of US$ 22.5 million in 2009–10 (India are based in rural areas. The agents, called bandhus Knowledge@Wharton 2010). FINO aims to keep interest (“friend� in Hindi), form a network of human ATMs. Each rates below 20 percent. The company has a similar cost agent is trained and equipped with the handheld biometric structure as other microfinance institutions (figure 7.11), transaction device which allows clients with smartcards but it claims to have operational costs of 4–6 percent, to access banking services. Balance transfers, deposits, nearly on par with traditional banks, because its rural and withdrawals can all be done through the smartcard agents cost less than urban agents, technology reduces system, even where the Internet is not accessible, since administrative paperwork, and FINO shares the cost of the smartcard retains the user’s account information (India maintaining the agent network with other banks that use Knowledge@Wharton 2010). New transactions are stored FINO to conduct transactions (India Knowledge@Wharton on the transaction device until Internet is available, at 2010). which point the data are synchronized with the core bank- ing system. Scale and Sustainability Products and Services FINO has grown spectacularly since it was launched in July Through its human and electronic network, FINO deliv- 2006. The company reached 2 million customers by 2008 ers microfinance transactions for various banks as well as (FINO 2008) and 5.5 million by 2009 (findBiometrics 2009), its own banking services. Originally meant as a conduit within an estimated market of 500 million rural people. By for other financial institutions, FINO decided to offer its September of 2010, “there were 21 million customers, 22 own financial services—savings, credit, insurance, and banks, 10 MFIs, 4 insurance companies and 12 govern- remittances—primarily because banks and businesses ment entities covering 22 states, 266 districts and 5,884 remained reluctant to pursue the rural market (India gram panchayats [village councils].� The ambitious goal Knowledge@Wharton 2010). is to reach 100 million customers by July 2011 and have revenue turnover of US$ 52 million (India Knowledge@ FINO is also testing new initiatives. For instance, the com- Wharton 2010). pany opened bank accounts for dairy farmers that supply milk to the National Dairy Development Board in Gujarat. The financial viability of the agent network is questionable, Along with a savings bank account, farmers can receive bank however. At about US$ 23, the average monthly profit for IC T IN A GR IC ULTUR E S E C T I O N 2 — E NHANCING P RODUCT IVIT Y O N TH E FA RM 169 FIGURE 7.11: Cost Structure of Microfinance Institutions (MFIs) in India (% of loan amount) Typical MFIs are less efficient than traditional banks on a unit basis, with meaningfully higher operating costs per loaned dollar 20% 31% 3% 8% 14% 8% 3% 3% Loan loss Cost of Operating Total Total Operating Cost of Loan loss reserves funds costs costs costs costs funds reserves Typical MFI Traditional Banks Source: CGAP and IBM. a FINO agent is less than 20 percent of the profit made Government of India, industry, and the World Bank, has by an M-PESA agent in Kenya or an agent in Brazil, both consistently innovated in service delivery. In 2004, the of whom make around US$ 130. FINO agents surely need bank launched the Kisan (“farmer�) Credit Card in Andhra additional income to supplement that from FINO, but Pradesh to facilitate delivery of cash loans and credit to being an agent for FINO takes up an enormous amount of tobacco farmers (ICICI Bank 2001). In the same year, ICICI time, leaving little for another job unless there are syner- unveiled biometric ATMs in peri-urban areas. The ATMs cost gies between the travel required for FINO and the other 5 percent of typical ATMs. job (Rotman 2010a). These steps led ICICI to envision a technology platform Key Enablers that could allow banking transactions in rural areas, and An operation on such a large scale requires strong support ICICI began incubating FINO to achieve this goal. The from major institutions, policy initiatives, and infrastruc- effort was guided by leaders of other companies that ICICI ture. FINO has benefited from all of these key enablers. A had incubated: Crisil, a ratings agency, and Ncdex, a com- major advantage was that ICICI Bank, India’s largest private modities exchange (Business Standard 2006). FINO spun financial institution with assets of US$ 81 billion, incubated off in 2006, with ICICI retaining a 19 percent stake. Intel FINO. It transferred critical technical and administrative Capital and the International Finance Corporation (IFC) each capacity to the company in addition to financial support. have a 15 percent stake, the Life Insurance Corporation of India has 8 percent, and various other public banks have Early on, ICICI Bank recognized the challenge of reach- the remaining 22 percent (figure 7.12) (India Knowledge@ ing rural customers. The bank, founded in 1955 by the Wharton 2010). E C O N O M IC AND S E CT OR WORK 170 MODUL E 7 — B R O A D ENING S MA LLH OLD ERS ’ A C C ES S TO FINA NC IA L S ERV IC ES TH R OUGH IC T FIGURE 7.12: Financiers of the Financial Inclusion Network and Operations Public sector International 8% 15% investors LIC 30% IFC 22% Intel Capital 40% UBI, Indian Bank 15% & Corporation Bank HAV 3 ho 2% (Maur ldings 2% itius) IFMR trust ICICI Bank 10% ICICI Lomb 19% ard 9% 28% Private equity Source: fino.co.in. Government policies and regulatory incentives have also to the development and implementation of a rural transac- been instrumental in helping FINO to grow and maintain tions system as ambitious as FINO. Another important les- its momentum. First, FINO earns most of its revenue from son is that government can be an important customer. 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IC T IN A GR IC ULTUR E S E C T I O N 2 — E NHANCING P RODUCT IVIT Y O N TH E FA RM 173 Module 8: FARMER ORGANIZATIONS WORK BETTER WITH ICT JULIE HARROD (Consultant) and PEKKA JAMSEN (AgriCord) IN THIS MODULE Overview. Farmer organizations can function more efficiently by using information communication technologies (ICTs) to attract and retain a wider membership, generate more funds, and provide better services to their members. Documented benefits of ICTs include improved connections to members, better accounting and administration, and stronger collective voice. Given the lack of basic infrastructure in much of the developing world, the most successful ICTs are robust and relatively simple. Governments, donors, and nongovernmental organizations (NGOs) generally initiate the development and testing of ICT solutions for farmer organizations, but in many instances partnerships with the private sector are essential. Two important challenges are to sustain the use of ICTs over the long term and ensure inclusiveness. Topic Note 8.1: Finding Better Marketing and Sharing Technical Information Using ICTs. Mobile phone systems appear to be the most flexible technology for improving connections within farmer organizations and providing a wider range services. Technologies that do not depend on literacy (digital photography and video clips) are extremely effective for sharing information within and between farmer organizations.  Zambia’s National Farmer Organization Develops SMS-Based Service  Burkina Faso Farmers Use ICTs to Share New Production, Processing, and Marketing Skills  The SOUNONG Search Engine for Farmer Organizations in China Topic Note 8.2: Dairy Cooperatives Lead the Way with Computerized Systems to Improve Accounting, Administration, and Governance. Computerized record-keeping has transformed efficiency in farmer cooperatives; approaches include commercial systems and systems using open-source software. Supportive government policy and willingness on the part of government organizations to join partnerships are important enablers.  IT Tools for India’s Dairy Industry  CoopWorks Dairy and Coffee, Open-Source Software Launched in Kenya  ICTs Improve Marketing and Governance for Malian Coop Topic Note 8.3: Giving Farmers a Voice and Sharing Information. Farmers’ collective voice is stronger and reaches wider audiences with the help of radio and television. Interactivity is possible and even more promising through phone-in programs and text messaging. Radio and television are also effective tools for agricultural extension. Interactivity through websites is becoming more important for farmer organizations, but less so for individual smallholders.  Community Listeners’ Clubs Empower Social Networks in Rural Niger  Through Radio and Television, Thai Bank Gives Rural Voices a Wider Audience OVERVIEW to farmers’ needs.1 Given a supportive policy framework, Farmer organizations play an important role in tackling the farmer organizations are well able to drive balanced social systemic causes of poverty, because they give farmers— and economic development (AgriCord 2010). men and women—a legitimate voice in shaping pro-poor rural policies. By articulating farmers’ interests to public and 1 Many smallholder farmers have little or no disposable income and would be considered poor by any standards, but it should be remem- private institutions, farmer organizations encourage those bered that there are others—landless laborers, for instance—who institutions to tailor their strategies, products, and services would not have the assets required to join such a group. E C O N O M IC AND S E CT OR WORK 174 MOD ULE 8 — FA R MER OR GA NIZATIONS WORK B ETTER W ITH IC T As well as forging institutional links and giving farmers a col- bring unexpected benefits, but the examples in this module lective voice, farmer organizations provide services to their are presented in three sections to reflect this categorization: members. Smallholders can generate more income in a num-  Enhanced connections to members. Through the ber of ways—such as by using better cultivation techniques organization, farmers share market information and and improved seed, reducing postharvest losses, and having technical know-how, and they remain informed about better access to markets—yet as individual entrepreneurs, the organization’s activities. For instance, topics dis- they may lack the knowledge or capital to change the way cussed and decisions taken at board or executive com- they operate. The collective strength of an organization can mittee meetings can be shared with members who, help its individual members become more efficient, if the for reasons of distance or cost (direct and opportunity) organization’s services match its members’ needs. ICTs are cannot attend. Decision-making processes become integral to fulfilling both the lobbying and service functions more transparent, increasing trust between members, of farmer organizations, speaking both for and to the farmer. the board, and executive managers, and the overall functioning of the organization is improved. Farmer organizations also have a third, commercial function,  Improved accounting and administration. Farmer as seen in agricultural cooperatives and producer groups. organizations are often responsible for handling very Commercial activities become more efficient and transparent large amounts of money that may represent the cash when supported by ICTs. income of thousands of farm families. Efficient record “ICT� is a catch-all term for an increasing number of tech- keeping allows an organization to serve its members nologies, each offering corresponding opportunities for inno- better, and the transparency offered by computerization vation. This module looks at a range of technologies, from and other technologies enhances trust. Cooperatives the well-established and familiar technologies like radio and that have invested in modern management and mem- mobile phones to the more specialized technologies, such as ber information systems can improve their image to computerized record-keeping systems and global positioning attract high-quality staff and gain members’ confidence. system (GPS). The discussion emphasizes technologies that  Stronger collective voice, including improved political can (or that have the potential to) reach large numbers of voice. “Interactivity� as understood in developed coun- beneficiaries and perform reliably in the challenging context tries with good infrastructure is still rare in many parts of the developing world. Different technologies offer differ- of the world. But individual farmers nevertheless “have ent benefits, achieve different objectives, and have different their say� by phoning and texting their participation in limitations, so each is considered on its own terms. agricultural radio broadcasts. They give feedback (and complain when necessary) about the services offered by their farmer organization and local government. Benefits Offered Through ICTs Comments are likely to have more influence expressed When considering the value of ICTs to farmer organizations over the airwaves than expressed in a less public forum. and cooperatives, it is worth bearing in mind that in remote rural areas of many developing countries, particularly in Africa, Despite the potential benefits of ICTs, farmer organizations these organizations often are the only ones operating. Local are rarely the first to adopt them, given that they usually work government offices may be found in district headquarters, in difficult environments with low margins to generate income but often there is little else apart from frontline extension for their members. Neither managers nor members are preoc- officers and schools. cupied with the latest iPad. Where particular ICT solutions are available and necessary to guarantee better performance and As a hub for business information, transportation, and stor- benefits to members, farmer organizations can be expected to age, as well as a place where people share new systems and be late adopters of such technology without external support. processes, farmer organizations have enormous potential— which should not be underestimated—for networking and In general, it is governments, donors, and NGOs that have bringing people together with the help of ICTs. the funds to develop and test ICT solutions that may ben- efit farmer organizations. Most if not all of the cases illus- The benefits offered by ICTs to producer organizations and trated in this module are public-private initiatives to “include agricultural cooperatives fall into three broad categories. the excluded� by promoting ICTs in remote rural areas. Practical examples of ICTs in use sometimes cut across Successful cases provide good examples for scaling up and these arbitrary categories, and particular technologies may replicating in other countries and regions. IC T IN A GR IC ULTUR E S E C T I O N 2 — E NHANCING P RODUCT IVIT Y O N TH E FA RM 175 Promising Approaches It is important to remember that ICTs—whether mobile Table 8.1 summarizes the types of ICT covered in this module, phones, computers, telecenters for Internet access, or arranged by topic note. All of them have proved useful in address- radio broadcasts—are not ends in themselves; they are ing one or more challenges faced by farmer organizations. simply the means by which information can be recorded, TABLE 8.1: Specific ICTs Discussed in This Module CHALLENGE FACED BY FARMERS AND THEIR ORGANIZATIONS LACK OF MARKET LENGTHY MANUAL LACK OF LACK OF ACCESS INFORMATION— BUREAUCRATIC KNOWLEDGE OF TO EXTENSION PRICES, PROCEDURES, POOR MARKET STANDARDS SERVICES AND EXAMPLES IN POTENTIAL TRANSPARENCY, BY FARMER, OR LATEST RESEARCH, THIS MODULE BUYERS, AND INCLUDING WITH LACK OF CONSUMER AND INABILITY TO TYPE OF ICT APPLICATION SO ON THE FO CONFIDENCE SHAPE RESEARCH Mobile phones (voice or short Fairer relationship If GPS an option, can Informed farmer can sort Voice and text increas- –ZNFU (Zambia) messaging system (SMS)) between farmer and make it easier to verify and offer produce accord- ingly used to contact –Coopeumo (Chile) to access price information, trader the source of crops— ing to required standards interactive radio –FrontlineSMS purchasing options, and other e.g., for organic or other broadcasts to solve –SOUNONG Enhanced connections to members market intelligence; also to certification problems access information in broader (China) sense. Digital multimedia (cameras, Can demonstrate stan- FO can document best –FEPPASI and video recorders, computerized dards in effective, visual practice and share Songtaaba Yalgré presentation) to share new way. Can help in reaching from farmer to farmer; Association techniques and effective prac- export market pictures are more (Burkina Faso) tices; ICT-based information on effective than words –Coprokazan (Mali) grades and standards. GPS technology for plotting Speeds recording Consumers know source of –Songtaaba Yalgré source of produce. process produce and trust claims Association about organic status and (Burkina Faso) similar characteristics Rural telecenters connected to Easier to find prices FO can share information Information available Information available, –Several Internet. and buyers for better transparency interactivity possible Member transaction systems; Reduces need for clerks, Graphic presentation –Dairy and coffee Improved accounting and software for financial speeds transactions, of financial info makes coops (India, management. improves transparency statistics easier for coop Kenya) administration members to understand –Coprokazan (Mali) Automated milk measurement Fairer relationship Reduces waiting time –Dairy and coffee systems. between farmer and for farmers and amount coops (India, coop of milk spoiled; farmers Kenya) trust the automated system Local radio stations providing Farmer better Together with mobile Farmers better informed Possible to broad- –Farm Radio market and technical info informed about phones, can increase on standards cast info on latest International and phone-in virtual markets. prices and possible connections with FO techniques; phone-in –RIU (Zambia) Stronger collective voice Could also share information markets members and increase programs allow farmers –Listeners’ clubs about FO. transparency to discuss problems (Niger, Zambia) TV programs specially tailored Market info As above for radio As above for radio Interactive problem- –Doordarshan to share farming information— broadcast solving seminars on Broadcasting Co. technical, market, problem- agricultural issues; (India) solving, and other. picture more effective –BAAC (Thailand) than words Websites set up by FO and Can reach wider FO could put financial Inform members of stan- Information can be –Several producer groups; online discus- markets and other info online to dards required accessed online sion forums. increase transparency Source: Authors. Note: BAAC = Bank for Agriculture and Agricultural Cooperatives (Thailand); FEPPASI = Fédération Provinciale des Professionnels Agricoles de la Sissili; FO = farmer organization; RIU = Research Into Use; and ZNFU = Zambia National Farmers Union. E C O N O M IC AND S E CT OR WORK 176 MOD ULE 8 — FA R MER OR GA NIZATIONS WORK B ETTER W ITH IC T summarized, displayed, and passed on more quickly. It is Public-private partnerships are also important, as develop- the information itself that is important. Since information ments in ICT come largely from the private sector. Dealing (on market intelligence and agricultural techniques, for with such partnerships will be a critical issue. Private compa- instance) changes, the task of collecting it and choosing nies need to make a profit for their goods and services, but the most relevant sources is critical. Farmer organizations safeguards need to be built into partnership arrangements so might have to be helped to create partnerships that will that the farmer organizations (and ultimately their members) provide information that is of most use and relevance to see long-term benefits. members and management. Any intervention dealing with ICTs must therefore consider this point. Where support is offered to farmer organizations that have not yet reached a level of financial maturity that would allow them to adopt ICTs independently, it is important to design KEY CHALLENGES AND ENABLERS interventions that give due consideration to the issue of With regard to farmer organizations, ICTs currently offer gender. Women need to be involved at the planning stage guaranteed improvements in enhanced connections to mem- as well as in the management of a project to ensure their bers and improved accounting and administration. Already, proper representation (box 8.1 lists obstacles to increasing working examples offer lessons for future development of women’s use of ICTs). Somewhat paradoxically, women, ICT interventions. The third topic discussed in this module— despite having lower social visibility and literacy than men, stronger collective voice—has fewer working examples, but have more to gain from ICTs. Women may not be able to it may benefit more from ICT interventions in the future. free themselves from their traditional time-consuming com- mitments to household and children, but armed with only a Farmer organizations can function more efficiently by using cheap mobile phone they can find the best prices for their ICTs to attract a wider membership and thus generate more crops without abandoning their domestic tasks (image 8.1). funds and provide better services in a virtuous spiral of devel- Women who might already be involved in the accounting opment. To speed the uptake of ICTs, it may be appropriate for public agencies to provide funds that can overcome the BOX 8.1: Factors that Can Hamper Women’s Uptake inertia typical of organizations struggling on a shoestring of ICTs budget. Supporting a pilot project to demonstrate benefits can be effective. Indeed, many examples in this module are  Cultural attitudes discriminate against women’s relatively small-scale interventions that succeeded in chang- access to technology and technology educa- ing the way farmer organizations operate. tion: What would a woman farmer want with a computer? The challenge in most cases, however, is to sustain the use  Compared to men, rural women are less likely to of ICTs after the period of support. Costs are associated own communication assets, such as a radio or with change, not only equipment costs but also the costs mobile phone. of maintenance, training, and continuing development. New  Rural women are less likely to allocate their technology must either generate enough extra income for income to use in public communications facilities, an organization to cover ongoing costs, or individual users except when they need to communicate with fam- must see enough tangible benefits in order to pay for the ily or to arrange for income transfers. technology. In the developing world, and particularly in agri- culture, subject as it is to the external shocks of unpredict-  Rural women are often reluctant to visit cyber able weather and global market forces, the benefits of ICTs cafés or public Internet centers, which are often must be very firmly established for farmer organizations to owned by men and visited by men. The café cul- sustain their costs. ture often excludes girls and women.  Rural women’s multiple roles and heavy domestic One way of looking at the sustainability issue is to regard responsibilities limit the time they can allocate well-functioning farmer organizations as a public good that to learning and using ICTs, until and unless they merits support from public funds, at least initially. Given the realize the potential information benefits (and time- vital role of such organizations in helping impoverished farm- saving elements) of using these technologies. ers improve their living standards in areas that may be poorly Source: World Bank 2008. reached by other interventions, this argument is powerful. IC T IN A GR IC ULTUR E S E C T I O N 2 — E NHANCING P RODUCT IVIT Y O N TH E FA RM 177 function of a farmer cooperative should have the opportunity IMAGE 8.1: Indian Woman Text Messages on Phone in to learn computer skills when these functions become com- India puterized. Such skills will become more valuable as com- puterization becomes more common, giving women more employment choices. Consideration should also be given to age asymmetries in access to ICTs, which younger people tend to adopt more readily. This asymmetry has the potential to cause friction in traditional societies where elders are respected and turned to for guidance. On the other hand, young people’s readiness to adopt new technology can be turned to advantage and used as a learning tool within communities. Of course, there are also the persistent challenges com- mon to developing countries: poor infrastructure, poverty, illiteracy, and the draw exerted by urban centers. Mains elec- tricity is rare outside major towns (although solar recharging devices and kiosks are starting to appear). Mobile phones are widely used in some rural areas, but others still lack network coverage. Maintaining computer systems can be a challenge in remote rural areas. Technical staff trained to use computers tend to migrate to towns, where salaries are higher. Farmers themselves may not see the importance of spending money on ICT (bringing Internet connectivity, say) when a reliable water supply would bring more immediate Source: Simone D. McCourtie, World Bank. and tangible benefits. A more subtle challenge is the danger of widening the digi- is poised to take this step, and one might predict that African tal divide, because better-educated groups are more likely countries will follow suit (The Economist 2010). to accept and use new technology, which further distances them from poorer organizations. The coops that are likely Using text messages or the web requires a certain level of to be successful are the ones that already have compe- literacy, however, and not everyone owns a phone, so radio tent, educated managers and already function well as busi- broadcasts have proved even more effective, especially nesses (see the discussion of dairy cooperatives in Topic when they are carefully considered. Popular and informative Note 8.2). Smaller, less well organized groups will always programs transmitted at appropriate times of day—such as present more of a challenge; they require more intensive early evening, when outdoor chores have been completed training and support services over a longer period. They and women can listen, too—can bring about real improve- might also need a significant period to become aware of ments over a wide geographical area. the benefits of computerization before any intervention is It is also worth noting that ICTs can be beneficial in indirect possible. ways, by reaching farmers who are not themselves online Given these challenges, it is not surprising that the most or using any new technology through farmer-to-farmer infor- effective technologies are relatively cheap and simple. Mobile mation sharing, at which farmer organizations have already phone ownership is increasing rapidly, and far more people proved adept. Some have used digital multimedia equipment own phones than have computers. Market information in the to produce teaching materials showing better farming or form of text messages to mobile phones can therefore reach production practices. Slide shows or video footage of actual large numbers of farmers and give them a stronger negotiat- farmers demonstrating new methods, particularly if the farm- ing position with traders. Phones that connect users directly ers are from the local area, appear to be much more effective to the web unleash an even wider range of possibilities. India in getting a message across than dry information presented E C O N O M IC AND S E CT OR WORK 178 MOD ULE 8 — FA R MER OR GA NIZATIONS WORK B ETTER W ITH IC T by an “expert� from outside. In such cases, even though the Kenya are at an earlier stage, pursuing a different approach with actual users of technology are few, the benefits are enjoyed open-source software developed specially for that context. by a much wider group. Topic Note 8.1 discusses how farmer organizations have The same can be said of the combination of community radio used ICTs to help their members find better markets and with text or voice contributions via mobile phones, where the share technical information, using examples from Zambia, audience as a whole is much larger than the number of par- Burkina Faso, China, and other countries. ticipants. Regular, facilitated programs covering local issues, agricultural extension messages, and specific problems Topic Note 8.2 looks at computerized accounting systems raised by farmers that can be answered by experts command used by cooperatives; examples from India and Kenya show a wide and receptive audience. The approach is inclusive as contrasting routes to developing such systems. The topic well, and with the interactivity made possible by SMS and note also highlights the unexpected benefits of ICTs, using phone calls, the audience can influence program content. an example from a cooperative in Mali. Taking the idea a step further, the workings of farmer orga- Topic Note 8.3 examines how ICTs can give farmer orga- nizations could be made more transparent with regular pro- nizations and their members a stronger voice. The lack grams covering recent activities and financial information. of infrastructure—electricity, mobile signal, and Internet Farmer organization leaders could take questions from listen- connectivity—in rural areas has severely limited the means ers and viewers, improving both awareness and trust. by which farmer organizations can receive communications from their members, but many organizations now have web- A final point is that even proven technology can take time to sites and use e-mail and online discussion forums to interact be adopted fully, and adoption rates will differ according to with similar organizations and the wider world. Other alterna- complex factors in the underlying development and business tives to communicate farmers’ views, locally and nationally, environment. The rate of adoption also depends on the route are rural radio and telecenters. The advocacy role of farmer chosen, and so far it is not possible to say which will be more organization can also be pursued by federations of farmer successful in the longer term. For instance, dairy cooperatives organizations linked by ICTs. The note provides examples in India are already benefiting from computerization based of how farmer groups have used all of these strategies and on commercial software systems, whereas similar coops in innovative practice summaries from Niger and Thailand. Topic Note 8.1: FINDING BETTER MARKETING AND SHARING TECHNICAL INFORMATION USING ICTS TRENDS AND ISSUES members, telecenters for mastering digital technology and The concept of farmer organizations is based on the notion of using it to meet the goals of farmer organizations, mobile strength in numbers, of giving small-scale farmers the chance phone technology to provide services, and ICTs to facilitate to punch above their weight and become entrepreneurs in certification and access to international markets. A persistent their own right. The challenge, though, is to reach isolated issue is how farmers and farmer organizations will pay for farmers with the information they need to sell their produce at obtaining and providing technical and market information. the best price and to grow more and better crops. Although an organization’s headquarters can offer a business hub for mem- Technology to Maintain Close Ties with Grassroots bers, many members live too far away to make frequent visits. Members Others are effectively barred from using the facilities because they speak a minority language or cannot read or write. Smallholder farmers are some of the poorest people in the world, and they cannot afford to join a group that does not New communication technologies are vital for overcoming offer tangible benefits. Creating better links between farmer these barriers. They include technologies that help farmer organizations and their members is crucial if the organiza- organizations to maintain and expand ties with grassroots tions themselves are to flourish. Reliable flows of information IC T IN A GR IC ULTUR E S E C T I O N 2 — E NHANCING P RODUCT IVIT Y O N TH E FA RM 179 between headquarters and the grassroots should boost trust IMAGE 8.2: Telecenters Can Attract a Wide Range and membership. of People The challenge of improving links between farmer organizations and their grassroots members can be tackled using ICTs, but in the poorest areas of developing countries where infrastruc- ture is lacking and many farmers are illiterate, the technology must be simple and cheap. Most farmer organizations cannot afford to introduce new technologies, even when they can see the potential benefits, so they rely on public-sector support. Despite the digital poverty in rural areas, evidence suggests that farmers, both men and women, are well able to learn to use relevant technology if they are taught in the local lan- guage and can see clear benefits from new ways of doing things. For instance, some of the nearly 2,000 women who work with a shea butter association in Burkina Faso (dis- cussed later) have become financially independent by learn- ing to use ICTs, including GPS and the Internet, to reach a developed-country market for certified organic shea butter. Another promising idea is for a farmer organization to com- municate with members to create a database on crops and productivity. Backed by reliable historic production figures and sound projections of possible future yields, the organi- zation would be in a better position to access credit for its members—a valuable service. Source: Jonathan Ernst, World Bank. Many small-scale producers struggle to access up-to-date technical information, but the experience in Burkina Faso and elsewhere shows that farmer organizations can use new BOX 8.2: Telecenters Build Skills, Directly and Indirectly, ICTs to provide advice and services tailored to members’ in Members of Farmer Organizations needs (see IPS “Burkina Faso Farmers Use ICTs to Share New Production, Processing, and Marketing Skills�). Using In its most basic incarnation, a telecenter is simply an local languages and photos or moving images are effective individual, often a woman, sitting under an umbrella with ways of reaching poorly educated farmers. ICTs have revo- a telephone that people can use for a small fee. More lutionized the means of disseminating information to such complicated solar-powered booths have been developed, an audience, although a facilitator is often needed as part of such as the Cooperative Internet Booth (Coop-e-Booth) the process. in Kenya, which has computer terminals, a terminal managed by an administrator, and wireless Internet con- nectivity. The booths were launched in July 2010, and Telecenters to Strengthen Farmer Organizations’ Skills the Cooperative Alliance of Kenya hopes that they will and Efficiency allow interested individuals and organizations to gener- Some farmer organizations have set up telecenters to help ate income and create employment. their members learn about ICTs and access market informa- tion, among other objectives; see box 8.2. The centers require The benefits of telecenters operated by farmer investments in equipment and training, which may be too high organizations—access to technical and market information for organizations to bear without initial and continuing support. from the Internet, for instance—do not have to be limited However, experience such as that of the Coprokazan coopera- to literate farmers who live close by. The benefits can be tive in Mali suggests that telecenter services may be attractive amplified if telecenters are used to develop training materi- to nonmembers as well. If they are prepared to pay to use the als for illiterate or far-flung members of the organization. Internet or to print a document, for example, the facility may Source: Authors. become self-sustaining (image 8.1). E C O N O M IC AND S E CT OR WORK 180 MOD ULE 8 — FA R MER OR GA NIZATIONS WORK B ETTER W ITH IC T In Uganda, the 3,800 members of the Busia District BOX 8.3: Unintended Consequences of Not Including Farmers Association have a telecenter with various facilities, Women including seven Internet-ready computers, a printer, a fax machine, and a generator for when the mains electricity fails Warana lies in the sugarcane belt of one of the most pros- (Nabwowe 2010). It was set up in 2008, with the Uganda perous regions in Maharashtra, India. Kiosks were set up Communications Commission contributing 80 percent of in 70 villages and equipped with a computer and printer, the costs and the members 20 percent. Farmers are trained which were networked to a central administration build- to use the Internet to identify markets and liaise with them ing via wireless telephony. Looking back, project staff directly, and they say they can find better prices and sell their pinpointed the project’s weaknesses to the exclusion of produce in bulk. They pay a small fee to use the center. women. Warana neither assessed the information needs of the community nor promoted local ownership and par- Another example of the telecenter model is the case of the ticipation. Because Warana did not give particular atten- arid Huaral Valley in Peru, where farmers cannot operate tion to ICT access among women and poor people, these without access to water for irrigation.2 The water comes from groups were marginalized. Women were not encouraged lakes in neighboring highlands, and there is a long history of to become information kiosk operators, and the resulting social organization to ensure that water is distributed fairly. increase in men’s digital literacy exacerbated the male- female digital divide. The poorest, landless laborers, and The Peruvian Center for Social Studies developed a project to tribal groups did not use the kiosks, even though these establish a network of local telecenters with the help of local groups would benefit the most from information about farmer organizations. An important aim is to provide informa- employment and educational opportunities. tion hubs for farmers so they can improve their practices and Source: World Bank 2008. become more resilient to periodic water shortages that have followed diminishing rainfall. It is also important to distrib- ute irrigation water fairly, so water use has been monitored and recorded in the information system and administered by As noted in box 8.2, the benefits of a telecenter can also the local board of irrigation users. Water use is now more reach the wider group of less literate farmers and those who transparent, and it is easier to monitor contributions toward live too far away to use it often. This was the case in Burkina maintaining and administering the irrigation systems. Faso, where the training courses created by the FEPPASI telecenters have benefited thousands of members even A small minority of farmers can access information directly though only a few hundred farmers were trained to use ICTs. online, but the new knowledge is said to be shared with a much wider circle. Changes in the community appear to be beneficial, Despite various examples of telecenters in use, there seems and a community radio station has been set up to broadcast on to be some doubt as to whether they can be self-sustaining farming and environmental issues. Effects on long-term food and whether they are being used optimally. One research security have not yet been seen, but the fact that farmers with example reported that a PC-based system was replaced low levels of formal education have proved able and willing to successfully by a mobile phone-based system. Using text embrace new technology to solve agricultural challenges in this messages instead of computers, it was possible to transfer difficult environment is a positive outcome. small but relevant amounts of data to farmers. The project (Warana Unwired) worked with a sugarcane cooperative in The telecenter concept shows that literate farmers readily rural Maharashtra. In an eight-month trial involving seven vil- learn to use ICTs to access technical information and market lages, the mobile phone-based system replicated all of the prices. The farmers benefit from being able to contact other PC-based functionality and was found to be less expensive, farmer groups and link with buyers. To ensure that women more convenient, and more popular with farmers than the benefit as much as men, however, the differences in their previous system (Veeraraghavan, Yasodhar, and Toyama 2009). socioeconomic contexts need to be considered (box 8.3 shows what happens when they are not). A telecenter must be attractive to women (not perceived as a men’s club) and Mobile Phone Technology Delivers Market Information sited in a place women find safe and convenient to visit while and Other Services to Members carrying out other chores. A major service provided by farmer organizations is to improve members’ access to market information, and the advent of mobile phones and SMS has exponentially increased their 2 See http://www.bcoalliance.org/node/459 and Bossio (2007). capacity to do so. Module 9, which focuses on the use of ICTs IC T IN A GR IC ULTUR E S E C T I O N 2 — E NHANCING P RODUCT IVIT Y O N TH E FA RM 181 in marketing, discusses many aspects of these issues; this messaging hub that does not need Internet connectivity. topic note concentrates on how farmer organizations have used Devised to enable information flow for election monitors, ICTs to gain an advantage in marketing and information sharing. news agencies, and humanitarian NGOs, the system is prov- ing adaptable to the needs of farmer groups. Among farmer organizations, SMS systems are proving their worth by enabling farmers to compare prices in different In El Salvador, for instance, where farmers in general do not markets and to take a stronger negotiating position when have access to computer-based information services but selling their produce. Some farmer organizations opt to join where there are more than 50 mobile phones for every 100 an established trading platform such as Esoko. Others have inhabitants, the Agricultural Technology Innovation Foundation set up their own services. Large organizations such as the is promoting the use of mobile phones to encourage farmers Zambia National Farmers Union (ZNFU) have developed mes- to exchange information and strengthen market links. With sage systems using commercial routes (see IPS “Zambia’s 600 subscribers who pay only for the information they receive, National Farmer Organization Develops SMS-based Service�). the pilot project is currently supported by the cost of calls. Smaller farmer groups have used free open-source software such as Mobile Information Platform or Frontline SMS, which In Aceh, Indonesia, FrontlineSMS is used to send informa- provide options for sending bulk messages. For an example tion to small-scale producers. A team gathers a range of from Chile, see box 8.4 (and for more detail, see Module 3). information, and the data are entered into a computer run- ning the program. Latest prices, costs of inputs, and weather FrontlineSMS (Banks 2009) is software that effectively turns forecasts are then sent to groups of producers and others in a computer and mobile phone into a two-way, group text the agricultural sector. Farmers say they like to have a base BOX 8.4: Chile’s Coopeumo and the Mobile Information Project Coopeumo, a Chilean farming cooperative with fewer than 400 members, uses text messages to help small-scale farm- ers increase productivity. This area of Chile, south of Santiago, has good soils and climate, but smallholders are at a disadvantage compared to larger enterprises because it is not easy for them to access specific market, technology, and weather information that could boost production. Smallholders are aware of computers and would like access to the Internet, but with low population densities and low incomes in the areas where they farm, it will be difficult for private service providers to offer connectivity. This “digital poverty� has been noted in Chile, where the government is keen to promote social equity, and agricultural exports are an important part of the country’s economy. Through the Mobile Information Project (MIP), farmers now receive research findings and news (including market prices and weather forecasts) directly from the Internet on their mobile phones. Weather updates are particularly useful to farm- ers at critical points such as planting and harvest. The MIP software works on the cheap phones (US$ 15–20) that farmers tend to use and is effective over slow networks. Several organizations implement MIP:  The Foundation for Agrarian Innovation (FIA, Fundación para la Innovación Agraria), is a Chilean governmental agency that works closely with agrarian communities to understand their information needs and to locate, edit, and/or create appropriate content to meet those needs (resulting in the creation of micro weather stations, for example). FIA is therefore a key partner responsible for sending a content stream of locally relevant information.  The United Nations Educational, Scientific, and Cultural Organization (UNESCO) is responsible for financial support and provides educational content.  Coopeumo, a cooperative based in the town of Peumo, is responsible for local implementation of the project among cooperative members.  Entel PCS, a Chilean telecommunications company, is helping support the project with the technological platform, telephony equipment, and competitive pricing for mass SMS messaging.  The national Chilean newspapers El Mostrador and El Mercurio supply news feeds, among which users can choose preferred news streams. Sources: Authors; Cagley 2010; Datadyne (http://datadyne.org/programs/mip/datagro). E C O N O M IC AND S E CT OR WORK 182 MOD ULE 8 — FA R MER OR GA NIZATIONS WORK B ETTER W ITH IC T price on which to start negotiations with buyers. They also IMAGE 8.3: Women’s Cooperative Processing Shea report that as they learn the range of price fluctuations for Butter in Ghana each product, they are better able to choose which crops to grow. An even more low-tech approach is used in the First Mile Project in Tanzania. The project supports a group of “market spies� to gather market intelligence and share it with farmers (“Bahati Tweve: The Honest ‘Middleman’ Brokering Deals,� New Agriculturalist 2008). This intervention is based simply on phone conversations, SMS messages, face-to-face meet- ings, and village notice boards, but it has helped build market chains and put farmers in a stronger position when selling their produce. After support from project funding comes to an end, the spies aim to cover their costs by charging a com- mission to link buyers with producers. Other possible ways Source: Jonathan Ernst, World Bank. to generate revenue might be to charge a small fee for adver- some organizations shows that they can reach this ambitious tising on information boards and for storing produce. goal even if their members have little formal schooling. Mobile market information has a number of benefits. At the Many women belonging to the Songtaaba Yalgré Association, very least, a smallholder armed with information on current a shea butter trading group in Burkina Faso, never attended prices has a better chance of negotiating a good deal for his school but confidently use ICTs and the Internet (Soré n.d.). or her produce with passing traders. Smallholders also value The group has had a French-language website since 2004 and use information on the price of inputs from different (http://www.songtaaba.net) and handles 90 percent of its sources and on the whereabouts of the nearest buying cen- sales through the Internet, sending shea butter products to ter. Although household responsibilities keep many women Europe, Canada, and the United States. close to home, if they can discover the best markets for their produce via SMS, they can maximize their income. The website describes the background of the producer group and lists the various products formulated using shea butter as Services for sending and receiving cash via mobile phone, such well as the chemical ingredients of those products. Largely as M-PESA, which has more than 13 million users in Kenya through their website, the women have strengthened their (“Not Just Talk,� The Economist, 2011), make it easier for position in the marketplace. As Noelie Ndembe, the head of farmer organizations to provide other services such as sell- MIPROKA (the national shea information and promotion cen- ing inputs and arranging more convenient payments for pro- ter),4 has said, “To be on the Net is to be seen everywhere in duce. For example, Zambia is testing an “e-voucher� project the world� (quoted in Soré 2008). (Sibanda 2010) in which farmers who register with the scheme receive prepaid mobile phone vouchers worth about US$ 50 A particular selling point for this particular shea butter (a to purchase inputs from agrodealers3 (see Module 9). Farmer sought-after ingredient for beauty products) is its certifica- organizations may be able to develop similar arrangements tion under Bio-Ecocert and Bio-NOP, which guarantee that a with input suppliers. product is 100 percent natural and has been manufactured under conditions that respect human and environmental Technology for International Certification and Markets health. GPS technology has been essential for recording the Farmer organizations are using ICTs not only to provide local source of the shea fruit and thus assuring distant customers and national market information to members but to increase that the certification is genuine. their international reach. The lure of lucrative international Website development and related training in the technology markets, such as those for organic or Fair Trade products, were done in partnership with MIPROKA. Two village tel- can be a strong motivation for farmer organizations to master ecenters were set up, each with several computers linked to ICTs in the first place (image 8.3). Anecdotal evidence from the Internet, a scanner, photocopier, and telephone. Technical 3 The scheme is a joint venture between the Zambian government and FAO, funded by various donors. 4 Maison d’Information et de Promotion du Karité. IC T IN A GR IC ULTUR E S E C T I O N 2 — E NHANCING P RODUCT IVIT Y O N TH E FA RM 183 training had two elements: (1) how to produce shea butter and its users.5 Where users choose the information of inter- to the exacting purity and cleanliness standards demanded est to them, a wider range of information can be offered of an export product and (2) how to use ICTs, including GPS without inundating users with valueless data. and computers. Other facets of the training included better ways of marketing the product, as well as environmental and A persistent issue is that it is not clear how information sys- energy awareness. tems that rely on mobile phones will pay for themselves over the long term. Experience to date offers conflicting evidence Moré, the local language, has been used throughout, and the about farmers’ readiness or ability to pay for information text trade group produces an in-house bulletin that also appears messages. in Moré. The bulletin gives information on the group’s activi- ties and on the production of organic shea butter. Before looking at specific examples of formal services, it is worth bearing in mind that mobile phone communication by Despite some literacy barriers, many women have learned itself is an effective way of sharing market prices. Several how to use GPS equipment to map their fields and record studies suggest that simply providing mobile phone coverage each tree from which they harvest shea fruit. A small group can affect market efficiency (see Module 9). This outcome was initially taught by an expert from Europe, but they can should be noted when considering whether to support more now train other village women in GPS skills. Mapped infor- formal SMS services (USAID 2010). mation is vital for certification. As an incentive to capture all relevant items each time, the women earn a small bonus if In India, early results from research attempting to quantify they do it without mistakes. Careful record keeping and good the impact on farm profitability of a subscriber-based, local- production techniques allow the women to sell their “bio� language information service suggest that farmers cannot shea butter at more than twice the price of uncertified shea afford it.6 They say this despite claiming to have negoti- butter. Even the raw shea fruit is worth more if it is certified ated better prices for their crops, spent less on inputs, and as coming from approved fields. enjoyed overall better income. The package costs about US$ 1.50 per month, for which the subscriber gets 75–100 SMS messages. Each subscriber shared the information with LESSONS LEARNED about seven other people. Only about half of the subscribers planned to renew their package. Almost all of those who had Although ICTs can certainly improve connections between not bought the service said that cost was the reason. farmer organizations and their members, farmer organiza- tions are unlikely to be early adopters of this technology. In contrast, the phone company Nokia has found that farmers Organizations of small-scale producers in particular are likely in India are prepared to pay US$ 1.35 per month to subscribe to need support to try new systems and learn how to make to their service, Life Tools (O’Brien 2010). Nokia reports that them cost-effective. It is worth remembering that farmers more than 6 million people have signed up to pay for com- can be reached by channels other than ICTs; prices can be modity data in India, China, and Indonesia and that Life Tools published in newspapers, broadcast on the radio, or simply is about to expand to Nigeria. chalked up on boards in markets or farm supply shops. In Zambia, the ZNFU admits that although there is huge Messaging systems and telecenters can require a level of lit- demand for its SMS-based market information system (see IPS eracy that is often rare in remote rural areas, and the limit of “Zambia’s National Farmer Organization Develops SMS-based 160 characters per text message can make it a challenge to pro- Service�), the system does not yet pay for itself and cannot vide certain kinds of content. Newer versions of software such yet be expanded. One possible revenue-raising mechanism for as FrontlineSMS hope to incorporate multimedia information ZNFU and similar schemes might involve transport companies. in audiovisual formats. Other software and hardware design- Recognizing that running trucks empty after making a delivery ers are also developing products that are more intuitive to use is inefficient, truck owners might be willing to pay for infor- and employ audio and video. One benefit of using a common, mation to find return loads. Other revenue-raising possibilities open-source platform like FrontlineSMS is that users can easily might include charging for arbitrage or brokerage services. share experiences, which in turn should lead to improvements. Studies of a range of agricultural market information systems 5 “Agricultural Market Information Systems in Africa: Renewal and Impact.� Unpublished summary of workshop held March 29–31, in sub-Saharan Africa suggest that disseminating information 2010, Montpellier, CIRAD—UMR MOISA. by mobile phone creates interactivity between the system 6 Grahame Dixie, World Bank, personal communication. E C O N O M IC AND S E CT OR WORK 184 MOD ULE 8 — FA R MER OR GA NIZATIONS WORK B ETTER W ITH IC T The experience in Chile (box 8.4) suggests that disseminating the fact that Zambia had not finalized its ICT policy was information via simple mobile phones is a good way to reach regarded as slowing development of the ICT industry.7 farmers in areas where Internet facilities are unlikely to be pro- vided in the near future. Since the pilot project closed, Coopeumo In many African countries, providers of new mobile services has taken on the responsibility and costs of creating and sending must use intermediaries to get a short code for customers the SMS messages. Farmers do not pay directly—the charges to dial, and many governments see phone companies as are included in the membership fees they pay to the cooperative. sources of easy tax revenue. Competition and the develop- Refinements to the system should make it easier to provide rel- ment of new infrastructure are often limited by restricting evant content to each individual. The goal is to tailor the content licenses to new operators (see Module 3). Mobile communi- automatically (a human editor would slow the service). cations are thus more expensive in Africa than they need to be (“Not Just Talk,� The Economist 2011). A concluding lesson is that farmer organizations and their partners may find it challenging to use ICTs in the absence Kenya is a notable exception. Its good regulatory environment has of a supportive regulatory framework for the technology. led to competition and reduced the cost of mobile phone tariffs Mobile phone networks are subject to varying degrees of (World Bank 2010). See box 8.5 for additional considerations for bureaucracy, taxation, and government regulation in different designing effective ICT interventions for farmers’ organizations. countries, and any proposal to set up a messaging service 7 Unpublished summary of the meeting of the Agricultural The- using mobile phones must comply with prevailing rules. matic Group (part of the e-Brain Forum of Zambia), “e-Agricultural When ZNFU was setting up its market information system, Marketing—What Are the Issues?� on October 27, 2006 in Lusaka. BOX 8.5: A Checklist of Considerations for Designing an Effective, Sustainable ICT-Based Project to Support Farmer Organizations  What are the levels of literacy, mobile phone ownership, and willingness of farmer organization members to embrace new technology? Many smallholders cannot afford phones, do not know about SMS or voicemail, or can- not punch a message into a phone keypad.  How well can farmers understand market information and use it to their advantage?  What is the role of smallholder farmers’ organizations in this context? What capacity is required for them to be effective?  How will the most vulnerable members of the organization be included? Some people might be too poor to pay for infor- mation or might live outside the range of mobile phone coverage. Women may be less likely to have access to a phone.  What information is best disseminated by different media (SMS, ICT-enhanced training workshops, telecenters)?  Do different categories of farmers need different information? Large-scale farmers have different interests than smallholders, but both may be members of the same organization.  Are there transport links to the different markets? Information is of no use unless farmers can get their crops to the market of their choice.  Can farmers store crops safely and without spoilage after harvest? Otherwise they are in no position to delay sell- ing until prices are optimal. Market price information has little value here, so improved drying and storage facilities might need to go hand in hand with a market information system.  What are the sources of information needed by farmers? They are likely to include research bodies, government extension services, news media, the Internet itself, other farmers, other farmer organizations, and private seed or input supply companies.  How should information be sorted to be most useful for the recipient? SMS messages have 160-character limit, so it is a challenge to prioritize messages.  Who will be responsible for selecting and sorting information, and how can quality control be maintained?  How will the costs of the service be covered?  What is the level of cooperation offered by mobile phone companies? How well might rival companies work together?  What is the appropriate software? Is free open-source software such as FrontlineSMS the way forward? Source: Authors. IC T IN A GR IC ULTUR E S E C T I O N 2 — E NHANCING P RODUCT IVIT Y O N TH E FA RM 185 INNOVATIVE PRACTICE SUMMARY week the extension officers display the prices and details of Zambia’s National Farmer Organization Develops interested traders on posters in local information centers. SMS-Based Service So far the system seems successful and popular with farm- ZNFU’s messaging system is an easy-to-use service that ers. For instance, Grace, a farmer involved with the scheme, announces prices via SMS to mobile phones and the web.8 said, “The SMS system makes everything so much easier. ZNFU introduced the system with support from the main You can check the market on your phone to find the 10 best mobile phone network provider in Zambia, several other local prices in the district or even in another district if that works organizations, many farming cooperatives, the agribusiness out better for the transport cost� (Goudappel 2009). Farmers chamber, and buyers and sellers. The mobile phone network coordinate their delivery times and organize a single location provider organized the bulk messaging process to deliver the for traders to pick up goods in bulk, saving many individual information to as many mobile phones as possible, and it farmers from traveling to the Lusaka market. offered several hundred half-price mobile phones to farmers. The Smallholder Enterprise and Marketing Program gave This arrangement saves money and gives farmers more time additional funding and technical support. to work on the farm. Grace said, “Although we still pay for the costs of the SMS messages, we end up spending only 5,000 Starting with details of just 6 commodities in 2006, the system kwacha,� (just over US$ 1), adding, “It’s a big saving but it now deals with 14 commodities and sends 1,000 messages also reduces a lot of the risk involved with travelling to the each month. Pamela Mulozi, the market/trade information city every time� (Goudappel 2009). administrator at ZNFU’s head office in Lusaka, reported “a sig- nificant change in how farmers and traders are dealing with each Despite this initial success, which means that ZNFU would like other� and observed that traders “are now taking the farmers to extend the trading system to more farmers, any immediate much more seriously as trading partners� (Goudappel 2009). expansion is limited by the lack of funding. Hamusimbi Coillard of ZNFU observed, “We still have to work out how the system More than 200 buyers use the system, giving farmers a bet- will pay for itself. . . . If we can use the SMS system to link up ter choice as to where to sell their produce. Another measure farmers and other small traders to the trucking companies, then of success is the fact that food processing businesses, gov- both sides would benefit and we would gain more subscribers ernment ministries, and banks regularly use the system to to the scheme� (Goudappel 2009). If another network operator, provide broader support to the country’s agricultural sector. MTN, joins the scheme, coverage will reach more communities. Each commodity, trader, and district has a code. ZNFU sup- plies everyone using the system with a small information card with instructions and relevant codes and trains them INNOVATIVE PRACTICE SUMMARY how to use the system. Farmers wanting to know the price Burkina Faso Farmers Use ICTs to of a particular product simply type the code into a text mes- Share New Production, Processing, sage and send it to the specified number. The system sends and Marketing Skills back another text with the latest prices and the codes for the The Federation of Agricultural Producers of Sissili Province traders offering those prices. The farmer chooses a trader and (FEPPASI)9 (http://www.feppasi.org/) in south-central Burkina sends the code in a second SMS to the system, which replies Faso was founded in 1998 and has about 12,000 members, a with the trader’s full name, phone number, business address, quarter of them women.10 It began a project in 2003 called Sissili and directions. The farmer can then contact the trader directly. Vala Kori (“Sissili farmers’ voice�), which focused on rural infor- mation and communication. Since 2005, FEPPASI, supported by To make the information available to farmers without mobile the International Institute for Communication and Development phones and in areas lacking network coverage, ZNFU trains (IICD), has been testing the potential of ICTs to train farmers. at least one farmer in every district to act as a contact farmer. Contact farmers, based in district offices, publish the commod- FEPPASI now uses multimedia tools, such as digital photo and ity price and trader information that they get either via SMS video cameras, to document the results of field trials and to or from the website and give it to extension officers. Every create training materials. The FEPPASI headquarters in Léo and 8 This summary is based on Goudappel (2009) and personal com- 9 Fédération Provinciale des Professionnels Agricoles de la Sissili. munication with Pamela Mulozi, market/trade information admin- 10 This summary is based on information from Lenoir (2009), IICD istrator, ZNFU. (2010), and personal communication with Miep Lenoir, IICD. E C O N O M IC AND S E CT OR WORK 186 MOD ULE 8 — FA R MER OR GA NIZATIONS WORK B ETTER W ITH IC T one of its regional offices are connected to the Internet. Both organization in Benin that taught him to produce seed yam locations function as information centers where members can from fragmenting yam roots. FEPPASI advisors also act as use the computers. GPS is used to map farms, and a family intermediaries between farmers and INERA, notifying them farm database has been set up. Information and documents with digital photos of disease outbreaks. are stored on the Synology server (http://www.synology.com). In 2009, the dial-up connections were replaced by more FEPPASI initially trained a group of 20 farmers to advise other expensive very small aperture terminal (VSAT) connections.13 farmers in their districts, where they were trusted more than Costs are recovered by sharing the connection with other advisors from the capital city. This initial group was also organizations nearby for a fee (20,000 CFA francs per month). trained in basic ICT skills and how to use them to create train- This step, which has turned FEPPASI into an Internet provider, ing materials that are more persuasive. Korotimi Douamba, a could move the organization away from its core objectives. former evaluation officer at FEPPASI, observed: FEPPASI has also expanded the telecenter at headquarters. Previously, people fell asleep during our training ses- Several lessons can be drawn from this experience. Farmer- sions. With the digital camera, we can show images to-farmer approaches have proved successful in many parts of the development in the agricultural test fields. In of the world (AgriCord 2010). Farmers often are more pre- our meetings with producers, these images allow us pared to trust information imparted by another smallholder to make visual comparisons. We beam the images and than by an anonymous “expert,� and ICTs offer a means to discuss the causes of the successes and failures of the extend this principle. FEPPASI needed time to incorporate different fields. We also make videos of the farming the technology, build skills, and discover how ICT tools could techniques and show them during the training sessions. best suit members’ interests. Networking with local ICT training partners and other organizations was also crucial, Translated by author from IICD 2010 enabling FEPPASI to get technical advice and share ideas. Douamba added that it was difficult to convince farmers about Although the farmer-trainers devised specific audiovisual con- crop varieties simply by telling them that their neighbors in tent (based on local research and adapted to local conditions), the other village produced more per hectare, but now people they have no central storage system for these materials. It can actually see the improvements. Images make it easier to would be beneficial for these materials to be centrally available explain certain topics to audiences, 80 percent of whom may to colleagues within the organization or a wider audience online. be illiterate. FEPPASI’s advisors have used videos, photos, and digital presentations to train about 2,500 farmers in new pro- Success was not purely a result of technology. It sprang from duction and food processing methods, marketing skills, organic the organization’s clear aims and understanding of how ICTs fertilizers, and sustainable management of natural resources. might facilitate them, taking into account the importance of local trainers, locally developed content, local support, and Workshops are shorter but more effective, and farmers the freedom to change objectives according to new insights. surveyed through anonymous questionnaires in 2006, 2007, Financial support was only one part of the support IICD pro- and 2008 mentioned many benefits: “I have found contacts vided (the project cost € 101,000): The long-term partnership online to sell almonds and shea,� said one; “I manage the between IICD and FEPPASI, which gradually explored how production techniques to produce yellow and white maize,� ICTs could best strengthen the activities of the organization, said another. A farmer who now processes yams into flour, was a more important factor. The program is sustainable in the couscous, and cake increased his income through market- sense that ICT is now integrated in the organization, the added ing: “The products are better presented through the use value is clear, and the organization will continue to invest in ICT. of labels, and I sell more.�11 An impact study carried out by INERA,12 the national agricultural research institute, revealed that, on average, agricultural production increased from 0.5 tons per hectare in 2003 to 4.5 tons in 2007. INNOVATIVE PRACTICE SUMMARY The SOUNONG Search Engine for Farmer Sissili farmers also use the Internet to develop techniques to Organizations in China select and improve seed from their best varieties. Producer A good example of how ICT enhances farmer organizations’ Moumouni Niébié searched online and found a specialist access to knowledge comes from a project in China (the 11 Quoted material translated by author from IICD (2010). 13 Very small aperture terminals, which are two-way satellite ground 12 Institut de l’Environnement et de Recherches Agricoles. terminals offering better connectivity. IC T IN A GR IC ULTUR E S E C T I O N 2 — E NHANCING P RODUCT IVIT Y O N TH E FA RM 187 Construction and Popularization of Agriculture Info-Service diagnostics. Electronically generating a short list of agricultural System), where a priority is to make modern ICTs acces- information from this array of websites reduces the time spent sible and useful for farmers. The project, introduced in Anhui collecting it manually. In 2009, 1,276 households were using Province, has three main features: an Internet portal, infor- the site—by 2010, that figure had almost doubled. mation assistants, and information dissemination models. It targets specialized farmers’ cooperatives, a primary force for Once the website was launched, project leaders selected 38 agricultural development in China. The project is funded by farmer organizations to act as partners. The organizations were the World Bank and implemented by the Hefei Institute of well established and had good management, which suggests Physical Sciences of the Chinese Academy of Sciences.14 that it may be critical for farmer groups to meet certain criteria to become involved in ICT for agricultural development. The Institute of Intelligent Machines developed an Internet search engine called SOUNONG to aggregate information A total of 76 information assistants, who are responsible for from the Internet and provide it to farmers’ cooperatives in a collecting information and disseminating it, as well as 541 meaningful manner (figure 8.1). SOUNONG coordinates with farmer households, were trained to use computers to search, China’s governmental agricultural websites, which maintain browse, download, and disseminate information through the high user rates and have more authority to promote informa- Internet. As the project grew, over 1,000 members of coop- tion. This multilateral collaboration has helped raise the visibil- eratives received ICT training. ity of SOUNONG and its activities and also prevents overlap. Members of farmer organizations can access informa- SOUNONG monitors over 7,000 websites per day, including tion from the SOUNONG site through computers, mobile nearly all of China’s agricultural data. These sites contain infor- phones, personal digital assistants (PDAs), and PDAs plus mation on prices of wholesale farm products, prices in 9,000+ mobile phones. Depending on network connections, regional markets, and prices for 20,000 types of agricultural products. characteristics, and farm conditions, farmers can select the Information is also retrieved from a number of databases, appropriate option for their local network capacities and skill including those on climate, crop species, and pest and disease level. All provide low-cost, easy access to the SOUNONG site. For members who may not have access to computers, 14 Information gathered from SOUNONG 2010, Institute of Intel- mobile phones, or PDAs, cooperatives can also print informa- ligent Medicines. tion and recommended actions. FIGURE 8.1: Conceptual Technological Framework for the SOUNONG Search Engine Information access terminal: Different 1. Computer information services 2. Mobile Farmers Web 3. Information Network machine resources information is Agriculture automatically vertical Professional collected by search cooperative soft robots engine agency of farmers soft robots Agricultural Information enterprises Data service warehouse platform (7,900) Agriculture Household information agriculture processing specializations Agriculture websites (9,500) Source: Adapted from SOUNONG 2010, Institute of Intelligent Machines. E C O N O M IC AND S E CT OR WORK 188 MOD ULE 8 — FA R MER OR GA NIZATIONS WORK B ETTER W ITH IC T Surveys founds the mobile phone option to be popular IMAGE 8.4: ICT Programs Like SOUNONG Helps because of its timeliness and convenience. The mobile Cooperatives Identify Livestock Disease phone option is consumer friendly—farmers had both “push� and “pull� options. The computer option was also popular because users could browse for and select specific information. Network coverage is not a problem in rural Anhui Province, but the Internet remains more expensive than mobile phones and requires users to become adept at identifying irrelevant or misleading information. Success stories are common. In 2010, farmers in Taihi Jinqiao Cooperative recognized that a number of their pigs had high fevers. The information assistant released the information onto SOUNONG. Veterinary experts diagnosed fatal swine high fever syndrome and provided control methods that prevented potential losses of 1,000,000 yuan (Y) for the farmer group. Source: Steve Harris, World Bank. Taihi Jinqiao extended sales of their local chicken breeds Cooperative to generate an online platform enabling more dis- to poultry markets like Nanchang and Wuhan by using the cussion and real-time information sharing between members. SOUNONG website. Smaller cooperatives producing pork have used SOUNONG to reach major markets like Shanghai. The Anhui Fengyuan Agriculture Science and Technology Co. Ltd. was selected to monitor and evaluate the project and its SOUNONG attracted additional cooperatives, entrepre- development over time. The company continuously examines neurs, and farmer households and led to the development the practicality, effectiveness, degree of user satisfaction, and of more specialized services for farmer organizations. public welfare (the four main indicators) of the Construction Websites were developed to provide information for spe- and Popularization of Agriculture Info-Service System. A key cific producer organizations; for example, the Agriculture lesson is that farmers require training to use the information Committee in Anhui Province formed an Anhui Farmers’ they access appropriately. Those involved in the project note Specified Cooperative website (http://www.ahhzs.com). The the challenges associated with introducing ideas and tech- Taihi County Government gave Y 24,000 to the Jinqiao nologies that have major learning curves for users. Topic Note 8.2: DAIRY COOPERATIVES LEAD THE WAY WITH COMPUTERIZED SYSTEMS TO IMPROVE ACCOUNTING, ADMINISTRATION, AND GOVERNANCE TRENDS AND ISSUES Throughout the world, accounting in small companies Computer systems have the potential to vastly improve the effi- is generally regarded as a “backroom� function that ciency, governance, and accountability of farmer organizations attracts little management interest or company invest- (image 8.4). Dairy coops are considered the type of organization ment. Management counts the cash in the till and requires most likely to see clear benefits from computerized accounting no other financial information. Accounting is done only systems, simply because of their numerous members and large because the government requires accounts for taxation. volume of daily transactions. Even smaller coops benefit from Yet when “other people’s money� is involved in a busi- computerizing their accounts, which leads to greater efficiency ness (like a cooperative), accounting becomes the only and transparency. Having financial and membership information means to explain what happened with the money, to prove always at hand helps management make better decisions, and that transactions with members and clients are straightfor- using software to present financial information in graphical or dia- ward, and to create the trust that enables a cooperative to grammatic form can make the information easier to understand. function. IC T IN A GR IC ULTUR E S E C T I O N 2 — E NHANCING P RODUCT IVIT Y O N TH E FA RM 189 Farmer organizations and cooperatives in the developing they do not necessarily understand the technology, coop- world are turning to computerized management systems, erative members can see that the new systems work well. despite their cost and the challenges posed by infrastructure, In dairy cooperatives, for example, computerized systems for some or all of the following reasons: facilitate timely payments to farmers for their milk, together  Better accounting and management increase effi- with clear records of all transactions (milk supplied and ciency, save time, and reduce mistakes. The more inputs bought). Where there is an automated milk collec- logical approach demanded by computerization means tion system, it is operated by dairy coop personnel who are that procedures have to be improved, which leads to generally also farmers and members of the society. Milk is better overall administration. always weighed and tested, with few errors, and the data are  Information for control and management decisions displayed clearly on the testing equipment. The operation is is available instantly. Inventory control improves, and quick and transparent. Farmers no longer worry that figures real-time information becomes available. might be adjusted by unscrupulous staff.  Relations between members and management can Benefits to the cooperative societies are many, largely be improved. Better services to members flow from because computerized accounting is faster and more reliable. more efficient administration. New and improved Computerized accounts are much quicker to audit and may services to members mean that they are prepared to even be displayed online for greater transparency. Coops invest more in the society. need to employ fewer clerks, and daily accounts are available  The cooperative has more options for communication immediately at each milk collection center. Profit and loss cal- and information sharing. There may be opportunities to culations are easily done and the balance sheet is automati- communicate beyond the organization, using e-mail, cally updated. The various options for graphic display—using newsletters, websites, and information networks. colored charts, for instance—make it easier for management  Data are available to guide policy decisions. and coop members to understand financial information. Capacity is built within the organization as staff members learn In dairy systems, daily payment slips are printed for farmers new skills. The general lessons from these efforts are discussed and can be modified to include other pertinent information, next, followed by three innovative practice summaries. Two such as reminders to inoculate cattle. When detailed milk summaries describe contrasting approaches to the develop- ment of computerized accounting systems for cooperatives in IMAGE 8.5: Many Enablers Are Needed to Ensure India (dairy) and Kenya (dairy and coffee). The third shows how Coop Function computers brought in for other purposes improved administra- tive efficiency in a women’s shea butter cooperative in Mali. LESSONS LEARNED The evidence to date suggests that computer systems can be adopted successfully to improve accounting, administra- tion, and governance in cooperatives for staple commodities such as milk as well as export commodities such as coffee and shea butter, in peri-urban as well as remote rural areas. People with very low levels of literacy can benefit from and learn to use the systems, if they are designed with care and deliver tangible benefits (image 8.5). Even so, the danger of widening the digital divide persists. The best potential clients for computerization are successful and relatively rich organizations with business-minded manage- ment, situated near a big city. Poor coops find it challenging to purchase computers, and distant ones do not have electricity. Computerization has clear potential to make the governance of cooperatives more efficient, transparent, and fair. Even if Source: Ray Wiltin, World Bank. E C O N O M IC AND S E CT OR WORK 190 MOD ULE 8 — FA R MER OR GA NIZATIONS WORK B ETTER W ITH IC T records are kept for each farmer, patterns in production can Indirect government support can come from the educational be discerned. Seasonal variations in quantity and fat content system, because without skilled young people no one will can be predicted, which is useful for the dairy, veterinary ser- be able to develop and maintain computer systems. For vices, and cattle feed companies alike. example, among Kenya’s roughly 30,000 university gradu- ates in 2008, only about 5,000 were considered suitable for The quality of infrastructure and the resources available to employment in the ICT industry (World Bank 2010). This situ- maintain it are an issue with all ICTs. Computers need an ation makes it all the more important for Kenya’s Cooperative electricity supply, with backup generators and uninterrupted College to move forward with plans to train students in the power supply equipment to cope with failures if they are CoopWorks software. common (generators will add to the overall cost of installing a computer system). Power can be provided by solar panels The independent nature of open-source software allows where the climate is suitable. users to tailor it to their needs, and it can be a form of insur- ance against power issues—no single individual or group The choice of technology also depends on whether a range can control it, and users may be encouraged to cooperate. of computer and training experts can be found within a rea- But this advantage is theoretical in the many cases where sonable distance of the coop offices and are able and willing farmer organizations do not yet have the capacity to develop to travel to the site. If a solar-powered computer system is software themselves. set up in a remote area, for example, initial training and rou- tine maintenance will almost certainly be done by staff from For long-term sustainability, the private sector probably elsewhere. Coop administrative personnel must be confident should be involved in computerization projects. Success may that any subsequent problems will be dealt with speedily. thus depend to an extent on the willingness of entrepreneurs This kind of response is unlikely if support services are to risk capital. In India, the inventors of milk-testing equip- sparse, do not exist, or the surrounding road network is poor. ment were prepared to lend it out for free so that dairy coop- eratives could see the benefits. They also had the foresight Although there are real benefits for a farmer organization to predict that illiterate farmers would accept the system and to have a simple computerized member and management use it confidently. Success might also depend on creating a information system, the organization can achieve far more if critical mass of users so that a business “ecosystem� can it also has Internet connectivity. Dialup connections are pos- develop. This effort would include software development, sible where telephone land lines are available. Mobile phone support, marketing, and other network effects. coverage is expanding, and another alternative is to use a small plug-in wireless adapter to connect to the Internet. Finally, aside from modernizing their management information Neither of these options is as fast as a broadband connec- tools, cooperatives need to attract good management staff if tion, and both are subject to lapses in service. they are to compete in the marketplace. A coop must decide how much it is prepared to spend on managerial capacity. Supportive government policy and willingness on the part Box 8.6 lists practical guidelines to help farmer organizations of government organizations to join partnerships are impor- use computerized administration and management systems. tant enablers. For example, India’s National Cooperative Development Corporation supports computer projects in the cooperative sector, including hardware, site preparation, sys- INNOVATIVE PRACTICE SUMMARY tem and application software, and training.15 It has encouraged IT Tools for India’s Dairy Industry cooperatives from the primary level to the state and national With demand for milk in developing countries projected to dou- levels to install computers and evolve effective management ble in the next 20 years, dairy cooperatives are crossing the digi- information systems. Lower-level (district and primary) coops tal divide. The need for computerized administrative systems must have a threshold turnover of Rupees (Rs) 1 crore (roughly is especially urgent in India, the world’s largest milk producer. US$ 225,000) to qualify for assistance and must be financially sound and viable. This stipulation raises the issue touched on Dairy cooperatives typically have thousands of members. before—that only the more organized coops qualify for assis- The recording system at the collection point has to cope tance, thereby widening the digital divide. with the huge volume of members’ daily transactions. Milk is highly perishable, especially in hot climates, and any delay in 15 See http://www.ncdc.in/Activities_files/Computerisation.htm. collection quickly leads to significant waste. Members often IC T IN A GR IC ULTUR E S E C T I O N 2 — E NHANCING P RODUCT IVIT Y O N TH E FA RM 191 BOX 8.6: Considerations for Effectively, Sustainably Computerizing Farmer Organizations and Cooperatives  The organization’s management and members will want a system that works, can be maintained, and is affordable. In small, cash-strapped cooperatives, it may be hard to persuade farmers that it is worth making the investment, because initial costs are high and benefits are not immediately apparent. It is broadly true that the bigger the insti- tution, the more likely it is to afford the costs of computerization.  How willing are management and members to invest money and time and to take a long view? In the early stages, manual and computerized systems must operate in parallel to make sure that data are not lost, and this procedure increases costs in the short term.  Can coops make independent investment decisions and buy a computer system from a local provider on a com- mercial basis? Management might lack the skill to do this, and it might be hard to get loans for the investment.  Which approach to software development—commercially licensed or free open-source software—is best? In prac- tice, the cost of the software is likely to be only a small part of the overall cost of computerization, so this issue might be less important than others, such as technical support (see the next point).  Is backup technical support available? Aside from requiring initial installation of the software and training in its use, the contract should require fully functioning accounting output. All operations, not just the machinery, must work and be reliable for a long time.  Consider how the process will be funded and develop plans for sustainability.  Training is very important. Enough trained operators must be on hand locally. This issue is particularly important, because those with computer skills tend to migrate to towns to work for companies at higher pay.  Training should not focus simply on narrow technical issues; it needs to provide an insight into the wide-ranging possibili- ties of a fully functioning computerized system. Without this overview, coops may not use a system to its full capacity.  Consider the possibility of offering on-the-job training. Internships might be offered by coops already using com- puter systems to staff from other coops. Perhaps such internships could be linked with formal technical education at the tertiary level. Source: Authors. buy inputs on credit from the cooperative. These purchases Early Innovation have to be reconciled before members can be paid for their A significant change occurred in 1996, when a small, private milk. Each member needs a statement at the time of each company (Akashganga–Shree Kamdhenu Electronics Private monthly or twice-monthly payment to show (correctly) how Ltd.) developed IT-based tools to automate milk collection it has been calculated. Payments must be timely and regular, at local dairy cooperatives and computerize the accounting because coop members depend on receiving their money system.16 The company introduced simple technology to on time. In manual accounting systems, a mountain of weigh milk, check its quality (fat content), and pay produc- paperwork is done before issuing each payment. Computer ers promptly. The basic model was an electronic weighing accounting can produce up-to-date payment calculations and system, a milk analyzer, personal computer, and accounting member statements at the click of a mouse. and management software.17 The most advanced examples of computerization are to be found in the Indian dairy industry, where cooperative soci- 16 This summary is based on information from the Akashganga eties have a long history. India has more than 10 million website (http://akashganga.in/WhatWeDo.htm and http://www dairy farmers, most of whom run small, marginal operations .akashganga.in), a presentation on the Amul Dairy Project by Vipul Vyas (http://www.scribd.com/doc/16808474/Amul-Dairy- (Sharma and Yadav 2003). Although milk yields had quadru- Project-by-Vipul-Vyas), the UN-Habitat Best Practices Database pled in the 40 years ending in 2001, time-consuming manual (2006), and personal communication with Anil Epur. recording systems had changed little. Producers waited for 17 Akashganga’s current high-end system, selling for about US$ 3,300, incorporates an electronic weighing system, a milk ana- hours before they could deliver their milk, much of which lyzer to test milk quality, a personal computer, and accounting soured in the heat. and management software. E C O N O M IC AND S E CT OR WORK 192 MOD ULE 8 — FA R MER OR GA NIZATIONS WORK B ETTER W ITH IC T The new technology found a ready market, once initial mis- BOX 8.7: What Is ERP? trust was dispelled by active marketing by the company, which offered equipment to some coops free of charge. The There are many different systems in a large company’s free installations showed neighboring cooperatives the util- “back office,� including planning, manufacturing, distribu- ity of automated collection centers. Intensive training was tion, shipping, and accounting. Enterprise resource plan- provided, and IT systems were maintained by motorcycle- ning (ERP) integrates these functions into a single system borne service engineers who could quickly attend to any designed to serve the needs of each department within faults. Only when the coop was convinced of the system’s the enterprise. ERP is more of a methodology than a worth did it have to pay. The application, initially built around piece of software, although it does incorporate several a microprocessor but now usually involving computers, took software applications under a single, integrated interface. a decade to diffuse on a large scale, but many Indian dairy Source: Sererra (http://www.sererra.com/ERP). cooperatives have now adopted computerized systems. Developers of the Akashganga system claim that there is a of these is the Gujarat Cooperative Milk Marketing Federation viable market for companies that can design products suited Ltd. (whose brand name is Amul). The federation collects over to the needs of cooperatives in developing countries. The 10 million liters of milk every day and is co-owned by some 2.8 design of the equipment was carefully considered, not only million milk producers. All zonal, regional, and member dair- to ensure that it was easy to use but to make the weighing ies are connected through VSATs to make information-sharing equipment sufficiently robust to cope with the heat and dust easier. Amul is in the process of web-enabling the entire sup- of rural India. Price was an issue, as coops have to justify ply chain so it can capture key information at the source. expenditures to members. The equipment to measure fat The experience in India suggests that the private sector plays content was developed in India for less than one-quarter the an important role in bringing computers to rural communi- cost of European designs. ties and that such activities can profit private enterprise and benefit users. Complementary support from the public sec- Subsequent Innovation tor was also valuable, including support from the National Village cooperatives have installed more than 3,000 comput- Cooperative Development Corporation (discussed earlier) ers to support automated milk collection.18 Distributors are and National Informatics Center. The National Informatics keen to computerize their operations, too, and to get e-mail Center developed Lypsaa and openLypsaa software, a com- connectivity for better communication with sales offices. plete solution for dairy cooperative societies, used by more than 50 societies in Kerala. The center also developed a Currently no standard ICT solution is used throughout the Linux-based portal for communication between the coopera- industry. Software may be tailored by local vendors to a par- tive department and the cooperative societies.21 ticular enterprise (the Mulkanoor Women’s Dairy Cooperative has taken this route), or dairies may choose to use packages The key lesson is that change does not come quickly, even developed by software companies such as Tata Consultancy where all factors are conducive to development. Despite Services.19 Member records can include not only information aggressive marketing by the inventors, clear benefits to on milk delivered and inputs bought but information on vet- users, and a supportive policy environment, it has taken a erinary care (dates for vaccination or artificial insemination, decade to automate dairy cooperatives on a large scale. for instance) so that farmers can be prompted to take action. Some dairies are now upgrading to enterprise resource plan- INNOVATIVE PRACTICE SUMMARY ning (ERP), which encompasses the range of activities from the CoopWorks Dairy and Coffee, Open- farmer or collection point to consumer sales (box 8.7).20 One Source Software Launched in Kenya 18 See the presentation on the Amul Dairy Project by Vipul Vyas, Kenya, one of the largest milk producers in Africa, sources http://www.scribd.com/doc/16808474/Amul-Dairy-Project-by- more than 80 percent of its milk from roughly 800,000 small- Vipul-Vyas. scale dairy farmers (Seré 2010). These producers “represent 19 Anil Epur, personal communication. 20 A widely used, comprehensive ICT solution (based on the Micro- soft DYNAMIX ERP package) currently costs around Rs 3.5 mil- 21 See http://news.kerala.nic.in/imgmulti.aspx?Id=E1328; http:// lion. It can handle all activities for a daily throughput of up to in.linkedin.com/in/douglasdsilva; http://www.kerala.nic.in/Brochures/ 10,000 liters of milk (Anil Epur, personal communication). opensource.pdf; http://informatics.nic.in/archive/july2007.pdf. IC T IN A GR IC ULTUR E S E C T I O N 2 — E NHANCING P RODUCT IVIT Y O N TH E FA RM 193 an emerging market opportunity for local and international from 3,000 to 10,000 kilograms per day, and the average agribusiness alike� (Seré 2010). price paid to members increased from K Sh 10 per kilogram to K Sh 17. Coop sales also tripled in eight months. The milk Despite this potential, the process of computerizing agricul- customer base increased from two processors to five after tural cooperatives and producer organizations is at an earlier many private buyers emerged. stage in Kenya than in India. The impetus for computerization in Kenya has come not from private enterprise with govern- After various revisions, CoopWorks Dairy version 2 was ment support, as in India, but as a joint push from FAO and tested at Oloolaiser and Wamunyu dairies, where it was donors (Kenya National Federation of Agricultural Producers also well received. By 2010 at Tulaga, coop membership had 2008).22 reached 3,000, and milk production was 18,000 kilograms per day. Since the introduction of CoopWorks Dairy, Tulaga Under a donor contract, the private sector developed a has used its own funds to increase the number of comput- prototype management and member information system ers from 4 to 15 and uses all the capabilities (modules) of to improve the business efficiency and competitiveness of CoopWorks in its operations. producer organizations and cooperatives in national, regional, and global markets. The system, known as CoopWorks, is A group of donors and international organizations, together open-source software available free of charge from http:// with the Cooperative College, the Cooperative Bank, and the sourceforge.net/projects/coopworks/.23 Kenyan Ministry of Cooperatives, all see a need to comput- erize Kenya’s dairy coops on a larger scale and believe that The software replicates all the accounting functions that it can be done. Electricity is available in most places, dairy would formerly have been done on paper, and it consists of a coops are big enough to need quick accounting methods, dozen or so modules (including member management, inven- and investors are ready to help. CoopAfrica has a project tory, payroll, and others). It conforms to Kenyan government to involve all stakeholders, including the Cooperative Bank regulations and the stipulations of the International Systems (providing loans) and the Cooperative College (training local Audit and Control Association, and the prototype was fol- service providers). lowed by improved versions (the latest being CoopWorks 5). The Coffee Experience The Dairy Experience Given the applicability of the software to other products CoopWorks was first trialed at the Tulaga dairy coop in 2006. as well as milk, a Finnish-funded AgriCord-Agriterra proj- The system kept member records, including the amount ect developed a version of CoopWorks for coffee (Kiplagat of milk delivered and any purchases made by the member. 2010). Smallholder coffee farmers were dissatisfied with the Clerical officers found they could operate more efficiently, record keeping in coffee factories, where they suspected without duplicating work, and the task of preparing mem- that unscrupulous clerks easily abused the paper-based sys- bers’ monthly payments was much easier. Fewer errors in tem. The Kenya Coffee Producers Association (KCPA), which this important task meant that members’ confidence in the implements the project, was attracted by the lower cost of society improved. free open-source software. At the start of the trial, Tulaga had 800 active members, The new system has two components, one to keep records which increased to 1,800. Daily milk intake more than tripled, within the society and one to provide information via a web- site and SMS. The system tracks all the steps from coffee 22 Specifically, an FAO project funded by the Government of Fin- collection to processing to sales. A member management land in collaboration with Agriterra (the Netherlands) and Kenya feature holds data on individual members, and the account- National Federation of Agricultural Producers. 23 This summary is based on information from the Kenya National ing module has cash book registers, ledgers, and a payroll Federation of Agricultural Producers (2008); personal communi- system. Other features include asset registration, loan man- cation with Marcel Werner (Flametree Systems/Innovation Africa) in Kenya; the draft report of the Agriterra CoopWorks evaluation agement, inventory for the cooperative store, and report mission to Kenya (January 2011); “How Open Source Software publication. Makes Money for Coffee Grower Cooperatives� (http://www .selectstartcafe.com/2010/08/how-open-source-software- With the old manual data entry system, the cooperatives makes-money-for-coffee-grower-cooperatives-in-kenya-and- around-the-world-by-fighting-back-against-the-ghost-kilograms/); did not know how much coffee the milling factory would and “Kenya Coffee Eyes a New Golden Era� (2011)). produce from their beans and could not predict the financial E C O N O M IC AND S E CT OR WORK 194 MOD ULE 8 — FA R MER OR GA NIZATIONS WORK B ETTER W ITH IC T return. The new system, however, can convert the weight were used, the effects of computerization were considerable, of beans into an estimated value once it goes into the mill. not least in creating a stronger bond between the coop and its members. The main challenge is to make users aware of The software also monitors coffee deliveries based on each the true scope of the software and the significant benefits cooperative’s tracking number. Once the coffee is sold, the that will accrue on top of the improvements in efficiency and payment is received into the system and credited to the transparency already experienced. Good ICT support at the appropriate cooperative’s account. CoopWorks already pro- local level is vital. Trainers or advisers must be proactive in duces a member statement of inputs bought on credit and demonstrating the “big picture� of what CoopWorks can do, the proceeds of deliveries sold to millers, which helps farm- rather than dealing only with narrow technical instruction or ers better understand their costs and profits. KCPA is deliv- responding to queries from coop staff.26 ering coffee and input prices to members on their mobile phones via SMS and will soon link to mobile banking as Apart from highlighting capacity issues specific to Coop- well. The association has also promoted CoopWorks Coffee Works, the experience has shown that further capacity build- throughout the country (covering about 600,000 producers). ing in modern information systems is required. To address this issue, Kenya’s Cooperative College is adopting a proac- A weighing scale may be added to the system, although this tive, innovative approach by planning to cover CoopWorks option is relatively expensive (€ 1,000). Farmers are said to software in its curriculum. Even though the short timeframe value automated scales, as they believe there is less scope of the pilot project was insufficient to develop capacity, it for dishonesty behind the scenes, but their high cost has could be argued that without such support for development, prevented most cooperatives from adopting them.24 dairy coops in Kenya might be even slower to computerize. Preliminary Conclusions from the Open-Source Experience INNOVATIVE PRACTICE SUMMARY ICTs Improve Marketing and Governance for The experience in Kenya suggests a different route to com- Malian Coop puterization. Free open-source software can be developed, customized, and upgraded, preventing the software provider In some cases, the decision to use computers is not driven from becoming too powerful within an organization. by a perceived need for better governance and administra- tion, but better governance may be a welcome byproduct Using free open-source software does not mean there are no of the process. Women in southern Mali traditionally gather costs to computerization, however. The software is available fruit from the shea tree (Butyrospermum parkii ) to extract as a free download, but a cooperative still has to buy appro- the seed for processing into cooking oil and a “butter� that priate computing hardware and find resources to train staff is an effective skin moisturizer. In 1999, by forming a coop- to use the system.25 The low costs and high adoptability of erative society, Coprokazan (http://www.coprokazan.org),27 open-source software are insufficient to create critical mass producers were able to get better prices for their products. and network effects if other related costs are too high. All management and accounting procedures were done manually, and the society had only a few hundred members. A survey in late 2009 of 27 agricultural coops in Kenya sug- gested that many are aware of the potential benefits and The move toward computerization came from a desire to would be keen to computerize if the process were less produce effective training materials for coop members, raise expensive (Flametree Systems Engineering Ltd. 2010). The the profile of the society, and enable its products to reach a two coops involved in the pilot project certainly felt the sys- wider market (Laureys, Marcilly, and Zongo 2010).28 Working tem to be a success (Nissila, Puhakainen, and Tanhua 2009). with the Malian Association for the Promotion of Youth and the IICD, Coprokazan assessed what sort of technology A recent review found differences in the extent to which coops would be most useful. Zantiébougou, the town where the use CoopWorks’ capabilities. Even when only some modules society was based, had no mains electricity, so all equipment 24 Draft report of Agriterra CoopWorks evaluation mission to Kenya, January 2011. 26 Draft report of Agriterra CoopWorks evaluation mission to Kenya, 25 Successful free, open-source software (FOSS) initiatives are January 2011. driven by large developer communities, including programmers, 27 Coopérative des Productrices de beurre de Karité de Zantiébou- trainers, and advisors with commercial interests. The software gou (Zantiébougou Shea Butter Producers’ Cooperative). will be free but related services may not be. 28 See also http://www.iicd.org/projects/mali-shea-butter-and-ict. IC T IN A GR IC ULTUR E S E C T I O N 2 — E NHANCING P RODUCT IVIT Y O N TH E FA RM 195 had to be solar powered. This requirement limited the soci- with more members. From a base of fewer than 400 in 2006, ety to three computers, together with a printer, a projector, a the coop expected to have more than 1,100 members by the small video camera, and some digital photo cameras. end of 2010. The coop plans to invest in GPS equipment as a step toward traceability and possible organic certification. With these, the coop planned to create visual training materi- als that would give clear information to all members, including Among the more general lessons from Coprokazan’s experi- those who could not read. Photographs showing the quality ence was the lesson that local languages make technology of nut suitable for processing would prevent women from more accessible. Many poorer farmers, especially women, harvesting and transporting poor-quality produce to the col- have poor reading and writing skills, even in their own lan- lection point only to have it rejected. Filmed demonstrations guage. It is unrealistic to expect them to master ICTs in a for- of new, more efficient processing methods would improve eign language. Computer keyboards were adapted to make it the quality as well as the quantity of shea butter. easier for Coprokazan women to type in the local language. These benefits materialized, and Coprokazan now has its Multimedia tools, on the other hand, often do not require own website showcasing its products. An unplanned ben- high literacy levels. Women who could barely read or write efit of computerization was that it enabled Coprokazan to learned to use digital cameras and create image-oriented nar- improve governance and administration. Coop office per- ratives that could be used for training coop members. sonnel began using the computers for routine administra- tion, and member records are now kept electronically. Staff Another unforeseen effect of bringing solar-powered com- members also learned to use PowerPoint to produce a visual puter equipment to a small town without electricity was that overview of yearly accounts and activities to show at the the coop offices became a magnet for nonmembers. Some Annual General Meeting, which has increased transparency people reportedly traveled more than 30 kilometers to type, and boosted members’ confidence in the workings of the print, and copy documents. The training room was used by coop. This experience indicates the extent to which it can be other organizations for training sessions, and local schoolchil- challenging to neatly apportion the benefits of ICTs. dren were attracted to the premises to do their homework, as the building is one of very few in the area to have electric In the four years since ICTs were introduced, the coop’s shea light. As mentioned in Topic Note 8.1 with regard to telecen- butter production and income have almost tripled. With its ters, it may be possible to levy a small charge for nonmem- improved administrative capacity, the coop can now deal bers and direct this revenue toward operating costs. Topic Note 8.3: GIVING FARMERS A VOICE AND SHARING INFORMATION TRENDS AND ISSUES passed to higher levels, which suggests an important role In an increasingly interactive world, the idea of “having your for ICTs. Answers to technical problems raised by members say� is easier to put into practice. Internet-based discussion need to reach farmers even in remote areas, which is cur- forums, blogs, and phone-in radio programs are part of the rently best achieved by using broadcast media. information exchange landscape. For farmers in the develop- ing world, opportunities to be heard are few, but the situation Given the lack of infrastructure typical of remote rural areas, is changing, largely as a result of the simple combination of it is a challenge for farmer groups to use ICTs for interac- local radio and mobile phones. (See Module 13 for more on tive communication. Radio and, to a lesser extent, television citizen participation, exchange, and knowledge sharing.) broadcasts reach wide audiences and can be understood by all, even those who cannot read or write, so they are cur- Farmer organizations have higher visibility than individual rently the best ways of transferring information to individual farmers. Many have a website and Internet connectivity farmers. When the makers of radio and television programs to communicate with similar organizations or in regional base their output on real issues raised by farmers them- forums. If farmers can raise issues with their local organiza- selves, farmers readily act on the information to improve tions, there is a chance that their concerns will be noted and their production methods. Farmer organizations thus have a E C O N O M IC AND S E CT OR WORK 196 MOD ULE 8 — FA R MER OR GA NIZATIONS WORK B ETTER W ITH IC T role in seeking the views of their members on which topics of listeners claim to have learned something new from the should be featured in the broadcast media. program, and half said they had put advice into practice. A typi- cal hour-long program can attract up to 200 SMS messages, The following sections highlight the effectiveness of radio including contributions from neighboring Uganda and Tanzania. and television in reaching a broad audience, including women. They show that the interactivity enabled by phone-in and SMS Local radio stations are particularly well placed to develop contributions brings true relevance and usefulness to farmers. programming to suit their audiences. When radio oper- ates as a source of reliable information that works at the local level, it gives farmers an alternative to limited public ICTs Make Radio Programming Less Expensive, More agricultural extension services. In Kenya, Radio Mbaitu FM Inclusive prioritizes content on fruit farming and horticulture and uses Research in Uganda found that more than 90 percent of farm- the Kikamba language to reach the farmers in its listening ers interviewed owned a radio, but only 25 percent owned a area. Radio Coro FM, broadcasting in Kikuyu, covers dairy mobile phone; none claimed access to a computer (Ferris, farming, which is widespread in central Kenya. Radio Salaam Engoru, and Kaganzi 2006). Radio is a popular medium that uses Kiswahili to broadcast information on fisheries and fruit can draw a wide audience and operate in local languages. farming to coastal farmers, while Kass FM, a Kalenjin station, Like mobile phones and other ICTs, however, radio has focuses on dairy and maize production. issues related to access, such as who owns the radio, who chooses which programs to hear (men, women, elders), or In Zambia, the Research Into Use (RIU) program uses com- whether programs are broadcast when listeners can actually munity radio as a way of promoting conservation agriculture. listen. The innovation in radio is that programming is becom- Programs follow different formats—prerecorded factual ing more interactive, with phone-ins, live community forums, programs, drama programs, and phone-in or interactive and radio diaries all finding a place in the schedules. SMS programs—and are broadcast in either English or the local messages allow listeners to contribute cheaply and easily. language.29 Listeners particularly enjoy the vernacular, drama, and interactive output. Radio is also becoming cheaper in the sense that the cost of setting up a radio station has fallen dramatically in recent RIU Zambia has set up radio listeners’ clubs that have trained years (AFRRI and FRI 2008). Recording equipment that only over 1,000 people in recording skills and club coordination. a decade ago would have cost thousands of dollars can now Local farmers can now record their discussions, questions, be bought for about US$ 100 or less, and computers, the and development concerns and send the recordings to their Internet, and mobile phones have brought down the cost of local radio station. A producer then edits the material and obtaining and storing information for broadcast. Research in includes feedback from experts before the program is aired. 2008 reported that a microstation with a broadcast range of These programs are also interactive at the point of broadcast; 2.5 kilometers had been set up in Mali for just US$ 650. farmers phone in with further contributions. The hope is that as radio becomes cheaper and more inter- Some of the radio stations are private, such as Sky FM in active, its programming can become much more locally Monze District. The RIU program supports them to broadcast relevant and inclusive. Efforts in this direction include Farm this content, and six radio dramas were sponsored by a local Radio International. This NGO partners with more than 350 seed company. This suggests a route toward sustainability radio broadcasters in almost 40 African countries to develop when RIU support comes to an end. Another possibility is programming to help small-scale farmers improve their food shown by Namwianga Radio in Kalomo District, which is security. Participatory Radio Campaigns, carefully planned supported by the church. Community church services have broadcasts focusing on one farmer-selected issue at a time, apparently proved to be useful forums for smallholders to feature farmers’ participation and appear to make measur- share experience with conservation agriculture. able differences to farmers’ livelihoods (AFRRI and FRI 2009). (For more detail, see Module 6.) Television Support to Agricultural Extension in India In Kenya, the popular weekly program Mali Shambani (“wealth In 2005, the Doordarshan Broadcasting Corporation of India on the farm�) (Mbogo 2008) offers advice on various technical began a project to televise live, interactive, problem-solving and financial issues. Listeners are invited to call or text the pro- gram with specific questions. Surveys suggest that 80 percent 29 Research Into Use (2011). IC T IN A GR IC ULTUR E S E C T I O N 2 — E NHANCING P RODUCT IVIT Y O N TH E FA RM 197 crop seminars as well as to set up various other initiatives radio. The system brings together 215 organizations with a to spread agricultural information.30 Agricultural seminars total membership of more than a million people, of whom are set up in a village, with farmers invited to bring diseased just over half are women. Local Committees for Coordination or pest-infested crop samples or other field problems to be of Farmers’ Organizations are the “anchor points� for each of discussed by a panel of experts. Possible solutions are then the seven telecenters. suggested. The Internet is used for e-mail, sharing documents, and Each seminar is filmed and broadcast live by Doordarshan searching for specific information useful to farmers. Ten local through its provincial network (55 stations, using the appro- radio stations have signed contracts to broadcast agricultural priate local language) to share the information with farmers information, and local radio also advertises activities relevant who live too far to attend in person. Daily bulletins on the to farmers, such as workshops and meetings. There is also a latest market prices and weather forecasts also appear on regular radio broadcast on legal issues related to agriculture. television. Legal issues are also covered on the website, but the forum section is not yet operational. The broadcaster also offers a weekly live phone-in program to give experts’ “instant solutions� to farmers’ problems. In So far all the telecenters are said to function well, apart from some areas of India, this televised exchange occurs twice poor Internet connectivity in three of the hubs. Eighty farmers a week. Information about the programs is shared on the were trained in basic ICT skills, with a further 10–20 trained Internet—television producers upload program details onto at each center. Direct project users are relatively few—the the portal. The website also features contact details to facili- heads of the local farmer organizations and some individual tate interaction between farmers and appropriate subject producers—but they in turn share information with mem- matter specialists, as well as opportunities for farmers to give bers. Farmers themselves are encouraged to raise issues for feedback and offer suggestions. discussion at higher levels. A Voice in the National Debate on Agriculture in Mali Farmers “Cluster� in the Caribbean An ambitious project in Sikasso Province aims to bring farm- The Caribbean Farmers Network (CaFAN) (http://www ers, through their organizations, into the national agricultural .caribbeanfarmers.org/) has found that farmers in the policy debate. With the descriptive title “Let’s Talk under Caribbean region benefit from working in clusters that are the Palaver Tree,� the project was set up by the Regional created either geographically or thematically (Greene 2010). Committee for the Coordination of Rural People.31 This Farmers working in close proximity, or those who simply regional committee was set up by a group of farmer coop- share an interest, set up a cluster to share technical infor- eratives that hoped to represent the interests of Sikasso’s mation and experiences, plan for new market demands, and farmers at the national and perhaps international level, within maximize their lobbying and bargaining power. the West African rural network ROPPA.32 Its aim, apart from offering market and technical training, is to act as a lobby CaFAN encompasses 30 member organizations that together group and to strengthen its members by encouraging infor- represent half a million farmers in 12 countries. Clusters cut mation sharing. The regional committee now has a website across membership boundaries. Farmers use Skype, e-mail, with information about the project, lists of members, and and the CaFAN website to keep in touch. Text messages are news about events. also widely used to communicate directly with farmers, and it is hoped that production information will soon be sent by SMS. The project has a simple structure: Seven telecenters in towns and villages throughout the province form information CaFAN claims that fostering connections, sharing informa- hubs for a communication system based on Internet and local tion, and training farmers puts farmers in a stronger position to respond to the perennial problems of the agricultural sec- tor. They say that collective action can give better access to 30 “Mass Media Support to Agricultural Extension,� ICT for Devel- opment, http://www.comminit.com/en/node/133865/307, important resources (agricultural inputs, credit, transport, accessed May 2011. information) and can reduce financial risk. Pooling resources 31 See http://www.iicd.org/projects/mali-jefako-gelekan. and collective marketing reduces the high transaction costs 32 Réseau des Organisations Paysannes et des Producteurs Agri- coles de l’Afrique de l’Ouest (Network of Farmers’ and Agricul- incurred by farmers acting alone: Operating as part of a group tural Producers’ Organisations of West Africa). is simply more efficient. E C O N O M IC AND S E CT OR WORK 198 MOD ULE 8 — FA R MER OR GA NIZATIONS WORK B ETTER W ITH IC T The ZNFU Discussion Forum discussion forum, given the ubiquity of radio ownership and ZNFU reports more than 10,000 hits a month to its website access. Radio producers are now skilled in presenting infor- (http://www.znfu.org.zm/). New topics are introduced to mation in memorable ways, and radio programs are more the discussion forum as a means of encouraging farmers to interactive, owing to contributions made through mobile participate and share their experience related to particular phones. Listeners’ clubs in Zambia and Niger show that oral issues. Current threads include the state of feeder roads in communication is very popular. rural areas, price expectations for the maize crop, and tariffs Technological developments can be seen simply as exten- charged by Zesco (the national electricity supplier). Members sions of a very human need. These developments indicate are invited to make suggestions to be included in ZNFU’s that there is an argument for recommending that govern- submission of proposals relevant to agriculture in the national ments and donors should strengthen the capability of farmer budget. The “How Do I� section for technical questions is organizations to contribute to radio programming. The credibil- divided by subject and includes farm and land, equipment, ity and transparency of farmer organizations would improve if livestock, and employment. problems and achievements were discussed openly on local Despite its welcome and advanced features, this online radio, with members’ comments being welcomed on air. Any forum still has low participation, because most farmers do issue related to the organization could be raised. not have computers, Internet access, typing skills, or great proficiency in English. There are only a few posts and com- IMAGE 8.6: Women Speak About the Livelihood ments on the forum—some discussion categories are empty, Challenges They Face on the Radio and several of the other posts are more than six months old. At this stage, the ZNFU website appears much more useful to large-scale farmers than to the smallholders who form the majority of those working in agriculture in Zambia. LESSONS LEARNED There is much to gain but much to be done in giving farmers a voice. Rural areas lag behind towns and cities in the infra- structure needed for online connectivity and access to blogs or Internet discussion forums. Many farmer organizations are situated within reach of electricity and the Internet, however, so they are able to set up websites to raise their profile and Source: Ami Vitale, World Bank. market possibilities. Their online forums offer a space for those few farmers with Internet access to share information or raise concerns to be aired more widely. Independent community radio is relatively new in most African countries, however. Even a decade ago, the only pro- Considering the current state of infrastructure in much of the grams offered were from publicly funded state radio. A study developing world, it is realistic to expect the uptake of ICTs to of the effectiveness of the Participatory Radio Campaigns give farmers a stronger voice at the organizational rather than tentatively concluded that participatory farm radio by itself, individual level. Giving smallholder farmers a stronger political without any other intervention, has a strong impact and is a voice, for example, can be done by encouraging them to join highly cost-effective strategy for helping farmers learn about an organization or cooperative. If individual farmers can reach and adopt new approaches to farming (AFFRI and FRI 2009). their representative organizations better, these organiza- tions can effectively represent farmers at the local, regional, A recent study into the economics of rural radio, a hitherto national, and international levels. The best way for individual unexplored subject, points out that the costs of programming farmers to be heard at present is via local radio stations. depend on the level of interactivity of the program format, the accessibility of additional resources to produce specialized The visual nature of television makes it particularly valuable programs, and the type of station involved (AFFRI and FRI for practical demonstrations of good agricultural practice. 2009). Community stations tended to invest more resources Overall, though, radio seems more useful than television as a in interactive programming with community involvement and IC T IN A GR IC ULTUR E S E C T I O N 2 — E NHANCING P RODUCT IVIT Y O N TH E FA RM 199 less on in-studio formats. The cost of a reporter in the field (a BOX 8.8: Considerations for Effectively, Sustainably common format for agriculture reporting) was about US$ 300 Enabling Farmers to Share Information and per program for a commercial station in Uganda and just over Gain a Greater Voice in the Agricultural Sector US$ 100 per program for a community station in Malawi.  How many members of the farmer organization Educational farm radio must compete for airtime with less can realistically benefit, given local infrastructure? expensive and popular items such as music and evangelism, This question favors radio broadcasts over Internet but interactive programs with farmers—phone-in shows, discussion forums and similar technologies. field interviews, listening groups, and talk shows with local  What resources are available to the farmer organi- experts—can be popular enough to compete. Among the zation, including basic infrastructure and financial radio stations examined, the average cost of rural production and human resources? ranged from just over US$ 100 for a phone-in show to US$  Will radio broadcasts be done in the form of “com- 300 to record and air a village debate. An investment of US$ munity� radio, or will they be part of a commercial 500 per week (US$ 26,000 per year) would therefore finance local radio station? the production and broadcast of 3–6 hours per week of inter- active farm radio programming.Radio broadcasting requires  What is the best way to support the process an enabling policy framework under which local radio stations to ensure that it can become self-sustaining? can flourish without excessive regulation. Many African coun- Consider whether radio broadcasts should be tries lacked such a framework until recently, so commercial regarded as a significant public good that justifies and community radio stations are still relatively new. Many long-term public support. countries have issues related to freedom of expression. For  When setting up a website, determine how com- instance, proposed amendments to the Zambian constitution plex it will be. The level of complexity will depend included scrapping an article on freedom of speech in favor on its intended purpose. Is it simply intended to of one providing penalties for false statements. This amend- raise the profile of an organization and provide con- ment is of major concern to the many privately sponsored tact details, or does it need to be used interactively and civil society–sponsored local radio stations. Another by buyers or those seeking information? example is Ethiopia, where community radio (whether run by Source: Authors. the private sector or civil society) is not fully liberalized. Effective radio programs depended heavily on partnerships, for prevailing conditions. See box 8.8 for additional consid- both with radio broadcasters, individual farmers, and agricul- erations in designing and implementing ICT interventions to ture experts. For example, close cooperation with the Indian increase farmers’ voice. Department of Agriculture has been necessary to support the Doordarshan Broadcasting Corporation’s live crop seminars. Villages are chosen in consultation with the department, and INNOVATIVE PRACTICE SUMMARY the experts who deal with the farmers’ questions come from Community Listeners’ Clubs Empower Social the agriculture department of the nearest university. Where Networks in Rural Niger possible, the Department of Agriculture sets up an exhibition Since July 2009, 300 community listeners’ clubs (200 all- in tandem with each broadcast to offer farmers additional women, 89 all-men, and 11 mixed clubs) have been estab- information about crop varieties and new technology. lished in villages of southern Niger.33 Involving more than For farmer organizations wishing to set up a website, with 6,000 women and men, together with nine community radio or without a discussion forum, the question of design can stations, the Listeners’ Clubs Project breaks the isolation of be fraught with difficulties. Since bandwidth is expensive— rural populations, especially women. It does this by offering expressed as a percentage of average annual income, the access to information and communication and by encouraging cost of an Internet connection in 2003 was more than 100 people to join discussions on development issues. The proj- percent in much of Africa and was from 10 to 50 percent in ect is led by FAO, via the Dimitra Project, and cofinanced with much of Asia and Latin America—it is unlikely to be increased 33 This section is based on information from FAO’s Dimitra News- quickly. Given that the biggest factor in user satisfaction is letter, issues 17, 18, and 19, available at http://www.fao.org/ the speed of response, it makes sense to design websites dimitra/dimitra-publications/newsletter/en/. E C O N O M IC AND S E CT OR WORK 200 MOD ULE 8 — FA R MER OR GA NIZATIONS WORK B ETTER W ITH IC T UN agencies and the Canadian Development Corporation. It 800 branches and field offices throughout Thailand.34 It sees is implemented by an NGO. public interest in promoting agriculture, and its radio and tele- vision programs link farmers with the outside world. Farmer The community listeners’ clubs are groups of villagers who organizations discuss issues relevant to their members. have been trained and organized through literacy training centers to identify and discuss their information needs and As well as radio programs produced from its provincial offices, development priorities. Whenever a group finds a topic that BAAC broadcasts various television programs that focus on they feel deserves attention, they contact a community agriculture. For instance, “The Villagers’ Stage� is broadcast radio to record club members’ views on the subject. These free every week. Aimed at farmers, farmer organizations, views are then broadcast, prompting immediate responses, agricultural cooperatives, and the general public, it shows opinions, and suggestions sent by mobile phone from other the rural way of life and presents the voice of village dwellers listeners. The clubs have already discussed a wide range of to the wider community. A reality program called “My Little topics, including food security, agricultural inputs, plant and Farm Project� appears on cable television daily. Particularly animal health, and policy issues such as land access and “hot� issues are covered on the “Thai Agricultural Heart decentralization. Debating and listening to radio programs Program� on free television every weekday. That program gives the participants knowledge, allows them to share their presents Thai agricultural students as they learn about farm- experience, and reinforces self-confidence. ing processes, project management, and financial issues. The project has also improved rural populations’ knowledge of new technologies. At the outset each club was given a REFERENCES AND FURTHER READING solar-and-crank-powered radio and mobile phones fitted with For general information on the use of ICT in development, solar chargers, but the project was so popular that clubs see: Information and Communications for Development were soon given extra mobile phones. These phones were (IC4D). http://go.worldbank.org/DMY979SNP0. Three publi- linked up in a network known as a “fleet,� which enables cations by the Royal Tropical Institute (KIT), Amsterdam, and cost-free communication at any time between the clubs and International Institute of Rural Reconstruction (IIRR), Nairobi, radio stations. are particularly recommended: These mobile phones are now also used to pass wide-ranging  KIT and IIRR. 2005. “Chain Empowerment: Supporting information between villages—such as forthcoming social African Farmers to Develop Markets.� events or the price of agricultural produce and livestock—or  KIT and IIRR. 2008. “Trading Up: Building Cooperation to offer products for sale. The telephones in the fleet also between Farmers and Traders in Africa.� serve as public telephones, allowing private calls to be made  KIT and IIRR. 2010 “Value Chain Finance: Beyond for a small charge. 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A growing body of evidence suggests that market information services, especially those based on mobile phones, reduce asymmetries of information between traders and producers, reduce transaction costs, enable farmers to purchase inputs, and enhance farmers’ ability to fine-tune production strategies to match the accelerating rates of change in consumer demand and marketing channels. The latent utility of the technology is still being discovered, and the scale of its impact is still being understood. It is difficult to anticipate the eventual balance between privately run agri- cultural information services and government services, but it is very likely that the optimum configuration could involve some kind of public-private arrangement. Topic Note 9.1: Mobile Phones as a Marketing Tool. Farmers use mobile phones to build a network of contacts and draw on this wider experience and expertise to obtain critical information more rapidly. Essentially the mobile phone, its special applications, and the Internet (although to a lesser extent currently) are becoming management tools for farmers, specifically in relation to marketing. Greater access to information seems to help farmers make better decisions around transportation and logistics, price and location, supply and demand, diversification of their product base, and access to inputs. Topic Note 9.2: ICTs Improve Logistics, Lower Transaction Costs. Information communication technologies (ICTs) improve logistics and reduce transaction costs by improving supply-chain management. The benefits largely reside with traders, so the key question for development practitioners is how to design ICT interventions that enable producers to improve their returns and/or help urban consumers to buy food at lower prices. Combined investments in roads, tele- phone communications, and electricity have a greater aggregate benefit compared to separate investments.  In South Asia, Mobile Phones Amplify Investments in Extension and Infrastructure to Bring Farmers to Markets  Across Africa, Mobiles Ease Market Logistics Topic Note 9.3: ICTs Facilitate Market Research. Market information strengthens farmers’ position in their day-to-day trading and, over time, market intelligence enables them to focus on satisfying consumers’ and buyers’ demands and on developing relationships with stakeholders in the next stage of the value chain. The key development challenge lies in assembling and disseminating this information in a timely manner, not just to traders or larger-scale farmers but also to smallholders.  Evidence of the Impact of Immediate Market Information in Asia and Africa  Web Portals Offer the Big Picture on Markets in Africa, Europe, and Asia Topic Note 9.4: ICTs Facilitate Access to and Delivery of Inputs. ICTs can enable farmers to make more informed decisions about which inputs are better or cheaper to buy, when and where to best obtain them, and how to use them. ICTs can also ensure that subsidized inputs are sold to the intended beneficiaries.  Agribusiness Advises India’s Farmers through e-Choupal Kiosks  Zambian Farmers Buy Subsidized Inputs via Mobile Phone E C O N O M IC AND S E CT OR WORK 206 MOD ULE 9 — STR ENGTH ENING A GR ICULTUR A L M A R K ETING W ITH IC T OVERVIEW marketing, focusing on lessons from the field. The main themes One of the best definitions of marketing is that “marketing include: mobile phones as a marketing tool (Topic Note 9.1); involves finding out what your customer wants and supplying evidence that ICT is changing logistics and transaction costs it at a profit.� Probed more deeply, this deceptively simple (Topic Note 9.2); the use of ICTs for market research (both for sentence manages to encompass most facets of marketing. acquiring immediate market information and acquiring market It is also a convenient structure around which to explain the intelligence over time) (Topic Note 9.3); and the use of ICTs to expanding role of ICT in strengthening agricultural marketing. make input supply and use more effective (Topic Note 9.4). The phrase “finding out what your customer wants� empha- Farmers’ Changing Information Needs and Sources sizes the role of communications in agricultural marketing. Studies of farmers’ information needs paint a mixed picture. It encompasses two kinds of information: (1) the immedi- Information needs differ significantly between countries and ate information required on the market’s demand for spe- within countries for farmers producing different products. cific volumes and quality of agricultural products and (2) the Farmers differ in their perceptions of the information they longer-term information on market trends (referred to here require (as revealed by market research) and in their priorities as “market intelligence�) required to make future plans for when they come to access information. The primary mes- the farm. ICTs, especially mobile phones, facilitate the provi- sage underlying these disparities appears to be that farmers sion of both types of information. ICTs are used for real-time require a package of information and that their needs and market research to obtain current information and help users priorities change throughout the production cycle. gradually accumulate market knowledge and insight. Farmers’ information sources outside their immediate “Supply� emphasizes the critical role of transport and logis- network have not always been reliable, but the situation is tics in moving products efficiently and effectively from rural changing (box 9.1). Very often farmers’ primary source of production areas to consumption points, which increasingly information continues to be progressive farmers (figure 9.1 are located in distant urban markets. The management of presents an example from India). Farmers give more cred- supply chains—the aggregation of product, organization of ibility to information provided by other farmers considered to transport, and consolidation of loads—is increasingly improv- have a similar status and cultural profile. ing through the use of ICTs. According to market research by a private company in India, The phrase “at a profit� has as a subtext the multiple issues farmers’ information priorities include accurate local weather surrounding the reduction of costs and improvement of forecasts, technical information sequenced according to the prices. Reducing costs can involve, for example, reducing stage in the crop cycle, data on the costs of production, and transaction costs, reducing losses following the harvest, gain- market supply and price information. These priorities shift ing better access to cheaper inputs, and increasing produc- during the production cycle—for example, market informa- tivity for an overall reduction in the unit costs of production. tion is of little interest until the start of the harvest. In prac- Improving prices can involve, for example, gaining a stronger tice, when a subscription-based agricultural information ser- negotiating position, exploring alternative markets, or making vice was rolled out, farmers claimed that the market news better decisions on where and when to sell product. service was the most valuable. This module begins with an overview of the need for and impact of ICTs in agricultural marketing, especially from the perspectives of producers, consumers, and traders. The FIGURE 9.1: Percentage of Farmers Relying on a Given overview concludes by reviewing lessons and envisaging Information Source, India future developments in ICTs for agricultural marketing, sug- Extension gesting potential policy changes and active interventions to improve their utility. (Note that although mobile phones fea- TV ture significantly in the discussion, the emphasis is on their Radio contribution to agricultural marketing. For a comprehensive Input suppliers discussion of mobile phones in agriculture, see Module 3.) Progressive farmers The second major part of this module consists of four topic 0 2 4 6 8 10 12 14 16 18 notes that drill deeper into the role of ICTs in agricultural Source: Mittal, Gandhi, and Tripathi 2010. IC T IN A GR IC ULTUR E S E C T I O N 3 — AC C E SSING MARKE T S AND VA LU E C H A INS 207 BOX 9.1: Changing Sources of Information for Farmers A number of initiatives by governments aim to provide market price services, driven by the view that greater price transparency is a public good. Price has been disseminated in many ways—chalked on notice boards, broadcast by local radio stations, published in newspapers, and (more recently) posted on websites. The information on these websites is confined mainly to product standards and specifications as well as market studies—particularly of external markets but increasingly of local value chains—including databases of contacts such as buyers, traders, agricultural processors, and input suppliers. To the extent that these sites become more accessible, their usefulness could increase, but at present they are out of reach for most rural people. Government-run market information services have been criticized because their poor accuracy and lack of timeliness have resulted in little immediate economic impact. Public market information systems collect, analyze, and disseminate information. They are generally considered to carry out the price analysis satisfactorily. There are weaknesses in price gathering, as there are few incentives for accuracy or for working outside office hours. The major criticism has been that the information does not reach farmers on time, if at all. Mobile phone applications are changing farmers’ sources of market information. Agricultural applications support logis- tics with graphical presentations of available supplies and methods for traders to upload price and supply information directly. They facilitate marketing by linking buyers and sellers. Private companies have started to either sell subscription-based information services or to use price information as a means of promoting other products to farmers—most notably to sell mobile phone services (rural markets being among the few unsaturated markets for mobile phone services) or inputs (particularly fertilizer). These services generally rely on local-language text messages to farmers’ phones. In the main, the information has been well received by farming clients, with good reports on its quality, accuracy, and timeliness and positive evaluations of its impact. Source: Authors. Through examples from India, Indonesia, and Uganda, like coffee, whereas the Indian farmers are specialized figure 9.2 illustrates how farmers’ information priorities apple producers from Kashmir. For market information, and sources of information can differ. It is worth bearing these farmers rely very little on the Internet but turn to in mind that Ugandan farmers mainly supply commodities multiple other sources, including farmer organizations, FIGURE 9.2: Farmers’ Differing Information Priorities and Sources of Market Information in Indonesia, India, and Uganda Farmers’ priorities for information differ Farmers’ sources of market information Indonesia India Uganda Indonesia India Uganda Info on farm credit & subsidies Family & friends Farmer organizations Access to experts in real time Farmer supplier/vendor Information type Market/price information for commodities Other farmers Weather info SMS/voice service Pest info & remedy Internet Package of practices leading to certification Newspaper et al Package of practices TV 0 1 2 3 4 5 6 7 8 Radio Importance Rank (out of 7) of 0 10 20 30 40 50 Information Type Percentage Source: Kumar n.d. E C O N O M IC AND S E CT OR WORK 208 MOD ULE 9 — STR ENGTH ENING A GR ICULTUR A L M A R K ETING W ITH IC T FIGURE 9.3: Ugandan Farmers’ Use of Voice- and SMS- other farmers, newspapers, radio, TV, and short messaging Based Agricultural Information Services service (SMS) and voice services. SMS search for market prices Some sense of farmers’ actual demand for information ser- 14% vices can be gained from figure 9.3, which compares farm- SMS weather and ers’ use of voice and SMS delivery mechanisms in Uganda. technical advice Technical advice was the most popular agricultural informa- SMS keyword 29% search tion service, provided via phone-in hotlines, followed by for inputs SMS-based technical and weather advice, with SMS-based 10% market price services coming third. Menu-based SMS linkages SMS for to traders banana and 2% coffee LESSONS AND FUTURE DEVELOPMENTS 12% Live hotline with expert advice Quantitative evidence is increasingly available on how mar- 33% Source: Kumar n.d. ket information affects prices paid to farmers (table 9.1). The results are generally positive in terms of farmers’ income and prices. There is some evidence that consumer prices can be lowered; it is also clear that traders who have access to ICT and mobile phones can raise their margins. TABLE 9.1: Summary of ICT’s Impact on Farmers’ Prices and Incomes, Traders’ Margins, and Prices to Consumers LOCATION, PRODUCT, MEDIUM (STUDY AUTHORS) FARMER TRADER CONSUMER COMMENTS Uganda, maize, radio (Svensson and + 15% Increase in price paid to farmers considered to be due to farmers’ improved Yanagizawa 2009) bargaining power Peru, range of enterprises, public + 13% Increases in farm income, but higher for nonfarm enterprises phones (Chong, Galdo, and Torero 2005) India (West Bengal), potatoes, SMS + 19% Yet to be published, but showed information to be important both in the form (M. Torero, IFPRI, pers. comm.) of SMS and as a price ticker board in markets Philippines, range of crops, mobile + 11–17% Effect on income among commercial as opposed to subsistence farmers, plus phones (Labonne and Chase 2009) perceived increase in producers’ trust of traders India (Madhya Pradesh), soybeans, + 1–5% Transfer of margin from traders to farmers, effect seen shortly after web-based e-Choupal (Goyal 2008) (average: 1.6%) e-Choupal established Sri Lanka, vegetables, SMS (Lokanathan + 23.4% Appreciable price advantage over control over time, plus benefits such as and de Silva, pers. comm.) increased interaction with traders and exploring alternative crop options India (Maharashtra), range of products, No significant In this one-year study, quantitative analysis did not show any overall price SMS (Fafchamps and Minten n.d.) effect benefit, but this finding is thought to be due to sales in state by auction; price benefits of 9% were observed with farm-gate sales and younger farmers Morocco, range of crops, mobile phone + 21% Small sample showed usual behavioral changes; higher-value enterprises (Ilahiane 2007) took a more pro-active approach to marketing via mobile phone India (Kerala), fisheries, mobile phones + 8% –4% Outlier in the sense that fish catches are highly variable and fishermen have (Jensen 2007) their own boat transport Uganda, range of crops, SMS and radio Bananas + 36% Awareness of market conditions and prices offers more active farmers (Ferris, Engoru, and Kaganzi 2008) Beans + 16.5% opportunities for economic gain Maize + 17% Coffee + 19% Niger, grains, mobile phones (Aker + 29% –3 to –4.5% Traders increased margin by securing higher prices through greater capacity 2008) to search out better opportunities Ghana, traders, mobile phones (Egyir, + 36 Traders using mobile phones tended to sell at higher prices but also tended Al-Hassan, and Abakah 2010) to be larger-scale traders than nonusers Kenya wholesale traders, mobile + 57% Improved trader margin through combination of cheaper buying prices and phones (Okello 2010) higher sale price Source: Authors. IC T IN A GR IC ULTUR E S E C T I O N 3 — AC C E SSING MARKE T S AND VA LU E C H A INS 209 The scale of the effect on farmers’ prices appears to depend For example, the collection and analysis of information could on a number of factors, including: be outsourced to the private sector, which could use such a platform to create additional value-added services for the  The effectiveness of the informal market information network of businesses and institutions that support the farm- networks that already exist. ing sector. Another option is for the agricultural department  The stability of the price structure—for example, to create a database of farming clients and negotiate lower whether the government controls prices for a staple SMS costs. This platform can be used to deliver a fast, tar- crop or whether fixed contract pricing is widely used. geted, and holistic package of information services consisting  How the product is sold—for example, ICTs may have of public-good information and also private-sector messages a greater effect where negotiation is part of the sales to the farming community. Such a service has the potential process and a lesser effect when sales are by auction. of creating a cadre of smaller-scale commercial farmers,  The type of product being marketed. Circumstantial who will be better adapted to changing agricultural markets, evidence suggests that market information systems trained in the use of modern information systems, and able to have a greater effect on prices of higher-value, less- access services and receive advice via their mobile phones. perishable products such as onions, potatoes, and pulses and a lesser effect on prices of extremely perish- For the development practitioner, the key messages of this able products such as leaf salad. (For an exception, see module relate to the benefits of accelerating the dissemina- “Remote farmers with perishable crops� in this module.) tion of mobile phone technology (Topic Note 9.1), especially to areas where its signal, and therefore its impact, have not yet By all indications, the phone—especially the mobile phone— reached. In many countries, profits generated by mobile phone is the most powerful marketing tool available to farmers use in urban areas are set aside specifically for extending the and traders. The latent utility of the technology is still being mobile phone network further into rural areas. Typically these discovered, and the scale of its impact is still being under- funds are underused. This module provides a broad swathe stood. Even so, the studies reviewed throughout this mod- of empirical evidence of the benefits of phone technology for ule indicate the phone’s potential for reducing asymmetries improving rural income and, potentially at least, for reducing of information between traders and producers, lowering transaction costs and thus consumer prices. In occasional transaction costs, and enhancing farmers’ ability to fine-tune instances, technologies such as mobile phone amplifiers and their production strategies to match the accelerating rates of transmitters, focused on marketplaces, will extend the dis- change in consumer demand and marketing channels. tance over which wireless signals can travel and encourage additional agricultural trade to emerge. Many of these ICT It remains unclear whether market information services can infrastructure issues are discussed in Module 9.2. be delivered on a financially sustainable basis by the private sector or whether they can ever be delivered efficiently and Although ICTs appear to reduce transaction costs (see Topic effectively by the public sector, given its history of gathering Note 9.2), most of these cost savings presently accrue to trad- inaccurate data and disseminating it badly. The private sector ers who have invested in mobile phones. To date, disappoint- is finding it difficult to develop a working business model to ingly little analytical work has been done to provide empirical charge farmers for agricultural information and market services evidence of these effects. These kinds of studies need to delivered through ICTs. Some governments are interested in be done. They are likely to be important for informing better purchasing SMS-based agricultural information services, either investment decisions on infrastructure, particularly at the nexus to empower their field extension officers or to provide holis- between investments in roads, markets, and communications tic agricultural information services directly to farmers. The technology. Given accelerating urbanization and the increasing content can consist of technical, marketing, weather, costing, emphasis on food security, the development sector needs a pest, and disease alerts as well as information on government better understanding of how to ensure that the reductions in schemes. SMS-based services are likely to cost considerably transaction costs that are possible along the agricultural mar- less than sending out mobile extension officers and be more keting chain especially benefit those at both ends of the supply accessible than Internet-based services (box 9.2). chain—the rural producers and urban consumers. In the long run it is difficult to anticipate the eventual balance As discussed in Topic Note 9.3, market intelligence and mar- between privately run agricultural information services and ket education are increasingly important to farmers’ survival in government services. It is very likely that the optimum config- increasingly competitive markets. Given the projected accel- uration could involve some kind of public-private arrangement. eration of change in consumer demand, the emergence of new E C O N O M IC AND S E CT OR WORK 210 MOD ULE 9 — STR ENGTH ENING A GR ICULTUR A L M A R K ETING W ITH IC T BOX 9.2: The Spread of SMS-Based Services and Prospects for Reducing Their Costs Unit Costs of SMS Messaging in Selected Developing Countries In the future SMS will increasingly enable the Lao P.D.R. two-way flow of information. The emergence of Indonesia Sri Lanka China open-source software is facilitating the dissemina- Bangladesh Iran tion of targeted SMS messages on a large scale Pakistan Guinea (see the discussion of FrontlineSMS in Module 8). Korea (Rep. of) Panama Agricultural line departments and projects are Nepal Philippines using this technology to better control and improve India Bhutan Viet Nam their agricultural information dissemination. In par- Mauritius ticular, this new technology should help eliminate Azerbaijan Paraguay Oman the recognized weaknesses in dissemination by Maldives Bolivia government-run market information services. Dominican Rep. Botswana Ethiopia The prices charged for sending SMS messages dif- Tanzania Ghana fer hugely from country to country and region to Russia Sudan region. They tend to be significantly lower in South Malaysia Guyana Asia than in Africa (see figure). For a mobile phone Serbia Micronesia Georgia company, the actual costs of SMS transmittal is a Cambodia fraction of the price charged. Informed opinion often Jamaica Jordan Montenegro puts the costs at between US 0.01 and 0.02 cents Senegal Yemen each. The margins that SMS messages generate for Gambia Uruguay mobile phone companies are particularly high. In the Seychelles Namibia minds of mobile phone company executives, their Tunisia El Salvador challenge is to balance the high margins generated Kenya Suriname Ukraine by SMS messaging with the potential of those mes- Guatemala sages to generate additional revenue from voice Egypt Trinidad & Tobago Niger services. This equation is not fully understood. Even Mali Benin so, there is considerable scope for a regulator to Djibouti Argentina insist that SMS rates be significantly reduced for the Moldova Uganda transmission of public-good information. Armenia Central African Rep. Burkina Faso For example, in South Asia the total cost for a pri- Sao Tome Romania vate company to deliver a single agricultural text Venezuela Samoa message is believed to be around 2 US cents. Colombia Zambia This cost is divided into one-third (that is, about Algeria Price in US$ of SMS Nicaragua Malawi US 0.6 cents) for broadcasting the SMS, one-third Peru Madagascar for sales and marketing, and the remainder for the Nigeria Mexico whole operation of collecting and analyzing infor- Togo Lebanon mation and operating the business. Even at this Thailand Lesotho relatively low cost, farmers still resist paying for Papua New Guinea Angola this information. Where the public sector wants to Swaziland South Africa use SMS technology to disseminate information Rwanda Vanuatu Barbados to government staff and farmers, the affordability Morocco Cote d’ Ivoire of the technology is highly relevant. A World Bank Cameroon Chile project coordination office in India recently negoti- Belize Fiji ated to broadcast 100,000 SMS messages at US Slovenia Bulgaria 0.4 cents each. Albania Brazil Turkey 0 5 10 15 20 25 30 Cents Source: Authors (figure source is authors’ calculations, based on InfoDev cross-country data). IC T IN A GR IC ULTUR E S E C T I O N 3 — AC C E SSING MARKE T S AND VA LU E C H A INS 211 TABLE 9.2: Current and Future Roles of ICT in Agricultural Marketing FUNCTION DELIVERED ENABLING OR BY ICT DELIBERATE? TECHNOLOGY FUTURE Real-time market research Enabling infrastructure Fixed-line and mobile phones Extending range of mobile phones and ICT, facilitated by infrastructure investment and policies Coordination of logistics Enabling infrastructure Fixed-line and mobile phones Specialist applications, training/producer organizations Market information (price and Deliberate: Public and private Web-based and SMS Applications and public–private sector partnership, plus training and supply) sector organization Market intelligence Deliberate Web-based Applications and development of market intelligence services, plus training and organizations Inputs Enabling infrastructure Fixed-line and mobile phone Targets SMS messaged by private sector, e-vouchers for subsidies Source: Authors. marketing channels, and the evolution of modern variations where and when they can purchase inputs, especially if within traditional marketing channels, better information will help private input suppliers have been crowded out by govern- farmers align production more closely with changing demands. ment distribution of subsidized inputs. ICTs can provide this information (see Topic Note 9.4). It can be argued that if the situation were left to resolve itself, the bulk of the benefits generated by these new mar- Input-supply companies can use text messages to promote ket opportunities would go to the larger-scale and better-off their products and provide technical advice to farmers. farmers and to the trading sector. To redress that imbalance, Electronic voucher schemes offer potential for implement- there may well be a role for extension—particularly the public ing subsidy programs that “crowd in� the private sector and extension services—to alert farmers to new market opportu- enable more precise targeting of input supply programs to nities, provide training on changing market conditions (espe- the poor. cially experiential training), and transmit important market intelligence, especially through the Internet. Table 9.2 summarizes the role of ICT in agricultural market- ing, based on whether the ICT consists of enabling infra- Not only do farmers have difficulty identifying the best mar- structure such as telephones or deliberate applications. It kets for their produce; they often have difficulty discovering also suggests what the future is likely to hold. Topic Note 9.1: MOBILE PHONES AS A MARKETING TOOL TRENDS AND ISSUES of contacts and draw on this wider experience and exper- Although the mobile phone’s main purpose among the public tise to obtain critical information more rapidly. Essentially is for social interaction, it is proving to be a powerful market- the mobile phone, its special applications, and the Internet ing tool. Around 60–70 percent of calls are made to family (although to a lesser extent currently) are becoming and friends; business calls typically constitute 5–10 percent management tools for farmers, specifically in relation to of calls. Learning to exploit the economic benefits of the marketing. mobile phone is a skill that takes some time to develop (see Research data are emerging on just how much farmers are the evidence from Malaysia later in this section). Younger starting to use mobile phones to assist in marketing their pro- users are typically better able to exploit the mobile phone’s duction. For example, work in Bangladesh, China, India, and business advantages. Vietnam showed that now about 80 percent of farmers own A building body of knowledge, summarized in the sec- mobile phones (Minten, Reardon, and Chen n.d.). They use tion that follows, indicates that phones, especially mobile them to speak to multiple traders to establish prices and mar- phones, have a positive impact on agricultural incomes. ket demand. More than half concluded selling arrangements The evidence suggests that farmers use mobile phones to and prices on the phone (the exception was rice farmers in tap into a wider range of knowledge and information than China). This work illustrates just how much phone access is they could access previously. Farmers build up a network driving change in marketing systems. E C O N O M IC AND S E CT OR WORK 212 MOD ULE 9 — STR ENGTH ENING A GR ICULTUR A L M A R K ETING W ITH IC T Greater access to information and buyers steadily adds to intriguing suggestion that farmers’ use of the phone creates farmers’ market knowledge and gives them greater con- a greater sense of trust with trading partners, presumably fidence to diversify into higher-value (often perishable) because information asymmetries are reduced. products. The additional knowledge translates into a more  Peru: Rural access to telephones raises incomes accurate understanding of demand and an enhanced ability from farms and other rural businesses. When Peru to control production and manage supply chains. Farmers’ privatized its telecommunications industry in the behavior is changing, and their farming is becoming more 1990s, the government required the telecommunica- commercial. Trends emerging around the use of mobile tions company to install public telephones in 1,526 phones include: (1) farmers deal directly with wholesalers or small rural towns across the nation. Some years later, larger-scale intermediaries rather than small-scale interme- a study of 1,000 rural households distributed across diaries; (2) farmers conduct market searches over a wider towns with and without public telephones found posi- number of markets; and (3) farmers develop a broader net- tive links between public telephone use and incomes. work of contacts than their peers who do not own mobile Telephone use resulted in a 13 percent increase in per phones. capita farm income and a 32 percent lift in nonfarm income (Chong, Galdo, and Torero 2005). Greater access to information seems to help farmers make better decisions around:  Filipino farmers used mobile phones to improve income and build trust with trading partners. In  Transportation and logistics. Farmers begin to the Philippines, Labonne and Chase (2009) compared leverage economies of scale. They can organize and the impact of mobile phones on subsistence farmers coordinate among themselves and (larger-scale) truck- and commercial farmers who generate a marketable ers to consolidate volume. Greater coordination also surplus. The study found little benefit for the sub- occurs around the timing of aggregation, collection, sistence farmers, but commercial farmers benefited and volumes. Larger volumes can lower costs and significantly, as measured by improvements in their enable farmers to realize higher prices. consumption of 11–17 percent. A particularly inter-  Price and location. An ability to compare prices esting finding was that farmers reported improved increases farmers’ power to negotiate with traders. It relationships with trading partners following the acqui- also enhances farmers’ ability to change the time and sition of mobile phones. They may believe that the place of marketing to capture a better price. relationship is more fair, since they now can negotiate  Supply and demand. Farmers gain greater control better terms. over their production and product sales by finding new  In Malaysia, mobile phone use was linked to sources of demand, improve their ability to adjust sup- increased profits among younger owner/ ply and quality to market conditions, and learn about managers of farms and smaller agribusinesses, quality, grades, and product presentation. especially with growing experience in using the  Diversification of their product base. Over the technology. When 134 younger agricultural-based longer term, a better understanding of market demand entrepreneurs were interviewed about their percep- and consumer trends helps farmers diversify into tions of the impact of mobile phones on their busi- higher-value crops and capture greater value. nesses, they reported two overarching benefits:  Access to inputs. Farmers can make more informed They could draw upon a wider network of people for decisions about which inputs are better or cheaper to information (a “wisdom of crowds� effect), and they buy and when and where to best obtain them. could obtain information at a greatly increased speed (Shaffril et al. 2009). Other benefits, such as market EVIDENCE OF THE IMPACT OF PHONES information, time savings, and technology, were of ON MARKETING a lower order (figure 9.4). The overall impact was an The evidence to date indicates that farmers (as well as other increase in businesses profits, especially after the stakeholders in the supply chain) increasingly use ICT, par- entrepreneurs had used their mobile phones for more ticularly mobile phones, to reduce their costs, increase the than two years. prices they receive, and eventually acquire market knowl-  Mobile phones in Niger bring better price inte- edge that improves supply-chain efficiencies and adjusts gration, improve profits for traders, and reduce supply more closely to changing demand. There is also an consumer prices. In Niger, Aker (2008) found that IC T IN A GR IC ULTUR E S E C T I O N 3 — AC C E SSING MARKE T S AND VA LU E C H A INS 213 FIGURE 9.4: Commercial Farmers and Small Increasingly, they spoke directly with wholesalers or Agribusinesses Rate the Relative larger-scale middlemen rather than smaller interme- Importance of Using Mobile Phones on a diaries. Farmers changed where they marketed their Scale of 1 to 4 (Very Useful), Malaysia crops, switching markets to capture better prices and often resorting to larger and more distant mar- Improved prices Wider markets options kets. They coordinated with local truckers to improve More systematic business product transport and identify where to deliver their Dissemination new Time saving products. Some farmers developed a two-way trade, Knowledge of technology bringing products back from the market to sell in Securing market information their own rural communities. A particularly important Extension channel Updated information change was that they used their new market knowl- Enhanced networking edge to become more market oriented in their produc- Timely access to information tion, move away from producing low-value crops, and 2 2.5 3 3.5 Source: Shaffril et al. 2009. diversify into higher-value enterprises. The knowledge gained from using the mobile phone reduced the perceived levels of risk and helped them target their mobile phones reduced search costs by 50 percent production to specific, identified market opportunities. compared with personal travel and that mobile phone use increased both traders’ and consumers’ welfare. Figure 9.5 illustrates where the impacts of ICTs on agricultural Traders’ profits increased by 29 percent—not because marketing occur along the links in value chains, thus indicat- they traded more product but because they obtained ing the information required and the technology involved. The better prices through real-time market research con- diagram has two key messages. First, ICT potentially has an ducted via mobile phone. Mobile phones were also impact on the management of every step in the production associated with a 3.5 percent reduction in average marketing chain, from planning to sales. Second, almost all of consumer grain prices. Aker also found that the use these functions are likely to be carried out by mobile phone. of communications technology had several benefits. Other potential services, such as market price information, Search costs were significantly reduced, coordina- market intelligence, and specific cell-phone-based applica- tion among market participants improved, and market tions, largely perform support and secondary functions that efficiency increased as traders became engaged in the make farmers’ mobile phones more useful. search process themselves rather than being on the receiving end of a one-way communications system. Traders were able to expand their reach of searchable LESSONS LEARNED markets, sell in more markets, and increase their net- The experiences in using ICTs to improve access to market work of contacts. An average trip to a market located information reveal that ICTs contribute to: 65 kilometers away in rural Niger can take two to four hours round trip, compared to a two-minute call.  Reduced logistics and transportation costs. Farmers obtain the latest information with a phone “[With a mobile phone], in record time, I have all sorts of call instead of making a long trip to a market. They can information from markets near and far.� —Grain trader coordinate with other local farmers to use one large from Magaria. truck rather than several smaller ones to deliver their products. “[Now] I know the price for two dollars, rather than  Improved negotiation power. Farmers’ increase traveling [to the market], which costs twenty.� —Grain their power to negotiate, particularly with traders, trader from Zinder. based on their ability to understand pricing in multiple  In Morocco, mobile phones changed farmers’ markets, to cut out intermediaries, and to sell directly cropping mix and marketing methods. A survey to larger-scale buyers. of a small sample of farmers in Morocco found that  More sophisticated marketing plans based on mobile phone use resulted in a 21 percent increase in price information. For example, farmers can modify income (Ilahiane 2007). An even more relevant finding the date of marketing, product permitting, or switch to was that the technology changed farmers’ behavior: alternate markets, transport and regulation permitting. E C O N O M IC AND S E CT OR WORK 214 MOD ULE 9 — STR ENGTH ENING A GR ICULTUR A L M A R K ETING W ITH IC T FIGURE 9.5: ICT Inputs to Marketing Along the Agricultural Value Chain Harvesting, primary Transport and Sales and Production processing, and logistics marketing storage Harvesting dates Arranging the Pre- affected by Establish supply, production aggregation of market prices, product & demand, and decisions grades adjusted prices based on consolidation of on basis of market loads accumulated information market knowledge and Storage decisions based Real-time market intelligence Seeking lower-cost Access to inputs on market knowledge and transport and improved research and access and costs of arrangements negotiation storage Motivated by Real-time Mainly Organized Real-time market visits, Mainly phone market facilitated by by cell market phone contact, Mainly real- research on cell phones, phone, with research Mainly conversations, increasing SMS- time cell phones some cell some by phone, cell-phone sometimes based input market with some phone apps assistance supported based supported by advice and research on support being from web- by SMS and conver- web-based promotion, plus cell phones through developed to based web-based sations market e-vouchers for web-based support the market market intelligence subsidies market processes intelligence price intelligence services Source: Authors.  Broader and deeper networks. Farmers commu-  Informed use of inputs. Farmers improve their nicate by phone with traders and farmers outside of capacity to raise yields through better use of inputs their immediate geography as opposed to making a and/or use of better inputs. They can identify sources physical trip. The ability to communicate more easily of inputs, obtain them more cheaply, and are better and to triangulate information creates deeper trust in able to buy and apply them at the optimal times. key trading relationships.  Improved farm business management. Farmers  Innovative partnerships. For example, partnerships can become better managers through better informa- are facilitated and built among groups of producers, or tion about which inputs to use, new knowledge about by virtue of direct communication with corporations grades and standards for produce, and increased and traders, or through the ability to supply product interaction with corporations, traders, and other based on just-in-time and/or quality needs. farmers. IC T IN A GR IC ULTUR E S E C T I O N 3 — AC C E SSING MARKE T S AND VA LU E C H A INS 215 Topic Note 9.2: ICTS IMPROVE LOGISTICS, LOWER TRANSACTION COSTS TRENDS AND ISSUES to improve, as well as the downstream positive effects on The higher the transaction costs, the smaller the geographi- consumer food prices. cal area in which it is feasible to market any product. Without A typical rural agricultural value chain has several steps. market access, productivity is low (Kunaka 2010), and options Production takes place on small plots of land. Very small for the farming enterprise are limited. volumes of the produce are then sold to a local aggregator, who perhaps collects it on a bicycle or bullock cart. This inter- Driving down transaction costs in the supply chain delivers mediary then sells the aggregated (but still small) volume to very clear public goods. It can create benefits, especially another intermediary, perhaps one with a tractor. for poorer urban consumers, by lowering the costs of food. Lower transaction costs also offer the prospects of higher In such a manner, product cascades through the hands of net returns for producers. several intermediaries, who increase the load size at every step, before it reaches the end market. Small aggregate As noted in the overview, field observations show that in loads generally incur high unit transport costs. In addition, many places ICTs, particularly mobile phones, are transform- each small-scale trader has to charge a relatively high margin ing how rural logistics function. The resulting improvement per kilogram to make a living wage. The aggregate margins in logistics can be seen through lower transaction costs, are relatively high. The resulting multiple handlings also improved potential profits, and less wastage. By giving cause significant wastage through loss or spoilage, further people the ability to replace distance with “space-shrinking impacting the price that the smallholder receives and the technology,� mobile phones enable market agents to better consumer pays. coordinate product supply and demand, strengthen existing trade networks, facilitate the assembly of products to reach Table 9.3 and figures 9.6 and 9.7 serve to overlay this descrip- a critical mass, and enable products to be delivered cost- tion of a rural value chain with some sense of scale and num- effectively to new markets. Despite these positive impacts, bers. Most farmers need transport to move small loads (units other factors can still limit increased supply-chain efficiency, under 80 kilograms) over relatively short distances (of 1–10 such as geographic position, limited access to transportation kilometers). Rarely are motorized transport services avail- and credit, and poor access to inputs. able, affordable, or even necessary to meet this demand, particularly in sub-Saharan Africa. An ICT-enabled logistics system can help in:  Collection—by setting out well-organized collection Figure 9.6 provides an indication of how unit costs for routes. transporting produce change depending on distance, road  Aggregation—by assembling markets with sufficient quality, and transport mode. The key take-aways are: critical mass to attract large-scale traders. Traders use (1) the high cost of head loads and pack animals; (2) the low the quantity and variety of products and the mobile unit costs, particularly for short distances on bad roads, of phone network to conduct real-time research and intermediate modes of transport such as ox carts, hand- identify arbitrage and market opportunities for the carts, and bicycles/trailers; and (3) the greater cost efficien- products they buy directly in rural areas. cies of mechanized transport, especially medium-sized  Delivery—by coordinating directly with other farmers trucks, when the distances and the quality of the roads are or truckers to organize times, dates, volumes, and so reasonable. forth. Figure 9.7 demonstrates the importance of critical mass in Currently, ICTs mainly benefit those who can afford the lowering transport costs. A vicious circle is often observed technology—mostly the traders. The logistics system will in the field: Even with a new road, truckers will not invest in not be fully transformed and smallholders will not fully ben- additional vehicles until they see a substantial increase in the efit from the ICTs described here until the technology is ubiq- volume of agricultural produce that needs to be transported; uitous and market information is less asymmetrical. At that at the same time, farmers are wary of expanding produc- point, prices and the returns realized by farmers are likely tion without evidence that the necessary transport services E C O N O M IC AND S E CT OR WORK 216 MOD ULE 9 — STR ENGTH ENING A GR ICULTUR A L M A R K ETING W ITH IC T TABLE 9.3: Size of Loads and Distance Covered in Moving Rural Goods Produced by Small-Scale Farmers, Various Countries WESTERN REPUBLIC OF KENYA MALAYSIA INDIA BANGLADESH SAMOA KOREA Typical distance of transport 90% of trips < 7 km 75% of trips < 7 km 90% of trips < 5 km Most trips < 12 km Most trips < 5 km Most trips < 10 km Average off-farm distance 10 km 8.3 km Loads transported 70% of trips < 25kg Most trips < 50 kg Most trips < 80 kg 30–80 kg Source: Banjo, Gordon, and Riverson 2010. FIGURE 9.6: Transport Costs for Different FIGURE 9.7: Transport Costs in Relation to Demand, by Vehicles in Developing Countries Mode (US$ per Ton-Kilometer) 1.25 Truck Cost/t/km (US$) 1.00 Pickup Ox cart Handcart Tractor 0.75 Bicycle/trailer Power tiller Medium truck Medium distance, good road 0.50 Farm vehicle Donkey cart 0.25 Ox cart Short distance, poor road Pick up truck 0.00 Bicycle Power tiller 10 50 100 250 500 750 1,000 1,500 2,000 Motorcycle/trailer Demand (t) Pack donkey Source: Sieber 2009. Headload 0 0.2 0.4 0.6 0.8 1 1.2 1.4 1.6 1.8 Source: Sieber 1999. The literature on ICTs’ impact on rural logistics largely focuses on data obtained from user surveys and case will be in place to deliver their surplus to external markets. studies. Little research has been done to assess the direct One solution to this conundrum is to aggregate product into impact of mobile phones on reducing transaction costs sensible critical masses at particular times and places. For related to agriculture. The lack of information is not surpris- example, a 10-ton (medium) load would need to be made up ing, given that logistics is generally regarded as an infra- of product from 150 to 200 smaller-scale farmers, a process structural issue and that its synergies with ICT have not that is being greatly facilitated by the use of ICT, especially been considered. mobile phones. Additionally, there is little transparency around the avail- LESSONS LEARNED ability of facilities for transportation, warehousing, stor- Findings on how mobile telephony enhances marketing by age, processing, and so on. One particular feature of rural improving supply-chain management include: transport internationally is the high costs in Africa, which  More efficient use of existing storage, packaging, are often four times the cost in South Asia of transporting transport, and processing facilities. larger loads over longer distances. Some of this difference in cost is ascribed to the cost of vehicles and poor quality  Increased monitoring and coordination of freight of roads in Africa, but a significant proportion is believed to transport operations, including product collection, be the consequence of cartels. (In contrast, in Pakistan, for delivery, and security. example, transport brokers regularly operate to consolidate  Quick response to any disruptions in the supply loads and improve transport efficiency with backhauls.) This chain (for example, disruptions such as vehicle break- lack of information results in high transaction costs at each downs clear up more rapidly). stage in the value chain and offers little opportunity to lever-  Reduced travel time and expense through the ability age economies of scale or move swiftly to alleviate blocks to call markets to obtain information instead of having in the supply chain. to travel there. IC T IN A GR IC ULTUR E S E C T I O N 3 — AC C E SSING MARKE T S AND VA LU E C H A INS 217  Disintermediation and improved transport effi- good potential for improving marketing efficiencies and ciency as mobile phones facilitate the assembly of lowering transaction costs. Studies in South America product, which enables larger trucker/traders to buy have demonstrated synergies between investments sensible-sized loads directly in rural areas. Suppliers in roads, telephones, and electricity, although individu- can use mobile phones to conduct real-time market ally telephones consistently show the highest return research, and entire truckloads can be bought and (Jansen, Morley, and Torero 2007). Integrated rural sold while still on the road. infrastructure investments could include, for example,  Synergies between investments, so that combined investments that improve agricultural productivity, investments in roads, telephone communications, rural roads, and rural markets (specifically assembly or and electricity have a greater aggregate benefit than primary wholesale markets) and extend rural mobile separate investments ever could have. (If a single phone coverage. For example, in areas where phone investment were to be made, however, the most cost- signals are weak, a mobile phone amplifier, located at effective investment would probably be telephones.) a market, would facilitate conversations and flows of information around market opportunities and needs, logistics, and prices. Markets themselves could be PRINCIPLES AND GUIDELINES FOR POTENTIAL built in selected hubs in rural areas where local farmers INTERVENTIONS can convene and sell produce. Experience indicates Information technology is stimulating a quiet communica- that such markets must be located correctly. Normally tions revolution in traditional agricultural marketing channels these investments are made in existing and expanding in many developing countries. The benefits largely reside marketplaces, often with public investment linked to with traders, who use the technology to maximize profits by improvements in market management. For example, lowering search and transaction costs. The key question from a market committee is formed of stakeholders to development practitioners is how to design ICT interventions actively promote the market, oversee its operation and that enable producers to improve their returns and/or help management, and become empowered to act on its urban consumers to buy food at lower prices. Little empirical further development. evidence is available on the scale of these effects or on the  Create capacity in farmer organizations and practices and investments that could enhance them. groups. Coordinated activities by farmer groups offer potential for improving opportunities and farmer A combination of economic intuition, observation, and incomes through many channels—in operating the research indicates that important synergies can be created market, in actively being empowered to seek out com- from a confluence of investments. peting transport options, and in organizing (through  Address policy issues around increasing access to mobile phones) sensible collection routes that ease the poorest. Despite phenomenal growth in tele- logistics, create the necessary critical mass of prod- phone lines and mobile phone networks, access is ucts, and attract larger-scale and more efficient buyers still highly inadequate and unequal. Today, the main and traders. As this topic note emphasizes, ICT will beneficiaries of ICTs are those who have the tech- increasingly provide avenues to link producer organiza- nology, enabling them to increase their profits. Not tions, cooperatives, smaller transporters, and others. only are the poor and those living in rural areas at a (See the discussion in Module 8.) disadvantage, but full utilization of the technology is impossible, even for those with access, until universal access is achieved. In other words, a full transforma- INNOVATIVE PRACTICE SUMMARY tion of the logistics system will not happen until the In South Asia, Mobile Phones Amplify technology becomes ubiquitous, intensifying competi- Investments in Extension and Infrastructure tion and carrying the potential long-term benefits of to Bring Farmers to Markets reducing transaction costs. The following examples from Bangladesh, India, and Sri  Look for possibilities to create an integrated rural Lanka describe how poultry farmers and vegetable produc- infrastructure investment program. Investments ers managed to market their produce more efficiently. The that help to remove intermediaries are believed to have situations of these producers may be quite different, but the E C O N O M IC AND S E CT OR WORK 218 MOD ULE 9 — STR ENGTH ENING A GR ICULTUR A L M A R K ETING W ITH IC T catalyst in each instance was the advent of mobile phones. costs with the few (normally 8–10) chickens they had avail- The example from India shows how benefits are magnified able for sale. The women asked, “How many chickens will through complementary investments in infrastructure (in this you need to be able to pay us sensible prices?� “Around 50,� case, roads and phone networks) was the trader’s reply. When it was established that the traveling trader had his Bangladesh: Market Extension and Mobile Phones Give own mobile phone, an arrangement was reached that the Women Chicken Farmers New Leverage with Traders community would phone him whenever they collectively had As part of a Swiss-funded livelihoods project in Bangladesh, 50 chickens for sale. The arrangement worked. The price community organizations, particularly women’s groups, has increased by 60 percent, enabling the women to aggre- were provided with a six-step, experiential training pro- gate chickens from a far wider group of nearby villagers and gram in marketing. The program covered the selection of encouraging increased production, as backyard chickens are key products to market (step 1); basic economics (step 2); now considered a profitable enterprise.1 market research (step 3); review of findings (step 4); pre- sentation of action plans and agreement by the community Primary Rural Wholesale Markets Capitalize on New (step 5); and implementation of the chosen action plan Roads, Increased Vegetable Production, and Mobile (step 6). Phone Coverage in Assam One women’s group (image 9.1) traditionally sold backyard Planning studies for an agricultural competitiveness project chickens to a visiting trader. When they visited the nearby in Assam, Northeast India, showed flat or declining turn- market town, they were shocked to discover that chickens over in traditional wholesale markets but rapidly rising lease were selling for nearly twice the price they were receiving. incomes for weekly consumer markets (haats). Deeper They agreed that they would be prepared to consolidate their investigation revealed that only a small proportion of the chickens and transport them for sale directly into the market haats were booming (about 13 percent) They had developed town. Before committing to this action, however, they wanted into daily wholesale markets selling tens of thousands of to confront the trader with their increased market knowledge. tons of product (figure 9.8, image 9.2). When they challenged the trader about the price disparity, When these markets were visited and stakeholders inter- his reply stunned them. He explained that he could not afford viewed, an explanation emerged. The markets were boom- to pay them more because he had to cover all his transport ing owing to investments in new rural roads, expanded vege- table production following increased investment in irrigation, IMAGE 9.1: The Bangladeshi Community Who Solved and the arrival of larger-scale truckers (with 10-ton vehicles) Their Chicken Marketing Problems to buy product. Through Mobile Phones The trucker/traders described the benefits of these larger markets: They offered sufficient product for sale to provide choice, they offered a variety of products, and the turnaround times were quick, but the critical change was the extension of the mobile phone network. The network enabled trucker/ traders to carry out real-time market research with their cus- tomers to meet their produce requirements and prices. Instead of product passing through the hands of multiple small traders, resulting in high unit transport cost, significant postharvest losses, and a high overall aggregate margin, the transaction costs were reduced. The Assam Agricultural Competitiveness Project is investing in these successful Source: Authors. 1 For more information, see Dixie (2007). IC T IN A GR IC ULTUR E S E C T I O N 3 — AC C E SSING MARKE T S AND VA LU E C H A INS 219 FIGURE 9.8: The Emergence of Primary Rural Wholesale Markets at Well-Located Weekly (Haat) Markets in Assam 3000 2500 2000 100000 Rs 1500 1000 500 0 ow a lis a ch ria M rid a ha on Ka Ju a h B dh r Ka Pa ra n lia ga sa ar C gm a G alo hat Bo ha t Ka dun i Si nia rc rali N lla la ta Ba ipe l M Ja ori n m R a si gu ti Lo Ju noi C Ma ani ya lla or on C orh an Ka yak ara Lo igani ar ge h C iha r i R uw Ba eow ha or r ria kh a Se okia n di is m su M ma r at pa ko uc is u un a ng w gij ho ha u D ga he n ob n K rg Ja o p on r l Ba Villages Source: Project documentation for the Assam Agricultural Competitiveness Project (http://web.worldbank.org/external/projects/main?pagePK=64283627&piPK =73230&theSitePK=40941&menuPK=228424&Projectid=P084792). IMAGE 9.2: Produce for Sale at an Assamese “Super- “super-haats� to provide them with the facilities required for haat.� the growing volumes of business they transact.2 Sri Lanka’s Smallholders Could Reduce Cost of Market Information by Using Mobile Phones Ratnadiwakara, de Silva, and Soysa (2008) calculated the information-related transaction costs of smallholder farmers who sell their vegetables at one of Sri Lanka’s largest whole- sale agricultural markets (Dambulla). The four vegetables that were most heavily traded (by volume) were considered in the study: tomatoes, onions, eggplant, and chilies. Information-related costs formed 70 percent of the transac- tion costs incurred by farmers growing those crops. On aver- age, a farmer made 24 visits to the wholesale market during the crop cycle at an average cost of US$ 2 per visit, which included travel, food, and related costs. The total search cost Source: Authors. 2 For more information, see the documentation for the Assam Agricultural Competitiveness Project (http://web.worldbank.org/ external/projects/main?pagePK=64283627&piPK=73230&the SitePK=40941&menuPK=228424&Projectid=P084792). E C O N O M IC AND S E CT OR WORK 220 MOD ULE 9 — STR ENGTH ENING A GR ICULTUR A L M A R K ETING W ITH IC T for a farmer averaged US$ 52, of which over 80 percent was Remote Farmers with Perishable Crops Reach More the cost of travel. Ugandan Markets when Mobile Phone Coverage Expands If half of a farmer’s market visits could be replaced with Uganda’s mobile phone network expanded from covering phone calls (assuming a phone call costs US$ 0.37), the total 46 percent of the population in 2003 to 70 percent in 2005. search cost would be reduced by 33 percent, without even Using panel data from 856 households in 94 communities accounting for time saved. across the country, Muto and Yamano (2009) estimated the impact of mobile phones on farmers’ market participation. INNOVATIVE PRACTICE SUMMARY Improved access to price information appeared to reduce Across Africa, Mobiles Ease Market Logistics marketing costs and increase farm-gate prices. Mobile phone The examples that follow, from West and East Africa, coverage was associated with a 20 percent increase in sales describe how farmers and entrepreneurs use mobile phones of bananas, although the same was not true for maize. This to ease the traditional barriers to moving and marketing pro- difference suggests that expanding mobile phone coverage duce. Some rely on sophisticated applications; others rely on has been more useful for perishable crops and that farmers a series of phone calls. have gained particularly from being able to arrange transpor- tation more efficiently. With Mobile Phones, Ghana’s “Market Queens� Farmers’ price gains are greater in areas close to the district Transform the Onion Trade center than in more remote areas, but the farther a farmer The onion wholesalers known as “Market Queens� increas- is located from the district center, the greater the impact ingly use mobile phones to coordinate supply among them- of mobile phone coverage on market participation. The selves and to improve profits by facilitating reductions in expanded mobile phone network favored banana farmers their transportation and opportunity costs (Overa 2006). in remote areas, who tend to have lower production costs, These costs are particularly high in commodity chains that compared to banana farmers near district centers, where are geographically extensive and organizationally complex, production costs were higher. The results also suggested such as the onion trade in Ghana. that even households without mobile phones benefited from the network, possibly because traders used mobile phones Mobile phones allow traders to save on time and transporta- to reduce transportation costs. tion costs because they are able to coordinate trucking and conduct their business in multiple locations or on the road (table 9.4). The phone also gives wholesalers greater access With Mobile Phones and Training, Ugandan Farmers to their customers, which helps them to build trust and a Supply Fast-Food Chain good reputation. In turn, these qualities encourage more The Nyabyumba Farmers’ Group reached an agreement transactions at less cost and risk. to supply Nandos, a multinational fast-food restaurant TABLE 9.4: Average Time and Cost Savings Occurring When Ghanaian Onion Traders Substitute Phone Communication for Travel DISTANCE FROM CENTRAL AVERAGE COST OF 5-MIN AVERAGE COST SAVINGS AVERAGE TIME LOCATION ACCRA (KM) TALK (US$) (US$)a SAVINGS (H)b Adenta 16 0.20 0.08 2 Prampram 50 0.80 1.66 3 Kumasi 289 0.80 11.66 9 Tamale 654 0.80 13.50 21 Bawku 899 0.80 22.00 30 Source: Overa 2006, as adapted from Table 5.2 in Segbefia 2000; Overa field data 2003. a Cost of a 5-minute telephone call from a communication center, subtracted from the average cost of transportation. b Includes average time spent waiting for minibus and traveling to Central Accra and back. IC T IN A GR IC ULTUR E S E C T I O N 3 — AC C E SSING MARKE T S AND VA LU E C H A INS 221 in Kampala, with graded ware potatoes3 at a fixed price IMAGE 9.3: Inventories of Karaya Gum Mapped throughout the year. Supplying these outlets offered farm- and Displayed Through a Mobile Phone ers higher incomes and more stable demand but required Application farmers to make significant improvements in product qual- ity, quantity, and business management (Kaganzi et al. 2008). To meet these conditions and engage with this higher-value market over the long term, farmers needed to become more organized and strengthen their partnerships with service providers. A purchase agreement specified the following conditions: Nandos would receive 50 bags of 100 kilograms each every two weeks throughout the year; potatoes would not be washed; bags would contain only one variety; each potato would be approximately 80 grams, oval, with few eyes; and a fixed price of US$ 170 per ton would be offered throughout the year, payable by check on the 15th of each month after delivery. The key challenges were to ensure that farmers could consistently produce potatoes to these standards and com- Source: Annerose 2010. municate directly with their client. Farmers’ lack of grading knowledge and initial inability to produce potatoes that met Nandos’ quality standards caused 80 percent of their produc- tion to be rejected. Training reduced the rejection level to gum producers have a contract to supply local exporters, but less than 10 percent in less than a year. exporters claim that they do not know how much stock is available and so cannot carry enough cash to pay farmers To ensure direct communication, the chairman of the at the sale point. Producers often are obliged to sell to local Nyabyumba Farmers’ Group purchased a mobile phone to middlemen instead at a lower price. maintain regular contact with Nandos as well as other mem- bers of the cooperative. The phone facilitated collection, Manobi reports that its new mobile phone application delivery, and the fine-tuning of harvesting and dispatch to gives gum growers a dedicated system for recording their match demand in Kampala. inventory, which is displayed on the exporter’s mobile on a map (image 9.3). Exporters can optimize their collection logistics, more accurately estimate cash requirements, Mobile Maps Optimize Logistics for Senegalese and save money on transport. Gum growers sell at higher Producers and Exporters prices directly to exporters and are paid cash on deliv- Manobi (http://www.manobi.net/worldwide/), a private ICT ery. Manobi claims that as a result gum producers have provider in West Africa, has developed a number of applica- increased their sales income by 40–50 percent (Annerose tions to facilitate agricultural marketing. For example, Karaya 2010). 3 Ware potatoes are potatoes grown for human consumption rather than for planting. E C O N O M IC AND S E CT OR WORK 222 MOD ULE 9 — STR ENGTH ENING A GR ICULTUR A L M A R K ETING W ITH IC T Topi c Note 9.3: ICTS FACILITATE MARKET RESEARCH TRENDS AND ISSUES Examples of these decisions include the choice of product to Multiple and complex dynamics operate around market produce, the choice of marketing channel to use, and other demand. Consumer demand changes constantly. Demand strategic decisions aimed at maximizing profits. To be made for specific products fluctuates daily and weekly; longer-term well, these kinds of decisions require an understanding of trends in consumer demand vary as well. Marketing chan- competing suppliers, buyers’ needs, product specifications, nels continuously evolve. The rate of change in consumer market trends, and other key issues for specific products. demand and marketing channels is accelerating. Ultimately, Generally these decisions also build on the aggregate knowl- the farming community will be better off if it can align pro- edge created through the acquisition of short-term market duction more closely to market changes and opportunities. information over a period of time. The key development chal- lenge lies in assembling and disseminating this information To become adept at pairing production with opportunities, in a timely manner, not just to traders or larger-scale farmers farmers and others along the value chain need to become but also to smallholders so that they can make more sensible better at acquiring market information that is immediately management decisions and increase their profitability. useful and at acquiring longer-term knowledge related to mar- kets. This topic note is organized around these two needs. Figure 9.9 shows how market information can significantly affect farming profits. Profitability is highly affected by prices, largely because any change in price has little or no effect on Market Information, Intelligence, and Knowledge costs, so the effect impacts directly on the bottom line. An Immediate market information is used largely to sell exist- inability to find buyers for products also has a profound effect ing crop and livestock products in ways that maximize their on profits. By accumulating market knowledge, however— profitability, mainly by creating a better understanding of from a combination of market information and market intelli- short-term fluctuations in pricing and demand. Most often, gence—producers gain an opportunity to identify and diversify short-term information improves price negotiation, but it can into alternative and more profitable products. also influence the timing of sales and the selection of the market. This kind of information tends to change rapidly, and The main goal of increasing access to market information its timeliness and accuracy is of great importance. is to empower farmers to take greater control of marketing their production and orienting their production to identified It is longer-term market information, referred to here as “mar- market opportunities. A deeper understanding of short- ket intelligence,� that affects farmers’ longer-term decisions. term and long-term market dynamics should, on balance, FIGURE 9.9: Farmers’ Incomes Are Highly Sensitive to Market Issues: Prices, Volume, and Enterprise Diversification 70,000 Net return Marketing costs Production costs 60,000 +64% Indicative cost (Rs) 50,000 +10% +29% 23,000 40,000 15,400 18,000 14,000 –64% 30,000 5,000 20,000 10,000 0 Base scenario 10% yield 10% price –30% sold Alternative increases increases enterprise Source: Authors. IC T IN A GR IC ULTUR E S E C T I O N 3 — AC C E SSING MARKE T S AND VA LU E C H A INS 223 FIGURE 9.10: Commercial Farmers’ Information Needs and Sources Commercial farmers require a package of information (Mobile phone/SMS) Short-term information Longer-term information (Web based) Real-time market research Alternative enterprises/options Market prices Price patterns Market supply/demand Demand trends Product specifications Accurate local weather forecasts Production blueprints Timely & specific technical advice Databases of buyers, Cost of production data suppliers, transporters Sources of inputs Source: Authors. enable farmers to become more commercially savvy and and long-term market intelligence. It also displays the likely profitable. sources of that information. In essence, the ability to conduct market research—to gather In the day-to-day marketing of their products, farmers are both short- and longer-term information—will increasingly mainly at a considerable disadvantage. Their market informa- become part of the mix of farming skills. In most situations, tion will come from a neighboring farmer who may have visited market information is fragmented, anecdotal, outdated, a market on the previous day. A trader’s core skill is to read the inconsistent, and incomplete, although the situation differs market, assess supply and demand, and compute how these by product. For example, markets for staple cereals, which factors might affect price. Increasingly traders will triangulate are often subject to price controls, move relatively slowly. their information with information from others. Given the oppor- Information about these markets is more widely known. tunity, traders will exploit farmers’ relative ignorance to buy low However, for products that are more perishable or for which and, ideally, sell high. The power balance in these negotiations consumer demand is shifting, the market situation is far is altogether different when the trader senses that that the more opaque. farmer-interlocutor also appreciates the real market situation and can access different markets, buyers, and outlets. The primary role of government in promoting the acquisi- tion of immediate information through ICTs is to focus on Field observations show that traders use their mobile phones the overarching importance of maximizing mobile phone extensively for finding information (such as local and more coverage while improving access to the technology for the distant prices and product availability), negotiating prices, and rural poor. An equally important role for government is to conducting entire transactions on the phone. These observa- support producers in using the technology to become more tions increasingly are supported by empirical evidence; fig- commercially astute and better attuned to changing markets ures 9.11 and 9.12 present examples from Kenya and Ghana. for agricultural products. The overall aim is to strengthen farmers’ position in their day-to-day trading and, over time, Research on negotiation approaches indicates that it is enable them to focus production on satisfying consumers’ important to obtain as much information as possible prior to and buyers’ demands and to develop skills in market servic- a negotiation. This information should include the trading pat- ing (the capacity to develop relationships with stakeholders terns, goals, and preferences of those that one is negotiat- in the next stage of the value chain). ing with. Groups provided with more information in advance achieved more effective and efficient outcomes as well as higher levels of satisfaction with the negotiation. These find- Producers’ Market Information Needs and Research ings reaffirm the findings from the Philippines discussed ear- Strategies lier in this module, where farmers reported feeling increased Figure 9.10 provides a sense of the package of information trust in their trading partners after farmers had gained access that farmers need with respect to immediate information to mobile phones. E C O N O M IC AND S E CT OR WORK 224 MOD ULE 9 — STR ENGTH ENING A GR ICULTUR A L M A R K ETING W ITH IC T FIGURE 9.11: Traders’ Perceived Benefits of Using Mobile Phones, Kenya 160 Number of observations 140 120 100 80 60 40 20 0 ut ets ea t ere S ing e t /vol e t /inp rk h l th SM rad ark lity ark ce ma oc e & t m i t m ro an tdu er st rav all to al tan ab nt c g oc ail p ist ok ne llin l dis ty of v nd /br tha ho ve myu r/ta i i es er p tra in np the bil de ri ath ing ut es e/i n o vaila tra dia er us tho ric uc si a to er me on rs wi np pro d ce n le int h ne s no pri oo Ab np art pri ce tio on on inf for so gp w a on on Ge t cy ce in ne orm ati ati en pri rad te inf rm rm nd te pt tia t fo fo dt e tia wu go Ge t in t in ce go llo ne Ge Ge du Ne Fo Re Re Source: Okello 2010. FIGURE 9.12: Traders’ Perception of the Benefits of Using Mobile Phones, Ghana Renegotiate new prices without travelling trading Followup trading partners using phone call & SMS Negotiate prices on phone rather than travel Accra Norhern Reduce tendency for intermediaries to cheat Able to trade in distant markets Get info on availability of produce/input Get information on prices in other/distant market Get information on produce/input availability/vol Get information on prices in my local market 0 2 4 6 8 10 12 14 16 18 Percentage of traders who gave response Source: Egyir, Al-Hassan, and Abakah 2010. Research on tomato farmers’ negotiations with rural trad- three to five years (Minten, Reardon, and Chen n.d.). About ers in Ethiopia showed that on average farmers’ initial ask- 70 percent of rice growers and 30 percent of potato growers ing price was about three times higher than the final price contact multiple traders by phone to explore selling opportuni- they obtained from buyers (Jaleta and Gardebroek 2007). ties and prices, and about 60 percent will agree on the details Yet when farmers had market price information—typically of the trading deal over the phone. These findings explain obtained by a mobile phone call to acquaintances close to and lend further weight to the findings presented earlier the central market—the difference between their initial ask- (for example, from Morocco, Malaysia, and the Philippines) ing price and the final price was reduced by 16.5 percent. In on how the use of phones appears to increase farmers’ other words, market information increased farmers’ bargain- incomes and profits. An example from Georgia (box 9.3) ing power by one-sixth. provides additional evidence. Still other evidence indicates that farmers increasingly use One of the most famous studies of the impact of mobile mobile phones for real-time market research. In Bangladesh, phones was carried out by Jensen (2007), who tracked impacts for example, about 80 percent of farmers now have mobile on the fisheries subsector as mobile phone coverage was phones; of these, two-thirds have owned mobile phones for extended along the coast of Kerala, South India (see Module 3 IC T IN A GR IC ULTUR E S E C T I O N 3 — AC C E SSING MARKE T S AND VA LU E C H A INS 225 BOX 9.3: Winter Salad Grower in Georgia Improves His FIGURE 9.13: How Farmers Use Market Information Negotiating Position with Itinerant Traders by to Improve Prices and Profits Mobile Phone Improved Reduced market strength in information Georgia has traditionally been the major supplier of win- negogiation asymmetry ter greens to Russia, primarily to the Moscow whole- sale market. The salad crops are purchased directly at Modify date of Greatest benefits the farm gate by a 5-ton trucker/trader, who delivers the marketing/sales with higher-value, bundled leaves to the Moscow wholesale market. To storable products negotiate from a position of strength, the farmer would phone a colleague in the Moscow market to establish Switch to Mobility and alternative access to wholesale prices and make some estimates of sup- markets options ply. From experience, the farmer had good estimates Source: Authors. of transport costs from Georgia to Moscow and of the typical margin the trader achieves. Using these figures, the farmer arrived at a sensible estimate of the price he markets. Producers also use market information to decide was likely to receive, and he used this information as when to harvest produce or, if possible, where to store it the basis of his opening offer. until they can sell it at higher prices. Source: Authors. The enlightened debate among practitioners centers on the relevance of the public sector’s role in market information services compared with that of the private sector, and on for details). The results were dramatic. Because farmers could whether the best way forward is a partnership between identify the best markets for selling their catch, price volatil- the two sectors. Some take the view that if telephone infra- ity was reduced, wastage was significantly lower, fishermen structure is provided, stakeholders will find a way to use the achieved higher average prices, and consumer prices fell. technology for gathering the price and market information that they need. The marketing of caught fish differs from the marketing of most agricultural products, however. Fish typically swim in How is this debate playing out? The public sector in differ- shoals, making for a “feast or famine� supply, whereas con- ent countries has invested in its own market information sumer demand is relatively stable. Fishermen, unlike most systems. As explained in the overview, this role consists farmers, have their own transport, but they may not have of three functions: (1) enumeration (collecting price data); information about where it is best for them to transport their (2) data analysis; and (3) dissemination. Their performance fish for sale. By using their mobile phones, they can seek has generally been poor over the last decade. out nearby undersupplied beach auctions and deliver their Government employees have few incentives to attend fish directly to markets where supply is low and prices cor- wholesale markets out of normal office hours to collect respondingly high. real-time data. Analysis of price data sets frequently reveals disturbing gaps or suspicious similarities in prices from day to day. Field surveys often reveal little confidence in the ACCESSING IMMEDIATE MARKET INFORMATION: information by farmers and traders. The information is rarely LESSONS LEARNED used except to give a general sense of the broad changes in Short-term (immediate) market information refers to the product prices, and often it arrives so late that it services only constant (daily or weekly) changing picture of supply and for retrospective analysis by academics. In addition, govern- demand requirements or a product in terms of quality, taste, ment market information has been mainly posted on Internet grading, delivery, size, color, and alternative market oppor- sites to which small-scale farmers have almost no access tunities. Figure 9.13 sets out the three ways that producers (box 9.4). are likely to use this information. As shown in the previous discussion, farmers in Georgia used market information to Even if farmers can obtain the information from the Internet, the strengthen their negotiating position, whereas in Kerala information is of limited use for changing the balance of power fishermen used market information to switch to alternative in negotiations between farmers and traders. Despite these E C O N O M IC AND S E CT OR WORK 226 MOD ULE 9 — STR ENGTH ENING A GR ICULTUR A L M A R K ETING W ITH IC T BOX 9.4: Government-Provided Information on Market The private companies that have emerged more recently Prices: A South Asian Example (typically in the last four to eight years) to deliver market information take a pro-active approach to understanding A South Asian government took the view that the exis- potential customers’ information needs, and they build feed- tence and dissemination of complete and accurate mar- back loops to learn how their services can be better attuned keting information was the key to achieving both opera- to demand and more responsive to complaints. They use tional and pricing efficiency. Not only did farmers need their own enumerators, whose employment depends on the agricultural market information to plan production and accuracy of their price reporting. Generally their customers— marketing, but market participants needed the informa- mostly younger, more literate, and larger-scale farmers— tion to arrive at optimal trading decisions. have reacted positively. In the service operated by Reuters The government’s market information system was Market Light, evidence indicates that the information is fur- established in 2000 as an Internet portal with the aim ther distributed by recipients to 5–12 others. In this process, of providing easy access to daily prices and arrivals by the status of the primary recipient is elevated in their rural commodity. The operating budget is some US$ 900,000 community. As emphasized in the overview, the early lesson per year (which does not include enumerators’ salaries is that it is not at all easy to manage and operate financially but does cover the US$ 11 monthly bonus if 20 daily viable businesses selling information to farmers. reports are submitted). The system reports on 1,700 A third (and seemingly the most effective) option for provid- markets. The Internet site receives some 1.75 million ing market information is some kind of public-private partner- hits per year at a public cost of US$ 0.5 each. ship. Partnership with the private sector helps to overcome The users are not farmers. They are graduates in the some of the public sector’s challenges in gathering and dis- 35–44 age group, who are mainly academics or work for seminating accurate market data. Under outsourcing arrange- agriculture-based companies. It is claimed that outreach ments, for example, governments may purchase SMS-based to farmers has not happened because of inadequate agricultural information for extension agents to distribute or infrastructure (computers and networking), coupled for direct distribution to farmers. with a lack of manpower and trained personnel in rural areas. Though still useful for broader economic growth, Another option is for the government line department to take the ICT scheme has not yet reached those targeted in responsibility for disseminating information itself. To do so, the outset of the intervention. the department must build its own producer database, includ- Source: Authors. ing information on producers’ locations, key enterprises, farm sizes, and so forth, and negotiate with mobile phone companies to obtain SMS prices that more accurately reflect the actual cost of sending SMS messages. The government challenges, there is major potential for government-provided covers the costs of this service as well as the costs of run- ICT services to improve as resources become available, infra- ning an incentivized market price reporting service by selling structure expands, and technological learning becomes more the SMS service to others—input suppliers, banks, and other widespread. (See Module 13, where key lessons in building companies—who wish to target messages/information to more effective IT-driven public services are discussed). In the the farming community. Using the platform created to gener- future, smartphones might make Internet-based dissemination ate income by selling targeted messaging is a role that can more effective, especially for interventions that seek to expand be outsourced. If and how this sort of arrangement will play market intelligence (see the innovative practice summaries). out in practice remains to be seen. As discussed in the overview, however, open-source software that can be downloaded onto a laptop computer to send targeted SMS messages to a database of mobile phone owners may have ACCESSING MARKET INTELLIGENCE: a far greater impact. This technology offers the prospect of deliv- LESSONS LEARNED ering market price information directly to farmers’ mobile phones Aside from increasing their profits and competitiveness and thus empowering farmers to understand the value of their through immediately useful information related to prices, products and immediately firm up their negotiation positions. If markets, and logistics, farmers require information about governments do venture into this territory, a key issue will be the market changes that may influence their production and mar- unit price of each SMS message (as discussed in the overview). keting choices over the longer term. The purpose of market IC T IN A GR IC ULTUR E S E C T I O N 3 — AC C E SSING MARKE T S AND VA LU E C H A INS 227 FIGURE 9.14: Aggregate Consumer Demand by Agricultural Product from 2005 to 2020 at a 5.5% Yearly Growth in GDP, India (Rs Billion) 2500 2005 2010 2 % 2000 2. 2015 2020 % 1500 4.9 % 6.3 1000 % 3.5 % 3.5 500 % % % 3.2 6.5 % 3.6 3.8 % % 4.6% 5.6 6.5% 5.1 5% 0 ls ilk ts ls try t gs sh r es es ts es ks ea gu ea oi uc ui M in Eg Fi ls bl ic ul m Fr d le Pu sp dr er od ta Po an ed ib ge C pr & d Ed R r an Ve od ga ilk fo M lt Su Sa ed CAGR % ss ce o Pr Source: CESS 2007. Note: CAGR = compound average growth rate. FIGURE 9.15: Projected Consumer Expenditures in in consumer expenditure on food over the longer term in India from 2005 to 2020 and Additional India. They are based on a combination of income elasticities Farm-Gate Income (Rs Billion) for various food categories, the impact of urbanization, popu- lation increases, and a projected annual growth rate of 5.5 Key Consumer Spending 2005 percent in GDP. Per capita cereal consumption is projected 204 Consumer Spending 2020 Additional farm-gate income to be flat, and growth in demand for cereals is forecast to CAGR % 292 % be broadly in line with population growth. Strong growth in 2.2 140 consumption is expected for animal proteins (surpassing 5 percent), processed products (over 6 percent for milk % 5.0 94 4.3 % and other processed foods and beverages), and high-value % crops (over 4 percent). Demand for fish is projected to grow 116 3.4 .2% 31 at more than 5 percent. Given that about half of India’s fish 5 6.3 % is sourced from the sea, meeting this demand will require fish supplies from freshwater sources such as lakes, rivers, Milk & Meat, fish, Cereal Field crops: High-value Processed ponds, and fish farms to grow by about 10 percent per year. milk eggs Pulses, crops: Fruit, foods & In business language, freshwater fish demand constitutes a products oils, sugar vegetables, drinks spices “booming market.� The single agricultural subsector that will Source: CESS 2007. deliver the greatest increase in farm-gate income is milk. Note: CAGR = compound average growth rate. Patterns of consumption will change elsewhere as well. Huge intelligence is to improve farmers’ understanding of changes increases in Africa’s urban population (approximately 4.3 per- in agricultural marketing and demand so that they can adjust cent per annum) over the next decade will place strong addi- their plans and production more closely to changing circum- tional demands on agriculture to supply a different mix of prod- stances and generate the highest value. ucts. Changes in marketing systems will occur at the same time. Agribusiness will increasingly look to source raw material Figures 9.14 and 9.15 illustrate why it is vital to understand directly from producers. New, alternative marketing channels the implications of changing patterns in consumer demand for are emerging in many countries to deliver higher-quality prod- agricultural products. The figures show projected increases ucts to supermarkets, hotels, exporters, and other buyers. E C O N O M IC AND S E CT OR WORK 228 MOD ULE 9 — STR ENGTH ENING A GR ICULTUR A L M A R K ETING W ITH IC T To facilitate diversification, farming communities are thought and discover market opportunities for themselves. to require product-based information, which typically includes: Because the information is relatively slow to change,  A general overview of the market. What is the is required only occasionally, and mostly needs to be market’s size, value, and growth rate? What are the downloaded and printed for later reflection, it can be divisions between sectors? Who are the competing conveniently housed on an Internet site. suppliers?  Market information on prices, supplies, and  Product specifications. What are the prevailing grad- demand can positively affect prices paid to farmers, ing and packing standards and consumer and market but only if it is done well. Farmers need a package preferences (taste, color, size, season)? of information that changes as their priorities change  Marketing issues. What are the typical prices and sea- throughout the agricultural season. This information sonal price patterns, quality premiums, and marketing package can encompass weather forecasts, techni- channels? What is the prognosis on future prices and cal advice, market prices, pest and disease alerts, and changes occurring in the supply chains for the market? messages about schemes and support from the appro- priate line departments. Market information on its own  Key contacts. What are the names, addresses, and is not enough to make farmers both more productive telephone numbers for key contacts, particularly buy- and more profitable, however. An integrated approach ers, agribusinesses, and traders but also specialist to information generation and delivery is required. input suppliers and transport operators?  Both the private sector and government are hav- Development practitioners often underappreciate the value ing difficulty in delivering ICT-based information of names and addresses. Publishers in the agricultural sector in a sustainable, effective way. One approach is to understand the value that stakeholders place on contact data- outsource the supply of agricultural and market infor- bases, as they can be the key information required to open a mation to the private sector. This approach would help new market opportunity, enable producers to deliver product to underwrite their finance, enable them to use the a step further up the supply chain, or discover an alternative financial security to build a platform for a range of value- way of doing things. Field experience has repeatedly shown added services, and enable them to look for alternative that larger-scale traders and agribusinesses are interested in income sources from other private companies deliver- making more direct purchases in the field, provided produc- ing products and services to the farming community. ers can collectively aggregate a critical mass of product.  An alternative arrangement is a public-private partnership, in which the public sector plays a Information that can be categorized as “market intelligence� dominant role. New open-source technology is mak- changes slowly and is used occasionally (rather than every day). ing it possible for government institutions to provide It is most naturally housed on a website from which individual far more targeted information, primarily by sending farmers, farmer organizations, traders, and extension person- local-language SMS messages or voice messages nel can download and print it out for reference. The information directly to farmers’ phones and by allowing feedback is generally considered to be a public good (and thus unlikely to from the field. The technology helps overcome the be delivered on a financially sustainable basis). For this reason, major criticism that government information systems the information is mostly funded publicly, although the prepara- do not reach their clients. Open-source systems can tion of market intelligence is often outsourced. become the foundation of an ICT-mediated extension service that alerts clients to pest and disease prob- lems, other information vital for production, and oppor- PRINCIPLES AND GUIDELINES FOR POTENTIAL tunities to participate in new government schemes. INTERVENTIONS The potential for generating income to cover operating Based on the accumulating evidence, experience, and les- costs would be significantly increased if the govern- sons learned, a number of principles and guidelines are ment would use its resources to build an accurate important to consider in developing market intelligence: and useful database of its farming clients, with their  Market intelligence is one of the building blocks mobile phone numbers and farming characteristics, for stronger knowledge of the changing market for and leverage a very substantial reduction in the cost agricultural products. The provision of market intel- of SMS messages (see the next point). The extension ligence is primarily seen as a public-sector activity that service will have the very real possibility of selling should enable more disadvantaged farmers to explore SMS broadcasting services to clients supporting the IC T IN A GR IC ULTUR E S E C T I O N 3 — AC C E SSING MARKE T S AND VA LU E C H A INS 229 farming sector, such as banking institutions (to send affected (or are anticipated to affect) farmers’ profits. The messages, technical and price information, and loan delivery methods vary considerably, ranging from immediate repayment reminders to borrowers) or input suppliers access through SMS and radio to the physical circulation of (to promote products, remind farmers to buy inputs, information sent via SMS to extension agents. and respond to pest, disease, and plant/animal nutri- tion issues). Sales of such services, along with the col- Better Incomes for Farmers with Better Market lection of price data, may best be done by the private Information in Madhya Pradesh sector or suitably incentivized individuals. Goyal (2008) compared farmer prices in the regulated market  Lower the cost of SMS. Clearly there are important (mandi) for soybeans in two areas of Madhya Pradesh. In some opportunities for enhancing the range, scale, and areas, 1,600 Internet kiosks (e-Choupals) (http://www.itcportal impact of information dissemination by working with .com/sustainability/lets-put-india-first/home.aspx) operated by the regulator to reduce prices for bulk messaging to ITC disseminated price information, whereas the other areas producers. Development institutions need to be able relied only on the mandi for such information (figure 9.16). to benchmark costs to strengthen negotiations when proposing the development of public good, SMS- Goyal found that farmers obtained better prices when they based information services. had access to a wider range of market information. Farmers’  Invest in farmer education and extension training. price increases ranged from 1 percent to 5 percent, with an Helping smallholders to understand needs for grading, average of 1.6 percent. The additional farm income from soy- organization, coordination, and market opportunities beans in Madhya Pradesh was estimated at about US$ 10–20 is critical to success. Marketing education, especially million per year. This income was almost certainly a transfer experiential marketing training, can be an important from traders to producers as a result of producers’ greater element in leveraging the benefits that ICT can bring market knowledge and improved strength in negotiation. to farmers’ prices and returns. In India, Reuters Provides SMS-Based Market INNOVATIVE PRACTICE SUMMARY Information to Farmers Evidence of the Impact of Immediate Market In 2007, Thompson Reuters introduced the Reuters Market Information in Asia and Africa Light (RML) service in India, a mobile information service The summaries that follow describe how various strate- sending customized message to farmers in their local lan- gies for disseminating short-term market information have guage (for details, see Module 3. A survey of the 243 farmers FIGURE 9.16: Prices Paid to Soybean Farmers in Areas with and without Market Information from e-Choupals (Internet Kiosks) Broad Trends in Mode Price of Soybean Across Districts of the State 1,800 1,600 Price in rupees/quintal Farmers’ soybean prices in e-Choupal 1,400 traditional markets with and without areas 1,200 e-Choupals, Madhya Pradesh 1,000 800 600 No Location of 400 e-Choupal e-Choupal 200 0 1998q2 1998q3 1998q4 1999q1 1999q2 1999q3 1999q4 2000q1 2000q2 2000q3 2000q4 2001q1 2001q2 2001q3 2001q4 2002q1 2002q2 2002q3 2002q4 2003q1 2003q2 2003q3 2003q4 2004q1 2004q2 2004q3 2004q4 2005q1 2005q2 2005q3 Locations of regulated markets (mandis) Quarter 0 90 270 Mandi 45 180 360 Hub Program districts Non-program districts Source: Goyal 2008. E C O N O M IC AND S E CT OR WORK 230 MOD ULE 9 — STR ENGTH ENING A GR ICULTUR A L M A R K ETING W ITH IC T that received the Reuters Market Light package (onion, wheat, officers will be specifically tasked with disseminating the infor- pomegranate, soybean, and tomato farmers) found that around mation to smaller-scale and more disadvantaged farmers. 60 percent believed that they obtained improved prices and often changed the time and location of sales. The information The annual cost of the SMS program will be about US$ was passed on to 5–12 others. 500,000. Annual crop sales in wholesale markets in the state are valued at about US$ 8 billion per year. If the SMS The analysis did not demonstrate any overall impact on prices market information service for 20,000 extension officers in paid to farmers. This finding needs to be seen in context, Maharashtra has an effect similar to that of the 1,600 Internet however. Produce prices are rising rapidly in Maharashtra, kiosks in Madhya Pradesh (where the e-Choupal scheme and the vast majority of produce is sold by public auction, raised prices paid to farmers by 1.6 percent), it could gener- where knowledge of earlier prices has little or no impact ate an increase in farm-gate income of some US$ 120 million. on the price that farmers receive. The research was carried out only for one year when this new information technology Radio Raises Farmers’ Maize Prices in Uganda was provided to a number of randomly selected farmers, but farmers will need time to learn to exploit this marketing tool. Svensson and Yanagizawa (2009) assessed how prices paid to farmers were influenced by market information collected The data did show that RML users were able to achieve 8–9 by the Market Information Service Project and disseminated percent increase in prices for the relatively small volume of through local FM radio. The information was broadcast produce sold directly to visiting traders, and that the service through daily bulletins of 2–4 minutes and a longer weekly appeared to have a greater effect on younger users, who may program that provided district market prices. be on the front end of a learning curve. Younger users tended to receive higher prices (6 percent) than nonusers of the same Having access to a radio was associated with a 15 percent age and to increase the proportion of produce that was graded. higher farm-gate price. Where market information was not disseminated through the radio, there was no effect. The results suggest that reducing the information asymmetries Government Program to Equip Extension Workers with between farmers and other intermediaries increased farm- Timely Agricultural Information and Improve Farm-Gate ers’ bargaining power. Prices in Maharashtra The annual cost for an extension officer to operate in India is Market Price and Supply Information for Farmers around US$ 5,000–7,000 per year. These officers are generally in Senegal isolated. They are rarely trained or provided with up-to-date tech- nical data and market information to disseminate to farmers. Manobi’s Time2Market (T2M) application provides real-time information on prices and arrival status of products in mar- Under a new Agricultural Competitiveness Project to improve kets (Annerose 2010). Manobi independently collects the the market orientation of production, 20,000 extension offi- information, which it uploads onto a central database using cers (plus other farmer decision influencers) who own mobile mobile phones that dial in to the server via WAP (wireless phones will receive annual subscriptions to SMS-based infor- application protocol, which is specifically designed for hand- mation services.4 The services (in the local language) will be held wireless devices to browse Internet content). It offers tailored to suit local agricultural specialization and consist of access to the data for producers, exporters, and public agen- technical information, local weather forecasts, price informa- cies through the web, WAP, SMS, and voice. tion, overviews of the market, and information related to the competitiveness project, such as training opportunities, Farmers can check prices before they set off to sell their government agricultural schemes, and so on. produce and discover where they are likely to find the best offers. Farmers have secured, on average, about 15 percent The cost will be around US$ 10–15 per year (constituting about higher profits after having paid net costs, including the price 0.2 percent of the operating cost for an extension officer). Each of Manobi’s service. officer will receive around 1,000 messages per year. Extension 4 Information in this section is based on the Project Appraisal Doc- Esoko Develops a B2B Market Information Exchange ument for the Maharashtra Agricultural Competitiveness Project to Increase Market Efficiencies in Ghana (http://web.worldbank.org/external/projects/main?Projectid=P12 0836&theSitePK=40941&piPK=73230&pagePK=64283627&me Esoko’s (http://www.esoko.com/) business model is to become nuPK=228424). a market information exchange that aggregates and delivers IC T IN A GR IC ULTUR E S E C T I O N 3 — AC C E SSING MARKE T S AND VA LU E C H A INS 231 market information and intelligence.5 The idea driving the model percent improvement in revenue. Sixty-eight percent of farm- is that most businesses in the agricultural value chain collect and ers said that they would pay for the service; every farmer who deliver their own data; Esoko will provide tools and a platform received information would forward it to a further 10 farmers. and co-opt businesses to generate content for the platform. (For additional details on Esoko, see IPS in Module 3.) Esoko pays on an incentive basis to acquire information, using targets and bonuses. Their revenue-generation model INNOVATIVE PRACTICE SUMMARY is based on levels of subscriptions (bronze, silver, gold, plati- Web Portals Offer the Big Picture on Markets num), each with a different pricing structure and its own mix in Africa, Europe, and Asia of content and tools. The summaries that follow describe web portals that offer The impact of this information on traders, exporters, trans- market intelligence in three quite different settings: South porters, procurers, and others in the agricultural value chain Africa, Moldova, and India. The information spans a wide is still to be determined. The service is believed to have range, including long-term price trends, quality standards, the potential to reduce inefficiencies in the value chain. For options for marketing export crops, market advice specifically example, an exporter took 60 days and needed 5 people in developed for smallholders, and overviews of value chains the value chain to procure a natural plant product, but with for individual products. This kind of information can shorten Esoko’s technology, the procurement process required 31 the time that producers need to acquire a sound knowledge days and 3 people, improving both the major traders’ and base to develop production and marketing strategies. producers’ share of the export price. Market Intelligence from Price to Advice in South Africa Esoko offers options for farmers as well. Anyone with a Market intelligence is included as part of a marketing extension mobile phone can request data for the cost of an SMS, with- program developed by FAO and the Republic of South Africa. out a subscription. For a subscription of US$ 1 per month, Overviews of the markets for different products are posted on farmers can automatically receive information on commodi- the program’s website. They are downloaded by farmers as well ties, markets, and other topics of interest. as extension officers providing marketing extension training, particularly to South Africa’s emerging cadre of black farmers. In developing a model for selling information to farmers, Esoko encountered a few challenges. Farmers are widely dispersed The reports cover horticultural crops, livestock, dairy, wool in the field and hard to reach. It is also difficult to quantify the and mohair, and broilers and eggs, and aside from the infor- exact value that the service generates for farmers. Free field mation on markets, they include price histories, grading stan- trials for farmers elicited self-reported evidence of a 20–40 dards (fat codes for beef animals, for example), and advice 5 Information in this case study is based on personal communica- on market options for smaller-scale farmers. Figures 9.17 tion with Esoko staff. and 9.18 reproduce examples of marketing information for FIGURE 9.17: Vegetable Marketing Channels, Republic of South Africa Farmers 13% Packhouses Processors 1% 22% 54% National produce Export Wholesalers 3% Wholesalers markets 25% 10% Bakkie operators 33% 18% 1% Supermarkets Retail shops Hawkers Asian markets franchises Consumers Source: Ministry of Agriculture, The South Africa Horticulture Market 2000. Note: A “bakkie� is a pickup truck. E C O N O M IC AND S E CT OR WORK 232 MOD ULE 9 — STR ENGTH ENING A GR ICULTUR A L M A R K ETING W ITH IC T FIGURE 9.18: Average Tomato Sales for Three Fresh national extension service website. Export Moldova provides Produce Markets, South Africa a portfolio of important information to traders and produc- 11,000 1,750 ers to facilitate their access to export markets. The informa- Johannesburg 10,000 1,650 tion covers 13 products and drills down to detailed market 9,000 1,550 information on export markets, varieties, packaging, and Riton Tons 8,000 1,450 postharvest handling and processes, as well as EU quality 7,000 1,350 6,000 1,250 standards, the standards endorsed by Global G.A.P., and 5,000 1,150 similar information.6 J F M A M J J A S O N D Months 2,200 2,200 Cape Town 2,000 Detailed Market Price Projections from India’s AGMARK 2,050 1,800 Service Riton 1,900 Tons 1,500 1,750 In India, under the World Bank-funded National Agricultural 1,400 1,600 1,200 Innovation Project (NAIP), a consortium headed by the Tamil 1,450 1,000 Nadu Agricultural University has developed a largely web- J F M A M J J A S O N D Months based market intelligence service (although SMS and print 2,600 1,600 media are also used). The service, AGMARK (http://www Durban 2,400 1,500 .tnagmark.tn.nic.in), carries out a number of functions aimed 2,200 1,400 at improving farmers’ prices and their understanding of the Riton Tons 2,000 1,300 bigger marketing picture for selected products. 1,800 1,200 1,600 1,100 1,400 1,000 Like the Moldova portal, the NAIP portal offers information J F M A M J J A S O N D Months on grading standards, export processes, and postharvest technology, but its innovative element is a projection of Quantity Price Source: NDAA 2000. future prices based on rigorous surveys of the trade, interna- tional information, and an understanding of Indian and global production data (figure 9.19). With this information, the ser- horticultural crops and fresh produce in South Africa (http:// vice generates future price estimates to enable growers to www.nda.agric.za/docs/GenPub/marketEx.htm). improve their decisions to sell or store products. As an adjunct to this information, the Department of Agriculture website (http://www.daff.gov.za/) lists over 40 FIGURE 9.19: India’s Farmers See the Bigger Picture: value chains, providing an overview of the market for a range AGMARK’s Market Price Projections of products, including field crops, livestock, and horticultural products. The Agrimark website (http://www.agrimark.co.za/ about_frame.htm) posts weekly reports on key commodities such as sugar, maize, and livestock, which build up a picture of the market for these products over the medium term. This is a good example of how government can provide a comprehensive market intelligence service aimed at build- ing farmers’ understanding of the market. Interestingly the main criticism of the information has been the urgent need to update it, especially the contact details of key organizations. “Export Moldova� Portfolio Provides Detailed Export Market Assistance Another example of ICT used to provide market intel- Source: Tamil Nadu Agricultural University. ligence comes from Moldova, where the USAID/CNFA website, “Export Moldova� (http://www.acsa.md/category .php?l=ro&idc=178), has been incorporated into the larger 6 CNFA is the Citizens Network for Foreign Affairs. IC T IN A GR IC ULTUR E S E C T I O N 3 — AC C E SSING MARKE T S AND VA LU E C H A INS 233 Topic No te 9.4: ICTS FACILITATE ACCESS TO AND DELIVERY OF INPUTS TRENDS AND ISSUES Robinson (2009) argue that a tendency to procrastinate may Farmers’ yields deviate from potential yields for a variety explain why so few African farmers use fertilizer, despite of reasons: poor climate or weather may play a part, along knowing that it raises yields and profits. Only 9 percent with other factors such as socioeconomic status, physical of farmers interviewed believed that fertilizer would not infrastructure, institutional and government policies, or poor increase their profits, yet only 29 percent had used any fer- access to farming technology or finance. The benefits of nar- tilizer in either of the two preceding seasons. When asked rowing the yield gap include increased productivity and prof- why, almost four-fifths of the respondents said that they did its. These issues—covered elsewhere in this sourcebook— not have enough money to buy fertilizer, although fertilizer remain a central challenge in improving farming efficiency. was readily available, and even poor farmers earned enough Why don’t farmers use inputs and intensify their production to buy fertilizer for a portion of their fields. Better intentions more? The response to this question often is limited to farm- made little difference. Virtually all farmers said they planned ers’ lack of knowledge about technology, its affordability, and to use fertilizer the following season, but only 37 percent farmers’ access to working capital. actually did so. Yet farmers may also lack information on how to get inputs. Duflo and colleagues contend that the reason for this gap Farmers can be unsure when inputs are available, particu- between thought and action is that many farmers are biased larly when the government distributes subsidized inputs. toward the present and procrastinate repeatedly. Right after Farmers’ buying habits may also be suboptimal; a little the harvest, when farmers are cash-rich, most can afford to “nudging� at the right time could help them purchase inputs buy fertilizer. But they don’t. They postpone the purchase, at the correct time. This note examines how much of the believing they will make it later. It seems that a small dis- yield gap is related to problems in accessing inputs and how count, and little “nudging,� could improve the intensity of ICT can be used to facilitate access. To date, research on this input use. subject has been limited; it might be important to prioritize The question is whether ICT, with targeted messages, could for further research. be effective for helping farmers to become more rational and better-organized buyers of inputs. In other circumstances, ICTS AND IMPROVED ACCESS TO INPUTS: having access to such information through ICT seems to pro- LESSONS LEARNED vide clear benefits (table 9.5):  In India, farmers with access to ICT services reported Farmers’ need accurate information on agricultural techniques, 10–40 percent yield increases, primarily through gain- including input use, and they also need to source good-quality ing better access to hybrid seed and being encour- inputs in a timely way for production. In a study of mobile aged to introduce new farming practices (Vodafone phone use in India, six of the focus groups interviewed high- India 2009). All farmers claimed that their mobile lighted difficulties in sourcing inputs such as fertilizer, seed, phones had led to increased yields, with some also cit- and agrochemicals for plant protection. They highlighted this ing price and revenue improvement. These increases problem twice as frequently as the next key problem, which are a result of better information flows through the was their lack of irrigation. Several groups noted that they use of mobile phones and other ICT services such as lacked information for distinguishing genuine products from the e-Choupal. the counterfeits flooding the market, which remain a signifi- cant productivity drain. Their concern over accessing inputs  A national survey of Indian farmers found that only was echoed in surveys of how Indian farmers used their 40 percent of farm households accessed information mobile phones. The search for inputs—particularly seed, fertil- about modern agricultural techniques and inputs.7 The izer, and plant protection chemicals—was listed high among farmers’ reasons for using mobile phones. 7 Situation assessment survey of farmers conducted by the Even if they know where to buy inputs, farmers do not or National Sample Survey Organization (June 2005), Government cannot always buy them at the right time. Duflo, Kremer, and of India, quoted in Mittal, Gandhi, and Tripathi (2010). E C O N O M IC AND S E CT OR WORK 234 MOD ULE 9 — STR ENGTH ENING A GR ICULTUR A L M A R K ETING W ITH IC T TABLE 9.5: Information Priorities of Farmers Using Mobile Phones in India (Ranked) INFORMATION PROVIDED VIA: NSS 59TH ROUND OF PHONE USAGE VODAPHONE REUTERS MARKET LIGHT Seed Seed Accurate local weather forecasts Fertilizer application Prices Technical information Plant protection Plant protection Input sources and/or production costs Harvesting and marketing Fertilizer application Market information Farm machinery Harvesting and marketing Farm machinery Source: Authors. survey also found that almost all small-scale farmers that provide input information because of the potential reported some increase in convenience and cost sav- benefits that can be realized from increasing input ings from using their mobile phones to seek informa- sales. Moreover, input suppliers and dealers can come tion such as input availability.8 together to create partnerships to facilitate access to  In a survey of farmers who received the RML service, inputs. They can do so by combining their data and 50 percent said they reduced expenditures on agricul- communicating via SMS. It is certainly envisaged that tural inputs because of SMS information services. The SMS systems can and will be used by input supply service is also changing farmers’ behavior: 44 percent companies to alert farmers to the arrival of inputs, said that it changed their fertilizer applications and remind them to purchase inputs, and provide timely 43 percent said that it changed the timing of spraying.9 advice on proper input use, especially for treating emerging pest and disease problems. A reason commonly cited for the difficulty in obtaining inputs  Identify ways to use ICT to improve governance is that the government will often distribute subsidized inputs, of subsidy programs. ICT offers a means of deliver- often through schemes that last only a few years. These ing subsides to the intended beneficiaries. It enables policies restrict the potential for the private sector to supply community procurement of inputs and input delivery inputs, and when government programs end, no company through the private sector. The embedded e-payment can sustainably deliver inputs to the farming community. system guarantees timely payment from the govern- ment and encourages the emergence of a private PRINCIPLES AND GUIDELINES FOR POTENTIAL network of input suppliers. INTERVENTIONS  Education and information dissemination are key Given the multidimensional challenges of designing an effec- components of supplying inputs through ICT. It tive intervention to supply inputs, a successful design will is critical for farmers to have a rooted understanding take a multipronged approach: of the potential long-term implications on produc-  Find innovative ways to form private-sector tivity and profits of using better inputs in a timely partnerships. Better involvement and organiza- manner. On a more practical level, farmers need tion of stakeholders can improve farmers’ access to information about how to source inputs and iden- information about inputs. Agribusinesses and input tify counterfeit supplies, which remain a significant suppliers have an incentive to invest in ICT services productivity drain.10 Examples are emerging in Nigeria of e–systems for verifying the provenance of specific agricultural inputs. Similar systems might be applied 8 Mittal, Gandhi, and Tripathi (2010). elsewhere. 9 The World Bank and Reuters are funding a project commissioned by Oxford University’s Economics Department and International Food Policy Research Institute (IFPRI) to quantify the impact of the RML service on farm profitability. 10 Mittal, Gandhi, and Tripathi (2010). IC T IN A GR IC ULTUR E S E C T I O N 3 — AC C E SSING MARKE T S AND VA LU E C H A INS 235 The innovative practice summaries highlight two experi- its revenues from commodity transactions at the kiosks and ences in supplying inputs based on the use of ICT, one from from using the kiosks to market other goods such as agri- India and one from Zambia. These innovations seek to over- cultural inputs.11 In addition to the kiosks, ITC will also offer come some of the limitations encountered in input supply information services to farmers over mobile phone, thus programs, such as the challenges of transmitting informa- deepening its relationship with the farmer (Kumar n.d.). tion on input use to widely dispersed farmers or of ensur- ing that government-subsidized inputs reach the intended Table 9.6 shows the impact of e-Choupal service on farmers’ beneficiaries. yields and costs. Ultimately ITC expects half of its revenue to come from input sales. INNOVATIVE PRACTICE SUMMARY Agribusiness Advises India’s Farmers through INNOVATIVE PRACTICE SUMMARY e-Choupal Kiosks Zambian Farmers Buy Subsidized Inputs via ITC is an agribusiness that provides information services to Mobile Phone India’s farmers through 6,500 e-Choupal (Internet) kiosks In Zambia, an electronic voucher (e-voucher) system is being (http://www.itcportal.com/sustainability/lets-put-india-first/ piloted by the United Nations World Food Program (WFP), home.aspx). Started in 2000, the kiosks presently operate CARE, and the local Conservation Farming Unit (CFU). With in 40,000 Indian villages to reach approximately 4 million farmers. These kiosks are hubs where farmers can obtain price information, seek options for selling their produce, 11 “ITC’s Rural Development Philiosophy at Work� ITC, http://www buy inputs, and obtain advice on farming practices related .itcportal.com/ruraldevp_philosophy/echoupal.htm, accessed July to input use. Services are offered free of charge; ITC earns 2011. TABLE 9.6: Agricultural Interventions Made through e-Choupal Kiosks and Their Impacts TYPE OF AGRICULTURAL TECHNOLOGY OR PRACTICE BEFORE E-CHOUPAL: 2000 E-CHOUPAL INTERVENTION IMPACT Seed use per unit area For soybeans, farmers used a high plant- Farmers advised to use a lower planting Savings: 10 kg seed/acre (Rs 200/acre) ing density (45–50 kg seed/acre) density (30–35 kg seed/acre) Seed of verified quality Farmers’ limited awareness of benefits The e-Choupal demonstrated the benefits Yield increase and self-sufficiency in of certified and foundation seed led to of foundation and certified seed through seed (for self-fertilizing, nonhybrid limited use of such seed its agricultural extension program crops) (Choupal Pradarshan Khet) Seed treatment Low awareness of benefits of seed The e-Choupal spread awareness about Germination percentage and yields treatment benefits of seed treatment and provided increased significantly treated seed to some farmers New varieties and improved timing Farmers used varieties inappropriate The e-Choupal suggested new varieties Most suitable variety planted on time, of planting for local conditions (climate, pest, and suitable for adverse conditions and leading to higher yields disease incidence and timing of rainfall) advised farmers how to better align planting with rainfall Weed and other pest management Farmers controlled weeds by hand; for The e-Choupal suggested use of Effective weed and pest control leading pest control, they were largely guided by herbicides and/or pesticides in specific to low loss of yield local input dealers circumstances Soil testing No awareness of soil testing and conse- The e-Choupal propagated the practice of Reduced fertilizer costs and more quent benefits replenishing soil nutrients based on soil appropriate nutrients applied testing reports Storage practices and market Low awareness of hygienic practices for The e-Choupal advised storage of grain Reduced losses from poor storage linkages stored crops; limited opportunities to sell based on moisture content to avoid loss practices as well as better earnings products and contamination; it offered farmers alter- from the sale of output nate opportunities to sell their products Source: ITC Ltd 2010. E C O N O M IC AND S E CT OR WORK 236 MOD ULE 9 — STR ENGTH ENING A GR ICULTUR A L M A R K ETING W ITH IC T the help of Mobile Transactions (a company specializing in effectively for specific training programs with input- and low-cost payment and financial transaction services) (http:// productivity-enhancing components. Moreover, the www.mtzl.net/), the e-voucher system empowers smallhold- e-voucher system supports private agribusinesses by mak- ers to obtain subsidized inputs from private firms (giving ing them the direct source for inputs; as more private input the firms, in turn, an incentive to expand and improve their dealers choose to participate, competition may increase. business).12 REFERENCES AND FURTHER READING An e-voucher is redeemed in the following steps:13 Aker, J. C. 2008. “Does Digital Divide or Provide? The Impact of 1. On receipt of the e-voucher, which resembles a Mobile phones on Grain Markets in Niger.� Center for Global prepaid mobile phone card, the farmer goes to a Development Working Paper No. 154. http://www.cgdev.org/ registered agrodealer. He/she buys inputs using the content/publications/detail/894410, accessed January 2011. voucher and the amount of top-up cash required to Annerose, D. 2010. “ICT for Social and Economic Development.� complete the purchase. Presentation by Manobi at the World Bank, Washington, DC, August. 2. He/she scratches the first foil to reveal a PIN. The agrodealer uses the PIN to validate the authenticity Banjo, G., H. Gordon, and J, Riverson. 2010. “Rural Transport: Improving its Contribution to Rural Growth and Poverty of the farmer’s voucher and certify receipt of the top- Reduction in Sub-Saharan Africa.� Washington, DC: World Bank. up payment. Upon validation, the redeemable cash CESS (Centre for Economic and Social Studies). 2007. Preparatory value of the scratch card is automatically credited to Study for the Multi-State Agricultural Competitiveness Project. the supplier’s transaction account from the master Unpublished study, CESS, Hyderabad. “subsidy account.� Chong, A., V. Galdo, and M. Torero. 2005. “Does Privatization 3. Upon delivery (which is either immediate in the case Deliver? Access to Telephone Services and Household Income of an agrodealer or later if the buyer purchases from in Poor Rural Areas Using a Quasi-Natural Experiment in Peru.� an agent), the farmer scratches the second PIN to Inter-American Development Bank Working Paper No. 535. Washington, DC: Inter-American Development Bank. confirm delivery and complete the final authorization, which allows the agrodealer or agent to receive final Dixie, G. 2007. “Marketing Extension: A Powerful Six-Step Process payment from the master subsidy account. from Bangladesh.� Presentation at the University of Illinois at Urbana-Champaign. http://lightning.itcs.uiuc.edu/india2007/ grahame_dixie.html, accessed April 2011. Under the government’s Fertiliser Support Programme (FSP), small-scale farmers had difficulty accessing inputs owing to Duflo, E., M. Kremer, and J. Robinson. 2009. “Nudging Farmers to Use Fertilizer: Theory and Experimental Evidence from Kenya.� delays in input distribution and poor monitoring of the pro- NBER Working Paper No. 15131. Cambridge, USA: National gram’s fertilizer distribution.14 The mobile transaction system Bureau of Economic Research. 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E C O N O M IC AND S E CT OR WORK S E C T I O N 3 — AC C E SSING MARKE T S AND VA LU E C H A INS 239 Module 10: ICT APPLICATIONS FOR SMALLHOLDER INCLUSION IN AGRIBUSINESS SUPPLY CHAINS SOHAM SEN (World Bank) and VIKAS CHOUDHARY (World Bank) Overview. Smallholders can raise their incomes by participating in commercial supply chains, but including smallholders entails significant challenges for agribusinesses and smallholders. For agribusinesses, interacting with a large group of smallholders implies high transaction and monitoring costs to ensure quality, safety, and timely delivery. For smallholders, participation can be risky, requiring access to inputs and training to satisfy stringent quality requirements. Information communication technologies (ICTs) facilitate exchanges and flows of information between parties all along the supply chain and can be used to manage transactions, arrange logistics, and ensure that quality specifications are clearly under- stood. Under the right circumstances agribusinesses have the incentives, capacity, and resources to create and apply technologies that support inclusion. Public organizations play an important role by implementing supportive policies, fostering public-private collaboration to develop ICT applications, and by developing and using their own ICT applications. Topic Note 10.1: Private-sector Efforts to Integrate Smallholders in Commercial Supply Chains through ICT Applications. Many companies have taken innovative, instructive steps to include smallholders in supply chains. These efforts are useful to understand because agribusinesses have the motivation, capacity, and resources to create and apply ICTs that help to overcome the problems involved. Private-sector demand for technological solutions appropriate for developing contexts has created a market for ICT applications and spurred innovation in private companies in developing economies, most vividly in India and Kenya.  EID Parry’s Indiagriline Services Improve Sugarcane Production and Sourcing  Virtual City’s AgriManagr Builds Better Supply-Chain Links with Farmers Topic Note 10.2: Public-sector Efforts to Integrate Smallholders in Commercial Supply Chains through ICT Applications. The public sector does indeed lead collaborations with other partners, including the private sector, to pro- duce useful applications for a given development context. The public sector can bring together stakeholders that might otherwise be competitors or unable to collaborate effectively. These partnerships require careful structuring, however, and prior agreements regarding revenue sharing and intellectual property rights. Although donor-funded projects present unique challenges to scale and sustainability, they can be overcome.  ACDI/VOCA’s ICT Solutions Help Private Companies Source from Smallholders in India  TIPCEE’s ICT Applications Bring Ghanaian Smallholders into Export Supply Chains OVERVIEW Smallholders in the Global Food Industry: A Complex The global food industry has undergone significant struc- Relationship tural changes in recent years that have created opportu- The global food industry, with over US$ 4 trillion in annual nities for smallholder farmers in developing nations. The retail sales (Gelhar 2009), comprises agribusinesses of vary- inclusion of these smallholders in agribusiness supply ing sizes. The largest are multinational corporations that chains offers significant opportunities as well as chal- operate internationally. In this module, “agribusiness� refers lenges. ICTs can aid smallholders in taking advantage of to a wide range of private companies: opportunities and mitigating some of the challenges, as  Retailers such as supermarkets or convenience stores discussed in this module. (Walmart, Carrefour, ITC Choupal Fresh) E C O N O M IC AND S E CT OR WORK 240 MODUL E 1 0 — ICT A PPLI C ATIONS FOR SMA LLH OLD ER INCLUSION IN A GR IBUSINES S S UPPLY C H A INS  Food processors and manufacturers (Nestlé, Kraft, When farmers are insulated by layers of intermediaries, it Unilever) is difficult to communicate to farmers what items or quality  Input suppliers who produce fertilizer, seed, pesticide, levels the market demands. Reducing the number of inter- irrigation equipment, and farm machinery (Bayer, mediaries (“disintermediation�) allows companies to reduce, Syngenta, Monsanto). deploy their market power more directly to garner lower  Producers that may be smallholder farmers, coopera- prices, and improve quality control. tives, or corporate farming entities. Direct procurement and improvements in production, trans-  Wholesalers, traders, and other intermediaries in a port, and supply-chain technologies make it possible to supply chain that connect retailers or processors to source competitively from vast numbers of suppliers and producers (ADM, Bungee, Cargill, Olam). increase the relative importance of factor costs such as labor and raw materials. Companies looking to economize move In recent years, following deregulation of the food industry in production to places where factor costs are lower, which many developing nations (Reardon et al. 2009:5) and the low- presents an enormous opportunity for farmers in developing ering of trade barriers in developed ones (World Bank 2008), countries (World Economic Forum 2009). private, market-driven agribusinesses have replaced state- supported entities. On the demand side, an increasingly “Commercial supply chain� refers to a supply chain in which urban population worldwide requires food to be delivered a private agribusiness is sourcing agricultural produce from farther and farther from the farm; with rising incomes and farmers or selling products to farmers in accordance with changing preferences, this population also demands higher a profit-seeking business model. “Supply chain� typically levels of food safety, quality, and traceability. refers to the set of buy-sell interactions as goods flow from raw materials through production to the final retailer where Changes in the informal supply environment have accom- consumers can buy them. “Value chain� generally refers to panied changes in the broader industry. The entry of large, the whole ecosystem of players involved moving from the private, often international agribusinesses from the formal retailer backward to the producer. These terms are often used economy has caused fragmented, informal suppliers to interchangeably, and a special distinction is not made in this consolidate and formalize. To meet supply requirements module. Such chains can be of various types (see figure 10.1). arising from changing demands, agribusinesses often prefer to source through lead farmers or farmer cooperatives or Although participation in commercial supply chains presents directly from individual farmers. The alternative—purchasing an opportunity for smallholders to attain higher incomes from wholesale markets—can pose difficulties, be inefficient, (between 10 and 100 percent; see World Bank 2008:127) and most important, cost more. When sourcing from whole- and reduce poverty, these outcomes are not certain unless sale markets, agribusinesses have little quality control, face other important factors are addressed. For example, actual uncertainties in supply and price, and lose the ability to trace income changes depend on the crop, the time needed for products (which consumers increasingly demand). farmers to learn to produce the crop more efficiently, and FIGURE 10.1: Examples of Value Chains, Their Participants, and the Value Added Along the Chain Yam value chain, Ghana Travelling Actor Farmer Wholesaler Retailer trader Value added* – 13% 18% 50% Kaja Apple value chain, Pakistan Pre-harvest Commission Actor Farmer Wholesaler Retailer contractor agent Value added – 16% 31% 92% 11% Cocoa value chain, Ivory Coast Actor Farmer Agent Trader Exporter Processor Value added – 9% 15% 60% 24% * Value added = price received by actor – price paid by actor. Source: World Economic Forum 2009. IC T IN A GR IC ULTUR E S E C T I O N 3 — AC C E SSING MARKE T S AND VA LU E C H A INS 241 TABLE 10.1: The Business Case for and Against Procuring from Small-Scale Producers FOR AGAINST  Smallholders’ comparative advantages (premium quality, access to land, and so on) Costs and risks in organizing supply from dispersed producers:  Risk management: Securing supply in volatile markets, spreading portfolio geographi-  Quantity cally, reducing risk of undersupply and localized pest and disease problems  Quality  Flexibility in production: Capacity to ramp up or ramp down production without incurring  Consistency fixed costs (contract farming)  Safety  Access to donor assistance  Traceability  Compliance with rising standards  Packaging  Loyalty and fulfillment of commitments by farmers  Negotiation time and costs Source: K. Kumar, personal communication. the quality and other standards required. Changes in income smallholders’ lack of credit, inputs, extension services, and may not be sustainable unless accompanied by improved marketing resources (Reardon et al. 2009). practices such as postharvest handling or risk management. Smallholder inclusion is challenging for agribusiness because Market forces do not in and of themselves guarantee small- interacting with a large group of small suppliers implies high holders’ inclusion in modern supply chains. When possible, administrative and transaction costs (for example, in control- companies might seek to source from larger producers, who ling quality, maintaining traceability, or ensuring adherence to can deliver economies of scale, often are better educated, certification standards). The agribusiness may have to sup- and typically also have better access to finance. Including ply physical assets (land, machinery, inputs) and information smallholders can present significant challenges for both the (on management practices and postharvest practices) for agribusiness and smallholder, but a strong business case can smallholders to produce the quantities and qualities required. be made for both sides to work together (table 10.1 sum- Farmers may have to learn how to grow new crops or obtain marizes the advantages and challenges). more costly inputs. Farmers may not honor standing agree- ments with agribusiness at harvest, especially if the spot mar- For agribusiness: ket offers higher prices than the company; the agribusiness  Smallholders can have distinct competitive advan- may not honor its commitment to purchase from farmers. tages in certain situations. Compared to smallholders, large suppliers have greater market reach and multiple In short, a supply-chain relationship between agribusinesses options to sell produce, so it can be riskier to source and smallholders is a complicated partnership with difficult from them. It may also be less risky to source from requirements on both sides. Procurers need an agreement numerous producers distributed across a wider geo- that will provide them with the right product mix, items that graphic area, which can reduce systemic vulnerability meet safety standards and are traceable, items of the right to floods, droughts, and pests. Uncertainty about quality, timely delivery, and a cost-effective arrangement. prices and quantities is reduced in the short term. Farmers require market information, extension services,  Smallholders might simply have access to better land risk-management capacity, financial services, and support- or other resources, and they are often more likely ing physical infrastructure services (such as roads, storage, to follow the labor-intensive management practices power, and telecommunications). required for higher-quality outputs.  With smallholders under contract farming, production ICTs and Smallholder Inclusion in Commercial Supply can adapt more rapidly to market demand. Chains  Government or donors may offer incentives to include Modern ICTs and their applications significantly affect small- smallholders. holders’ inclusion in commercial supply chains. ICT applica- On their side, smallholders can earn higher incomes. tions (hardware and software), guided by business logic, Participation also reduces their uncertainty as to who will buy can foster smallholders’ inclusion by making the following at harvest and how much they will pay. Linking to a modern interventions in the supply chain: reducing costs of coordina- supply chain might be an important mechanism to address tion (collection of production, distribution of inputs, and so E C O N O M IC AND S E CT OR WORK 242 MODUL E 1 0 — ICT A PPLI C ATIONS FOR SMA LLH OLD ER INCLUSION IN A GR IBUSINES S S UPPLY C H A INS FIGURE 10.2: Drivers of ICT Applications for ICT for Supply-Chain Management Including Smallholders in Supply In conditions of poor information flows supply chains are Chains highly fragmented. Otherwise information technology driven innovations make it easier to acquire, manage, • Applications for own suppliers only and process information and allow closer integration Private- • Commercial applications, between adjacent steps in the value chain. There is sector generalizable usage driven • No special focus on smallholders therefore greater integration of supply chains based on • Sustainable model ICT information availability. applications and services Kunaka (2010:24) for smallholder inclusion in • Applications for whole chain supply chains Organizations have understood for some time that logistics and Public- • Specialized, low-cost solutions; supply-chain management (SCM) applications could reduce the sector may not be useable elsewhere driven • Special focus on smallholders transaction costs of procuring from smallholders. Indeed, any • Sustainability unclear sizeable company in the developed world uses SCM systems to handle procurement and other tasks (box 10.1). Source: Authors. BOX 10.1: Functions of Supply-Chain Management on); increasing transparency in decision making between Systems partners; reducing transaction costs; disseminating market demand and price information; disseminating weather, pest, Supply-chain management (SCM) software running on and risk-management information; disseminating best prac- networked computers and handheld devices typically tices to meet quality and certification standards; collecting performs some or all of the following functions: management data from the field; and ensuring traceability.  Stores information about suppliers. In the context of sourcing agricultural products from Such interventions have been driven by the private and pub- smallholders, this function would allow a food- lic sector. Their slightly different focus and resource base processing company to know which farmers grow influence the kinds and the sustainability of ICT applications what, as well as other information, such as farmers’ they propound (figure 10.2). names, locations, previous transactions, and previ- The private sector views its supply-chain relationships as a ous performance. Such a database makes it much competitive advantage. The ICT applications it develops to easier to deal with a large base of smallholders. engage with the supply chain and provide information services  Enables the company to transmit an order to are typically exclusive to its suppliers. Larger agribusinesses farmers. The order would specify what is required, are also likely to have the scale and resources to deploy more when it will be collected, and how much will be expensive, commercially available ICT solutions within their paid for it. supply chain. These interventions, if supported by a viable busi-  Ideally, allows production to be monitored, mak- ness model, are likely to be sustainable, but agribusiness-driven ing it possible to manage quality and incentivize high- interventions may not necessarily focus on smallholders. performing suppliers or support poorer performers. The software could provide answers to questions The public sector, donors, and civil society typically see the such as which farmers are on schedule, which are inclusion of smallholders as a public good. Their interven- behind, and how much product has already been tion in the supply chain is therefore focused on inclusion. collected from each farmer. If connected to the bank The applications they create and develop are less likely to accounts or mobile transaction accounts of the pro- be exclusive. Because they have usually been designed to curer and supplier, such software might also transfer be specific to particular projects and used only once, public- payments when orders are fulfilled. sector interventions are unlikely to be easily generalizable to  Finally, SCM software might track the transport other contexts. Sustainability of donor-supported efforts has of goods from the farm gate to the warehouse or therefore been more uncertain, though future designs are retailer. expected to incorporate learning from previous experiences Source: Authors. to enhance sustainability. IC T IN A GR IC ULTUR E S E C T I O N 3 — AC C E SSING MARKE T S AND VA LU E C H A INS 243 FIGURE 10.3: Typical ICT Applications and Service Business case ICT hardware: Mobiles, PDAs, Networked computers, GPS readers, RFID tags . . . Software: SCM, ERP, GIS . . . Typical applications and services Transactions Logistics Market creation Information provision Supplier mgmt. (collection, payment) (track, trace) (order mgmt., (extension, weather, (production, virtual mkt.) pest) performance mgmt.) Source: Authors. The lack of context-appropriate software, the prohibitive cost producers (whose languages and education levels also vary). of hardware, and the lack of supporting infrastructure once Not surprisingly, the varying degree of sophistication in ICT made it quite difficult to use SCM systems in developing applications reflects this diversity. Bigger firms can extend countries. The diffusion of ICT devices (especially mobile their SCM solutions; other, smaller firms, turn to the off-the- phones) and infrastructure has eased these constraints by shelf software or applications for mobile phones that are making it possible to aggregate smallholders virtually. A increasingly available; still others rely on spreadsheets. Some secondary-source survey of ongoing or recent efforts toward applications handle everything from transactions to logistics smallholder inclusion using ICTs and their applications sug- and quality control. Others focus on a smaller subset of areas. gests that these technologies can solve many supply-chain They rely on different combinations of software and hard- problems associated with transactions (ordering, invoicing, ware, but a combination of mobile phones, PDAs, networked payment); logistics (collection, storage, transport), quality computers, and centralized databases figure prominently in assurance (safety, traceability); process management (pro- the architecture of most applications. (Module 2 discusses duction oversight, input distribution, extension support); and how the accessibility and affordability of ICT devices and product differentiation (specialization in organic, fair trade, or infrastructure influence their use.) regional labels) (figure 10.3). Finally, the applications differ in their commercial approach. The development of ICT applications for SCM can be driven Some are public goods that do not have a revenue-generating by a wide variety of agents in the private and public sector, model, while others adopt a one-time turnkey installation fee. but collaborative partnerships appear to yield more effective Still others take a fee-per-transaction approach, while many applications. For example, agribusiness companies, mobile follow an embedded service model in which revenues are network operators, third-party service providers, and soft- generated from commercial trading (buying-selling) transac- ware firms as well as development institutions and research tions and a fee for ICT services is not charged to farmers.1 institutes may participate. It is rare for applications to be developed independently by any one party; collaborative There is a sense that ICT applications can be the glue that partnerships focused on smallholder inclusion or value-chain holds together complex supply-chain partnerships. The rapid competiveness are much more common. flow of information between buyers and producers that such applications allow minimizes misunderstandings, allows for No single ICT application is ideally suited for all procurement risk management, provides higher levels of transparency, contexts or types of producers and actors along the chain. and ultimately fosters trust. Organizations vary in size, budget, and operations. Some 1 A discussion about value-chain business models is outside the source perishables; others source staple grains. Supply scope of this module, but readers can turn to World Economic chains encompass larger and smaller ranges of regions and Forum (2009) or Barrett et al. (2010) as a starting point. E C O N O M IC AND S E CT OR WORK 244 MODUL E 1 0 — ICT A PPLI C ATIONS FOR SMA LLH OLD ER INCLUSION IN A GR IBUSINES S S UPPLY C H A INS A particular area of concern on both sides is the possibility Commercial value chains prosper in an enabling business that one side or another will not uphold the preexisting agree- environment; policies that support such an environment are ment. As mentioned, when prices are high, farmers have an indirectly quite important to the effectiveness of ICT applica- incentive to sell to the spot market (side-sell) instead of to tions in supply chains. Policies can also discourage or encour- agribusinesses. Similarly when market demand for certain age smallholder inclusion. In India, for example, limits on the products changes or is lower than expected, procurers have size of landholdings make it difficult for agribusinesses to an incentive to buy less than promised or at a lower price avoid smallholders in favor of larger producers. Until quite (finding produce to be of insufficient quality is a common recently, policy barriers made it difficult to source directly tactic). Better communication between farmers and procur- from farmers at all. ers, and systems that allow farmers to be paid faster, can reduce such myopic behavior and help relationships endure. Public-private partnerships have proven critical in develop- If farmers know that side-selling this season will have reper- ing ICT applications targeted toward smallholder inclusion. cussions in the next because the company keeps electronic Public organizations lack the technical capacity, agribusi- records, they might be less likely to engage in this behavior. nesses alone may not have sufficient incentive to reach out On the other hand, automated processes in the collection to smallholders, and technology companies are reluctant center make it more difficult for buyers to reject products to absorb the risk of producing products unless they are arbitrarily or pay less. assured of markets. Public institutions can lead such collab- orative efforts if they are willing to share rights to outputs of ICTs will not sustain linkages that are fundamentally flawed, the joint activities. however. If the supply chain is not competitive or the busi- ness environment or trade laws prove restrictive, software to Public intervention in the private sector’s use of ICTs in sup- manage sourcing will not reverse the situation. If market price ply chains should focus specifically on improvements in the fluctuations are sufficiently severe, ICT applications may not policy environment and the competiveness of smallholders. prevent farmers from side-selling or procurers from reneging. An important role of the public sector might be to incentivize smallholder inclusion and provide guidance on technologies Finally, the impact of these ICT applications on smallhold- that can be used to do so. The public sector might also work ers’ inclusion in commercial value chains is not yet known. to organize farmers into groups and spread financial literacy There is a general consensus that participation has a positive (ICTs can help here, too; see Module 8). effect, but to what extent ICTs enhance or dilute that effect is unknown and requires research. The application of ICTs Finally, the public sector should rigorously evaluate current can be expensive from the perspective of software devel- ICT applications to determine their impact on smallholder opment or purchase, implementation, training, and so forth. inclusion and incomes. Quantitative and qualitative evaluation The costs may not be justified in all cases. Better information can include a variety of indicators to document outcomes. on potential impact can help to make this determination. Key quantifiable indicators that are relevant to smallholders and can measure impact throughout the chain can include production volumes; product quality; net income; distribu- tion of income among smallholders, within households, and KEY CHALLENGES AND ENABLERS along the supply chain; and the distribution of costs associ- ICTs may create opportunities to incorporate smallholders ated with risk mitigation and management. more effectively into supply chains, but their impact will be limited without the requisite supporting infrastructure, policy, These indicators can be complemented by additional quanti- and culture of collaboration. This section describes the chal- tative measures that assess the overall viability of the supply lenges and enabling factors associated with using ICT to chain, such as market position and penetration, profitability manage supply chains and integrate smallholders. as compared to similar chains, and trends in volume and prices. Wherever possible, disaggregate data by gender. Infrastructure is particularly critical for ICTs, which often require reliable electrical power and telecommunications Key qualitative or skills-based indicators that have an impact networks. The presence of complementary infrastructure on farmers’ incomes can include key skills related to: also has much to do with the success of ICT interventions (1) the nature and quality of the relationship between farm- for smallholder inclusion (roads, storage facilities, transporta- ers and trading intermediaries; (2) improvement in bargain- tion, and financial infrastructure, among other types). ing power; and (3) the governance functions of the chain IC T IN A GR IC ULTUR E S E C T I O N 3 — AC C E SSING MARKE T S AND VA LU E C H A INS 245 itself. For chains linked to high-value markets, pay additional a new product cannot be avoided, sustainability should be a attention to issues related to product and process upgrading made a priority, and local partners must be included. A focus and collective innovation as the chain adapts to increasingly on developing standards for ICT applications and systems demanding market conditions. While this process does not will allow interoperability between technologies and make it occur fully at the farmer level, the existence of this skill set easier to develop new applications when necessary. is critical for the entire system’s continuing competitiveness. Unlocking innovation and opportunities for smallholders is a Finally, human capacity is critical for the development and critical element of impact, because it leads to benefits that uptake of ICTs in supply chains. Farmers or farmer associa- help drive farmers’ incentives for inclusion (K. Kumar, per- tions may find ICT tools challenging to use (illiteracy, a lack of sonal communication). training, or simply a lack of comfort with modern ICTs are typi- cal barriers). Nor can ICTs be developed or deployed well if a When beginning an intervention, ascertain whether the bar- technical talent pool with an entrepreneurial spirit is lacking. riers to smallholder inclusion are best addressed by an ICT application. Care should be taken to ensure the presence of This module continues with two topic notes. Drawing on key enablers—special attention is required to include women actual cases (figure 10.4), the notes highlight trends and and other vulnerable groups. It is also important to consider issues and identify lessons that might prove instructive to the full cost of ownership beyond any one-time software and others.2 Topic Note 10.1 focuses on efforts led by the private hardware fees. Installation charges, maintenance, upgrades, sector to apply ICTs to the various problems associated with and the cost of training users must also be included. including smallholders in commercial supply chains. Topic Note 10.2 reviews efforts led by the public sector or in col- After diligent consideration, if an ICT application is deemed laboration between public and private organizations. appropriate, consider existing commercial products before 2 Payne (2010) provided an immensely helpful starting point for attempting to develop new products. If the development of many of the examples and cases in this module. FIGURE 10.4: Cases and Examples Discussed in Topic Notes and Innovative Practice Summaries Typical applications and services Supply-chain Market Information Logistics Transactions management creation provision Suguna Poultry, Godrej Agrovet, OLAM—standard commercial SCM EJAP Bangladesh—spreadsheets Virtual City AgriManagr—mobile- Private > based application Supply-chain driver Muddy Boots, Sourcetrade, FarmERP—off-the- shelf SCM specifically for developing contexts ICT e-Choupal, EID Parry Indiagriline, among others— collection center-based information providers ACDI/VocafreshConnect—SCM developed for developing context in India Mobile Transactions Zambia—mobile- based payments Public > SAPA Mobile for Agribusiness—mobile-based SCM TIPCEE—GIS and barcodes for mapping and traceability Fruiléma Mali—web-based platform connecting buyers and sellers Source: Authors. E C O N O M IC AND S E CT OR WORK 246 MODUL E 1 0 — ICT A PPLI C ATIONS FOR SMA LLH OLD ER INCLUSION IN A GR IBUSINES S S UPPLY C H A INS Top ic Note 10.1: PRIVATE-SECTOR EFFORTS TO INTEGRATE SMALLHOLDERS IN COMMERCIAL SUPPLY CHAINS THROUGH ICT APPLICATIONS TRENDS AND ISSUES information and technology services directly to farmers Private efforts to use ICTs to include smallholders in supply in southern India and purchases their produce (sugarcane) chains are useful to understand because agribusinesses at its rural collection centers. The second describes Virtual have the motivation, capacity, and resources to create and City, a Kenyan company that produces software to automate apply ICTs that help to overcome the problems involved. and standardize the process of sourcing from a smallholder Many companies have taken innovative, instructive steps through rural collection centers such as EID Parry’s in India. to do so. Private-sector demand for technological solutions appropriate for developing contexts has created a market for ICT applications and spurred innovation in private companies ICT AND SUPPLY-CHAIN MANAGEMENT in developing economies, most vividly in India and Kenya. THROUGH PRIVATE INITIATIVES As noted, food processors and retailers, especially in India The specific context is critical in determining if and why and Latin America, are turning to procurement models that any agribusiness will source from smallholders. Private bypass traditional wholesale markets to engage directly with companies often source from smallholders out of com- farmers. Through SCM software on networked computers petitive necessity, even if doing so can be difficult (Barrett and mobile phones, ICTs facilitate this process in headquar- et al. 2010). Quality and certification demands by consumers ters, field offices, collection centers, farmer cooperative and export markets also force agribusinesses to assert more offices, and in the hands of farmers and extension workers. control and link backward to the producers in the supply The sophistication and source of the technology, as well as chain. Often there is no choice but to source from numerous the extent of its reach to smallholders, vary. smallholders, because they dominate production of certain goods. Corporate social responsibility initiatives may encour- Many large organizations simply extend the use of their cur- age procurement from smallholders; the political context rent ERP software to manage their smallholder suppliers may require it—the ramifications of ignoring smallholders (box 10.2). Such software is used by large organizations to may be significant. centrally store organizational data and manage data transmis- sion and use between departments within the organization Agribusinesses, especially larger domestic ones and certainly and external partners, such as suppliers. A 2002 report found international corporations, already use technology to manage that typical costs of ownership for an SCM system average their organizations. When linking backward to smallholders, about US$ 15 million and can range from US$ 500,000 to these companies reflexively turn to technology. It can simply US$ 300 million (Sysoptima 2005). These costs represent become an exercise in extending their current technologies fees for software, consultants required for installation, and through the “last mile� to smallholders or deploying more hardware. context-appropriate ICTs. Typically, such corporations are more capable than nongovernmental organizations (NGOs) or For smaller operations, world-class SCM systems may be governments in marshaling the human and financial resources neither necessary nor cost-effective. These players develop to develop new technologies or extend existing ones. Finally, modest systems in-house to manage sourcing challenges. when these technology needs cannot be met with current In Bangladesh, EJAB (http://www.ejabgroup.com/) relies on systems or commercial software, companies demand solu- Microsoft Excel and printed forms to track and manage rela- tions that are better suited to the specific context, language, tionships with its potato farmers (USAID 2011). or region, fueling development for innovative new solutions. A market for cheaper ICT solutions has developed owing to At the end of this topic note, two innovative practice sum- the growing trend toward direct sourcing as well as the large maries illustrate the different ways that the private sector is number of procurers that cannot afford SCM systems but can taking the lead to include smallholders in their supply chains. no longer get by with simple spreadsheets. The market has The first focuses on EID Parry, a company that provides especially grown because of the need for applications that IC T IN A GR IC ULTUR E S E C T I O N 3 — AC C E SSING MARKE T S AND VA LU E C H A INS 247 BOX 10.2: Companies Use Enterprise Resource where computers and Internet connectivity are generally less Planning Software to Manage Smallholder accessible than mobile phones and wireless service. Several Suppliers private firms have produced such solutions, and others have been created in joint efforts by private and public organiza- In India, Suguna Poultry (http://www.sugunapoultry tions (see Topic Note 10.2). .com/), with annual revenues of US$ 700 million, oper- ates in 11 states. The company sources poultry prod- Virtual City (http://www.virtualcity.co.ke/), a ten-year-old com- ucts from over 10,000 farmers from 270 locations. In pany in Kenya, sells several pieces of software that address 2006, the International Finance Corporation invested challenges in supply chains. AgriManagr automates the collec- US$ 30 million in Suguna to expand production capacity. tion of produce from smallholders at rural centers. The system In the same year, Suguna deployed Oracle’s SCM sys- consists of handheld PDAs running the AgriManagr software tem across its organization, though it had information and smartcards belonging to individual farmers. AgriManagr systems before implementing Oracle’s product. Agents reduces the time required to collect materials from the farm- in field offices interact with the system using computers ers and pays them electronically. Information is recorded with connected to the Internet to track information and man- fewer errors, and farmers receive a receipt with their previ- age the operations of Suguna’s contract farmers. ous transactions, which they can use as collateral to borrow. The system strengthens the link between smallholders and Suguna is not the only agribusiness in India to move procurers by reducing the cost and time associated with the toward world-class SCM software. Godrej Agrovet transaction for the latter and by increasing transparency and (http://www.godrej.com/godrej/GodrejAgrovet/index trust through faster payments for the former. .aspx?id=2), with US$ 300 million in annual revenue from oil palm, animal feed, poultry, and agrochemicals, Collecting information accurately is quite important for firms implemented SAP software in 2010 to manage informa- to manage their operations optimally. Muddy Boots (http:// tion and interactions with oil-palm famers. en.muddyboots.com/), a private British software company These companies follow in the footsteps of their interna- founded in 1996, has developed a product (called Greenlight) tional counterparts. Singapore-based Olam (http://www for large aggregators and exporters who are sourcing from .olamonline.com/home/home.asp), with revenues of many smallholder farmers. This product allows users to around US$ 8 billion and sourcing operations in over 60 track information relevant to standards compliance along the countries, supplies cashews, coffee, and rice. The com- entire value chain. It mostly runs on networked computers, pany uses SAP to manage its interactions with farmers but agents use it on mobile phones at the field level to col- and to support production activities. lect data on production and compliance (Muddy Boots 2007). American firm SourceTrace (http://www.sourcetrace.com/) Large farmer organizations that source directly from offers software with similar features, which has been used in members (some of whom are very small-scale produc- Latin America and India (SourceTrace 2011). Indian software ers) also use ERP software. Module 8 describes the use maker Shivarai produces a similar product called FarmERP of ERP software in an Indian dairy cooperative. (http://www.farmerp.com/). Developed in 2003, the product Source: Authors, based on IFC 2006, Oracle 2006, and “Godrej Agrovet Empowers Rural India With SAP,� The Financial Express 2010. has gone through several iterations and has been available as an Internet-based service since 2007 (FarmERP n.d.). perform specific supply-chain functions that are common for ICT applications can improve linkages between procurers procurers working with smallholders, such as tracking data and smallholders in indirect ways as well. A phenomenon about producers and their performance over time; communi- not limited to India, but highly prevalent there, is agrodealers’ cating orders to farmers; managing production; speeding col- practice of running retail distribution and collection centers lection and payment at harvest; and tracing materials along in rural areas. These centers (sometimes simple kiosks; see the chain to comply with certification requirements. image 10.1) offer ICT-based access to information and exten- sion services to attract farmers to the centers. Farmers are Also in demand are applications that can run on mobile consumers of household items and agricultural inputs sold in phones or other lower-cost ICT devices such as personal these places, but they are also suppliers of agricultural pro- digital assistants (PDAs). Supply-chain solutions relying on duce. In some instances, farmers have the option of visiting such devices are better suited for use in developing contexts multiple centers nearby, but in other cases, a company that E C O N O M IC AND S E CT OR WORK 248 MODUL E 1 0 — ICT A PPLI C ATIONS FOR SMA LLH OLD ER INCLUSION IN A GR IBUSINES S S UPPLY C H A INS IMAGE 10.1: ICT-Enabled Kiosks in Rural India Can Help to Inform Rice Farmers corporations. Many of these corpora- tions have dedicated corporate social responsibility programs that empha- size smallholder inclusion. A second likelihood is the amalgamation of the mobile-based information services that exist in many countries (one of many examples is Nokia’s Life Tools. Instead of recreating similar services, retailers are likely to simply offer such services to their farmer-suppliers. LESSONS LEARNED The private sector can be effec- tive in developing and deploying ICT tools to procure directly from Source: International Rice Research Institute. farmers and has demonstrated an interest in doing so. It is less clear procures the major crop grown in a place might have the sole whether they are developing tools that will allow them to collection center in the area. source from smallholders specifically. By offering access to information and other services through Providing services (information, advice, inputs, finance, and other their rural centers, companies build farmers’ trust and loyalty. resources) to farmers can be an effective incentive for them to Come harvest time, farmers familiar with the center are likely participate in commercial value chains. Farmers often join value to sell their produce at the distribution center, which reduces chains to solve market failures in insurance, financial, input, and the company’s cost of procuring raw material. In exchange, information markets (Barrett et. al. 2010:13). The numerous farmers have access to information that improves the pro- instances of rural collection centers creating links with farmers by ductivity and quality of their crops. providing access to weather, extension, or other services through Internet-connected computers appear to be effective. The example cited most often is that of ITC’s e-Choupal service, an extensive network of kiosks—6,500, in 40,000 The wide array of private information services available for villages reaching approximately 4 million farmers—where agribusiness to communicate with or manage their interac- farmers access an extensive array of information (prices, tions with farmers is still growing. Care must be taken to weather, expert advice) for free. ITC’s revenues come from identify the actual problems that prohibit farmers from its commodity transactions and input sales at the kiosks.3 participating prior to the implementation of an ICT solution. ITC plans to deepen its relationship with farmers by offering Knowledgeable experts can provide guidance here. information services via mobile phone (Kumar n.d.). ICT interventions are not one-time efforts. Technologies and Many other retailers have followed ITC’s lead. They include Indian business needs continually change, and the deployment of Farmer’s Fertilizer Co-Operative Limited (IFFCO) Kisan Sanchar ICTs must continue to evolve as well. Limited (IKSL), DSCL—Haryali Kisan Bazar (http://www.dscl .com/Business_Agree_HarKisBzr.aspx), Tata Kisan Sanchar (http:// www.tatakisansansar.com/), Gojred Adhar, Bharti FieldFresh INNOVATIVE PRACTICE SUMMARY (http://www.fieldfreshfoods.in/), and Reliance Fresh. EID Parry’s Indiagriline Services Improve Sugarcane Production and Sourcing The most hopeful possibility in the near future is the poten- EID Parry is a large, publicly traded Indian company that tial for technology development and transfer from major food sells sugar and fertilizer.4 It is innovative because it uses a 3 “ITC’s Rural Development Philosophy at Work� ITC, http://www .itcportal.com/ruraldevp_philosophy/echoupal.htm, accessed 4 This section draws on information from Annamalai and Rao July 2011. (2003) unless otherwise noted. IC T IN A GR IC ULTUR E S E C T I O N 3 — AC C E SSING MARKE T S AND VA LU E C H A INS 249 franchise model to create a network of service and collection IMAGE 10.2: IIndiagriline Logon Screen kiosks. The kiosks distribute information and other services for smallholders to improve sugarcane production; in turn, they make it easy for farmers to sell their sugarcane to EID Parry. Partnerships play a critical role in the information con- tent provided; the state research and veterinary services are key contributors. While rural distribution centers are not a new concept in India, elsewhere they are less common. EID Parry depends on smallholders to remain competitive. It sources sugarcane from 80,000–100,000 farmers for nine sugar-processing plants it operates in three states of southern India (M.C. Gopinathan, personal communication) and earned over US$ 280 million in revenue in 2010 (EID Parry 2010). When India began to remove import restrictions in response to pres- sure from the World Trade Organization in 1997, agribusinesses like EID Parry had to optimize their production to reduce costs Source: A screenshot of the Indiagriline homepage. and stay competitive. EID Parry was already cost efficient in production, but there was scope to reduce the cost of sourcing sugar. The company had a clear incentive to work with its large farmer base to increase productivity and improve quality. became franchisees by investing US$ 1,000 for space, com- puters, and standard equipment such as a printer, power The Rural Kiosk Network and Indiagriline backup, telephone, and furniture. They also pay for opera- In response to the need for larger quantities and higher qual- tional costs such as Internet and power. The company offers ity, the company developed Indiagriline (http://www.indiagriline financing through local banks if necessary. .com/) in their Research and Development Department. In exchange for the franchise arrangement, EID Parry pro- Indiagriline is a web-based portal that provides farmers with infor- vided training and assistance to the franchisees and the right mation to improve productivity and quality, such as market prices, to use the brand, sell products, and source sugar on behalf of weather alerts, and advisory and extension assistance as well as the company. Over the first years of project, EID Parry spent supply-chain information (image 10.2). US$ 500,000. Supply-chain information comes to farmers through EID Operators can expect to earn US$ 16–40 per month. The fran- Parry’s Cane Management Software, which enables farmers chisees earn their revenue from additional services offered to forecast demand, access records of their previous trans- at the kiosks along with Indiagriline. The information service actions with the company, register their sugarcane area, acts to attract customers and create effective demand for submit payment information, and monitor demand, among the other services. The most important of these is the pro- other services. Most of the content consists of the extension curement of sugarcane from farmers. Incentivized by prompt information provided by state universities or independent payment and fair weighing, sorting, and transaction records, foundations in partnership with the company. farmers sell to EID Parry instead of the local market. The In the pilot launched in 2001, 16 kiosks, called “Parry’s kiosk also acts as a rural retail outlet, selling agricultural prod- Corners,� were deployed with the Indiagriline system in ucts such as fertilizer and seed alongside household items 16 villages near the largest sugar factories. These kiosks such as oil or processed sugar. Finally, the kiosks also allow were connected to a main Internet server in the factory by farmers to access educational programs, farm extension ser- a cheap, easy-to-maintain wireless access technology called vices, banking and insurance services, and communications “corDECT� (FAO 2005). over phone and Internet. Besides Indiagriline, some of these other services also rely Franchise Business Model on ICTs, especially remote agricultural extension. Farmers Instead of paying for and operating the kiosks, the company use email and digital cameras to reach agricultural experts opted for a franchise model. Independent local entrepreneurs remotely for crop diagnostics. E C O N O M IC AND S E CT OR WORK 250 MODUL E 1 0 — ICT A PPLI C ATIONS FOR SMA LLH OLD ER INCLUSION IN A GR IBUSINES S S UPPLY C H A INS Impact, Scalability, and Sustainability all farmers. Extension workers have access to Internet- As FAO (2005) notes, the information system obviously connected netbooks to provide better information to farmers removes critical barriers that have kept farmers from par- for optimal cane growth. ticipating in the commercial sugar supply chain. Farmers As of April 2011, the company was also piloting a call center receive relevant and timely information regarding sugarcane at one factory to field farmers’ questions. After a few months, production, the company effectively communicates demand the center was receiving 80–90 calls per day. If the pilot proves and quality requirements, and farmers can demand a fair successful, the service will be extended to the other factories. price and be assured of a market. Further, agricultural yields, access to finance, agricultural extension services, and EID Parry considered partnering with commercial informa- time required to transact with EID Parry all have reportedly tion service providers instead of creating their own capac- improved. ity, but they concluded that existing services restricted their farmers’ choices. For instance, Nokia Life Tools requires the These improvements have not been quantified, however use of Nokia phones. Netbooks were chosen over handheld (FAO 2005). The Indiagriline project was started in 2001 with Palm devices to access the Internet and move data through a stated goal of “increasing farmers’ incomes three times in wireless mobile networks. five years,� but no systematic evaluation has determined the precise impact on sugarcane farmers’ incomes. It is also not clear whether more farmers are participating in the supply chain because of Indiagriline. INNOVATIVE PRACTICE SUMMARY Virtual City’s AgriManagr Builds Better Eventually the ubiquity of cheap mobile phones (even among Supply-Chain Links with Farmers smallholders) and reliable Internet connections did away Virtual City is a private Kenyan technology startup founded by with the need for farmers to come to a kiosk for information. entrepreneur John Waibochi in 2000.6 The company had its Urbanization fed a critical labor shortage for production oper- beginnings in e-commerce but shifted its focus to developing ations and harvest. The company realized that labor short- software applications that manage supply chains, knowledge, ages made the mechanization of production and harvesting and customer relationships. In response to a perceived market operations essential. opportunity, Virtual City developed its AgriManagr software. The Parry’s Corner kiosks have been transformed and renamed Parry Mayams,5 and 82 of these rural centers cover AgriManagr Builds Trust Among Supply-Chain Partners all of the areas that EID Parry sources from, acting as rural The AgriManagr software is used by collection centers to retail outlets to sell inputs, equipment, and other services. manage the process of buying agricultural produce from The centers, like the kiosks that preceded them, continue to farmers (figure 10.5). The application runs on mobile phones run on the entrepreneurial model that supported the kiosks. or PDAs. They also provide complete farm management services to landowners who no longer wish to manage their land When a farmer brings his or her produce to the collection themselves—the company calls this “business process out- center, it is weighed using an electronic scale that sends data sourcing for farmers.� via Bluetooth wireless technology to a handheld device. The data are appended to the farmer’s transaction record. The ICTs in various forms are integral to delivering these services. farmer (who is uniquely identified through information on his Mobile phones and SMS deliver weather, price, market or her smartcard) is paid without cash through a mobile pay- demand, and operational information to farmers from a cen- ment system and given a printed receipt (the scale is wire- tralized IT operation of EID Parry. Much of this information lessly connected to a printer) noting the current transaction. was previously provided through Indiagriline, but farmers no longer need to come to the kiosk and log on to the system. The receipt also contains a record of the farmer’s previous Currently, 60 percent of EID Parry’s farmers receive mobile transactions at the collection center. It serves as a proxy for phone messages, and the company is planning to include the farmer’s creditworthiness, just as a credit history does in 5 The section draws on information from an interview from an EID 6 This and the next section draw on information from Virtual City Parry executive (Gopinathan 2011). (2009). IC T IN A GR IC ULTUR E S E C T I O N 3 — AC C E SSING MARKE T S AND VA LU E C H A INS 251 FIGURE 10.5: The AgriManagr System Weight transmitted wirelessly through Bluetooth The PDA running AgriManagr can be used to access previous transaction records, make payments, and store collected data PDA WEIGHED PRODUCE DATABASE The Internet-connected database collects and consolidates data from the PDAs and stores it permanently. Data can be used by management to make business decisions. Source: Adapted from Virtual City 2009. developed nations. The farmer can use a record of consistent factories, and Brookside, Kenya’s leading milk processor. earnings at harvest as collateral for credit. Technoserve reportedly uses the product for coffee-sector interventions, and a Virtual City executive also noted use in Data from the collection center are held in the PDA until they the cotton sector. The company won a grant of US$ 750,000 can be uploaded or wirelessly transmitted to a main server from the Africa Enterprise Challenge Fund to automate the in the field office, where all the data from various collection dairy supply chain using AgriManagr (AECF 2009). centers are gathered and consolidated. Data from various field offices are sent over the Internet to headquarters, AgriManagr has several benefits for both the procurer and where they are consolidated. In this way, field offices and the the farmer. It eliminates the manual transcription that inevi- headquarters are immediately aware of how much of what tably results in record-keeping errors or fraud. It speeds pro- has been collected, from where, and when. curement and sharpens management’s view of the process, thus increasing its ability to respond rapidly to bottlenecks In the meantime, the collected products are sent to warehouses or opportunities. Farmers, the company claims, receives where entire truck payloads can be weighed. The weight is an average weight that is 9 percent higher than weights recorded and sent to headquarters, where it can be cross- recorded using manual scales. Farmer presumably benefit referenced with the data from collection centers and field offices from rapid cashless payment and from being able to use their to ensure no product was lost on the way to the warehouse. transaction records to obtain credit. Impact, Scalability, and Sustainability Evaluations that could answer two fundamental questions AgriManagr has been deployed by at least a handful of are still lacking, however. Are farmers in the value chain earn- customers across several sectors, all in Kenya (M. Kagochi, ing more owing to the implementation of this technology? personal communication). They include the Kenya Tea Can more farmers participate in the value chain than previ- Development Authority, which controls about 60 tea ously? Both questions need formal consideration. E C O N O M IC AND S E CT OR WORK 252 MODUL E 1 0 — ICT A PPLI C ATIONS FOR SMA LLH OLD ER INCLUSION IN A GR IBUSINES S S UPPLY C H A INS Topic Note 10.2: PUBLIC-SECTOR EFFORTS TO INTEGRATE SMALLHOLDERS IN COMMERCIAL SUPPLY CHAINS THROUGH ICT APPLICATIONS TRENDS AND ISSUES include smallholders. In Ghana, USAID’s TIPCEE project aims The public sector can help smallholders participate in com- to link fruit and vegetable exporters to the international agricul- mercial supply chains by helping them to develop relation- ture and trade value chain. An interesting feature is the use of ships with agribusinesses and to grow products that the barcodes and GIS to trace exports back to their place of origin. market demands. Public organizations have facilitated the creation and deployment of various ICT applications to reduce PUBLICLY SUPPORTED ICT FOR SUPPLY-CHAIN transaction costs associated with the interaction between MANAGEMENT producers and procurers, better monitor the production pro- cess, and improve traceability. As these technologies and The unique role of public organizations is reflected in the their applications become more appropriate to local contexts way they use ICTs and ICT applications to foster smallholder and needs over time, they are likely to become indispensable participation. Public efforts have focused on creating nonpro- for smallholder inclusion. prietary software and platforms that can be used by multiple procurers and suppliers within supply chains or that can be A special focus on efforts led by the public sector is war- applied to supply chains for different products altogether. ranted for a number of reasons. First, public organizations have a unique role to play in enhancing competition, facilitat- The spread of telecommunications infrastructure and devices ing smallholders’ participation in commercial supply chains, such as mobile phones, PDAs, radio-frequency identification and ensuring higher earnings for those that do participate. (RFID), and global positioning system (GPS) have made it The growing processed-foods market and urban consumers’ possible, cost-effective, and useful for public agencies to preference for supermarkets do not necessarily translate to work with private partners to develop context-specific soft- higher competition among procurers or automatically imply ware for SCM. Many of these applications seek to enhance the inclusion of smallholders (World Bank 2008). the competitiveness of entire agricultural supply chains and foster the inclusion of smallholders. Second, public organizations can push for policy changes and make systematic interventions. They can coordinate partner- Aside from the examples detailed in the innovative practice ships between parties in the supply chain that create value but summaries, in Indonesia, the Institut Teknologi Bandung would be difficult for any single player to facilitate. For exam- incubated the development of SCM software in partnership ple, they can invest in both ICT and non-ICT infrastructure. with Nokia, the Korean International Cooperation Agency, various Indonesian government ministries, and local cor- Third, public organizations can deploy technology and other porations. Like many similar applications, SAPA Mobile for resources to support and maintain such partnerships and Agribusiness (http://akucintaindonesia.com/), runs on mobile help farmers become more productive, produce the right phones and networked computers. Now a private venture, mix and quality demanded by the market, and meet the cer- SAPA links over 5,000 small-scale organic rice producers into tification requirements for participating in high-value supply commercial export supply chains. Smallholders in Sukabumi, chains. To source from smallholders, at times it may be ben- West Java, Serdang Bedagai, and North Sumatera regions eficial for a private organization to invest in public goods such participate; further expansion is planned (Kumar n.d.:35–36). as roads, extension services, access to finance, and market information, but often this is not the case. The public sector While not all efforts are so comprehensive, some have generally provides such public goods. unique features, such as the incorporation of mobile pay- ments, which nevertheless serve to establish links between Two innovative practice summaries follow this topic note. In farmers and agribusiness. In Zambia, the USAID-funded India, Agricultural Cooperative Development International/ PROFIT (Profit, Finance, and Improved Technologies) project Volunteers in Overseas Cooperative Assistance (ACDI/VOCA) helped establish a partnership between the cotton-producing is an excellent example of how a public organization can coor- company Dunavant Zambia Ltd. and Mobile Transactions, a dinate other supply-chain players, both private and public, to mobile payment provider (Chemonics 2010). IC T IN A GR IC ULTUR E S E C T I O N 3 — AC C E SSING MARKE T S AND VA LU E C H A INS 253 FIGURE 10.6: The Process by Which Dunavant and MTZL Collaborate to Pay Farmers 1 Agrees to 3 Activates account be paid by entering a using mobile Person secret PIN code transactions being Registration registered 2 Company registers the 7 Enters person’s name and NRC payment to a payment account details on Company cellphone Mobile making transactions payment agents 4 Company makes payment using mobile transactions 6 Visits 9 On success, Person agent with agent pays Payment 5 Informs person that payment being payment cash and has been made (if a phone 8 Confirms details paid documents receives number has been registered, an and enters secret and NRC payment SMS can be sent automatically 4-digit PIN on documents to confirm payment) agent’s phone Source: MTZL. Note: NRC = National Registration Card. Dunavant (http://www.dunavant.com/) found it difficult to property rights. ICTs developed by the public sector provide pay its contract farmers on time. The prospect of slow pay- the visibility, communication, and speedy transactions that ment from Dunavant caused cash-strapped farmers to sell keep partners together for mutual benefit. to local dealers, even though farmers could earn more from selling to the company (Zachary 2007). By partnering with Not surprisingly, the public sector focuses more on small- Mobile Transactions, Dunavant can pay farmers instantly holder inclusion than the private sector does, so it tends to using mobile phones and Mobile Transactions’ network of develop ICT solutions focused on this objective. The result- agents (figure 10.6). Facilitating payments as well as access ing products differ from those developed by the private to finance is a powerful mechanism to link farmers to supply sector, especially with regard to exclusivity: SCM solutions chains (see IPS “Kenya’s DrumNet Links Farmers, Markets, from the public sector are usually not for the exclusive use of and Financial Service Providers� in Module 7). one buyer. They are generally platforms that multiple buyers, public or private, can plug into. Some public efforts have used ICTs to include farmers in commercial supply chains by improving the traceability of A general drawback of buyer-driven models for producers is produce. For example, Fruiléma (a Malian fruit and vegetable the frequent demand for exclusivity. From a processor’s or exporter) assisted mango small-scale producers to comply retailer’s perspective, a supply chain is a source of competitive with GlobalG.A.P. standards, helping them reach high-value advantage, and these actors will seek to exclude competitors export markets (see Module 12 for details). Another exam- and prevent suppliers from side-selling. Because a buyer has ple, TIPCEE, is discussed later in this module. invested in the supply network, and because the buyer needs to able to fulfill contractual obligations for specific volumes to its customers, the buyer will demand exclusivity from its smallholder suppliers (K. Kumar, personal communication). LESSONS LEARNED The public sector does indeed lead collaborations with other Donor-funded projects present unique challenges to scale partners, including the private sector, to produce useful and sustainability. Low-cost, context-specific software, for applications for a given development context. The public example, can have difficulties supporting higher volumes, sector can bring together stakeholders that might otherwise and in such cases success can lead to collapse. In other be competitors or unable to collaborate effectively. These cases, the products are too specialized and cannot be partnerships require careful structuring, however, and prior applied to other projects. ICT applications are not one-time agreements regarding revenue sharing and intellectual interventions. Hardware and software must be maintained E C O N O M IC AND S E CT OR WORK 254 MODUL E 1 0 — ICT A PPLI C ATIONS FOR SMA LLH OLD ER INCLUSION IN A GR IBUSINES S S UPPLY C H A INS and upgraded. The funds and human capacity to do so might large base of farmers and the procurer needed to be coordi- be in short supply after a project is completed, unless special nated and managed effectively and efficiently. care is taken to ensure sustainability. Strong local partners who can support a product are criti- Collaborative Development Process cal, but products and services should ideally be designed to In response to these needs, which ACDI/VOCA realized could become commercially viable and self-sustaining. The sub- be addressed at least partially through the use of ICT, the orga- stantial learning from deploying ICTs provides good reason nization set about developing an appropriate application. They to think that future donor-funded projects might overcome decided it would be based on wireless mobile networks to many of these challenges to scalability and sustainability leverage India’s high-growth telecommunications market, low (see, for example, Ducker and Payne 2010). wireless service rates, and the need for real-time information in managing a supply chain for perishable fruits and vegetables. To augment their own learning, ACDI/VOCA hired Accenture INNOVATIVE PRACTICE SUMMARY ACDI/VOCA’s ICT Solutions Help Private Development Partnerships to analyze the need for an ICT Companies Source from Smallholders solution and determine which capabilities would add the in India most value. In a competitive bidding process, they selected Indian software giant Infosys to develop a product that would ACDI/VOCA innovated by working with Infosys to develop be commercially viable and obviate the need for donors to SCM software that reduces the barriers private organizations support future development and maintenance. A critical face in sourcing from India’s smallholders. Beyond develop- piece of the agreement was ACDI/VOCA’s willingness to ing the software, ACDI/VOCA developed the business case allow Infosys intellectual property rights over the software for its use by several large food logistics firms. The case (McCarthy, Kumar, and Pavlovic 2009). demonstrates significant and successful collaboration but also shows the challenges for ICT applications to become sustainable and achieve scale. ICT Application By 2008, this extensive collaboration had resulted in freshCon- ACDI/VOCA is an American nonprofit with annual revenue of nect, a software application that could be accessed by net- US$ 124 million. It was founded in 1963 and has conducted worked computers, mobile phones, and PDAs using wireless economic development projects in more than 145 coun- technologies. Figure 10.7 depicts the partners’ contributions. tries. Success with a project to integrate small-scale Indian producers of fresh fruits and vegetables into commercial supply chains (the India Growth-Oriented Microenterprise FIGURE 10.7: Partnerships Involved in Developing Development Program, GMED) (ACDI/VOCA 2011) led to a freshConnect grant from USAID in 2006 to develop “ICT-enabled applica- tions to improve the efficiency of private sector extension ACDI/VOCA services and fresh produce supply-chain management in (primary driver) India� (McCarthy, Kumar, and Pavlovic 2009). USAID-funded Accenture GMED project (market research) Based on the GMED experience, ACDI/VOCA had learned Business several lessons about the difficulty of sourcing fruits and vege- and user specifications tables directly from smallholders. They quickly realized that the “only means of guaranteeing a reliable supply and remaining competitive is to establish ongoing, mutually beneficial partner- Infosys ships with organized groups of farmers.�(ACDI/VOCA 2011) (technical development) Such partnerships would have to overcome several problems. Farmers lacked access to production and postharvest skills and the knowledge and technology to produce the right mix, quality, and quantity of produce. Farmers also needed market information systems to learn about prices and demand trends. freshConnect Monitoring and traceability were increasingly required to sell to domestic and export markets, and interactions between a Source: Authors, based on ACDI/VOCA 2011. IC T IN A GR IC ULTUR E S E C T I O N 3 — AC C E SSING MARKE T S AND VA LU E C H A INS 255 The software has three main modules. The first module efforts to retail grocery chains (Pavlovich and Cech, personal (Order Placement) allows procurers to place an order, which communication). field agents then divide among suppliers. The application continuously monitors prices at wholesale markets to deter- Nonetheless, freshConnect remains under the ownership of mine minimum and maximum prices that the procurer will Infosys, where it continues to be developed and marketed. pay when placing an order. The quality required can also Several lessons with regard to sustainability were offered by be specified when the order is placed. The second module the project manager from ACDI/VOCA: (Order Fulfillment) allows field agents to collect information  Information services alone will not lead to smallholder on the quality and quantity produced at harvest. The third inclusion. Additional services, especially extension, module (Order Shipment) allows field agents, farmers, and are required, but delivering extension services only by procurers to track the produce and trucks in transport. phone is quite challenging. Farmers often prefer face- to-face interaction with extension agents.  Understanding farmers’ requirements and willingness Business Model to pay for a product is critical for sustainability. This After a pilot phase, the software became commercially understanding is difficult for software developers or available through Infosys, which charges a setup cost and a project designers to attain if they are not intimately transaction cost based on the volume of produce supplied. familiar with farmers’ environment. For instance, Two major Indian food retailers, HyperCity (http://www various mobile information services provide price .hypercityindia.com/index.asp) and Radhakrisna Foodland information. These services typically update prices (RF) (http://www.rkfoodland.com/), became the first agribusi- daily when, in fact, intraday price fluctuations can be nesses to use the software commercially to source directly significant for farmers. from a cooperative of more than 300 farmers.  ICTs should be localized. “Localized� does not just mean that an ICT application is available in the local language. Instead of displacing existing relationships Impact, Scalability, and Sustainability and processes at the local level, ICTs should fit into Farmers and procurers have benefited from the use of fresh- existing relationships to augment their capacity. Connect. Farmers have unfiltered access to market demands and can plan their production knowing that their product will be bought. They know the price they will receive as well as the technical information to produce it at the required qual- INNOVATIVE PRACTICE SUMMARY TIPCEE’s ICT Applications Bring Ghanaian ity. Procurers are able to specify quantity, quality, timing, and Smallholders into Export Supply Chains price information in placing an order, which reduces uncer- tainty and wastage. USAID’s Trade and Investment Program for Competitive Export Economy (TIPCEE) in Ghana was innovative in its use Farmers report earning 15–20 percent more through fresh- of ICTs to enable fruit and vegetable exporters to become Connect. HyperCity and RF report a 10–15 percent reduction sufficiently competitive to link with international value in postharvest wastage. An independent evaluation has yet chains. The project used barcodes, GPS, and geographical to be conducted to verify these claims. information system (GIS) to ensure that produce could be traced to the smallholders who grew it—a major requirement An additional 200 farmers had joined the chain to supply to participate in the target export markets. HyperCity and RF by 2009, and the freshConnect software has the capacity to scale with additional hardware. The pilot A five-year (2005–09), US$ 30 million project, TIPCEE focused ran into a number of problems that have inhibited wider appli- on the maize, pineapple, tomato, citrus, and onion supply cation, however. chains. Its goal was to increase export sales to European and United States markets by US$ 75 million over the life of The financial crisis of 2008 ultimately caused RF to go out the project and to affect the lives of at least 15,000 farming of business. At the same time, other commercially devel- households (this number was revised to 100,000 after a suc- oped information services such as RML entered the space. cessful first year). This large project covered 58 percent of Additional customers have not signed on to use freshCon- Ghana’s districts (CARE 2008). nect because the product is more expensive compared to those of new market entrants. Finally, Infosys has not The project’s two main initiatives were to: (1) include small- succeeded in tailoring the licensing terms and marketing holders in supply chains by systematically improving product E C O N O M IC AND S E CT OR WORK 256 MODUL E 1 0 — ICT A PPLI C ATIONS FOR SMA LLH OLD ER INCLUSION IN A GR IBUSINES S S UPPLY C H A INS quality and reducing costs and bottlenecks in each supply with barcodes but is typically done by physically marking the chain and (2) implement broad policy reforms to improve the items. The advantage of barcodes is that, once assigned, enabling environment around the supply chains and make they can be scanned at points along the supply chain to track them more competitive (Chemonics International 2006). not only the origin but the path of goods from the farm to the end consumer. In this way, GIS maps can, in conjunction As discussed, produce exported to international markets with barcodes, ensure traceability. must typically meet stringent certification standards, which often require traceability. The consumer needs to know the Business Model origin of each individual product in a supermarket. There is no business model in this particular case because TIPCEE as well as the GIS component is supported by the ICT Application donor. A business case for such an investment is not dif- The TIPCEE project used GIS and barcode applications with ficult to make, however. For example, if traceability allows GPS readers, barcode scanners, a wireless mobile network, products to enter a high-value international market, the gain and networked computers to address the traceability prob- in revenue should easily pay for the equipment and labor lem. GPS readers communicate with global positioning satel- required to maintain a GIS. lites to indicate the exact location of a place on the earth’s surface through latitude and longitude coordinates. These Impact, Scalability, and Sustainability coordinates can be collected from the boundaries of a partic- ular farm and fed into a GIS application on a computer, which The use of precise electronic maps can lead to superior pro- can map the location of the farm, often with great precision. duction planning (actual area is often below declared area; see figure 10.8) and yield forecasting. Knowing the location Once a farm is mapped electronically, a product from that and size of farms makes it easier for procurers to monitor pro- farm can be traced back easily to the source if the product is duction and improve the targeting of assistance and inputs. marked with the coordinate information, which can be done Ideally, traceability makes smallholders more attractive FIGURE 10.8: Declared and Actual Area Can Differ Significantly (Citrus farms) 18 16 14 12 10 Acres Declared area Mapped area 8 6 4 2 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 Farmers Source: Adapted from USAID 2009. IC T IN A GR IC ULTUR E S E C T I O N 3 — AC C E SSING MARKE T S AND VA LU E C H A INS 257 suppliers to exporters. It is unclear whether GIS mapping AECF (Africa Enterprise Challenge Fund). 2009. “AECF Portfolio affected TIPCEE farmers’ incomes or inclusion in a particu- and FAQ.� Africa Enterprise Challenge Fund, http://www .acismoz.com/acisofala/UserFiles/file/Noticeboard/AECF% lar supply chain, however. What is known is that by 2009, 205%20pager%20November%202009.pdf, accessed May 12,000 farms on more than 20,000 acres had been mapped 2011. for all types of crops (USAID 2009). The use of GIS mapping Annamalai, K. and S. Rao. 2003. “Indiagriline by EID Parry.� is replicable elsewhere if funding and training are available. Corporate Strategy and International Business, Case Study Series, Michigan Business School. Next Billion Net, http://www The initial mapping was a result of the project, which is .nextbillion.net/lib/assets/documents/EIDParry_Case_Study.pdf, now completed. To increase the likelihood of sustainability, accessed July 2011). TIPCEE implementers trained the staff of three firms spe- Barrett, C. B., M. E. Bachke, M. F. Bellemare, H. C. Michelson, cializing in horticultural exports, two NGOs, and over 250 S. Narayanan, and T. F. Walker. 2010. “Smallholder Participation farmers, staff members of private firms, and agents of the in Agricultural Value Chains: Comparative Evidence from Three Continents.� MPRA Paper, University Library of Munich. Econpapers, Ministry of Food and Agriculture to use GPS devices and http://econpapers.repec.org/RePEc:pra:mprapa:27829, accessed GIS software. The training covered creating, maintaining, July 2011. and updating electronic maps. TIPCEE also facilitated discus- CARE. 2008. “TIPCEE Program Profile Brief.� Care, http://edu.care sions with international research institutes (such as IFPRI) .org/Documents/Program%20Profile%20Brief%20TIPCEE.pdf, and the University of Ghana to create standard practices and accessed January 2011. formats for platforms and data storage so that current maps Chemonics Internation 2010. “FS Series #9: Enabling Mobile Money will remain compatible with future maps. Interventions: Primer, Diagnostic Checklist, and Model Scopes of Work.� http://pdf.usaid.gov/pdf_docs/PNADW294.pdf, accessed January 2011. ACKNOWLEDGEMENTS Chemonics International. 2006. “Trade and Investment Program for a Competitive Export Economy (TIPCEE): Annual Report The authors thank the following people for providing addi- for Partners October 2005–September 2006.� USAID, http:// tional information about the cases or general comments and pdf.usaid.gov/pdf_docs/PDACJ151.pdf, accessed January suggestions in reviewing drafts: M. C. Gopinathan of EID 2011. Parry (Senior Vice President, R&D and IPR), interviewed by __________. 2010. “USAID PROFIT.� Zambia Case Study. http://bit Soham Sen, May 12, 2011; Hans Hesse (Manager, Voucher .ly/fCPqHQ, accessed January 2011. Unit, Mobile Transactions), interviewed by Soham Sen, Ducker, M., and J. Payne. 2010. “Information Communication October 16, 2010; Moses Kagochi of Virtual City (Business Technology as a Catalyst to Enterprise Competitiveness.� Development Manager), interviewed by Soham Sen, May 4, Business Growth Initiative/USAID, http://pdf.usaid.gov/pdf_ docs/PNADU068.pdf, accessed April 2011. 2011; Krish Kumar, interview and electronic correspon- dence with Vikas Choudhary, 2010); Rick Ody of Chemonics Dymond, A., and S. Esselaar. 2010. “Mobile Applications for (Director, Africa), interviewed by Soham Sen, May 2, 2011; Rural Development.� Presentation for Intelecon, December 1, Washington, DC. Alex Pavlovich (freshConnect Chief of Party) and Alexandra Cech of ACDI/Voca (India Portfolio Manager), interviewed EID Parry. 2010. “Profit and Loss Account: Annual Report 2010.� EID Parry, http://www.eidparry.com/inc/P&L.pdf, accessed by Soham Sen, May 10, 2011; Judy Payne of USAID; and January 2011. 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P. 2007. “Out of Africa: Cotton and Cash.� The New York India, http://www.oracle.com/global/in/pressroom/IN_310706_ Times, January 14.. http://nyti.ms/eYidnO, accessed January SugunaGoLive.html, accessed January 2011. 2011. IC T IN A GR IC ULTUR E S E C T I O N 3 — AC C E SSING MARKE T S AND VA LU E C H A INS 259 Module 11: ICT APPLICATIONS FOR AGRICULTURAL RISK MANAGEMENT SOHAM SEN (World Bank) and VIKAS CHOUDHARY (World Bank) IN THIS MODULE Overview. Risk and uncertainty are ubiquitous and varied in agriculture. They stem from uncertain weather, pests and diseases, volatile market conditions and commodity prices. Managing agricultural risk is particularly important for small- holders because they lack resources to mitigate, transfer, and cope with risk. Risk also inhibits external parties from investing in agriculture. Timely information is essential to managing risk. Information communication technologies (ICTs) have proven highly cost effective instruments for collecting, storing, processing, and disseminating information about risk. Topic Note 11.1: ICT Applications for Mitigating Agricultural Risk. ICTs have reduced the costs of gathering, process- ing, and disseminating information that helps farmers mitigate risk. Information services using mobile phones and radios can direct early warnings of inclement weather, market movements, and pest and disease outbreaks to farmers. With an early warning, steps can be taken to limit potential losses. Farmers can also access advisory services remotely to support their decisions related to risk-mitigating activities or to choose the most appropriate action in response to an early warn- ing. These decision support systems are critical for transforming information into risk-mitigating action.  Through mKRISHI, Farmers Translate Information into Action to Mitigate Risk Topic Note 11.2: ICT Applications to Transfer Agricultural Risk. Applications of ICTs to transfer agricultural risk through instruments such as insurance and futures contracts are still quite limited. The widespread use of these instruments seems to be hampered by low levels of institutional development, high costs, inability to customize products to meet smallholders’ requirements, and poor financial literacy rather than by the information constraints that ICTs can address. In a few instances, ICT applications are facilitating the design and delivery of index insurance. Although ICTs have made it easier for smallholders to access and participate in spot commodity exchanges, their use of ICT to participate in futures contracts to hedge price risks remains a distant dream.  ICTs Enable Innovative Index-based Livestock Insurance in Kenya  Kilimo Salama Delivers Index-based Input Insurance in Kenya through ICTs Topic Note 11.3: ICT Applications for Coping with Agricultural Risk. While there have been few applications of ICTs to cope with agricultural shocks, those that exist are proving important and potentially transformative. Mobile phones enable ground personnel or affected persons to report more easily to whoever is coordinating a response to the shock. This communication leads to better-targeted relief efforts. In the event of a shock, ICTs facilitate transfers and remit- tances to farmers from state and relief agencies as well as from farmers’ extended social networks. Finally, disaster management is using more sophisticated applications to collect and synthesize information from the field. In the future, these disaster management applications might be applied to respond to agricultural shocks.  Electronic Vouchers Are a Targeted, Traceable Lifeline for Zambian Farmers  Community Knowledge Workers in Uganda Link Farmers and Experts to Cope with Risk E C O N O M IC AND S E CT OR WORK 260 MOD ULE 11 — IC T A PPLIC ATIONS FOR A GR ICULTUR A L R IS K MA NA GEM ENT OVERVIEW The module begins by distinguishing among the kinds of Risk and uncertainty are ubiquitous in agriculture and have risks that affect agriculture and then describes three major numerous sources: the vagaries of weather, the unpredict- strategies for managing risk: risk mitigation, transfer, and able nature of biological processes, the pronounced season- coping. The crucial role played by information and ICTs in ality of production and market cycles, the geographical sepa- each major risk management strategy is described, along ration of producers and end users of agricultural products, with lessons from the experience to date. Topic notes and and the unique and uncertain political economy of food and innovative practice summaries detail specific applications, agriculture within and among nations. Managing agricultural their lessons, and principles for success. risk is particularly important for smallholder farmers, who are usually already vulnerable to poverty and lack the Defining and Describing Risk resources to absorb shocks. Typical shocks such as drought (image 11.1) or a pronounced drop in market prices prevent The terms “risk� and “uncertainty� indicate exposure to poor households from acquiring assets or making the most events that can result in losses. Although the terms are often of the assets they have (Cole et al. 2008). They push families used interchangeably, they have slightly different meanings. into poverty and cause extreme hardship for those already Risk can be defined as imperfect knowledge where the prob- in poverty. abilities are known; uncertainty exists when these probabili- ties are not known. Many of the losses expected from the Exposure to risk prevents farmers from easily planning ahead risks inherent in modern agrifood systems are in fact related and making investments. In turn, risk inhibits external parties’ to uncertain events for which there are no known prob- willingness to invest in agriculture because of the uncertainty abilities, although subjective probabilities can be conjured by about the expected returns. Improved management of agri- expert opinion (Jaffee, Siegel, and Andrews 2010). cultural risk has significant potential to increase productivity- enhancing investments in agriculture (World Bank 2005). The “traditional� risks to agriculture in developing countries include inclement weather of all kinds (floods, droughts, hail, This module discusses experiences with emerging ICT snow, windstorms, hurricanes, cyclones), pest and disease applications that channel critical information for mitigating outbreaks, fire, theft, violent conflict, and hardships of the agricultural risk in developing countries, reduce the costs sort that farmers have always feared. “Newer,� less familiar of delivering insurance to remote rural users, and deliver risks have appeared with the commercialization and global vouchers to farm households affected by droughts and integration of commodity chains, including commodity price floods. Although unproven, such applications offer glimpses volatility, input price volatility, sanitary and phytosanitary of how ICT is likely to be used to manage agricultural risk. risks, the risk of social compliance, and so forth. Regardless of whether these risks are old or new, their IMAGE 11.1: Unexpected Changes in Climate Contribute to Risk sudden occurrence and the inability to man- age them can push millions of farmers into poverty traps and undermine the econo- mies of countries that depend heavily on agriculture. Risk in agriculture can be further classi- fied according to whether it predominantly affects the immediate production environ- ment, markets, or the broad institutional context in which commodities are produced and supplied:  Production risks include bad weather, pests and diseases, fire, soil erosion, other kinds of environmental degrada- tion, illness and loss of labor in the farm family, and other events that negatively Source: World Bank. affect the production of agricultural IC T IN A GR IC ULTUR E S E C T I O N 3 — AC C E SSING MARKE T S AND VA LU E C H A INS 261 commodities. These risks have a direct, immediate Although ex ante measures allow farms and firms to elimi- impact on local agricultural production, but it is essen- nate or reduce risks, reduce their exposure to risk, and/or tial to understand that their effects are transmitted mitigate losses associated with risky events, they present from the farm all along the supply chain. real and/or opportunity costs before a risky event actually  Market risks can include volatile prices of agricultural occurs. In contrast, ex post risk management measures commodities, inputs (fertilizer, pesticide, seed, and so respond only to losses that actually occur, but they can have on), and exchange rates, as well as counterparty risks, very high real and opportunity costs when that happens. theft, risk of failure to comply with quality or sanitary Farmers make decisions based on their evaluation of risks standards, or risks imposed by logistics. These risks and the resources at their disposal. usually emanate from market actors (such as traders Each strategy for managing risk can be carried out through and exporters), and their effects are transmitted back a variety of instruments, each with different private and to the farm. public costs and benefits, which might either increase or  Enabling environment risks can include political decrease the vulnerability of individual participants and the risks, the risk that regulations will suddenly be applied, supply chain. When selecting a mix of risk responses, it risks of armed conflict, institutional collapse, and other is essential to consider the many links between risk man- major risks that lead to financial losses for stakehold- agement strategies and instruments (Jaffee, Siegel, and ers all along agricultural supply chains. Andrews 2010). Risks can be idiosyncratic—affecting only individual farms To sum up, agricultural risk management strategies can be or firms (for example, illness of the owner or laborers, classified into three broad categories: acidic soil, particular plant and animal pests and diseases) or  Risk mitigation. These actions prevent events from covariate—affecting many farms and firms simultaneously occurring, limit their occurrence, or reduce the sever- (major droughts or floods, fluctuating market prices). The ity of the resulting losses. Examples include pest and high propensity for covariate risk in rural areas is a major disease management strategies, crop diversification, reason that informal risk management arrangements break and extension advice. down and that formal financial institutions hesitate to pro- vide commercial loans for agriculture (Jaffee, Siegel, and  Risk transfer. These actions transfer risk to a willing Andrews 2010). third party, at a cost. Financial transfer mechanisms trigger compensation or reduce losses generated by a given risk, and they can include insurance, reinsur- Risk Management Strategies ance, and financial hedging tools. Agrarian communities have traditionally employed various  Risk coping. These actions help the victims of a formal and informal strategies to manage agricultural risk, risky event (a shock such as a drought, flood, or pest either before or after the effects of risk are felt. Ex ante strat- epidemic) cope with the losses it causes, and they egies (adopted before a risky event occurs) can reduce risk can include government assistance to farmers, debt (by eradicating pests, for example) or limit exposure to risk restructuring, and remittances. Government and (a farmer can grow pest-resistant varieties or diversify into other public institutions, through their social safety crops unaffected by those pests). Risk can also be mitigated net programs, play a big role in helping farmers cope ex ante by buying insurance or through other responses to with risk. expected losses such as self-insurance (precautionary sav- ings) or reliance on social networks (for access to community There is a distinct role for both public and private insti- savings, for example). tutions in helping smallholders to manage agricultural risk. Private interventions include individual actions and Ex post strategies (adopted to cope with losses from risks private arrangements among individuals (either informal that have already occurred) include selling assets, seek- arrangements or formal, contractual arrangements). ing temporary employment, and migrating. Governments Governments have a supporting role to play here, which sometime forgive debts or provide formal safety nets such may include providing infrastructure, information, and a as subsidies, rural public works programs, and food aid to suitable framework for private institutions. As noted, gov- help farms and firms (and their laborers) cope with negative ernments and civil society also have a role as providers of impacts of risky events. safety nets. E C O N O M IC AND S E CT OR WORK 262 MOD ULE 11 — IC T A PPLIC ATIONS FOR A GR ICULTUR A L R IS K MA NA GEM ENT Central Role of Information and ICTs in Risk in a long line of technologies (the newspaper, telegraph, Management telephone, radio, and television) that support risk manage- All of the above-mentioned strategies—risk mitigation, trans- ment practices by collecting, processing, distributing, and fer, and coping—have limitations, and farmers often deploy exchanging information (World Bank 2007). a combination of strategies to manage their risks. The mix of A survey of current applications of ICTs to manage agricultural strategies often depends on factors like the availability and risk suggests that they are valuable for two primary reasons. understanding of different risk management instruments, First, ICTs channel information, advice, and finance to farmers institutional and physical infrastructure, a farmer’s capabili- who are difficult to reach using conventional channels. Second, ties and resource endowment, and a farmer’s social network. ICTs reduce the costs for organizations to provide risk manage- Information about what needs to be done, when, how, and ment services, because they can greatly reduce the costs of why is fundamental for smallholders and other stakeholders collecting, storing, processing, and disseminating information. in the agricultural sector to implement actions to mitigate risk, transfer risk before it occurs, and determine how to These cost reductions have produced two effects that cope once those events have occurred. encourage private investment in ICTs to manage agricultural risk. First, previously unprofitable activities have become Farmers’ information needs and sources are varied and change profitable. Second, reductions in operating costs can reduce throughout the agricultural production cycle (table 11.1), but all prices for the end user. Products and services that were once farmers require a comprehensive package of information to too expensive for the poor have come within reach, opening make decisions related to risk. a new market segment for risk management products. Farmers typically have been poorly informed. As the founder The use of ICTs to manage agricultural risk is at such an of a market information service noted: early stage that it is difficult to discern trends, but interest- Most [farmers] have long relied on a patchy network of ing developments are underway. Increasingly, the private local middlemen, a handful of progressive farmers, and and public sectors are collaborating to invest in ICTs that local shop owners to receive decision-critical informa- can deliver timely information to farmers. With continuing tion, whose reliability, accuracy, and timeliness can have improvements in technology, software, and infrastructure, a critical impact on their decision making and therefore the quality and richness of that information are improving livelihood. These are fundamental decisions, such as over time to address specific needs for individual farmers. what price to sell the crop, where to sell (given the Information services will allow farmers ever more interac- numerous fragmented markets), when to harvest, and tive, two-way communication with agricultural experts and when to spray pesticides to save the crop. others in the agricultural innovation system (see Module 6). Mehra 2010 With the incorporation of ICTs, supply chains are becoming far more transparent and capable of including smallholders Research in Sri Lanka found that the cost of information, (see Module 10). The technology seems to help farmers from the time the farmer decides what to plant until produce avoid default risks and produce to consistent quality speci- is sold at the wholesale market, can be up to 11 percent fications, which is an important step towards participating in of production costs. The study also found that information more lucrative commodity markets. asymmetry is an important contributor to overall transaction costs (De Silva 2008). ICTs such as the Internet, networked As observed earlier, the encouraging trend in risk transfer computers, mobile phones, and smart phones are the latest products is the use of ICTs to design insurance contracts, TABLE 11.1: Farmers’ Information Needs in Relation to the Crop Cycle and Market BEFORE PLANTING BEFORE HARVEST AFTER HARVEST MARKET INFORMATION  Information on agricultural inputs  Good agricultural practices  Postharvest management  Alternative market channels such as seed, fertilizer, pesticide  Pest management  Storage  Commodity prices  Credit  Harvesting time and techniques  Grading and standardization  Wholesale market price  Weather  Packaging  Logistics information  Soil testing  Market information  Consumer behavior Source: Adapted from Narula and Sharma 2008. IC T IN A GR IC ULTUR E S E C T I O N 3 — AC C E SSING MARKE T S AND VA LU E C H A INS 263 deliver insurance policies, assess crop damage, and deliver physical and telecommunications infrastructure for the cost- indemnity payments. Although the agricultural insurance effective deployment of ICTs. Where costs are sufficiently markets in developing countries are very small, ICTs clearly low because mobile infrastructure is already available, more have features that should help broaden those markets. profitable opportunities may exist. Successful ventures will offer insight into ways of ensuring sustainability and use on With regard to risk coping, technologies that allow real-time a wide scale. visualization and assessment of damage are beginning to be applied to agricultural shocks such as floods. Two other Farmer capacity is also challenging. Rural areas, where risk technologies—mobile money and electronic voucher management services are so desperately needed, also lack systems—are expected to be more regularly incorporated into education services, financial services, and even agricultural the operations of multilaterals and governments that must services. Many aspects of human capacity—such as finan- transfer funds to beneficiaries without access to financial cial literacy, knowledge of best agricultural practices, and institutions (see Module 7). familiarity with technology—are prerequisites for using risk management tools successfully. KEY CHALLENGES AND ENABLERS Highly developed software programming skills and techni- If it is difficult to ascertain trends from nascent activities such cal expertise are also critical for deploying ICTs. Many risk as those described in the topic notes, it is even more chal- management services were able to leverage the significant lenging to assess outcomes and draw lessons. Many of these human resources of larger organizations such as Reuters activities should be evaluated rigorously to determine their and Tata Consulting Services to develop their software (see impacts and critique their approaches to using ICT in manag- Topic Note 11.1). This capacity is not universally available. In ing agricultural risk. Despite these caveats, several prelimi- addition, providers must be able to assess and thoroughly nary insights, cross-cutting challenges, and key enablers for understand the needs of their clients; experience shows that risk mitigation, risk transfer, and risk coping should be noted. most technology-driven projects that do not connect with and address users’ needs have higher rates of failure. First, in some instances, farmers will pay for risk manage- ment services, particularly information services, customized Women and other vulnerable groups do not have equal to their needs. However, before adequate customization access to risk management tools. Traditional cultural norms occurs, most risk management services need public or pri- in many societies restrict women’s mobility, education, vate funding to support farmers’ initial access. Thus partner- assertiveness, and awareness, all of which affect their ships are central to assembling the combination of knowl- ability to acquire information or advisory services to help edge, skills, and resources required to manage risk through manage agricultural risks. The underlying structural gender the use of ICTs. constraints make them passive recipients rather than active seekers of information. Even when women proactively Successful efforts display cooperation between software seek information, their access to information and ability to developers, hardware manufacturers, agricultural experts, use it are hampered by gender norms and stereotypes (ILO financial intermediaries, state governments and institutions, 2001:6). donors, nongovernmental organizations (NGOs), mobile operators, and others in the private sector. These partners Theoretically, the impersonal nature of ICTs overcomes might have different incentives for participation that may not some of the traditional barriers and gender asymmetries that always be compatible, and different stakeholders may have women face in accessing information. A mobile phone, for different time horizons. To hold such partnerships together, example, does not differentiate between a female farmer an appropriate balance must be struck between stakehold- and a male farmer, but a male extension worker might. It is ers’ competing interests and short- and long-term gains. often difficult for women farmers to travel long distances to ascertain market prices, but a short messaging service Because partnerships, particularly with the participation (SMS) might deliver that information without breaking any of the private sector, are so vital in risk management, an traditional stereotypes and gender norms. Very little data, enabling policy environment and institutional framework disaggregated by the gender of beneficiaries, is avail- supporting business and entrepreneurship is also critical able on the impact of ICT applications in agricultural risk to incentivizing private investment to cope with or trans- management. Increasing gender-disaggregated data and fer risk. Additional fundamental elements are adequate analyzing the effects of risk management instruments on E C O N O M IC AND S E CT OR WORK 264 MOD ULE 11 — IC T A PPLIC ATIONS FOR A GR ICULTUR A L R IS K MA NA GEM ENT women’s agricultural experience over the long term could In nearly every instance in which investments in ICT have provide useful guidance for improving women’s access to helped agricultural stakeholders to manage risk, external such instruments. support has been critical for providing complementary public goods, including: Trust in information and trust in transfer products are also  Infrastructure, especially electricity delivery and critical issues in risk management. The information delivery mobile network coverage. mechanism seems to influence farmers’ confidence and  Institutional and regulatory reform, especially with trust in the information as well as how they use it. Farmers regard to commodity markets that raise barriers to the are more likely to act upon information received directly from adoption of ICTs for risk management. an expert than on information provided by an automated database. Farmers are also more likely to trust and act on  Business climate reforms to encourage continued information they receive from a person standing in front of participation and innovation from the private sector. them than from somebody on the phone or an automated Donors can also encourage and foster cooperation phone message. among public and private sector actors.  Technological, agricultural, and financial literacy Because most initiatives discussed in this module have yet among smallholder farmers. Low literacy represents to be studied rigorously, it is difficult to draw quantitatively a significant barrier to smallholders’ effective use of sound causal relationships between ICT for risk management ICTs to manage risk. interventions and gains in risk reduction. Support is needed for research to establish the impact of ICT in risk mitigation, Donors such as the World Bank can also monitor innovative transfer, and coping systems. Such evidence would not only applications in risk management, evaluate their impact on improve the interventions but garner support to scale up small-scale farmers and the agricultural sector, and provide effective innovations. research and technical support where necessary. Top ic Note 11.1: ICT APPLICATIONS FOR MITIGATING AGRICULTURAL RISK TRENDS AND ISSUES alone is often not sufficient to manage risk. In Uganda, for While agriculture will continue to be risky, many risks can be example, the Grameen Foundation found that even if a farmer mitigated by timely action and through the application of best knew that a banana disease was spreading nearby, he or she practices. Typical risk mitigation actions might be spraying crops required help in choosing the right action to prevent infection with the appropriate pesticides in response to an early warning of the plants they owned (Grameen Foundation 2010a). of a nearby pest outbreak or optimally altering cropping patterns in response to news from commodity futures markets. In many cases, the early warning or decision support information already exists. State meteorological services Information is the most critical requirement for effective risk generally collect weather information and create forecasts. mitigation, and farmers need a variety of information to make Similarly, agricultural institutes, research universities, or choices to manage risk. Two types of information are most extension services are typically well aware of best practices important for risk mitigation: in crop selection, production techniques, input use, pest  Early warnings about the likely occurrence of inclem- management, global commodity trends, and other topics ent weather, pest and disease outbreaks, and market critical to smallholder farmers. International organizations price volatility. also generate early warning and decision support informa-  Advisory information to help farmers decide upon a tion. USAID’s Famine Early Warning System (http://www. course of action to manage production risks optimally fews.net) provides information for governments to manage or to respond to early warnings. food security risk, for example. A similar system at FAO helps to manage food security risk—the Global Information The connection between agricultural advisory services and and Early Warning System (http://www.fao.org/giews/ risk mitigation is an important one, because information english/index.htm). IC T IN A GR IC ULTUR E S E C T I O N 3 — AC C E SSING MARKE T S AND VA LU E C H A INS 265 One difficulty has been to collect and process this informa- BOX 11.1: Reuters Market Light Disseminates Early tion so that it is relevant to individual farmers. Another has Warnings to Mitigate Risk been to transmit the information to rural populations in poorly connected areas in cost-effective ways. ICT applications The main task of Reuters Market Light (RML) is to give have made it easier and cheaper to achieve these objectives. farmers price information to increase their bargain- ing power in markets, but it also provides early warn- There is some doubt about whether an early warning alone ing information that can be used to mitigate risk. Two can help farmers mitigate risk. Many of these causal links pieces of the service are particularly relevant here: have not been tested empirically. Latent demand for advice  Farmers receive daily SMS messages containing in addition to warnings appears to exist, but it is not clear weather information for their particular locations. whether farmers are willing to pay for such advice delivered This information includes predictions for rainfall, using ICTs or whether the private sector can deliver such humidity, and inclement weather. information sustainably. Public-sector and development insti-  Farmers receive three types of news for crops tutions should remain active in this space and keep a close specified when they subscribe to the Reuters eye on pilots in countries such as India, Uganda, and Kenya. service: (1) news regarding outbreaks of pests or diseases, (2) news and analysis from global markets, and (3) government policy information RECENT ICT APPLICATIONS FOR RISK regarding, for example, farmer support programs, MITIGATION schemes, and subsidies. Farmers in many countries receive news of impending bad That timely weather forecasts might help mitigate risk is weather and catastrophic events, pest and disease out- not difficult to ascertain, as this anecdote from Reuters breaks, and price volatility in commodity markets. The use indicates. A farmer is quoted as saying, “I got message of ICTs has reduced the cost and increased the profitability on relative humidity going up to 70 percent. As a precau- of providing this information, which has attracted private- tion, I put a spray of US$ 10. My friend did not know this. sector participation in a space traditionally dominated by He lost nearly US$ 8,000 of his crop that day.� state extension services or agricultural institutes. The private Source: Authors, drawing on Reuters 2007, Preethi 2009, and Mehra sector originally developed services to provide market price 2010. information, but most of these services have evolved to deliver news about impending catastrophic and inclement weather. 13 Indian states in 8 local languages (Mehra 2010). The infor- mation is delivered directly to farmers’ mobile phones through Risk-Mitigating Information SMS. RML subscription cards can be purchased from local The quintessential example of applying ICTs to agriculture shops, input suppliers, banks, and post offices. is the Indian agribusiness giant ITC and its e-Choupal ser- vice (http://www.itcportal.com/rural-development/echoupal. Rigorous, empirical evaluations have yet to be carried out to htm), detailed in Module 9. This extensive network provides determine the quantitative relationship between information approximately 4 million farmers with information on market availability and the implications for risk mitigation. A prelimi- prices, the weather, pest and disease outbreaks, and expert nary study in Sri Lanka concluded that 40 percent of post- advice. The service is free; ITC profits by using its informa- production losses could be mitigated with timely information tion service kiosks to procure commodities and market agri- (Mittal, Gandhi, and Tripathi 2010). From an internal study, cultural inputs to farmers (ITC 2010). Thompson Reuters claims that through information sharing, an estimated 1 million farmers in over 15,000 villages have Reuters Market Light (http://www.marketlight.org/) detailed in used the service and received high returns on their invest- Module 3, modifies the information delivery model of e-Choupal ment, amounting to over US$ 4,000 from additional profits by eliminating the kiosks and reaching out directly to farmers and US$ 8,000 on saved costs, far exceeding the service fee (box 11.1). Developed by the Thompson Reuters information (International Chamber of Commerce 2010). company, the service provides highly personalized, profes- sional information to India’s farming community. It covers over Through the ESOKO platform (http://www.esoko.com/) 250 crops, 1,000 markets, and 3,000 weather locations across described in Module 3, West African farmers and traders E C O N O M IC AND S E CT OR WORK 266 MOD ULE 11 — IC T A PPLIC ATIONS FOR A GR ICULTUR A L R IS K MA NA GEM ENT receive targeted, scheduled text messages on commod- FIGURE 11.1: Ownership of Radios and Mobile Phones ity prices or offers from buyers. The focus is on creating a in Ghana, Kenya, and Zambia, 2010 transparent, stable market and reducing transaction costs. 100% Radio Similarly, the Kenya Agricultural Commodity Exchange (http:// 90% www.kacekenya.co.ke/) makes prices on the exchange avail- 80% Mobile 70% phone able by text message (KACE 2010). These services improve 60% farmers’ ability to negotiate prices and serve to partially 50% 40% mitigate price risk. Even so, they cannot mitigate the more 30% significant price volatility that originates in global markets. 20% 10% Research institutes are also innovating in the delivery of 0% Ghana Kenya Zambia Total information services. MTT Agrifood Research Finland is Source: InterMedia AudienceScapes Surveys 2010. piloting the EVISENSE project (https://portal.mtt.fi/ portal/page/portal/mtt_en/ruralenterprise/tomorrowsfarm/ envisenseforecast) to provide 24-hour disease forecasts to best course of action to manage risks in production or respond Finnish farmers using a combination of technologies such as appropriately to early warnings. For instance, weather infor- weather sensors, databases, mobile phone SMS, GPS, and mation and advisory services are in place in many countries online management systems. Sensor networks across the to help stakeholders make optimal decisions from crop plan- country feed weather data to a centralized server. This central- ning to crop sale to manage risks. Again it is important to ized database contains farmer-specific cropping information emphasize that such advisory services are important for risk provided by the farmer. Computer models use the site-specific mitigation because they help farmers translate good informa- data along with the weather data to predict pest outbreaks. If tion into practical actions that reduce their exposure to risk. an outbreak is predicted, farmers receive messages on their Such services enable farmers to interact in various ways mobile phones and can then log onto the Internet to download (such as voice interaction or SMS queries using mobile additional information from a farm management information phones) with an automated database containing best prac- system. The online system recommends which spray agents tices and recommendations to handle most routine queries. to use and when to combat the impending attack. Common queries might include ideal planting times, optimal Through EVISENSE, farmers can mitigate the risk of dis- input applications, or suggestions on which crops to plant ease by spraying their crops with the appropriate pesticide based on market trends. In unique cases, queries are referred ahead of an outbreak. The spraying plan can be sent to the to agricultural experts. In other cases, the farmer is able to computer on the tractor’s sprayer to carry out the spraying. speak directly with extension personnel. Once it is entered into the tractor’s system, the plan can be The mKRISHI service recently piloted by Tata Consulting fine-tuned using GPS systems on the tractor and location- Services in India is a prototypical example of remote exten- specific data on moisture, wind, and predicted rainfall from sion services that allow two-way interactions. (“Krishi� is MTT’s SoilWeather system. For example, if rain is predicted “farming� in Hindi.) A farmer uses the platform to access within three hours of spraying, the spraying will be discontin- best practices and query agricultural experts through low- ued. This information prevents expensive inputs from being cost mobile phones, mostly using SMS (Banerjee 2010). washed away and damaging the environment (MTT 2009). MKRISHI is not the only program of its kind to offer remote Mobile phones are not the only way to deliver early warning extension services heavily reliant on ICTs. Other countries information. Radio remains very important: More farmers have experimented with slightly different ways of linking the are likely to receive information from the radio than from any farmer to extension information. The Kenya Farmers Helpline other source. Recent data show that in sub-Saharan Africa, (“Huduma Kwa Wakulima�) (http://www.kencall.com/index even among more developed nations, the penetration of .php/site/kenya_farmers_helpline/) was launched in 2009 by radio still exceeds that of the mobile phone (figure 11.1). KenCall, a Kenyan business process outsourcing company, with support from the Rockefeller Foundation. Instead of Decision Support Systems using SMS, farmers call the Helpline and speak to an agricul- Besides fostering the delivery of timely and accurate informa- tural expert in English or Swahili (Lukorito 2010). Kisan Call tion to mitigate risk, ICT applications also act as decision sup- Centre (India) and Jigyasha 7676 (Bangladesh) are similar port systems. These systems help stakeholders choose the operations that provide customized expert advice to farmers. IC T IN A GR IC ULTUR E S E C T I O N 3 — AC C E SSING MARKE T S AND VA LU E C H A INS 267 Radio (a traditional source of extension advice) is becom- LESSONS LEARNED ing a more interactive source of advice with the advent of A number of insights emerge from recent experiences in mobile phones and call-in (or text-in) programs. The African using ICTs to mitigate agricultural risk. One important insight Farm Radio Research Initiative (http://www.farmradio.org/ is that the missing link in providing risk-mitigating information english/partners/afrri/) of Farm Radio International (http://www to farmers was not the information itself but the challenge of .farmradio.org/) creates content that can be broadly described aggregating, personalizing, and disseminating it in a timely as agricultural extension information, including weather and cost-effective way. The content that farmers need is forecasts, price news, and early warnings about pests and already produced by universities and government institutes. diseases. (For details, see Topic Note 6.2.) Any use of ICT applications to mitigate agricultural risk must Supply Chain Integration and Traceability ensure that the fundamental requirements described above are present or can be developed easily. For example, farmers’ ICT applications are also helping supply chains become more familiarity with ICTs should be assessed before initiating an vertically integrated. Better cooperation between farmers and intervention. Similarly, there should be a baseline understand- buyers along the supply chain mitigates default risk. Amul in India ing of whether farmers have the capacity to make good use of has installed Automatic Milk Collection Unit Systems in village the information. Do farmers have access to rural finance, mar- dairy cooperatives. These systems enhance the transparency of kets, transport, technology, inputs, and so on? If not, consider transactions between the farmer and the cooperative and have awareness and education programs regarding risk-mitigating lowered processing times and costs. The application uses com- strategies or appropriate responses to early warnings. puters connected to the Internet at the milk collection centers to document supply chain data such as fat content, milk volumes One difficulty in providing early warning or advisory services to procured, and amount payable to the member (Bowonder, Raghu farmers was not that the information was lacking, but that it Prasad, and Kotla 2005) (for considerably more detail, see IPS “IT could not be delivered effectively. ICTs make it easier to collect Tools for India’s Dairy Industry� in Module 8). information from the universities and institutes that produce it and then to personalize it and provide it directly to farmers. The Dairy Information Services Kiosks at collection centers medium matters, however. A radio announcement is different describe best practices in animal care to enhance milk yield from a phone call, which is again different from a text message. and quality and assists dairy cooperatives to effectively schedule and organize veterinary, artificial insemination, Collaboration between the private and public sector is increas- cattle feed, and related services (Rama Rao 2001). Delivery ing. The public sector generates early warnings and provides of such comprehensive information helps to improve inte- expert advice, while the private sector has found that it can gration of the supply chain, thus reducing default risk. The leverage ICTs (particularly mobile phones and back-end data early detection of production volatility makes it possible to collection and processing systems) to deliver this content to take preemptive measures to address the underlying risk. farmers quickly. Profitability remains a challenge. In many instances, the upfront investment and capital costs (such as ICT applications, particularly GIS and RFID technologies, have had the cost of investing in weather and ICT infrastructure) as well an impact in mitigating two additional forms of risk in the supply as the operational costs are high. A longer-term horizon and chain: sanitary and phytosanitary (SPS) risk and default risk. Larger significant economies of scales are required to break even. aggregators and traders use software systems to collect and track information about who is growing what and whether farm- The ability to deliver highly personalized information is another ers are adhering to the food safety and quality standards imposed key to earning revenue. Farmers naturally want information in Europe and North America, especially for perishable foods. relevant to themselves—their crops, their plant and livestock Traceability technologies and software to increase integration in disease, their markets—in the language they speak. It is difficult supply chains, such as Muddy Boots (http://en.muddyboots.com/) to elicit direct payment for services from farmers, but if farmers (see Module 10), help to mitigate default risk when suppliers rely see a value proposition, they are often willing to pay for a service. on large numbers of small-scale farmers. Fruiléma (http://www. fruilema.com/), an association of fruit and vegetable producers and As a result, private participation in delivering information exporters in Mali, launched a web platform for potential buyers to should be encouraged where possible, but the commercial track the entire mango production chain and enables Fruiléma to sustainability of such initiatives should be analyzed rigor- comply with Global G.A.P. standards (see IPS “Mango Traceability ously. Information service providers should be encouraged to System Links Malian Smallholders and Exporters to Global partner with the public sector to source content. It is difficult Consumers� in Module 12). E C O N O M IC AND S E CT OR WORK 268 MOD ULE 11 — ICT A PPLIC ATIONS FOR AGR ICULTURA L R IS K MA NAGEM ENT to imagine that the private sector would find IMAGE 11.2: The mKRISHI Interface it profitable to invest in generating content as well as delivering it (unless delivering it to farmers they contract). State-funded institutions have been critical partners in sharing their knowledge and resources without cost. Cooperation and connectivity are critical between information distributors (mobile application developers) and informa- tion creators (universities, news organiza- tions, meteorological services, government data services). Source: TATA Consulting Services. Technology considerations are also critical. Even though farm- Through the advisory service, farmers might inquire how ers can get weather information from the radio, those reports much fertilizer or pesticide to use, so they can optimize their come only at a certain time and are easily missed, because use of these costly inputs. Similarly, farmers might inquire farmers are often in transit or working in the field away from about when to harvest to avoid inclement weather. Farmers the radio. Text messages, which can be stored and accessed with cameras in their phones can submit photographs to at any time, are preferred because they ensure that farmers supplement their messages. While responding to farmers’ receive the critical early warning. Mobile infrastructure is vital queries, experts are able to incorporate soil information by for most services that transmit risk-mitigating information to accessing the soil sensor nearest to the caller’s location farmers (except for services relying on radio). (Pande et al. 2009). Farmers can also request a voice- or SMS-based expert response. New capacities in technology may lead to even better risk miti- gation strategies. The growing sophistication of mobile phones and falling costs of weather sensors make it likely that farmers Growth and Development will soon have access to a richer variety of information that is MKRISHI was conceived and developed at the innovation lab even more tailored to their location, crop choice, and general of Tata Consulting Services (TCS). The first pilot was deployed information needs. Java-enabled phones, for instance, are in 2010 to an estimated 500 farmers in Uttar Pradesh and cheaper and allow farmers to access information using menus Punjab, who pay US$ 1–2 per month to use the service. The instead of simply sending SMS queries back and forth. Two-way service is being provided at a subsidized cost, as farmers were interaction between farmers and advisors, in which farmers unwilling to pay the unspecified higher cost at which the ser- can ask and receive answers to specific questions, are likely to vice was initially offered (Pande 2010). However, mKRISHI has increase but also to command a premium. A direct connection found that farmers may be more willing to pay if information overcomes literacy and language barriers, though these barriers on market linkages and the facilitation of credit is offered along should also ease as voice recognition technology improves. with the advisory services. Like RML, mKRISHI disseminates a wide range of person- INNOVATIVE PRACTICE SUMMARY alized information; the critical difference is that experts can Through mKRISHI, Farmers Translate Information respond to farmers’ queries. To provide the early warning into Action to Mitigate Risk and news information, the system relies on a web-based MKRISHI is innovative because it enables farmers to trans- mobile platform that ties into many information sources. form information into risk-mitigating actions (“TCS’ mKRISHI Data are gathered from commodity exchanges, agricultural � on Pilot Run in Maharashtra, The Financial Express, 2009). research institutions (often state supported, such as Punjab The mKRISHI platform, developed by Tata Consultancy Agricultural University), banks, weather servers, local mar- , Services in 2007 enables farmers to access best-practice kets, and solar-powered weather and soil sensors distributed information and agricultural experts through low-cost mobile throughout the areas where the service is offered (figure phones using SMS (Banerjee 2010) (image 11.2). The con- 11.2) (Pande et al. 2009). nection between agricultural advisory services and risk mitigation is an important one, because information alone is To respond to farmers’ queries, mKRISHI relies on an auto- often not sufficient to manage risk. mated database of frequently asked questions. The database IC T IN AGR IC ULTUR E S E C T I O N 3 — AC C E SSING MARKE T S AND VA LU E C H A INS 269 FIGURE 11.2: The mKRISHI Infrastructure Source: TATA Consulting Services. Note: CDMA = Code Division Multiple Access, a standard used by mobile phone companies. can handle most questions, which are usually generic, but 1991:643). Again, however, the implication of delivering such more specific or sophisticated questions are forwarded to 10 services remotely is still to be tested. experts with Internet access. These experts interact with a system that resembles email; they are able to see attached As noted, mKRISHI was made available to 500 farmers in photos and soil sensor information with each message and two Indian states as of 2010, and there are plans to offer their response is sent back to the farmer by SMS. the service across India. There are also discussions about launching similar services in the Philippines and Ghana (Banerjee 2010). Impact, Scale, and Sustainability The sustainability of the mKRISHI platform is still questionable. Farmers reportedly use mKRISHI to choose planting strate- The complexity of the platform and the numerous pieces that gies, optimize fertilizer use, and time the harvest to avoid bad are tied together, from people to technologies to automatic weather. Such choices surely contribute to risk mitigation, sensors, imply a difficult and expensive challenge to sustain- and some early data from the pilot studies and interactions ability. Another challenge is posed by the inability to collect the with farmers show promise in this regard. full marginal cost of the service from farmers (Pande 2010). If productivity increases can be partially attributed to supe- The independent development and implementation of the rior risk mitigation, then indirect quantitative research sug- project by a large private company suggests, however, gests that an agricultural advisory service such as mKRISHI that the program might be able to sustain itself until it can improves risk mitigation. Much evidence supports the idea resolve operational challenges to profitability which seems that effective delivery of traditional extension services to to be occurring. Much of the basic information comes from farmers improves productivity. Returns to extension services public sources, and mKRISHI has been able to organize and vary by crop and by geography, but studies show them to be personalize it through a large consortium of partners. The quite high: “75–90 percent in Paraguay, 13–500+ percent in ready availability of the basic information (a public good) thus Brazil, and 34–80+ percent in a group of countries in Asia, becomes one of the prerequisites for building and sustaining Africa, and Latin America� (Birkhaeuser, Evenson, and Feder such operations. E C O N O M IC AND S E CT OR WORK 270 MOD ULE 11 — IC T A PPLIC ATIONS FOR A GR ICULTUR A L R IS K MA NA GEM ENT Topic Note 11.2: ICT APPLICATIONS TO TRANSFER AGRICULTURAL RISK TRENDS AND ISSUES BOX 11.2: How Does Insurance Work? Farmers face many important risks that they can do little to Insurance allows risk to be transferred to a third party mitigate through better agronomic practices or the use of for a fee. In exchange for that fee (premium), a farmer early warning information, as described in Topic Note 11.1. receives an policy or insurance contract that is likely to Among these risks, price volatility and bad weather risk can have the following features, among others: (1) a speci- be particularly devastating. Low prices at harvest can signifi- fied time period during which the risk is partially or wholly cantly reduce a farmer’s income, while weather risk in the borne by the third party; (2) the events that are covered form of floods or droughts can reduce yields or destroy crops. (a single peril such as hail, for example, or multiple perils Farmers (or farmer groups) in developed nations can use such as drought, hail, fire, and theft); and (3) the payout specific instruments to transfer their risk to a third party in in the event that the risk event occurs (indemnity), and exchange for a fee. The third party can be a public or private possibly some gradation of the payout depending on the insurance company in the case of weather risk or a com- severity of the loss. modity futures exchange in the case of price risk. In develop- The insurance company profits by pooling risk across ing countries, the availability of such instruments is limited, large numbers of clients and charging a premium that although pilot projects are starting to introduce them. exceeds the likelihood of the peril occurring, multiplied by the losses that will accrue as a result. For a peril to be ICTs are playing a critical role in these pilot studies on risk insurable, the resulting loss has to be definite, acciden- transfer. Advances in mobile phone applications for money tal, large, calculable or able to be estimated, and the total transfers, improvements in the resolution and cost of sat- payout must be limited in the event of a catastrophe. ellite imagery, and the pyramiding of multiple ICTs (mobile Source: Greene 2010. phone, GIS, remote sensing data) to create newer applica- tions are all promising trends that could be leveraged to transfer agricultural risks. The heightened volatility of international commodity prices and the threat of climate change have increased developing- problems of moral hazard and adverse selection; insufficient country stakeholders’ interest in risk transfer instruments. data; high administrative costs in delivering the product, Now the bigger challenge is to make risk transfer instru- assessing damages, collecting premiums, and making pay- ments such as insurance and price hedging more relevant ments; and weak institutional and policy environments and affordable for smallholders. The ability of ICTs to reduce (Wenner and Arias 2003). Low trust and financial literacy transaction costs, deliver information and financial transac- have also limited the effective demand for insurance and tions, provide real-time data about hazards, and perform limited the willingness to pay for policies (Giné, Townsend, remote damage assessment can also help in piloting and and Vickery 2008). In recent years, a modified form of insur- scaling up risk transfer instruments. ance, weather-based index insurance, has been piloted in several parts of the world to address the moral hazard and adverse selection challenges and to lower the costs of dam- Instruments to Transfer Risk age assessments (box 11.3). Transferring risk through insurance has several important benefits. Insurance stabilizes asset accumulation by reduc- Farmers can use other means of transferring risk to avoid ing the negative impact of weather shocks. Insurance also the problems caused by large fluctuations in the prices of fosters investment, because it reduces the uncertainty of the commodities they produce. By transferring risk through returns (Mude et al. 2009) (box 11.2). futures contracts traded on commodity futures exchanges, farmers gain a means of managing the price volatility of Insurance contracts are complex, however, and profitable agriculture commodities, which lends greater certainty to insurance operations face numerous challenges. These chal- their production planning and farm investment decisions lenges include the difficulty of designing contracts to avoid (UNCTAD 2009:17–18) (box 11.4). IC T IN A GR IC ULTUR E S E C T I O N 3 — AC C E SSING MARKE T S AND VA LU E C H A INS 271 BOX 11.3: What Is Index Insurance? knowledge that most farmers or farmer cooperatives do not have. Even in the United States, less than 10 percent of The unique feature of index insurance is that it reduces farmers interact directly with commodity futures exchanges. the cost of assessing damage by substituting individual They do make use of futures prices to make planting and loss assessments with an indicator that is easy to mea- production decisions, however (Cole et al. 2008). Efforts are sure as a proxy for the loss. Weather events or visible underway in China (UNCTAD 2009:13) and India to teach vegetation have served as typical indicators. Besides farmers how to make use of futures markets, but ICTs do reducing transaction costs, another advantage of index- not play a central role (Cole et al. 2008). based insurance is that it reduces problems of adverse selection, because the insured cannot influence the ICTs and Risk Transfer Instruments index or the loss assessment. Although ICT applications have made it easier for farmers to The disadvantage is basis risk: the imperfect relationship access information from commodity futures markets, such between the policy holder’s potential loss and the index applications have not served to facilitate greater interaction behavior. It is not always possible to perfectly match with the futures markets to transfer price risk. one farmer’s loss from drought to that of all others. Undoubtedly, some farmers will lose more and some With respect to insurance, however, ICTs seem to be easing less. constraints arising from the lack of data and high administrative Source: Mude et al. 2009. costs. Data requirements can be intensive; for example, weather insurance contracts require time-series data on weather and associated losses for farmers. High-resolution satellite imagery BOX 11.4: Commodity Futures Markets has made data available to design insurance contracts that once would have been impossible to develop given the lack of data A recent report by the United Nations Conference in many countries. Advances in ICT can help overcome gaps on Trade and Development describes a commodity in weather data by creating synthetic data based on satellite exchange as: information. Together, new data and lower costs have facilitated the development of innovative index insurance products that . . . a market in which multiple buyers and sellers are currently in various stages of testing. trade commodity-linked contracts on the basis of rules and procedures laid down by the exchange. For example, AGROASEMEX (http://www.agroasemex.gob Such exchanges typically act as a platform for trade .mx/), a Mexican national insurance institution focused on in futures contracts, or for standardized contracts the rural sector, was a pioneer of indexed weather insurance for future delivery. Often, in the developing world, a (and now offers catastrophic risk insurance). In 2007, the commodity exchange may act in a broader range of institution began to offer an insurance product for pasture ways, in order to stimulate trade in the commodity land based on an analysis of vegetation detected by satel- sector. This may be through the use of instruments lite (called Normalized Difference Vegetation Index or NDVI) other than futures, such as the cash or ‘spot’ trade (IFAD and WFP 2010:65–73). Satellite data also allowed the for immediate delivery, forward contracts on the International Livestock Research Institute (ILRI) and its part- basis of warehouse receipts, or the trade of farm- ners to overcome data limitations and create an index-based ers’ repurchase agreements for financing. livestock insurance program in which damage is assessed Source: UNCTAD 2009:17. through remote sensing (see IPS “ICTs Enable Innovative Index-based Livestock Insurance in Kenya,� later in this note). In Nicaragua and Honduras, synthetic data were created through Like insurance, commodity futures exchanges have signifi- a public-private partnership in collaboration with the local cant requirements, particularly with regard to policies, regula- meteorological agency. Three insurance companies (Equidad in tion, and financial literacy. Exchanges must be governed by Honduras and LAFISE and INISER in Nicaragua) currently use clear rules, operated transparently, and regulated properly to these data to design index insurance contracts for farmers. ensure the level of confidence that traders demand. Such institutional capacity is often limited in developing nations. Another novel insurance scheme, Kenya’s Kilimo Salama The trading of futures contracts also requires specialized (http://kilimosalama.wordpress.com/), is described in the E C O N O M IC AND S E CT OR WORK 272 MOD ULE 11 — IC T A PPLIC ATIONS FOR A GR ICULTUR A L R IS K MA NA GEM ENT innovative practice summary at the end of this note. It uses providers need to be regulated to ensure that they can weather indicators as a proxy for input losses. deliver on payouts. The application of ICTs to risk transfer products has yet LESSONS LEARNED to mature, and interventions should be undertaken with extreme caution. This topic note describes promising Compared to the range of applications for risk mitigation, ICT examples, but any attempt to replicate them should take applications to transfer weather and price risk to third parties the local context into account. Furthermore, the current are limited. Risk transfer instruments such as insurance and pilot programs should be subject to impact analysis to futures contracts have fared poorly in developing countries in quantify their value. In the meantime, efforts can focus on general. Such instruments often require well-developed insti- improving the coverage and quality of ICT infrastructure, tutions and high levels of financial literacy, which are often improving the institutional framework required to support lacking in rural areas of developing countries. risk transfer products, and improving the awareness of transfer products and their proper use among farmers and The critical message here is that ICT applications reduce the cooperatives. cost of delivering insurance and improve the dissemination of prices from international futures markets, but by them- selves they are unlikely to foster widespread use of risk transfer instruments. Before ICTs can be used to transfer INNOVATIVE PRACTICE SUMMARY risk, the environment must be conducive. Appropriate infra- ICTs Enable Innovative Index-based Livestock structure, institutional structures, and policies for developing Insurance in Kenya and delivering such instruments must be in place. Farmers ICTs have enabled International Livestock Research Institute must exhibit sufficient demand for the instruments. High lev- (ILRI) and its partners to overcome data limitations and pro- els of financial literacy and technical skills are also required. hibitive administrative costs to create an index-based livestock Technical expertise is absolutely vital for accessing and inter- insurance product. Damage is assessed by remote sensing, preting satellite data and designing actuarially sound policies. and the insurance is distributed through wirelessly connected point of sale systems deployed across the country. Unique partnerships are essential to incorporate ICTs into risk transfer products such as index insurance. The array of ILRI, part of the Consultative Group on International partners must have the vital technical skills just described Agricultural Research (CGIAR) (www.cgiar.org), developed and must be able to access distribution channels, provide its Index-based Livestock Insurance product (http://www.ilri financial support, and assist with implementation. There is .org/ibli/) in 2009 in collaboration with a wide array of part- a role for the public sector to develop and disseminate basic ners, including private and government players (ILRI 2009). information about risk, because such information in the public Initiated in 2010, the pilot program provides farmers with domain facilitates the creation of risk markets. Governments livestock insurance for 6–8 animals per year for a premium of can also have a role in planning emergency response to infre- US$ 50–100 (Waruru 2009). quent but catastrophic risks, while allowing private markets to handle insurance. Partners must also be willing to collect Index-based livestock insurance seeks to interrupt the downward data and make it available for insurance companies to price spiral of vulnerability, drought, and poverty in northern Kenya—a policies correctly or, in the case of index insurance, to create process that is exacerbated by climate change. Northern Kenya the index that links weather events to specific losses. is home to 3 million pastoralist households and is prone to severe drought (Mude et al. 2009). Pastoralists earn a livelihood by An enabling regulatory and policy environment is funda- grazing cattle (also sheep, pigs, and poultry) on semiarid to arid mental for risk transfer tools to work and is characterized land and by selling meat, milk, and eggs (image 11.3). Livestock by such traits as the rule of law, contract enforcement, and account for 95 percent of family income in an area where the private property rights. For commodity markets, a rules- or incidence of poverty is 65 percent, the highest in the country principles-based approach to regulation and governance, (FAO–AGAL 2005:3). If drought occurs, the vegetation that the instead of a discretionary approach, is essential for success cattle graze upon is lost. Cattle starve, depriving vulnerable pasto- (UNCTAD 2009). In the case of insurance, the insurance ral families of their sole source of income. IC T IN A GR IC ULTUR E S E C T I O N 3 — AC C E SSING MARKE T S AND VA LU E C H A INS 273 Livestock insurance allows IMAGE 11.3: Pastoralism in Africa Is a Critical Means to Rural Livelihoods farmers to pay a premium to transfer the risk of livestock dying in a drought to an insur- ance company. If a drought occurs, the policy indemnifies the pastoralists’ loss. Previous insurance programs were not sustainable. The administrative costs of assessing the losses of remote pastoral communi- ties, collecting premiums, and paying out indemnities were prohibitive. It is unclear whether the advent of ICTs will make such programs more sustainable, because other factors affect sustainabil- Source: Curt Carnemark, World Bank. ity, such as creating effective demand or minimizing basis risk. Programs such as index- Statisticians used data on livestock losses for Marsabit based livestock insurance are being attempted, however, District, the pilot region, to create an index to predict live- because ICTs greatly reduce the administrative costs that stock mortality based on the remotely collected vegetation crippled previous programs. As noted, ILRI’s index-based data (image 11.4). This procedure allowed for actuarially fair program was designed using satellite data; damages are pricing of the index insurance (Mude et al. 2009). assessed by satellite; and delivery, premium collection, and indemnity payments are all done through wireless point of The project is being implemented with Equity Insurance Agency, sale systems. UAP Insurance Limited, Financial Sector Deepening Kenya, and three government departments: Kenya Meteorological Growth and Development Department, Ministry of Development of Northern Kenya and other Arid Lands, and the Ministry of Livestock (ILRI 2009). Much of the technical work on the insurance product was done by Cornell University and the University of Wisconsin Two significant operational challenges arose: creating BASIS program in collaboration with Syracuse University effective demand and delivering the insurance cost- and the Index Insurance and Innovation Initiative. As with effectively. Education by way of experimental games the design of any index insurance, the challenge was to proved critical to generate effective demand. Before a find sufficient data on both the peril as well as the indicator. farmer would pay for an insurance program, he or she Both kinds of data are necessary; data on the indicator are would need to understand what value the product added used to statistically predict the peril and price the insurance and how it would work. The challenge was exacerbated correctly. by low literacy (Mude et al. 2009). The innovation in this case was to use vegetation as the In a vast region with so few market channels, cost-effective indicator, because vegetation can be measured objectively delivery of the insurance product was also a significant chal- by satellite to indicate the level of drought. Fortunately, lenge. Policies were sold through Equity Bank’s point of sale the United States’ National Oceanic and Atmospheric system based on handheld mobile devices, which have been Administration has collected the high-quality imagery nec- rolled out to 150 areas across northern Kenya. This channel essary to construct a Normalized Difference Vegetation was primarily developed for another program (DFID’s Hunger Index since 1981, and the imagery is available free of Safety Net Program). charge. E C O N O M IC AND S E CT OR WORK 274 MOD ULE 11 — IC T A PPLIC ATIONS FOR A GR ICULTUR A L R IS K MA NA GEM ENT IMAGE 11.4: Normalized Difference Vegetation Index, commercially viable premium loadings. Because willing- Marsabit District, Kenya, February 2010 ness to pay is especially price sensitive among the most vulnerable pastoralists (i.e., those not currently caught in a poverty trap, but on the verge of falling into one) for whom the product is potentially most beneficial, subsidization of asset insurance as a safety net intervention may prove worthwhile. Simple simulations find that relatively inexpen- sive, partial subsidization targeted to households with herd sizes in specific ranges can significantly increase average wealth and decrease poverty, at a rate of just $ 20 per capita per one percent reduction in the poverty headcount rate.� Chantarat et al. 2009 This last point has implications for sustainability, which faces substantial financial hurdles if the product cannot be com- mercially viable. The development and pilot of the program were funded by Financial Sector Deepening Trust in Kenya, the UK Department for International Development (DFID), and USAID (Waruru 2009), but plans to expand nationally would require substantial private investment. There are also questions of dependency on other programs. The satellite data, for example, are critical. If they are lost, there would be sustainability concerns. Similarly, the point of sale system used to deliver the insurance is funded by Source: ILRI. a separate program; any changes to that program might threaten the insurance program. Impact, Scalability, and Sustainability It is too early in the pilot stage to assess the program’s actual effectiveness in managing risk and ultimately reducing pov- INNOVATIVE PRACTICE SUMMARY erty. An evaluation is to be conducted by the University of Kilimo Salama Delivers Index-based Input Wisconsin at the end of the pilot. The results will help design Insurance in Kenya through ICTs any modifications in the insurance program and influence The Kenyan insurance scheme Kilimo Salama (http:// decisions on scaling up the pilot to other areas. The plan is to kilimosalama.wordpress.com/) (its name means “safe farm- expand the program throughout the country if it proves suc- ing� in Swahili) innovates by using mobile phones to collect cessful in Marasabit District (Mude et al. 2009). Meanwhile, premiums and distribute payouts, thereby reducing assess- an ex ante assessment of the insurance found that: ment and administrative costs. Weather indicators are used as a proxy for the loss of inputs. Under Kilimo Salama’s “. . . household initial herd size—i.e., ex ante wealth—is the “pay-as-you-plant� model, agrodealers sell insurance policies key determinant of IBLI [index-based livestock insurance] according to the quantity of inputs purchased. performance, more so than household risk preferences or basis risk exposure. IBLI works least well for the poorest, Kilimo Salama was developed by the Syngenta Foundation for whose meager endowments effectively condemn them Sustainable Agriculture in partnership with Safaricom, UAP to herd collapse given prevailing herd dynamics. By con- Insurance, MEA Fertilizers, and Syngenta East Africa Limited. trast, IBLI is most valuable for the vulnerable nonpoor, for The program specifically insures the cost of inputs in case of whom insurance can stem collapses onto a trajectory of poor weather over the planting season. Plans are in place to herd decumulation following predictable shocks. offer a crop loss product in addition to the input loss insurance. “District-level aggregate demand appears highly price The premium amount is 10 percent of the input cost, which elastic with potentially limited demand for contracts with is shared equally by farmers and the input companies IC T IN A GR IC ULTUR E S E C T I O N 3 — AC C E SSING MARKE T S AND VA LU E C H A INS 275 (50 percent each). The farmer thus pays a premium of Micro-Insurance Plan Uses Mobile Phones and Weather 11 cents on a bag of higher-yielding maize seed that costs Stations to Shield Kenya’s Farmers,� Science Daily, 2010). US$ 2.20 or 31 cents on a 10-kilogram bag of fertilizer that sells for US$ 6.20 (Kilimo Salama n.d.) The value of the insurance generally is not disputed, but Kilimo Salama has just finished the pilot program and impact When the products are sold, the seller activates the insurance has yet to be rigorously assessed. Even so, the business policy using the Kilimo Salama application on the seller’s hand- model, privately cofinanced by input sellers, seems to be set by (1) scanning a product-specific bar code with the camera growing on its own. In 2010, 12,000 farmers had registered phone, (2) entering the farmer’s mobile number, and (3) linking for the insurance, and there are plans to make the product the farmer to the local weather station (image 11.5). The buyer available to 50,000 farmers in Kenya by 2011 (Ogodo 2010). receives an SMS confirming the insurance policy (“First Micro- Insurance Plan Uses Mobile Phones and Weather Stations to IMAGE 11.5: Weather Station in Kenya Shield Kenya’s Farmers,� Science Daily, 2010). ICTs are used in every part of the operation. Thirty solar- powered weather stations automatically monitor the weather; paperless channels are used to sell product; the Safaricom 3G network is used to cheaply and quickly transmit monitoring, sales, and payout data; and M-PESA (owned by Safaricom) is the platform used to make indemnity payments electronically. The Kenya Meteorological Department provided the support- ing weather data to create the index and correlate it to crop losses and therefore to input-investment losses (Ogodo 2010). Each insurance policy sold requires the farmer to be registered to the nearest weather station (Ogodo 2010). If there is excess rain or insufficient rain, as measured by the weather report- ing stations, the index correlating rainfall and crop growth defines the payout due. Then the payment is made straight to the farmer’s handset using M-PESA (see IPS “M-PESA’s Pioneering Money Transfer Service,� in Module 2). The insurance program was piloted to 200 farmers linked to two weather stations in 2009 in Laikipia District. There was a drought in both areas, and 80 percent of the input invest- ment was returned to farmers linked to one weather station, whereas the other station reported a less severe drought and the payout was 30 percent of the investment (“First Source: Syngenta Foundation. Topic Note 11.3: ICT APPLICATIONS FOR COPING WITH AGRICULTURAL RISK TRENDS AND ISSUES activities, disrupt them, or in the worst case, shut them down Regardless of the best efforts to mitigate or transfer risk, agri- (Jaffee, Siegel, and Andrews 2010:21). Coping involves cultural production is inevitably susceptible to risks of floods, responding to a shock in ways that immediately curtail further drought, and disease, among others. Such risks, when they losses in the short term, protect remaining life and assets in materialize, can force farmers to deviate from their agricultural the medium term, and enable recovery in the long term. E C O N O M IC AND S E CT OR WORK 276 MOD ULE 11 — IC T A PPLIC ATIONS FOR A GR ICULTUR A L R IS K MA NA GEM ENT Left to their own devices to cope with unmitigated risks, India created an SMS-based reporting service to track animal farmers typically employ strategies that are expensive in the health. Fieldworkers collected information about the health long run. They may quickly sell productive land and other of animals and reported it to the directorate for analysis via assets at below-market prices to generate cash; deplete per- text message (E-Agriculture 2008). MKRISHI helps farmers sonal savings, if they have any; pull children out of school; cope with similar shocks. If an outbreak occurs, farmers or borrow at high interest rates (Cole et al. 2008). Farmers can submit photos or describe the outbreak through SMS also turn to their social networks for support, but this strat- to receive assistance in identifying the disease or pest and egy does not work when entire villages are affected. When recommendations for managing the outbreak. a farmer loses crops to floods, he or she may not be able to rely on family members in the same village who have suf- The Community-level Crop Disease Surveillance Project fered the same fate. (CLCDS), discussed in an innovative practice summary fol- lowing this note, takes this activity a step further. Piloted in To prevent people from resorting to expensive coping strat- Uganda by the Grameen Foundation, the project employs egies, governments and relief organizations attempt to community knowledge workers to help identify diseases and quickly identify and assist those affected by shocks. Timely advise on control methods. assistance can stem further losses and begin the recovery process. Assistance might be provided in the form of food Another significant challenge in coping with shocks is the vouchers, low-interest loans, technical assistance to resume need to disburse transfers and remittances rapidly to affected productive activity, subsidized fertilizers, or loan cancellations. farmers, many of whom have limited access to formal finan- cial services. The advent of mobile money has dramatically eased this constraint, making it faster for farmers to receive remittances from their social networks or receive transfers RECENT APPLICATIONS from governments and relief agencies. A few ICT applications are used to cope with agricultural shocks such as droughts, floods, and disease outbreaks, The leader in this space is Safaricom’s M-PESA (http://www but they are proving important and potentially transforma- .safaricom.co.ke/index.php?id=745) a money transfer system tive. First, ICTs such as mobile phones (particularly those that allows individuals to deposit, send, and withdraw funds equipped with GIS and cameras) can be used to collect using SMS. M-PESA has grown rapidly, currently reaching information after a shock about the extent of the damage, approximately 38 percent of Kenya’s adult population. The numbers of individuals affected, and who needs relief. These M-PESA model has been copied with little modification field data have proven vital to relief efforts, especially for bet- worldwide (Jack and Suri 2009:6), but it has yet to be applied ter targeting and coordinating an effective response. Second, specifically to agricultural risk. (See IPS “M-PESA’s Pioneering ICTs (particularly mobile phones) have been used to address Money Transfer Service,� in Module 2, for an overview.) the problem of disbursing remittances or aid vouchers to individuals affected by agricultural shocks. Farmers are dif- A Zambian company, Mobile Transactions (http://www ficult to reach and lack access to financial institutions, but .mtzl.net/), delivers electronic payments, vouchers, and loan increasingly they have mobile phones. disbursements using mobile phones, scratch cards, and a countrywide agent network (see the innovative practice The use of ICT applications to assess the nature and extent summary following this topic note). The voucher system of risks and improve the coordination and targeting of cop- primarily targets organizations that regularly make transfers ing strategies has been particularly noteworthy for disease to a large number of beneficiaries, such as the World Food outbreaks. Rapid assessment and response are critical to Programme. controlling disease outbreaks. Only after a farmer has recog- nized the symptoms and identified the disease can he or she Another promising approach is the combined application adopt the appropriate control methods. of remote sensing, GIS applications, and crowdsourcing technologies to allow real-time damage assessment. Aside Mobile technologies are being used to collect information from improving the identification of affected areas, real-time from the field to assess damage or monitor outbreaks. assessments reduce the time lag between the shock and the For example, to monitor the threat of bird flu, the Animal delivery of assistance. These tools have not yet been used Husbandry and Veterinary Services of the Government of in response to agricultural shocks, but their use in response IC T IN A GR IC ULTUR E S E C T I O N 3 — AC C E SSING MARKE T S AND VA LU E C H A INS 277 IMAGE 11.6: Map of Flood Reports, Pakistan The combination of trained person- nel and information services delivered through various ICT channels might be the most effective way to help farm- ers cope with disease outbreaks that require a rapid response. The ICTs serve to reduce the training required, which in turn reduces the administrative costs of such programs. Reducing the required qualifications also expands the supply of people eligible for the job. Public institutions, governments, and NGOs often play a big role in helping farmers cope with risks. ICT applications can equip these institutions with better tools to manage their social safety net programs. Mobile money and electronic vouchers seem to have matured suffi- ciently to be replicated in other contexts and incorporated into plans to transfer Source: A screenshot of the Pak Relief homepage. funds to farmers affected by drought or flooding. Similarly, information services to catastrophic floods in Pakistan suggests that agricultural that empower people without formal education in agricul- applications are worth examining. ture to serve as agricultural extension workers might also be a replicable approach, provided that the infrastructure Crowdsourcing has become more sophisticated through and human capacity are present. Their effectiveness, how- platforms such as Ushahidi (http://www.ushahidi.com/), ever, should be determined first. Finally, because ICT appli- which have the capacity to aggregate, synthesize, and visu- cations for risk coping are still maturing, their incorporation alize data on a map. The software allows anyone with access into a risk coping strategy should ensure that alternative to the Internet or mobile technologies to submit reports of coping mechanisms can be used in the event that the tech- damage or requests for assistance. These reports are veri- nology fails. fied manually or automatically using computer programs. The data are then synthesized onto a GIS map, which relief and recovery agencies use to target and coordinate their response. Ushahidi is open-source software and has been INNOVATIVE PRACTICE SUMMARY Electronic Vouchers Are a Targeted, Traceable quickly set up following catastrophic events such as earth- Lifeline for Zambian Farmers quakes in Haiti and Chile and the floods in Pakistan (IRIN 2010) (image 11.6). Mobile Transactions (http://www.mtzl.net/) is a private Zambian company that began operating in January of 2010. Through mobile phones (image 11.7), scratch cards, and a national network of agents, the company provides access to LESSONS LEARNED banking services for rural Zambians. It has also designed a There is much to learn regarding the robustness or effective- voucher system for organizations that regularly make trans- ness of applying ICTs to cope with risk. Based on the limited fers to a large number of beneficiaries, such as food vouch- experience to date, early preparation and deployment seem to ers that help rural people cope with shocks such as droughts be the keys to success. Damage assessment tools, electronic and floods. voucher systems, or disease response advisory services can- not be deployed quickly after a shock occurs; they must be in The vouchers are quickly delivered through the Mobile place beforehand as a part of a robust disaster response plan. Transactions system in a targeted, transparent, and traceable E C O N O M IC AND S E CT OR WORK 278 MOD ULE 11 — IC T A PPLIC ATIONS FOR A GR ICULTUR A L R IS K MA NA GEM ENT IMAGE 11.7: Transactions Using Mobile Phones The remaining step is to register benefi- ciaries, who are identified by their national identification cards and assigned a unique number. The unique reference number on each voucher card can be linked to any registered beneficiary number. This link- age is made using a mobile phone when the beneficiary collects the voucher by presenting his or her national identification card. Redemption of the voucher requires the following steps: (1) the farmer takes the scratch card to an authorized retail agent; (2) the Mobile Transactions system vali- dates the card against the farmer’s ben- eficiary pin number on the voucher, which is revealed by scratching; and (3) if the Source: Mobile Transactions Zambia. system responds with a national identifi- cation number that matches the identifi- way. Between January and August of 2006, the World Food cation card the farmer presents, the retailer provides the Programme used the system to deliver food subsidies worth subsidized product. The retailer, in turn, (4) receives an US$ 500,000 to 32,000 Zambian recipients. FAO used Mobile electronic payment into his or her account in the Mobile Transactions to subsidize the purchase of agricultural imple- Transactions system. Finally (5), this transaction becomes ments worth US$ 600,000 for 6,000 recipients (Hesse 2010). visible to the client immediately through the Internet-based system. How the Voucher System Works The electronic money service is simpler than paper vouch- Operationally, there are two key aspects to the mobile ers. Agents throughout the country who have gone through voucher system: (1) setup and voucher distribution and the setup process are able to accept money from individual (2) voucher redemption. Farmers themselves do not need payers and transmit the payment to the recipient using the phones, nor is continuous mobile coverage necessary mobile phone and a unique code. The recipient can use that (McGrath 2010). unique code to redeem his payment from a nearby agent for cash. Mobile Transactions clients sign a contract and an account is set up for them to deposit the funds they wish to disburse. They are also given access to an Internet-based system that Impact, Scalability, and Sustainability indicates the level of funds disbursed, when, and to whom The World Food Programme has not yet used the Mobile (WFP 2010). Transactions system to help people cope after a shock. The infrastructure is there, however, in the event that Vouchers can be redeemed only for subsidized items (food, food rations need to be increased to allow farmers to farm implements, and so forth) at previously authorized retail cope with threats to food security. Most such threats in locations. The participating retailers are given a phone and a Zambia are agricultural: flood, drought, and cattle disease Mobile Transactions account and are trained to use the sys- (WFP 2010). tem. Retailers are also familiarized with the paper vouchers. Once the client and retailers are set up, the client deposits No rigorous impact evaluation of this electronic voucher funds into the Mobile Transactions account at a regular bank. system has been conducted. Though quite different in This money is credited to the client’s account within the some regards, the impact of mobile money might be used Mobile Transactions system. to approximate the impact of the Mobile Transactions IC T IN A GR IC ULTUR E S E C T I O N 3 — AC C E SSING MARKE T S AND VA LU E C H A INS 279 FIGURE 11.3: Value and Quantity of Electronic Voucher issues. This summary is concerned largely with their role Transactions in Zambia, 2010 in helping communities cope with risk. Electronic Vouchers 25,000 $800,000 The Community-level Crop Disease Surveillance Project $700,000 (CLCDS) provides Ugandan farmers with real-time advice 20,000 for coping with pest and disease outbreaks. CLCDS $600,000 $500,000 was piloted in Bushenyi and Mbale Districts between 15,000 $400,000 December 2008 and August 2009 as part of the Grameen 10,000 $300,000 Foundation’s larger Community Knowledge Workers $200,000 project (http://www.grameenfoundation.applab.org/section/ 5,000 community-knowledge-worker-project). $100,000 – $– Primary funding for the pilot came from the Bill and Melinda 0 10 10 0 10 10 0 0 -1 -1 r-1 l-1 g- b- n- n- ay ar Gates Foundation. Community knowledge workers in the Ap Ju Au Fe Ja Ju M M pilot districts used mobile phones equipped with extension Number of transactions Value (US$) information to identify diseases and offer advice about con- Source: McGrath 2010. trol methods (image 11.8). The workers were also trained to collect disease outbreak data and transmit it to experts. With system. Studies of Kenya’s M-PESA indicate there are the data, experts can recommend appropriate responses. If significant impacts. Those relevant to risk are: (1) more this can be done quickly, individual outbreaks can be con- efficient risk sharing though the expanded geographic tained before they become epidemics (Grameen Foundation reach of social networks and the (2) facilitation of timely 2010a:66). transfers of small amounts of money, which enable sup- port networks to keep shocks manageable (Jack and Suri 2009:11). Development and Growth CLCDS responds to the gap between scientific recom- Mobile Transactions has grown rapidly over its brief exis- mendations and on-farm practices in controlling crop dis- tence, from 2,500 voucher transactions worth US$ 60,000 eases. The difficulty of collecting timely data on spreading in January 2010 to about 23,000 transactions worth diseases and the limited effectiveness of on-farm control US$ 700,000 in August 2010 (figure 11.3). The company is methods aggravate disease epidemics, which reduce crop working to replicate the model internationally through part- yields, quality, and income at the household, community, ners in Zimbabwe. and national level (Grameen Foundation 2010a:58). In Uganda, three diseases threaten banana production. Of Mobile Transactions earns revenue from fees charged, these, banana bacterial wilt alone is responsible for losses which are approximately 5,000 kwacha (ZMK) or about of US$ 70–200 million in Uganda (Grameen Foundation US$ 1.08 per transaction. The company is searching for 2010a:59). additional capital to supplement the financing they have already received from venture capital firms and grants. It For CLCDS, Grameen Foundation partnered with the also hopes to begin transferring payments on behalf of the International Institute of Tropical Agriculture (IITA), the Government of Zambia. National Agricultural Research Organisation (NARO), and MTN-Uganda (a mobile network operator) to develop and test a disease surveillance system. They used several ICTs to bridge the gap between agricultural experts and farmers: INNOVATIVE PRACTICE SUMMARY mobile phone applications, a centralized database of disease Community Knowledge Workers in Uganda Link information, and GIS. The community knowledge workers tie Farmers and Experts to Cope with Risk all of these people and pieces together. Community knowledge workers are also discussed in detail in Module 4, which discusses gender implications; To respond comprehensively to farmers’ queries, knowl- as well as in Module 2, which focuses on regulatory edge workers had access to seven information services E C O N O M IC AND S E CT OR WORK 280 MOD ULE 11 — IC T A PPLIC ATIONS FOR A GR ICULTUR A L R IS K MA NA GEM ENT IMAGE 11.8: Community Knowledge Workers Source: Grameen Foundation. (Gantt and Cantor 2010), several of which offer the kinds 14,000 interactions with smallholder farmers (Gantt and of information needed to mitigate or cope with risk. See Cantor 2010). The initial group of 38 CKWs has now grown box 11.5 for details. to 98 operating in eastern Uganda (Grameen Foundation 2010b). Impact, Scalability, and Sustainability By the end of the pilot, knowledge workers had trained over The CLCDS team recruited and trained 38 community 3,000 farmers in the appropriate methods for banana disease knowledge workers, who completed over 6,000 surveys identification, preventive measures, and control procedures. (2,991 related to banana disease) and had more than The CKWs were estimated to have reached 500–1,000 farm BOX 11.5: Information Services Used by Community Knowledge Workers in Uganda  Google SMS Farmer’s Friend. A database of locally relevant, organic tips and advice, plus a three-day and seasonal weather forecast. The knowledge worker searches the database through codes sent via SMS. (See IPS “Farmer’s Friend Offers Information on Demand, One Query at a Time,� in Module 2.)  Google SMS Trader. A user-generated trading bulletin that provides farmers with the contact details of trad- ers and vice versa through SMS posting and notifications. Developed in partnership with MTN-Uganda and Google.  AppLab Question Box. Community knowledge workers phone this service to speak to an operator with access to an Internet database and expert agricultural advice from NARO. This tool was developed in partnership with the NGO Open Mind and NARO.  CKW Search. A series of forms, presented in Java, guides community knowledge workers through a menu to search for agronomic techniques for banana and coffee production. Content was provided by NARO, the Uganda Coffee Development Authority, and IITA. (continued) IC T IN A GR IC ULTUR E S E C T I O N 3 — AC C E SSING MARKE T S AND VA LU E C H A INS 281 BOX 11.5: continued  Input Supplier Directory. An SMS-based keyword search service gives the location and contact details of shops offering specific agricultural inputs such as seed, pesticide, and fertilizer. Content was provided by the Uganda National Input Dealer Association.  Banana Disease Control Tips. Pre-loaded HTML pages show control measures for specific banana diseases. Content was provided by IITA.  Market Prices. An SMS-based keyword search service gives retail and wholesale prices for 46 commodities in 20 markets. Information provided by FIT Uganda, a local market price provider. The AppLap Question Box and CKW Search draw from a database that the project team has built and continues to expand and refine. This database of actionable agricultural information is populated by agricultural research organiza- tions and other experts and reviewed by an Expert Review Board for further dissemination to farmers through knowl- edge workers. Source: Author and Grameen Foundation 2010b. households in their communities (Grameen Foundation develop a plan of preventive measures and allow the rapid 2010b). Farmers reported increased revenue and decreased dispersal of information that would decrease the spread losses upon using the helpline information to treat livestock of the disease. The GIS data could then help scientists to and plant diseases (Gantt and Cantor 2010). pinpoint sites to collect plant samples of new or suspicious disease reports for subsequent diagnosis in the laboratory CLCDS also showed how a mobile survey system could (Gantt and Cantor 2010). enhance scientists’ ability to monitor disease outbreaks in real time and deliver information to farmers in remote areas Given the pilot’s success, CLCDS will be scaled up with addi- through the knowledge workers, particularly to areas where tional support from the Bill and Melinda Gates Foundation extension officers and agricultural researchers do not regu- over four years to provide the service to 200,000 farmers larly visit (Grameen Foundation 2010a:66). Once CKWs sub- across Uganda (Grameen Foundation 2010a). The bottle- mitted their survey results, scientists could access and view neck is the limited number of knowledge workers. Grameen the data directly from the web and download the results for Foundation is training new ones and attempting to partner analysis. The surveys provided data showing the spatial dis- with existing extension services (Grameen Foundation tribution of banana disease in the communities. The team 2010b). Farmers are not currently charged for the service of scientists viewed thousands of digital photos of disease (they are compensated for participating in surveys, how- symptoms, which knowledge workers submitted with their ever), and it is not yet clear how the program will continue surveys (Gantt and Cantor 2010). when external funding ends. With this information, scientists could map disease incidence. The operational success of the CLCDS to date has depended Over time, they began to better understand the spread of dis- on the ability to: (1) recruit excellent knowledge workers; eases, the adoption of control techniques in different areas, (2) make information accessible to them through mobile and how these and many other factors intersect to impact phone applications; (3) train them in disease identification farmers’ livelihoods. This information is used to prioritize and control; (4) train them in the use of ICT tools for data actions and communicate recommendations to farmers via collection and effective dissemination of information; and the knowledge workers (Grameen Foundation 2010a:67). (5) maintain partnerships with experts to verify and analyze information to provide actionable advice to support the Having up-to-date information that included details of the knowledge workers. exact locations of a disease, agricultural experts could E C O N O M IC AND S E CT OR WORK 282 MOD ULE 11 — IC T A PPLIC ATIONS FOR A GR ICULTUR A L R IS K MA NA GEM ENT ACKNOWLEDGEMENTS ttnews[tt_news]=743&tx_ttnews[backPid]=204&cHash=1852b 8404a, accessed October 2010. The author thanks the following people for their time on the phone and over email: Jeff Groesbeck at MIT’s Legatum ECX (Ethiopian Commodity Exchange) Operations. 2010. http:// www.ecx.com.et/Operations.aspx, accessed September 2010. 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World Development 2009. “Development Impacts of Commodity Exchanges.� New Report 2008. Washington, DC. York and Geneva: UNCTAD. Waruru, M. 2009. “Satellite Insurance to Pay Farmers if Land Turns Brown.� Science and Development Network, http://www IC T IN A GR IC ULTUR E S E C T I O N 3 — AC C E SSING MARKE T S AND VA LU E C H A INS 285 Module 12: GLOBAL MARKETS, GLOBAL CHALLENGES: IMPROVING FOOD SAFETY AND TRACEABILITY WHILE EMPOWERING SMALLHOLDERS THROUGH ICT TINA GEORGE KARIPPACHERIL (World Bank), LUZ DIAZ RIOS (World Bank), and LARA SRIVASTAVA (Webster University) IN THIS MODULE Overview. The market for safe and traceable food can exclude small-scale producers who lack the resources to comply with strict standards. Wider access to information communication technologies (ICTs) may lift some of these barriers. The proliferation of mobile devices, advances in communications, and greater affordability of nanotechnology offer poten- tial for small-scale producers to implement traceability systems and connect to global markets. This module examines the effects of food traceability requirements and describes traceability systems implemented in the developing world. For small-scale producers, group systems development and certification may ease some of the constraints in imple- menting traceability systems, along with capacity strengthening in selecting appropriate technologies for traceability. Networks and partnerships with public, private, or nonprofit organizations can help finance and build traceability systems. Traceability technologies implemented for high-value crops may also expand smallholders’ ability to reach key markets. Topic Note 12.1: The Importance of Standard Setting and Compliance. Traceability is becoming an increasingly com- mon element of public (both regulatory and voluntary) interventions and of private systems for monitoring compliance with quality, environmental, and other standards. Stringent food safety and traceability requirements trigger new transac- tion costs for small-scale producers without adequate capital investment and public infrastructure. This note provides an overview of the wide and growing array of public and private standards, domestic and international standards, and data standards, with special attention to issues that impinge on developing countries’ capacity to comply with them.  Mango Traceability System Links Malian Smallholders and Exporters to Global Consumers Topic Note 12.2: Traceability Technologies, Solutions, and Applications. Smallholders face serious challenges in complying with standards, particularly with tracking requirements. The mobile wireless and nanotechnology revolution offers the potential to change all that as remote producers and smallholders gain access to ICTs. Mobile phones, radio frequency identification (RFID) systems, wireless sensor networks, and global positioning systems (GPS) are some technologies that enable compliance with food safety and traceability standards. They also make it possible to monitor environmental and location-based variables and communicate them to databases for analysis.  ShellCatch in Chile Guarantees Origin of the Catch from Artisanal Fishers and Divers OVERVIEW Traceability is an increasingly common element of public1 Food production and distribution systems are becoming and private systems for monitoring compliance with quality, more interdependent, integrated, and globalized. At the environmental, and other product and/or process attributes same time, escalating and heavily publicized outbreaks of related to food. Small-scale farmers may lack the resources foodborne diseases have raised awareness of the need to to comply with increasingly strict food safety standards, ensure food quality and safety. This need drives much of the particularly traceability requirements. Given the role of technological innovation to trace food consistently and effi- ciently from the point of origin to the point of consumption. 1 Both regulatory (mandatory) and nonregulatory (voluntary). E C O N O M IC AND S E CT OR WORK 286 MOD ULE 12 — GLOB A L MA RK ETS , GL OB A L C H A LLENGES traceability in protecting consumers, ensuring food safety, The International Organization for Standardization (ISO) and managing reputational risks and liability, it is vital to inte- ISO/DIS 22005 (November 20, 2006, N36Rev1) has largely grate and empower small-scale agricultural producers in the adopted this definition; however it is a bit broader in scope food supply chain through ICTs. as traceability is viewed not only as a tool for meeting food safety objectives but for achieving a number of other objec- tives in other sectors—for instance, in forestry for chain of Defining Traceability custody traceability, sustainable certifications, geographical “Traceability� is a concept developed in industrial engineer- indicators, or animal health. ing and was originally seen as a tool to ensure the quality of production and products (Wall 1994). Economic literature The EU General Food Law, Article 18 Regulation (EC) from supply-chain management defines traceability as the No 178/2002, defines traceability as “the ability to track food, information system necessary to provide the history of a feed, food-producing animal or substance intended to be, or product or a process from origin to point of final sale (Wilson expected to be used for these products at all of the stages and Clarke 1998, Jack, Pardoe, and Ritchie 1998, Timon and of production, processing, and distribution.�3 In comparison O’Reilly 1998). to some international and commercial standards for trace- ability, the EU does not require internal traceability4 (that is, Traceability (or product tracing) systems differentiate prod- it does not require all inputs to match all outputs) (Campden ucts for a number of reasons. Food traceability systems BRI 2009). allow supply chain actors and regulatory authorities to iden- tify the source of a food safety or quality problem and initi- For food products that are genetically modified, many coun- ate procedures to remedy it. While traceability in the food tries use identity preservation schemes, but only the EU sector has focused increasingly on food safety (Smyth and requires traceability. The EU (Directive 2001/18/EC) addition- Phillips 2002), agrifood and nonfood sectors such as forestry ally defines traceability in relation to genetically modified and textiles (particularly cotton) have instituted traceability organisms (GMOs) and products as: requirements for product identification, differentiation, and . . . the ability to trace GMOs and products produced historical monitoring. Specific standards for food traceability from GMOs at all stages of the placing on the market have been mandated internationally; by law in the European throughout the production and distribution chains facili- Union (EU), Japan, and more recently the United States; and tating quality control and also the possibility to withdraw by private firms and associations. products. Importantly, effective traceability provides a In the context of agricultural policy, traceability refers to full “safety net� should any unforeseen adverse effects be traceability along the supply chain, with the identification of established. products and historical monitoring, and not just the separa- As noted in CAC (2006), traceability can also help identify a tion of products under specific criteria at one or more stages product at any specified stage of the supply chain: where the of the chain. The Codex Alimentarius Commission2 (CAC food came from (one step back) and where the food went 2006) defines traceability as: (one step forward). Simply knowing where a food product can be found in the supply chain does not improve food the ability to follow the movement of a food through safety, but when traceability systems are combined with specified stage(s) of production, processing and distri- safety and quality management systems, they can make bution. . . . The traceability/product tracing tool should associated food safety measures more effective and effi- be able to identify at any specified stage of the food cient (CAC 2006). chain (from production to distribution) from where the food came (one step back) and to where the food went By providing information on suppliers or customers involved (one step forward), as appropriate to the objectives of in potential food safety issues, traceability can enable tar- the food inspection and certification system. geted product recalls or withdrawals. Similarly, the imple- mentation of food safety management systems can support 2 Established in 1963 by the Food and Agriculture Organization of the United Nations and the World Health Organization, the Codex Alimentarius (Latin for “food code� or “food book�) is a 3 “Food Safety,� Europa (official EU website), http://europa.eu/pol/ collection of internationally recognized standards, codes of prac- food/index_en.htm, accessed July 2010. tice, guidelines, and recommendations on food, food production, 4 See “Objectives of Food Traceability Systems� in the next sec- and food safety. tion for a definition of internal traceability. IC T IN A GR IC ULTUR E S E C T I O N 3 — AC C E SSING MARKE T S AND VA LU E C H A INS 287 efficient, consistent traceability. For example, prerequisite 2.2 million people die from diarrheal diseases largely programs such as good agricultural and management prac- attributed to contaminated food and water (WHO (2007a). tices and the Hazard Analysis and Critical Control Point The global burden of foodborne illness caused by bacteria, (HACCP) system include requirements for record keeping viruses, parasitic microorganisms, pesticides, contaminants that can support requirements for traceability. The areas of (including toxins), and other food safety problems is unknown animal identification, disease prevention and control, nutrient but thought to be considerable (Kuchenmüller et al. 2009). management, production safety, and certification for export all include practices that contribute to the efficacy of trace- Food safety issues have human, economic, and political ability systems. In summary, traceability can: costs. These costs are exacerbated by animal husbandry practices that increase the numbers of human pathogens,  Improve the management of hazards related to antibiotic-resistant bacteria, and zoonotic pathogens in meat food safety and animal health. and dairy products; unsafe agricultural practices involving the  Guarantee product authenticity and provide reliable use of manure, chemical fertilizer, pesticide, and contami- information to customers. nated water on fresh fruits and vegetables; the progressive  Enhance supply-side management and improve influence of time and temperature on globally traded prod- product quality. ucts such as seafood, meat, and fresh produce; the contami- nation of processed food by bacteria, yeast, mold, viruses, The benefits of traceability for consumers, government parasites, and mycotoxins; the presence of foreign objects authorities, and business operators are widely recognized. causing injury to the consumer such as glass, metal, stones, Yet for small-scale farmers in developing countries, espe- insects, and rodents; and the threat of bioterrorism (Safe cially farmers producing horticultural and other fresh food Food International 2005). products, traceability requirements can represent barriers to trade. The market for safe and traceable food can exclude Cases recorded in WHO’s epidemiological records, medical small-scale agricultural producers who lack the resources to journals, and other record systems over several decades comply with increasingly strict standards, particularly require- demonstrate the extent of the problem (table 12.1). The ments for tracking and monitoring environmental and supply Centers for Disease Control and Prevention (CDC) estimated chain variables through sophisticated technologies. that 48 million cases of foodborne illness occur each year in the United States, including 128,000 hospitalizations and Wider access to ICTs may lift some of these barriers. The 3,000 deaths.5 The three primary avenues of contamination proliferation of mobile devices, advances in communications, are production, processing, and shipping and handling. In and greater affordability of nanotechnology offer potential for light of global food safety concerns, the WHO Global Strategy small-scale producers to implement traceability systems and for Food Safety, endorsed in January 2002 by the WHO connect to global markets. Mobile phones, radio frequency Executive Board, outlined a preventive approach to food identification (RFID) systems, wireless sensor networks, and safety, with increased surveillance and more rapid response global positioning systems (GPS) make it possible to monitor to foodborne outbreaks and contamination incidents (WHO environmental and location-based variables, communicate 2002). This approach substantially expands the ability to pro- them to databases for analysis, and comply with food safety tect food supplies from natural and accidental threats and and traceability standards. In the context of food safety and provides a framework for addressing terrorist threats to food smallholders’ participation in global markets, this module (WHO 2008). explores incentives for investing in traceability systems and the prospects for traceability to empower small-scale pro- ducers in the value chain. It includes detailed information on Components of Food Traceability Systems standards, technical solutions, and innovative practices. Not only foodborne illnesses but globalization, consumer demand, and terrorism threats have impelled the diffu- Food Safety: A Challenge of Global Proportions sion and growth of traceability systems in supply chains for food and agriculture. Food is a complex product (Golan, Foodborne disease outbreaks and incidents, including Krissof, and Kuchler 2004), and modern food production, those arising from natural, accidental, and deliberate con- tamination of food, have been identified by the World Health 5 “Estimates of Foodborne Illness in the United States,� CDC, Organization (WHO) as major global public health threats http://www.cdc.gov/foodborneburden/2011-foodborne- of the 21st century (WHO 2007b). WHO estimates that estimates.html, accessed February 2011. E C O N O M IC AND S E CT OR WORK 288 MOD ULE 12 — GLOB A L MA RK ETS , GL OB A L C H A LLENGES TABLE 12.1: Examples of Food Safety Outbreaks (1971–2008) YEAR CASE 2008  294,000 children affected by adulterated formula tainted with melamine. More than 50,000 were hospitalized and 6 died. (China)a 2004–2005  Aflatoxin contamination of maize caused more than 150 deaths. (Kenya) 2001  Cases of variant Creutzfeldt-Jakob disease (vCJD), which is caused by the same agent as bovine spongiform encephalopathy (BSE), stood at 117 world- wide. A number of animal studies suggest a theoretical vCJD risk from human blood donors in countries associated with the use of BSE-contaminated meat and bone meal and recycling of animals into the animal feed chain.b The BSE (“mad cow�) outbreak was highly publicized by the media. It remains etched in consumer consciousness as an example of an acute breakdown in food safety and quality in the developed world.  E. coli O157:H7, various animal foods, 20,000 cases, 177 deaths in Jiangsu and Anhui provinces. (China) 2000s  Contaminated olive oil. (Spain)  Staphylococcus in milk. (Japan)  E. coli in spinach, carrot juice. (US)  Listeria in ready-to-eat meat. (Canada)  Salmonella in peanut butter. (US) 2000  WHO noted the presence of antimicrobial-resistant Salmonella bacteria in food animals in Europe, Asia, and North America, which have caused diar- rhea, sepsis, and death in humans, as well as Enterococci infections, which present severe treatment problems in immunocompromised patients.c 1990s  E. coli in hamburgers. (US)  BSE. (UK)  Cyclospora in raspberries. (US/Canada)  Avian influenza. (Southeast Asia)  Dioxin in animal feed. (Belgium) 1999  Salmonella typhimurium, more than 1,000 cases, meat products, Ningxia. (China) 1998  Statistics from the Ministry of Health showed a marked increase in food poisoning attributed to Vibrio parahaemolyticus, from 292 incidents (5,241 cases) in 1996 to 850 incidents (12,346 cases) in 1998. One large outbreak of 691 cases was caused by boiled crabs in 1996; another involved 1,167 cases traced to catered meals in 1998 (Japan). Outbreaks were also documented in Bangladesh, India, Thailand, and the United States.d 1980s  Beef hormones. (EU)  Salmonella in eggs and chicken. (UK)  Alar in apples. (US)  Hepatitis A in raw oysters, 300,000 cases, Shanghai. (China) 1971–82  Safe Food International, a global consumer organization, cited cases of foodborne illness arising from accidental or intentional adulteration: “During the winter of 1971–1972, wheat seeds intended for crop planting and treated with methylmercury were accidentally distributed in rural areas of Iraq. An estimated 50,000 people were exposed to the contaminated bread, of which 6,530 were hospitalized and 459 died. In Spain in 1981–1982, contaminated rapeseed oil killed more than 2,000 people and caused disabling injuries to another 20,000 many permanently.�e Source: Compiled by Tina George Karippacheril and Luz Diaz Rios; data on specific cases from (a) Ingelfinger 2008, (b) WHO 2001, (c) WHO 2000, (d) WHO 1999, and (e) Safe Food International (2005). processing, and distribution systems may integrate and detectable in the product. They are also useful for capturing commingle food from multiple sources, farms, regions, product premiums. Segregation systems are used to prevent and countries (Cannavan n.d.). Food products covered by the mixing of novel varieties in the handling of like varieties traceability standards include fresh produce such as man- or to discourage the mixing of a segregated product with like goes, avocados, and asparagus; bulk foods such as milk, products if potential food safety concerns exist. Traceability soybeans, specialty coffee, and olive oil; fish and seafood; systems, on the other hand, allow sources of contamina- and livestock for meat and dairy. This module also touches tion in the supply chain to be identified (Smyth and Phillips on the role of ICTs in animal identification, a prerequisite 2002), which enables a transparent chain of custody, raises for implementing livestock traceability in the meat and credibility, and makes it possible to transfer information on dairy sectors. the steps taken to alleviate food safety concerns (McKean 2001). Unsafe food can be recalled because information on Food products may be differentiated through systems of all possible sources and supplies of contaminated food can (1) identity-preserved production and marketing (IPPM), be traced one step forward, one step back, or end to end. (2) segregation, and (3) traceability. IPPM systems are impor- tant for providing information to consumers about the prov- Traceability systems can be classified according their capacity enance of a product when the attributes may not be visible or for (1) internal traceability and (2) chain traceability. “Internal IC T IN A GR IC ULTUR E S E C T I O N 3 — AC C E SSING MARKE T S AND VA LU E C H A INS 289 traceability� refers to data recorded within an organization or called critical tracking events. Data captured in critical track- geographic location, whereas “chain traceability� involves ing events are vital to linking products, both simple and com- recording and transferring data through a supply chain between plex, within a facility and across the supply chain (IFT 2009). various organizations and locations involved in the provenance of food. Food contamination may occur at the farm, during Traceability data can be static or dynamic, mandatory or processing or distribution, in transit, at retail or food service optional. Static data do not change, whereas dynamic data can establishments, or at home. Fundamentally, traceability sys- change over time and through the chain of custody (Folinas, tems involve the unique identification of food products and Manikas, and Manos 2006). “Trace back� implies that a sys- the documentation of their transformation through the chain of tem can identify production/processing steps that resulted in custody to facilitate supply chain tracking, management, and the creation of the product. “Trace forward� implies that a detection of possible sources of failure in food safety or quality. system can identify all derivatives of the product used as an ingredient in numerous other products. Food traceability sys- The smallest traceable unit will vary by food product and tems and definitions in standards, laws, and regulations are industry. Some of the data elements may include the physi- broadly conceptualized to permit producers to determine the cal location that last handled the product, as well as the type breadth, depth, and precision of systems based on specific of supply chain partner (producer, processor, or broker, for objectives (Golan et al. 2004). (For definitions and standards, example); incoming lot numbers of product received; amount see Topic Note 12.1.) “Breadth� denotes the amount of infor- of product produced or shipped; physical location where mation a traceability system captures, “depth� refers to how cases were shipped; lot number of the product shipped to far backward or forward the system tracks an item, and “pre- each location; date/time when the product was received cision� shows the degree to which the system can pinpoint or shipped; date/time each lot was produced or harvested; food characteristics and movement. Figure 12.1 illustrates ingredients used in the production of the product, along with these concepts for the attributes of interest in the stages of corresponding lot numbers; and immediate source of ingre- coffee production. dients and when they were received. Traceability data are recorded through media including but not Good practices in traceability entail making the lot number limited to pen/paper, barcodes, RFIDs, wireless sensor net- and name of the production facility visible on each case of works, mobile devices and applications, enterprise resource product and recording the lot number, quantity, and shipping planning (ERP) applications, and Internet-based applications. location on invoices and bills of lading. Traceability requires Information related to product tracing may be recorded and each facility to record data when a product is moved between transmitted through management information systems or, in premises, transformed/further processed, or when data cap- the case of smaller operations, paperwork such as invoices, ture is necessary to trace the product. Such instances are purchase orders, and bills of lading. Traceability data may also FIGURE 12.1: Coffee: Attributes of Interest and Depth of Traceability Attributes of interest Decaf Fair trade Fair wage Shade grown Non-GE Safety • Processing • Sale from producer Stages of production ?? to wholesaler/retailer • Transporation • Storage • Harvest • Cultivation • Bean/seed Necessary depth of traceability Source: Golan et al. 2004. Note: GE = genetically engineered. E C O N O M IC AND S E CT OR WORK 290 MOD ULE 12 — GLOB A L MA RK ETS , GL OB A L C H A LLENGES be captured directly from products such as fresh produce, sea- standards led producers to reorient their operations (Jaffee food, and livestock. Products may be tagged with barcodes and Henson 2004b). or RFIDs, which store product and associated data. Wireless sensors may transmit data on temperature, spoilage, or loca- Any application of product traceability systems must take into tion to RFIDs tagged to products. Topic Note 12.2 provides account the specific capabilities of developing countries. If detailed information on traceability technologies and systems. an importing country has objectives or outcomes of its food inspection and certification system that cannot be met by an exporting country, the importing country should consider Implementing Food Traceability Systems in Developing providing assistance to the exporting country, especially if it Countries is a developing country. Assistance may include longer time Nearly 500 million people reside on small farms in developing frames for implementation, flexibility of design, and technical countries (Hazell et al. 2006). Their participation in markets assistance (CAC 2006). In recent years, a variety of traceabil- typically is constrained by inadequate farm-level resources, ity systems have been implemented in the developing world, farm-to-market logistical bottlenecks, and more general including systems for fresh fruit, vegetables, grain, oilseeds, transaction costs in matching and aggregating dispersed bulk foods, seafood, fish, and livestock (table 12.2). Aside supplies to meet buyer and consumer demand. These from the examples in the table, Korea has implemented sys- “traditional� constraints have been amplified and in some tems for agricultural product tracing, and Jordan has estab- cases surpassed by “new� challenges related to complying lished a framework for product tracing and uses a national with product and process standards, including strict trace- digital database to track and investigate product and disease ability requirements, set and enforced by governments and movement (Hashemite Kingdom of Jordan 2004). private supply chain leaders (Jaffee, Henson, and Diaz Rios, forthcoming). TABLE 12.2: Traceability Systems Adopted in The implementation of traceability systems and assurance Developing Countries standards is controversial (Schulze et al. 2008), but it can TRACEABILITY CATEGORY COUNTRY be especially so in the context of small-scale producers. SYSTEM Weinberger and Lumpkin (2009) have expressed concern Fresh produce that traceability requirements and sanitary and phytosanitary Mangoes Mali issues will increasingly constrict exports of food products Avocados Chile from developing countries, where poor regulation of chemi- Bulk foods cal use, pollutants, and a steep learning curve in traceability Specialty coffee Colombia capacity restrict growers’ and processors’ participation. Green soybeans Thailand Many developing countries lag in developing and implementing Olive oil Morocco food safety and traceability standards, but some have selec- Olive oil Palestine tively met demands in high-income export markets thanks to Seafood regulatory, technical, and administrative investments. From Seafood Chile 1997 to 2003, more than half of the List 1 countries recog- Seafood Vietnam nized by the EU as having equivalent standards of hygiene in Shrimp Thailand the capture, processing, transportation, and storage of fish Livestock and fish products were low- or middle-income countries. Dairy India Jaffee and Henson (2004b) suggest that some countries use Meat Botswana improved food quality and safety standards as a catalyst to Meat China reposition themselves in the global market; the key for devel- Meat Korea oping countries is to “exploit their strengths and overcome Meat Malaysia their weaknesses such that they are overall gainers rather Meat Namibia than losers in the emerging commercial and regulatory con- Meat South Africa text.� As an example, the value of Kenya’s fresh vegetable Source: Tina George Karippacheril. exports increased from US$ 23 million to US$ 140 million Note: These examples from the agrifood sector include but are not limited to between 1991 and 2003 after stricter food safety and quality issues of food safety. IC T IN A GR IC ULTUR E S E C T I O N 3 — AC C E SSING MARKE T S AND VA LU E C H A INS 291 Support for traceability projects designed to connect small- and linkages to traders, other farmers, or market groups scale producers to global markets comes from a variety of for quality assurance, marketing, and sales. Empowering sources: (1) nonprofit organizations and development agen- Smallholder Farmers in Markets,6 a research project, found cies (such as IICD for Fresh Food Trace in Mali and IFC for that international trader-led linkages can empower smallhold- olive oil tracking in Palestine); (2) governments (Botswana ers to supply high-quality, traceable produce and gain from and Korea for livestock tracking; Thailand and Vietnam for quality-linked awards funded by the trader. For example, seafood); and (3) the private sector (ShellCatch for seafood Italian coffee roaster Illycaffè increased its procurement of tracking in Chile). The sections that follow provide examples superior Brazilian green coffee from smallholders by invest- of how food traceability systems have been implemented, ing significantly in quality assurance training and market particularly in low-income economies. information for smallholders. The company has won com- petitions and awards for best growers and for commanding In addition to support systems for developing countries, above-market prices for the product (Onumah et al. 2007). mobile technology provides new opportunities for smallhold- ers to connect with export markets. Mobile technologies have Fresh Produce Traceability for Quality Control not only alleviated asymmetries in the flow of information Fresh produce must move quickly through the supply chain from the market to smallholders (Muto and Yamano 2009), to avoid spoilage. After harvest, fresh produce is handled and but hold great potential for enabling the counterflow of infor- packed by a shipper or by a grower-shipper and exported or mation from small-scale producers to markets to meet trace- sold directly or through wholesalers and brokers to consum- ability requirements (figure 12.2). For example, farmers may ers, retailers, and food service establishments. Traceability use a mobile device to input information on the variety grown, systems track fresh produce along the supply chain to iden- planting and harvest dates, and use of farming inputs. Data tify sources of contamination, monitor cold chain logistics, captured by smallholders can be integrated with information and enhance quality assurance. systems and centralized databases to provide greater trans- parency to supply chain partners and consumers on the farm- A good example is the use of RFID technology by an avocado ing process, inputs, and output. The integration of wireless producer in Rio Blanco, Chile, for temperature and cold chain sensor networks, RFIDs, and mobile technology could yield monitoring. RFID tags called “paltags� (palta is the Chilean sophisticated means to capture data during farming and mini- word for “avocado�) are attached to the fruit on the tree, and mize the need for manual data input through mobile devices. after harvest, the fruit and tags are sorted, washed, waxed, and transported in pallets. Pallets are tagged to monitor tem- By fostering more linkages, socialization, and networks perature during transport, and should the temperature rise between small-scale producers, the diffusion of mobile above standard levels, pallets are put back into cold storage technology can address issues of geographic dispersion by quality inspectors at the harbor. Once the pallets arrive at the port in California, the temperature is read by hand- held readers to ascertain whether the temperature has risen FIGURE 12.2: Mobile Technology as a Key Enabler of above acceptable levels, thus checking quality and safety Information Counterflow from Farmers before shipping the avocados to marketers (Swedborg 2010; to Markets “Awards Honor RFID Innovators,� RFID Update, 2007). Traditional agricultural Fresh produce exporters may also be offered centralized information cooling and shipping services. The Fresh Produce Terminal systems: Provide market information in South Africa tracks fruit into the warehouse and onto ship- to farmers ping vessels, deploying 250 vehicle-mounted computers and 100 mobile computers from Symbol Technologies (Parikh, Patel, and Schwartzman 2009). Traceability systems: Provide farming 6 This research project is implemented through the International information to Federation of Agricultural Producers, European Consortium for markets Agricultural Research, and International Fund for Agricultural Source: Tina George Karippacheril. Development (IFAD). E C O N O M IC AND S E CT OR WORK 292 MOD ULE 12 — GLOB A L MA RK ETS , GL OB A L C H A LLENGES Bulk Produce Traceability for Product Authenticity distributed to farmers with a farm identification number and Bulk produce is more challenging to trace than fresh pro- a specialty coffee program code. The coffee is sold to one of duce. Products such as grain, coffee, olive oil, rice, and milk 35 cooperatives and transported to one of 15 warehouses, from multiple farms are combined in silos and storage tanks, where tags are read by two RFID antennas on either side of making it difficult to trace them back to their sources (IFT a conveyor belt with 99.9 percent accuracy for data and deliv- 2009). ery time. Tags are read at each step of the process, and if the coffee does not meet quality standards, it is rejected and Yet traceability systems for bulk products have been imple- the database is updated. In 2008, the federation extended its mented in developing countries, even among smallholders. program with a pilot to help adapt its traceability model to the For example, the National Federation of Coffee Growers in Tanzanian coffee supply chain. Colombia, a nonprofit organization for 500,000 small farm- ers, identifies and markets high-quality Colombian coffee Consumers may demand systems to trace fertilizer and from unique regions or with exceptional characteristics pesticide in bulk products. In Thailand, for example, export- (“Finalists Unveiled for the Fourth Annual RFID Journal ers require farmers to provide product information regarding Awards,� RFID Journal, 2010). The federation commands the farm, crop varieties, planting, irrigation, fertilizer applica- a 200 percent premium transferred entirely to its growers. tion, insect or disease emergence, pesticides or chemicals Its subsidiary, Almacafe, which handles warehousing, qual- used, harvest date, costs incurred, problems, and selling ity control, and logistics, implemented a traceability system price (Manarungsan, Naewbanij, and Rerngjakrabhet 2005). using RFID tags in 2007 for specialty coffee for its internal Figure 12.3 shows traceability activities carried out along the supply chain, from farms to warehouses and during pro- supply chain for green soybeans, from farmer to broker to cessing, bagging, roasting, and trading for export. Although processor. barcodes were considered first, RFID tags were eventually used because barcodes require line of sight and clear labels Traceability systems for bulk goods are also implemented to be read, which might have been a problem, considering for chain of custody monitoring and quality assurance based that coffee sacks weigh more than 40 kilograms and tend to on consumer demand. Olive oil, a high-value food, is some- be thrown around. times blended and sold by distributors and marketers, and traceability helps identify the source, method, variety, and The RFID tags each cost about US$ 0.25 (paid by the fed- farm where the crop was harvested, so it becomes easier eration), are encased in a wear-resistant capsule, and are for consumers to determine if the olive oil they are buying FIGURE 12.3: Soybean Traceability System in Thailand Farmer Record activities on the company-provided form Broker With the company’s technician, monitor farmer’s activities Processor Weigh Receive harvested soybean with farmer’s name, quantity, date, variety, area Transfer green soybean in pallet. Prepare label with code Processing Random testing for: Finished product • Standard quality • Pesticide residue Shipping Consumer Source: Manarungsan, Naewbanij, and Rerngjakrabhet 2005. IC T IN A GR IC ULTUR E S E C T I O N 3 — AC C E SSING MARKE T S AND VA LU E C H A INS 293 is genuine. In North Africa, a combination of GPS, mobile Council certification7 requires shrimp farmers to notify the devices, electronic security bolts, and sensors are used for Department of Fisheries five days before harvesting, to end-to-end, real-time monitoring of perishable olive oil ship- facilitate tracing shrimp back to their origin (Manarungsan, ments from Spain and Morocco by Transmed Foods, Inc., Naewbanij, and Rerngjakrabhet 2005). the United States distribution arm of Crespo Foods, and Savi Technologies (Savi Technology 2009). In another example, The Vietnamese State Agency for Technological Innovation an IFC project to improve the competitiveness and export has collaborated with the Vietnamese Association of prospects for West Bank olive oil assists small and medium- Seafood Exporters and Producers and private firms (IBM and size enterprises in implementing a basic traceability program FXA Group) to implement a seafood traceability system. The to maintain quality, including managing data related to the system is based on RFID technology (“Vietnamese Agency sources of oil, pressing, handling, storage, and packing Seeks Seafood Traceability,� RFID News, 2009). operations. Livestock Traceability for Disease Control and Product Seafood Traceability for Safety and Sustainability Safety Seafood traceability enhances the value of suppliers’ brands Unlike other food industries, the livestock industry has a long and consumers’ confidence in those brands. For traceabil- history of implementing animal identification and traceability ity, monitoring, and control, data about the farm of origin, systems to control disease and ensure the safety of meat processing plant, current location, and temperature are col- and dairy products. Lessons from livestock traceability sys- lected and made available to participants in the supply chain, tems may apply to other areas of food safety. including wholesalers, shippers, and retailers. If a problem Namibia was an early adopter of such systems in 2004. arises, this information enables a targeted market recall Botswana maintains one of the world’s largest livestock and limits the impact on consumers. Seafood traceability identification systems and had tagged 3 million cattle by is implemented to comply with the EU’s zero tolerance of 2008. Botswana’s livestock identification and trace-back residues of banned antibiotics (chloramphenicol and nitrofu- system uses RFID technology to uniquely identify livestock ran). Thailand, one of the world’s largest shrimp exporters, throughout the country. The system enables access to lucra- saw exports drop steeply to US$ 1.72 billion in 2002 from tive markets in the European Union, where traceability is a average annual revenue of US$ 2.3 billion between 1998 requirement for beef from birth to slaughter. A bolus inserted and 2001 (Manarungsan, Naewbanij, and Rerngjakrabhet into the animal’s rumen contains a passive RFID (it has no 2005). The decline caused the Thai private and public sec- battery or moving parts) microchip with a very hard ceramic tors to tighten sanitary measures on chemical antibiotic coating, which does not interact with stomach enzymes or residues in shrimp and adopt probiotic farming techniques, acids. Fixed readers placed at 300 locations scan the bolus disease-resistant shrimp, and laboratory diagnostics and of every animal in the herd to obtain identification numbers, testing. Farmers and cooperatives must register to facilitate information on new registrations, and the status of disease traceability, and quality management systems have been treatments in the herd. The information is relayed to a cen- implemented to isolate quality and safety issues along the tral database and on to 46 district offices. Aside from trace- value chain. The Department of Fisheries has been working ability, the tagging system enables weight and feed to be with farmers to introduce GAP (Good Agricultural Practice), monitored, yield to be managed, breeding history tracked, a code of conduct for sustainable shrimp aquaculture, and and animals selected for breeding (Burger 2003). HACCP standards and to improve product documentation and traceability. Animal identification and traceability systems have numerous applications, such as tracking animal movement, monitoring The department requires farmers to fill out a “shrimp catch- health, controlling disease, and managing nutrition and yield. ing form,� which includes the catch date, total shrimp RFID tagging systems for livestock contain unique identi- weight, name of the farmer, and ID number. Some central fication data and information on the animal’s location, sex, markets also require suppliers and buyers to complete this name of breeder, origin of livestock, and dates of movement. form to enhance traceability. Registering for traceability gives Handheld readers are used to register vaccination informa- cooperative members access to laboratory test services, tion and dates; the data are relayed to a central database. training, and information and experience sharing through networking. They also receive funding of US$ 1,160 and kits 7 The Marine Stewardship Council develops standards for sustain- to perform their own diagnostic tests. Marine Stewardship able fishing and seafood traceability. E C O N O M IC AND S E CT OR WORK 294 MOD ULE 12 — GLOB A L MA RK ETS , GL OB A L C H A LLENGES The Malaysian Ministry of Agriculture’s Veterinary Figure 12.4 illustrates the 2001 Scottish Borders full trace- Department has introduced a government-run system to ability system for cattle. The systems uses RFID ear tags control disease outbreaks among 80,000 cattle. The sys- for unique identification and a portable transceiver and data tem was implemented to increase the competitiveness of logger that transfers data to a farm computer or a central Malaysia’s livestock industry by meeting international import computer for farmers who do not have a personal computer. standards and domestic halal market standards (“Malaysia Begins RFID-enabled Livestock Tracking Program,� RFID In dairy farming, RFID technology enables unique identification News, 2009). China has a pilot RFID program for 1,000 pigs and monitoring of cattle, their feeding habits, health issues, and in Sichuan Chunyung to track epidemics and enable trace- breeding history to improve yield management. The technology ability from birth to slaughter for consumers (“China Fixes is integrated with feeding machines to determine the correct RFID Tags on Pigs to Track Epidemics,� ICT Update 2003). amount of nutrition for individual animals. The RFID chip sends In South Africa, the Klein Karoo Cooperative tagged 100,000 data about the animal’s feeding habits, dietary needs, and other ostriches to comply with traceability requirements for meat information to a sensor on the farm. The data are stored in cen- exports to the EU (“Project Klein Karoo Cooperative in South tral databases and analyzed by farm managers and supervisors Africa,� ICT Update 2003). to monitor the animals’ health and nutritional mix. Korea was another early adopter of animal identification tech- India has introduced cattle tagging for dairy farming in the niques and technologies, using general ear tags from 1978 states of Tamil Nadu and Maharashtra. The BG Chitale Dairy in to 1994, barcodes in 1995, and RFID since 2004. Korea intro- Maharashtra has tagged 7,000 cows and buffalo and plans to duced a full beef traceability system in 2008, in the wake of extend tagging to about 50,000 animals (“Milk Tastes Better the BSE scare, to promptly identify food safety problems and with RFID,� RFID News, 2010). (See IPS “RFID Facilitates ensure end-to-end traceability. Korea also uses DNA markers Insurance Credit for India’s Livestock Producers� in Module 7.) to trace components of carcasses. Markers recommended by the International Society for Animal Genetics are used for Traceability systems may be implemented to improve the verification (Bowling et al. 2008). global competitiveness of livestock and meat exports, the FIGURE 12.4: Scottish Borders TAG Cattle Tracing System 38-bit code = 12 digit number EID code Matching ear tag number 078594789870 189073940789 UK 123456 380034 067854885888 IE 564871 376896 Activation at 078594789870 UK 345623 734568 134.2 kHz 056714588577 UK 432679 279000 Cattle with RFID 512346778527 transponder in ear tag 789413546048 012453786899 214397869090 UK 674958 578699 Local look-up table held Portable transceiver in portable data-logger and data-logger Data transfer Data link by wire Central as required or modem cattle database 189073940789 UK 123456 380034 067854885888 IE 564871 376896 078594789870 UK 345623 734568 056714588577 UK 432679 279000 Electronic mail messages 214397869090 UK 674958 578699 to national government Identical look-up table held in farm computer database Complete scheme table held in scheme computer Farm computer (or central scheme computer for farmers without a personal computer) Source: From Pettitt 2001, World Organisation for Animal Health (OIE) Scientific and Technical Review. Note: EID = electronic identification; RFID = radio-frequency identification device. IC T IN A GR IC ULTUR E S E C T I O N 3 — AC C E SSING MARKE T S AND VA LU E C H A INS 295 quality of meat, and chain of custody traceability. Beef is placed In traditional societies, traceability is inherent, because produc- in refrigerated trucks and containers and sealed with a sen- tion and consumption occur in the same place, but comply- sor bolt and a tag for identification. Shipments are tracked to ing with modern traceability requirements for faraway global ensure that they do not remain in one place for too long. At key markets poses a challenge for small-scale producers with points in the supply chain, such as when the beef is unloaded few resources. For example, complying with record-keeping after it has been shipped from the port, the tag is read with arrangements associated with food safety assurance through a mobile reader to check for evidence of tampering prior to HACCP-based systems, with their detailed traceability systems, unloading, and tag data are stored in supply chain databases. requires widespread education and cooperation throughout the supply chain (Unnevehr and Jensen 1999). To understand trace- Namibia, which started tracking beef in 2004, was one of ability applications for fresh produce and horticultural products, the earliest emerging market adopters of advanced technolo- bulk produce, seafood, and livestock, small-scale producers will gies to ensure quality and traceability (Collins 2004). A pilot need to master a considerable range of skills and information. program executed through a public-private partnership with Savi Technology involved the application of RFIDs and sensor Although traceability capacity might have some positive bolts to containers of chilled and frozen beef shipped from effects on domestic markets in developing countries, by and Namibia to the UK as part of the Smart and Secure Tradelanes large traceability systems are unidirectional—they track the initiative extended to African ports. In March 2009, Namibia chain of custody of food exported from developing countries issued new animal identification regulations, which required to developed countries. Developing-country farmers who are livestock producers to identify cattle with one visual ear tag unable to meet traceability requirements run the risk of being and one RFID ear tag. Cattle must be individually registered marginalized. Jaffee and Masakure (2005) found that produce in the Namibian Livestock Identification and Traceability export markets in Kenya relied on the exporters’ own farms System. Namibia has also set up a veterinary fence to avoid for products that required traceability; products demanding contamination: Cattle from northern Namibia cannot be less traceability came from small-scale outgrowers. exported and must be consumed locally, and cattle from southern Namibia are protected from diseases and exported Some evidence indicates that the global movement toward to Europe. Namibia also sources non-genetically modified stricter food safety and traceability requirements has trans- (GM) maize from South Africa at a premium to ensure that lated into stricter demands in domestic markets in develop- beef sold in Europe is considered non-GM. ing countries. For example, the rise of supermarkets in Latin America, with their quality and safety procurement standards Basic technologies for animal identification and traceability and associated record-keeping requirements, had a negative have applications other than food safety and food security. impact on smallholder participation, although some cases of Cattle rustling threatens human security in East Africa, a region success were noted where there was public or private tech- characterized by nomadic movements of people with livestock nical assistance (Reardon and Berdegué 2002). over vast and hostile terrain. The Mifugo Project (mifugo is Swahili for “livestock�), ratified by Ethiopia, Kenya, Sudan, The costs associated with implementing traceability systems Tanzania, and Uganda, seeks to prevent, combat, and eradi- include investments in capital and infrastructure, record keep- cate cattle rustling in East Africa (Siror et al. 2009). Traditional ing, and improvements in harvesting and processing. Unlike methods of identifying cattle are harmonized with technologi- small-scale producers, large-scale producers and industry cally advanced approaches for unique identification, tracking, associations are better equipped to upgrade their operations and recovery of stolen animals. Livestock tags may be queried in compliance with traceability standards; the added cost of remotely using the Internet, SMS, and wireless communica- record keeping is small compared with the potential financial tion through mobile phones to track and monitor animals. damages of a product recall (Spencer 2010). The questions that remain, then, are who pays for the cost of implementing food traceability systems, particularly in the case of smallholders, and how sustainable those systems can be in the long run. KEY CHALLENGES AND ENABLERS Implementing traceability technologies for food safety and other With respect to business processes, an important challenge purposes does not come without its challenges. Broadly speaking, involves the poor integration of organizations in the value the main challenges lie in data collection, processes, technological chain. Proprietary tracking systems allow tracing one step solutions, business models, costs, and learning. Some of these forward or back, but they rarely allow traceability through the challenges will be discussed in more depth in the Topic Notes. full life cycle of a product. Organizations in a value chain may E C O N O M IC AND S E CT OR WORK 296 MOD ULE 12 — GLOB A L MA RK ETS , GL OB A L C H A LLENGES be reluctant to share proprietary commercial data about a in most developed countries, are small but advanced with product, with the exception of requirements for recalls. respect to traceability, a situation that could lend itself well to sharing experiences with small-scale farmers in developing Studies from the industrial sector, where traceability systems countries (Setboonsarng, Sakai, and Vancura 2009). It could and techniques originated, emphasize that the main difficul- provide insights into the most effective ways to implement ties lie in the design of an internal traceability system for a traceability systems and the internal and external capacities given, complex production process (Moe 1998; Wall 1994). A and resources needed for smallholders to upgrade success- study on traceability in the United States, undertaken by the fully and comply with safety and traceability requirements. International Institute of Food Technologies (IFT), found that challenges are related to both external and internal traceabil- Incentives to invest in traceability systems also act as ity. External traceability requires accurate recording and stor- key enablers for their development and use. Investments age of information on products and ingredients coming into are often driven by regulation and access to markets, the a facility and information on products leaving a facility. This long-term costs associated with public product recalls, the requirement frequently proves problematic, because industry proliferation of certification systems and standards (Heyder, partners in a food supply chain may not consistently record Hollmann-Hespos, and Theuvsen 2009), and pressure from and store the lot number of the incoming product or case. influential external stakeholders such as retailers, consum- For internal traceability, data on ingredients and products that ers, lenders, and NGOs. may undergo transformation within a facility must be tracked. In some cases, there may be confusion in the assignment of Yet investments in traceability systems offer viable benefits new lot numbers for products that do not match the incom- and incentives for actors in the supply chain, including swift ing lot number for products that enter a facility and undergo and precise recalls of unsafe food; premium pricing for safe, transformation. Industry practices on data capture, recording, sustainable, and traceable food; cost savings and business storage, and sharing also vary widely. Paperwork is often process efficiencies; and greater consumer confidence, inconsistent or incomplete, individual products or lots may among others (figure 12.5). It is worth exploring some of not be labeled with unique identifiers, and standardized defi- these incentives in detail, because they offer potential nitions for data elements may be lacking (IFT 2009). For small-scale producers, group systems development and FIGURE 12.5: Incentives for Investment in Traceability certification may ease some of the constraints in implement- Systems ing traceability systems. The GlobalG.A.P. standard (www .globalgap.org), for example, allows group certification for smallholders to facilitate their access to markets. Small- Legislation scale farmers and producers may also benefit from capac- Food safety ity strengthening in assessing and selecting appropriate Quality certification improvements systems and technologies for traceability; building networks and partner- standards ships with public, private, or nonprofit organizations that can help finance and build traceability systems; and traceability schemes facilitated through smallholder cooperatives or Cost savings Costs and risks & business the public or private sector. Finally, traceability technolo- Investment of product process in recall gies implemented specifically for high-value crops may also efficiencies traceability expand smallholders’ ability to reach key markets. systems Golan, Krisoff, and Kuchler (2004) have argued that mandatory Global Price competition/ traceability requirements that allow for variations in traceabil- premiums access to ity or target specific traceability gaps may be more efficient markets than systemwide requirements. They may be better suited Rise of Consumer to varying levels of breadth, depth, and precision of traceabil- supermarkets confidence ity in different firms.Developed countries’ experiences with traceability may in some cases be useful for building similar capacity in other countries. Japanese farms, unlike those Source: Tina George Karippacheril. IC T IN A GR IC ULTUR E S E C T I O N 3 — AC C E SSING MARKE T S AND VA LU E C H A INS 297 insights for preventing the adoption of systems that exclude outbreak, and in the absence of traceability capabilities, smallholders. Among smallholders, clearly the benefits of the United States Food and Drug Administration issued an establishing or investing in traceability systems should be import alert, denying all Guatemalan raspberries entry into balanced in relation to the associated costs, with consider- the United States. The number of raspberry growers declined ations for the long-term sustainability of those investments. dramatically from 85 in 1996 to 3 in 2001. Producers around the world noted the devastating effects of the ensuing trade Preventing Recalls of Unsafe Food restrictions on the entire industry and the role traceability systems could have played in reassuring the public and Food traceability systems make it possible to take a proac- containing the problem to a few growers (Calvin, Flores, and tive approach to food safety and prevent the reputational Foster 2003). and economic damage—to producers, products, firms, and nations—inflicted by product recalls. For example, the com- Gaining Premium Prices for Safe, Traceable Food plex recall of contaminated peanut products in the United States is estimated to have been one of the most expensive As noted, traceability systems and technologies are also used in that country (figure 12.6). to certify geographical origin, certify sustainable production processes, monitor the chain of custody, facilitate identity A well-known case of the potential damage of a recall on preservation and product marketing, and manage supply a young industry in a developing country occurred with chains. Some of these applications enable producers to earn raspberries in Guatemala. Following reports of a Cyclospora price premiums for sustainable, certifiable, and identifiable FIGURE 12.6: Peanut Corporation of America Recall National food chain Ice cream Ice cream Ice cream Store shop shop shop Store Store Store Peanut Ingredient granules manufacturer & distributor Peanut meal Food manufactuer Dry roasted Distributor Bakery Bakery Bakery peanuts Bakery Store Store Store Store Vending Oil Food machine roasted manufactuer peanuts Distributor Store Store Store Food Vending manufactuer machine PCA Vending Food machine Vending manufactuer Distributor company machine Peanut butter Food Store Store Store Distributor manufactuer Distributor Peanut Food paste Distributor manufactuer Distributor Store Store Store Nursing homes Caterers Restararnt Source: Adapted from U.S. Food and Drug Administration. E C O N O M IC AND S E CT OR WORK 298 MOD ULE 12 — GLOB A L MA RK ETS , GL OB A L C H A LLENGES specialty food products. The Almacafe model, discussed ear- Building Consumer Confidence lier, enables smallholders to command a 200 percent premium Traceability not only ensures food quality but builds con- for specialty coffee from unique regions in Colombia—strong sumers’ trust by making the supply chain more transparent motivation for farmers to adopt traceability technologies. (Bertolini, Bevilacqua, and Massini 2006). Consumer con- fidence builds demand for products. Studies suggest that In Honduras, the ECOM Agroindustrial Corporation, whose consumers in developed countries may be willing to pay customers are willing to pay high prices for high-quality, more for safe and traceable food. A study in Korea (Choe traceable products, supports farmers through technical assis- et al. 2008) found that consumers were willing to pay a tance and training (Pfitzer and Krishnaswamy 2007). With premium for traceable food and to purchase it in greater initial technical support, women belonging to a shea butter quantities. A consumer preferences study of traceability, cooperative in Burkina Faso learned to use GPS to document transparency, and assurances for red meat in the United the source of the shea fruit they processed and gain certifica- States suggests that consumers are willing to pay for tion under Bio-Ecocert and Bio-NOP, which guarantee that a traceability and that the market there for traceable food product is 100 percent natural and has been manufactured may be profitable (Dickinson and Bailey 2002). Although under conditions that respect human and environmental traceability systems tend to be unidirectional, consumers health. Certification enabled them to enter more lucrative in domestic markets in the developing world may also export markets—despite the fact they that are small-scale, benefit from their countries’ adoption of traceability tech- predominantly illiterate producers. (See Module 8 for details.) niques and systems. Topic Note 12.1: THE IMPORTANCE OF STANDARD SETTING AND COMPLIANCE TRENDS AND ISSUES (Senneset, Forås, and Fremme 2007), especially smaller- Increasing concerns about global food safety have positioned scale operations, which tend to record traceability data on traceability as an important component of food safety and paper. Data standardization is vital for end-to-end traceabil- quality regulations, management systems, and certification ity. There are multiple, globally recognized standards but no processes. Stringent food safety and traceability requirements standard nomenclature to describe how the data should look trigger a new set of transaction costs for small-scale produc- or be organized, and software applications vary. Many parts ers without adequate capital investment and public infrastruc- of the food supply chain do not use standardized formats for ture (Pingali, Khwaja, and Meijer 2007; McCullough, Pingali, data. The variety of traceability software in use makes data and Stamoulis 2008). As a result, one of the main challenges integration difficult (Bechini et al. 2005). A unified approach in designing food traceability systems—and ensuring small- to traceability across supply chains would promote rapid holder participation—is the development of fair, adequate, and and seamless traceability, including web-based, open, and broad food safety standards. Some studies have found that interoperable standards for end-to-end tracking systems. the introduction of safety standards associated with traceabil- ity requirements may lead smallholder farmers to switch to Public Standards products with fewer transaction costs. It has also been argued Public-sector interventions in food safety view it as a public that stringent safety standards introduced in Kenya’s fresh good. Regulatory (mandatory) or nonregulatory (voluntary) green bean industry were responsible for smallholders’ deci- public interventions are designed to provide consumers with sion to switch to processed green beans (Narrod et al. 2008).8 basic food safety and provide information about the nature of the food. Public-sector interventions usually take the form An additional issue is data standardization. Although trace- of product or process standards but also comprise analytical ability implies an end-to-end process in the supply chain, procedures, inspection and certification systems, and the only a few links in supply chains actually use software for provision of public information. Food safety standards cover traceability. Many organizations exchange data manually a wide range of parameters, including harmful substances in food (additives, pesticide residues, veterinary drug residues, 8 More recent work has found mixed effects on stricter food safety and traceability requirements in this industry (Jaffee, Hen- and other contaminants) and residues in animal feed. Process son, and Diaz Rios, forthcoming). standards, establishing how food is produced, prepared, IC T IN A GR IC ULTUR E S E C T I O N 3 — AC C E SSING MARKE T S AND VA LU E C H A INS 299 treated, and sold, include standards for genetically modified agreements to prevent misuse of standards as barriers to organisms (GMOs), food hygiene, labeling, packaging, and trade. Private food safety standards do not fall under harmo- requirements on traceability. nized World Trade Organization guidelines. Their legitimacy and transparency are the subject of intense debate owing to Private Standards their proliferation, prescriptive nature, potential to undermine public food safety, and potential economic development In recent years, stricter public standards and regulations for impacts, particularly for small-scale producers in developing food safety have been accompanied by a growing set of stan- countries. Many of the difficulties that small-scale producers dards developed by the private sector. Private food safety reportedly encounter in applying private food safety stan- standards, frequently characterized as surpassing require- dards relate to traceability, which is an area in which private ments imposed through public standards, have emerged as food safety standards exceed Codex recommendations a strategy to assure consumers that products meet a high (CAC 2010). level of regulatory compliance. As mentioned, traceability is mandated by law in the EU For example, private standards for particular attributes of and Japan (for specific commodities). Until recently, exten- food products might be higher and therefore perceived as sive traceability was stipulated in the United States by the more stringent or more extensive than public standards. private sector for reasons including improved supply chain Some private voluntary standards incorporate requirements management, differentiation of products in the market, and related to traceability. Examples include standards dealing product recall (Golan et al. 2003). With the passage of food with social and environmental goals (fair trade, sustainably safety regulations HR2749 and S.510, the United States has harvested products), as well as geographical indications and strengthened record keeping and traceability requirements. certification marks, which are generally applied to differenti- ate products (often as part of a marketing, branding strategy, The participation of developing countries in setting standards or sustainable development strategy). These standards are and assistance from developed countries in implement- not discussed in detail here. ing them is particularly important. Traceability systems are by and large unidirectional, and exporting countries must Domestic and International Standards accommodate different systems for verification and control Although food safety standards may be set nationally, World from major importing countries. This situation increases the Trade Organization agreements on technical barriers to trade administrative burden and costs of compliance (CAC 2009). for testing, inspection and certification, and sanitary and Table 12.3 lists examples of food traceability requirements phytosanitary matters form an international framework of related to food safety and/or security. TABLE 12.3: Examples of Food Traceability-Related Regulations and Standards, with Particular Application in Food Safety and Security CLASSIFICATION ORGANIZATION DEFINITION OF STANDARD AND REQUIREMENTS International agreement Codex Alimentarius Commission Codex defines traceability as “the ability to follow the movement of a food through specified stage(s) of production, processing, and distribution.� Movement can relate to the origin of the materials, processing history, or distribution of feed or food, forward or backward. Traceability is referenced in several Codex texts, such as the Codes of Practice on good animal feeding and Codes of Practice for fish and fish products. Domestic regulation Food Safety Act, 1990 (UK) The law radically transformed food safety management in the UK and provided strong stimulus for private-sector management of food safety by including “due diligence� requirements, making firms responsible for the safety and quality of food inputs, the conduct of suppliers, and the safety of consumers. Domestic regulation EU General Food Law, Article 18 of “The ability to track food, feed, food-producing animal or substance intended to Regulation (EC) No. 178/2002 be, or expected to be used for these products at all of the stages of production, processing and distribution.� Domestic regulation Bioterrorism Preparedness Act, 2002 Requires the maintenance of records of manufacture, processing, packing, trans- (United States) portation, distribution, receiving, holding, and importation of food to allow iden- tification of immediate previous sources and immediate subsequent recipients of food, including its packaging, to address threats of adverse health consequences or death of humans or animals.a (continued) E C O N O M IC AND S E CT OR WORK 300 MOD ULE 12 — GLOB A L MA RK ETS , GL OB A L C H A LLENGES TABLE 12.3: continued CLASSIFICATION ORGANIZATION DEFINITION OF STANDARD AND REQUIREMENTS Domestic regulation Food Sanitation Law, 2003 (Japan) The 2003 law requires full traceability for beef. A recent bill (2010) requires trace- ability for rice and rice products. Domestic standard French National Organization for “Traceability in agriculture and the food industry sector is applied mainly to two Standardization (AFNOR, Association combinations, i.e., product/process (progress), and product/localization (loca- Française de Normalisation) tion). Traceability can be described, as it were, as a combination of the flow of substances and that of information.�b Domestic regulation Food Safety Enhancement Act, HR 2749, The act, which passed the House in 2009 and the Senate in 2010, gives the Food 2009; S.510, 2010 (United States) and Drug Administration greater regulatory powers to ensure food safety, including establishing a national food traceability system, and imposes specific requirements on foreign suppliers. Each person who produces, receives, manufactures, processes, packs, transports, distributes, or holds such food would be required to maintain records to identify the immediate previous sources of such food and its ingredients and the immediate subsequent recipients of such food. Restaurants, grocery stores, and farms would also be required to keep records, with some exemptions as provided by the act.c International standard ISO 22000:2005 Establishes requirements for food safety management systems based on HACCP principles, as well as traceability requirements. International standard ISO 22000:2007 International standard for traceability in the food and feed sectors. Complementary to ISO 22000:2005. Private standard Produce Traceability Initiative* Produces a common framework and standards to help the fresh fruit and vegetable industry maximize the effectiveness of trace-back procedures through consistent nomenclature and protocols for end-to-end connectivity and traceability.d Private standard GS1 Global Traceability Standard (GTS) Supports implementation of traceability systems across the supply chain both locally and Programme (GTC) and globally, including the requirements of ISO 9001, ISO 22005, HACCP, British Retail Consortium Global Standard, International Food Standard, and GlobalG.A.P. Private standard for primary GlobalG.A.P. (Formerly EurepGAP)† HACCP-based reference standard for good agricultural practices, with traceability production as a key obligation. “A traceability system is referred to as the totality of data and operations that is capable of maintaining desired information about a product and its components through all or part of its production and utilization chain. Traceability systems contribute to the search for the cause of nonconformity and the ability to withdraw and/or recall products if necessary. The objective of these requirements is to ensure that any product sold as certified is produced from material that originates from certified farms.� Global Food Safety Initiative Include: British Retail Consortium Standards or schemes benchmarked by GFSI must comply with the “GFSI Guidance (GFSI) benchmarked standards Global Standard, International Food Document� (GFSI 2007), which contains commonly agreed criteria for food safety (private initiative)‡ Standard, Dutch HACCP, Safe Quality standards against which any food or farm assurance standard can be bench- Food (SQF) 1000 and 2000 Codes, FS22000 marked. With respect to traceability, the GFSI guidance document indicates in 6.1.17 that the standard shall require the supplier to develop and maintain appro- priate procedures and systems to ensure: identification of any outsourced product, ingredient, or service; complete records of batches of in-process or final product and packaging throughout the production process; and a record of purchaser and delivery destination for all product supplied. Source: Tina George Karippacheril and Luz Diaz Rios with information from (a) FDA 2009, (b) FMRIC 2007, (c) Johnson et al. 2010, and (d) Produce Traceability Initiative 2010. * Sponsored by the Canadian Produce Marketing Association, GS1 US, Produce Marketing Association, and United Fresh Produce Association. † Standard benchmarked by GFSI. ‡ GFSI was launched by the Consumer Goods Forum in 2000. GFSI brings together the chief executive officers and senior management of around 650 retailers, manufacturers, service providers, and other stakeholders across 70 countries. One of the GFSI’s objectives is “convergence between food safety standards through maintaining a benchmarking process for food safety management schemes.� GFSI (2007) contains commonly agreed criteria for food safety standards, against which any food or farm assurance standard can be benchmarked. According to the CAC (2010), as of June 2010, 13 schemes were recognized by GFSI. Data Standards product identification code and a company prefix, assigned As discussed, data standardization is vital for end-to-end by GS1. GLNs usually are assigned to a company, which traceability. A key player in data standardization and open sys- then assigns a unique GLN for each of its facilities. A GLN tems for product traceability is GS1, a global nonprofit orga- is typically associated with GPS coordinates for the facility nization with more than one million member organizations or plant. RFID applications use the serialized GTIN standard, in 108 countries. The GS1 Global Trade Item Number (GTIN) sGTIN, developed by EPCglobal. The United Nations Standard and Global Location Number (GLN) are assigned to identify Product and Services Code (UNSPSC) is a global classification the product and location. The GTIN has two components—a system for information on products and services, including IC T IN A GR IC ULTUR E S E C T I O N 3 — AC C E SSING MARKE T S AND VA LU E C H A INS 301 FIGURE 12.7: Fresh Food Trace Web Platform Source: Annerose 2010. food products. Access to UNSPSC is free and included as a information on mangoes on mobile devices at every step classification option in ERP systems such as SAP and Oracle. (image 12.1), thereby offering complete traceability to end markets. Importers, retailers, and customers are willing to pay US$ 0.09 more per pound for individual farm sourc- ing and compliance with food safety standards (Annerose INNOVATIVE PRACTICE SUMMARY 2010). The traceability system also serves to enhance the Mango Traceability System Links Malian Smallholders and Exporters to Global Consumers market’s reputation for supplying safe and traceable Malian mangoes sourced directly from smallholders. A produce traceability initiative is helping mango growers and exporters in Mali enhance traceability and comply with GlobalG.A.P. standards, connecting smallholder trade to IMAGE 12.1: Mango Growers in Mali Use Mobile global markets. Previously, Malian mango growers relied on Devices to Log Traceability Data importers in global markets who did not bear the risk associ- ated with transporting perishable produce, and the market system had not yet earned a reputation for high-quality pro- duce in export markets. The partners in the initiative included Manobi (http://www.manobi.net/worldwide/, the mobile data services operator), Fruiléma (http://www.fruilema.com/, an association of fruit and vegetable producers and exporters in Mali), and IICD (http://www.iicd.org/, a nonprofit that special- izes in ICT for development). The partners developed the Fresh Food Trace web platform (figure 12.7), which automates and visualizes data for track- ing mango production, conditioning, transport, and export (IICD 2008). Growers log traceability data and product Source: Annerose 2010. E C O N O M IC AND S E CT OR WORK 302 MOD ULE 12 — GLOB A L MA RK ETS , GL OB A L C H A LLENGES Topic Note 12.2: TRACEABILITY TECHNOLOGIES, SOLUTIONS, AND APPLICATIONS TRENDS AND ISSUES could prove cheaper (and easier to use) in nano form. The Systems for tracking products through supply chains range following sections review the technologies that may be used from paper-based records maintained by producers, proces- in a variety of contexts in developing countries, depending on sors, and suppliers to sophisticated ICT-based solutions. In the associated costs and business models employed. addition to supporting product traceability, ICTs may also sup- Document-Based Solutions (Paper/Electronic Documents) port data capture, recording, storage, and sharing of trace- ability attributes on processing, genetics, inputs, disease/ Smaller organizations and producers constrained for pest tracking, and measurement of environmental variables. resources typically use pen and paper to record, store, and Table 12.4 describes some aspects of how traceability is communicate data to partners in the supply chain. Paper used in agricultural and agrifood systems. invoices, purchase orders, and bills of lading, as well as electronic file formats (MS Word, PDFs, or others), may be The costs associated with putting traceability systems into used to store alphanumeric codes and other data on prod- place are seen as barriers even among established actors uct lot number, harvest date, product receipt/shipping date, and appear even more daunting to small-scale produc- quantity, or ingredients. Document-based systems, whether ers from less developed countries. Paper is still used as a physical or electronic, store data in an unstructured form. cheaper option for traceability, although it limits the ability to Searching through paper records is done by physically brows- record data accurately, store it, and query it to identify and ing through papers that are at best categorized and filed in trace products. Digital databases for traceability are seen as shelving space. Searching through electronic documents more expensive to implement, operate, and maintain, requir- requires users to locate the document and then perform full ing investments in hardware and software, skilled human text or metadata searches within it. resources, training, and certification. Because document-based systems take time and effort to RFID tags are still relatively expensive for widespread adop- query, they increase the time needed to locate the precise tion in the supply chain compared with the much cheaper and source, location, or details of a suspected contaminated more widely available barcodes (Sarma 2004). Tags priced at product. Data recorded on paper cannot be exchanged eas- less than US$ 0.01 apiece could offer lower-cost mass-market ily among partners in the food supply chain. They also have options for the technology. Commercialization of advances drawbacks related to illegible handwriting and human trans- such as those driven by nanotechnology may also push prices position errors when data are transferred from manual to down by enabling RFID tags to be printed on paper or labels database systems. Data may be inaccurate and quite difficult (Harrop 2008). RFID in its current form is a microchip and to verify through cross-checking. TABLE 12.4: Traceability Applications in Agriculture and Agrifood Systems APPLICATIONS DESCRIPTIONS Product Tracking the physical location of a product for supply chain management and to facilitate recall—e.g., through barcode labeling, RFID tags and readers, mobile devices, GIS, GPS, and remote sensing systems. Process Determining the types and sequencing of activities affecting the product during cultivation and after harvest, such as mechanical, chemical, environmental, and atmospheric factors, and the absence or presence of contaminants—e.g., through sensors and instrumentation devices that transmit and store information to RFID tags. Genetic Determining the types, source, and origin of GM ingredients and planting materials affecting a product—e.g., through DNA testing and nuclear medicine. Inputs Determining the types and origin of inputs such as fertilizer, chemicals, irrigation water, livestock, feed, and additives involved in the processing of raw materials into a food product—e.g., through instrumentation devices, nanotechnology, sensors, electronic tags, and handheld devices for data collection, storage and transfer. Disease and pests Tracking the epidemiology of pests, bacteria, viruses, pathogens, zoonosis in raw materials—e.g., through GIS, GPS, and mobile devices. Measurement Tracking and calibrating product data against national or international standards throughout the supply chain—e.g., through measurement and instrumentation systems, sensors, and laboratory equipment for analysis of chemical and physical attributes. Source: Opara 2003. IC T IN A GR IC ULTUR E S E C T I O N 3 — AC C E SSING MARKE T S AND VA LU E C H A INS 303 Structured Database Solutions worldwide, which can be read upstream and downstream Some organizations capture and store traceability data in their through a supply chain. management information systems and other databases, such An even more precise system of barcode traceability is as ERP systems for inventory control, warehouse manage- reduced space symbology. This system uses 14-digit GTIN ment, accounting, and asset management. They may also barcodes on individual items, boxes, and pallets, which can rely on homegrown custom solutions and legacy information all be linked by product and producer or distributor codes, systems. The advantage of capturing product traceability allowing trace-back from the level of an individual item data in structured database systems is the ability to rapidly (Golan, Krisoff, and Kuchler 2004). and precisely query data elements to isolate the source and location of products that may be contaminated. ERP systems The Produce Traceability Initiative requires produce tracking such as SAP can read standardized data from barcodes and via barcoded case labels with traceability information such RFIDs, including GTINs and GLNs. as the GTIN and lot/batch number. The European Article Numbering–Uniform Code Council standard has a set of 62 Electronic data interchange systems allow vendors and busi- product attributes for barcodes to track input, production, ness partners to exchange data such as GTINs and GLNs. and inventory along the supply chain, permitting open real- Businesses may also exchange information via ebXML time updates of information to all systems in the network (extensible markup language), which defines the structure of when producers enter new information in the system. data and security for the transfer. Database solutions such as ERPs may be supplemented by web-based portals for data input and data exchange with business partners in the supply RFID-Based Solutions chain. In legacy systems and custom solutions, data used to RFIDs offer promising capabilities for traceability in the devel- identify products may not follow traceability data standards oping and the developed world and are seen as an alternative such as product lot number. Multiple data standards cause to older barcode systems. Passive RFID tags use an initial errors and confusion and impede accurate product tracing. signal from an RFID reader to scavenge power and store data on an event at a specific point in time. Passive RFID tags do Emerging trends in ICT, such as the use of cloud computing not use a power source and are less expensive than active and SaaS (software as a service) solutions, have reduced the RFID tags. Grain-sized RFID tags or transponders incorpo- cost of owning ERP and database management solutions to rated as particles or attached as labels to food products can capture, record, store, and share traceability data. identify the food item and become connected to the Internet as uniquely identified nodes. Barcode Technologies Conventional methods of traceability through a chain of Products tagged with RFID may also be fed with data though custody involve the use of barcodes and labels. Barcodes an interface with wireless sensor networks. Sensors, also are commonly and recognizably used for inventory control called motes, may transmit data on motion, temperature, management and global logistics of people and goods, such spoilage, density, light, and other environmental variables as air travel tickets or parcel shipping and delivery. Barcodes sliced by time to the RFID tag (“Organic RFID to Cut Waste represent data to uniquely identify a product. Barcodes can on Produce,� RFID News, 2009). GPS, low Earth orbit satel- be scanned by an electronic reader to identify and interpret lites (Bacheldor (2009), and motion sensors may interface key data elements stored in the barcode. The data can be with RFID tags to communicate variables on location and used to trace the product forward and backward through the position coordinates (latitude/longitude). RFID readers to supply chain. read data from RFID tags may be integrated as an application on a mobile device. Thus an “ecosystem�9 built by combin- Barcode solutions require a printing component to print bar- ing RFIDs, wireless sensor networks, GPS, mobile devices, codes on labels or products and a scanning technology to and applications can make it possible to manage traceabil- read barcoded information. Barcode labels may also contain ity across the supply chain. Product traceability recorded some information below the barcode to allow for human through such an ecosystem-based solution may range from verification and cross-checking of data. Storage of data ele- data on logistics and postharvest practices surrounding the ments on a barcode depend on the type of barcode tech- trees of the small-scale producer right up to the table of the nology used. The GTIN uses a 14-digit barcode with infor- mation about companies, products, and product attributes 9 Also described as the “Internet of things� (ITU 2005). E C O N O M IC AND S E CT OR WORK 304 MOD ULE 12 — GLOB A L MA RK ETS , GL OB A L C H A LLENGES end consumer (Ampatzidis et al. 2007). Lower costs per the scale of a nanometer. One nanometer is one-billionth of device, nanotechnology advances that permit greater stor- a meter, or about 1/80,000 the width of human hair.�10 Nano age and smaller size, increased ruggedness in extreme tem- solutions can help food security by decreasing input costs, peratures and moisture, and rapid growth in wireless cellular increasing yields, and decreasing postharvest loss. network and device availability have led smaller producers in developing countries to use RFIDs, GPS, GIS, wireless sen- In the field of traceability, nano solutions enable food safety sor networks, and mobile phones to implement traceability and food preservation. Nano materials may be used in systems, paving the way for connectivity to global markets. smart packaging and in food handling to detect pathogens, gases, spoilage, and changing temperature and moisture. RFIDs have been used for unique animal identification, Traceability requirements for food safety may present a storage of data on breeding history, animal health, disease lower-risk, higher-benefit area for the application of nano tracking, animal movement, and nutrient and yield manage- solutions. (Froggett 2009, 2010). Current technologies to ment. RFID-tagged animals are tracked from birth through detect pathogens in food require considerable time, money, slaughter to check and monitor disease, to meet the needs and effort. Nano solutions can detect contamination in real of global markets for safe meat, and to enable product recall. time. Azonano, an online journal of nanotechnology, reported in 2005 that researchers at Kraft Foods, Rutgers University, The advantage of electronic traceability systems based on and the University of Connecticut were developing a nano RFID is their staggering capacity to store data on product solution called an “electronic tongue.� (“Food Packaging attributes. Barcodes permit only limited data storage. Unlike Using Nanotechnology Methods,� Azonano, 2005). An array barcode systems, which are read-only, RFID systems pos- of embedded nanosensors in the electronic tongue detect sess read/write capability. Barcodes require the item and the the presence of pathogens in packaged food and change scanner to be in the direct line of sight, and items must be the color of the tongue to signal spoilage to consumers. The physically moved to collect data on the product, whereas EU Good Food Project has developed a portable nanosen- data are automatically collected via RFID without line of sight sor to detect chemicals, pathogens, and toxins in food at the (Cronin 2008; Nambiar 2009; Sarma 2004; Stokes 2010). farm and slaughterhouse and during transport, processing, and packaging. Nanotechnologies are also enabling the pro- The disadvantages of RFID solutions include their cost, duction of cheaper and more efficient nanoscale RFIDs for complexity, and environmental sustainability (IFT 2009). tracking and monitoring food through the supply chain for RFID signals are affected by environmental conditions such traceability (Joseph and Morrison 2006). as moisture, which absorbs electromagnetic waves; metal packaging, which scatters waves; and physical damage to Nano solutions can help increase farm sustainability while the chipset in harsh conditions. Studies of RFID applications decreasing environmental impact. Nanoscale sensors in summarized in Nambiar (2009) identify challenges such as fields enable targeted minimal application of nutrients, a lack of expertise, resistance to change, lack of systems water, and/or pesticides (Froggett 2009). Encapsulation and integration (Attaran 2009), inconsistent information, lack of controlled-release methods are used to deliver doses of pes- supporting tools for implementation (Battini et al. 2009), and ticide and herbicide. Particle farming yields nanoparticles for integration difficulties as a result of the proliferation of RFID industrial use by growing plants in specific types of soil (one readers (Floerkemeier and Fleisch 2008). In practice, the example is the harvesting of gold particles from alfalfa plants implementation of RFID technologies is hampered by prob- grown in gold-rich soil). Nano solutions such as NanoCeram lems with tag detection, tag coverage, and reader collision (2 nanometer diameter aluminum oxide nanofibers devel- (Carbunar et al. 2009). Other technological hurdles include oped by Argonide in the United States) filter viruses, bac- protecting the privacy and security of data stored on the RFID teria, and protozoan cysts from groundwater. Altairnano is tag from unauthorized access and tampering (Langheinrich working on Nanocheck (which contains lanthanum nanopar- et al. 2009). ticles) to absorb phosphates from aqueous environments such as fish ponds. Research at the Center for Biological and Nano Solutions for Traceability and Precision Farming Environmental Nanotechnology shows that nanoscale iron oxide particles are effective at binding with and removing Transformative technologies such as nano solutions are creat- ing new pathways for food security and precision agriculture. 10 “The A to Z of Nanotechnology,� Institute of Nanotech- “Nanotechnology� is “the ability to engineer new attributes nology, March 19, 2004, http://www.azonano.com/Details through controlling features at a very small scale—at or around .asp?ArticleID=631, accessed February 2011. IC T IN A GR IC ULTUR E S E C T I O N 3 — AC C E SSING MARKE T S AND VA LU E C H A INS 305 arsenic from groundwater (Joseph and Morrison 2006). An DNA Techniques emerging trend in agriculture and food security is the con- While conventional methods of traceability work for labeling vergence of nanotechnology, biotechnology, information and tagging food products that are not genetically modified technology, and cognitive science, referred to by the United or engineered, DNA traceability offers a more precise form States government as “NBIC.� of traceability for animals and animal byproducts derived through biotechnology. DNA traceability works on the prin- The potential impact of nano solutions on smallholder farmers ciple that each animal is genetically unique and thus byprod- and agricultural producers is beyond the scope of this mod- ucts of the animal can be traced to its source by identifying ule but merits research and discussion. Investments in nano its DNA (Loftus 2005). research and approaches to regulation continue in OECD countries such as Australia, Canada, EU member countries, Japan, Korea, New Zealand, and the United States, as well as Nuclear Techniques for Traceability non-OECD countries such as Brazil, China, India, Russia, and A joint research project of the Food and Agriculture South Africa. Figure 12.8 depicts the use and convergence of Organization and the International Atomic Energy Agency information, communication, electronics, and nanotechnolo- (Cannavan n.d.) seeks to establish analytical techniques to gies to enable information to flow from farmers to markets. determine the provenance of food by assessing its isotopic FIGURE 12.8: ICTs Enable Information Flow from Farmers to Markets Data throughput/output methods Barcodes Wireless communications Radio frequency identification GPS/GIS Enablers of information Web based flow from farmers to markets ERP/database systems Wireless sensor systems networks Farmers Markets Data input methods Web Mobile based Information flow from markets to farmers Manual: pen/ Social Media/ paper/documents crowd-sourcing Source: Tina George Karippacheril. E C O N O M IC AND S E CT OR WORK 306 MOD ULE 12 — GLOB A L MA RK ETS , GL OB A L C H A LLENGES and elemental fingerprints.11 These techniques are also used GPS-equipped fishing boats transmit data on origin of to identify the geographical origin of food and to identify catch to a Transdata center in Santiago to monitor fish- sources of contamination. ing from legal fishing areas. When the catch is brought to port, a ticketing system cross-checks the origin of the catch via GPS data transmitted from the boats, then INNOVATIVE PRACTICE SUMMARY weighs, certifies, and labels bags of catch with traceability ShellCatch in Chile Guarantees Origin of the data in a barcode label. After ticketing, the certified catch Catch from Artisanal Fishers and Divers is sent to processing plants and on to domestic and inter- In Chile, ShellCatch (http://www.shellcatch.com/english/ national markets for consumption. Figure 12.9 illustrates index.htm) allows buyers to pinpoint the origin of shellfish this process. and the condition of catchment areas in the Tubul, Arauco Gulf, and Bio-Bio regions. ShellCatch shifts the responsibil- ity for daily monitoring of catch origin, including detection ACKNOWLEDGMENTS of extraction from legal catchment areas, from processing The authors gratefully acknowledge helpful comments and plants to harvesters—that is, artisanal fishers and divers. guidance received from colleagues Tuukka Castren, Aparajita Goyal, Steven Jaffee, Tim Kelly, Eija Pehu, and Madhavi Pillai 11 Joint FAO/IAEA Program. 2010. “Implementation of Nuclear of the World Bank, Andrew Baird of RTI, Steve Froggett of Techniques to Improve Food Traceability,� http://www-naweb .iaea.org/nafa/fep/crp/fep-improve-traceability.html, accessed Froggett & Associates, Guillaume Gruere of IFPRI, and Lucy February 2011. Scott Morales of EEI Communications. 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Paris: Institut National de Traceability.� Supply Chain Management 3:127–33. la Recherche Agronomique (INRA). Pp. 219–25. Unnevehr, L. J. 2000. “Food Safety Issues for Fresh Food Product Exports from LDCs.� Agricultural Economics 23:231–40. IC T IN A GR IC ULTUR E SECTION 4 Improving Public Service Provision S E C T I O N 4 — IMP ROVING P UBL IC SE RVICE PR O VI SION 313 Module 13: STRENGTHENING RURAL GOVERNANCE, INSTITUTIONS, AND CITIZEN PARTICIPATION USING ICT CORY BELDEN (World Bank) and REGINA BIRNER (University of Hohenheim) IN THIS MODULE Overview. Well-functioning public institutions in rural areas are critical to agricultural development and sustainability. However, these public institutions are often neglected as a result of underfinancing, isolation, a lack of technical support, and low levels of human capital. This module focuses on how information communication technologies (ICTs) can help governments, line departments, and civil society groups provide public services to the agriculture sector. Topic Note 13.1: Public Agencies and the Provision of E-government. ICTs help governments decrease bureaucracy, cut transaction costs, and spread information to other stakeholders. While improving service provision and rural liveli- hoods, these technologies also form more efficient relationships between the government and citizens, producers, pri- vate enterprise, civil society, employees, and other public agencies.  Building Public Service Provision through Internet Applications  Agricultural and Rural Information through Ministerial Websites  Using Biometrics to Provide and Target Rural Services  E-Government to Business  E-Government to Government Topic Note 13.2: Civil Society and the Provision of E-Services. Civil society organizations provide many digitized services similar to those of public agencies. Yet they also perform the important function of using ICT in more sensitive activities such as publishing information on political figures, political parties, or new legislation. They can more easily direct their efforts to more specific groups or needs and fill voids in public agriculture services.  Providing ‘Hubs’ for ICT Innovation  E-Learning through the Web and SMS  Collecting Data to Protect Local Knowledge and Ecosystems Topic Note 13.3: Increasing Citizen Participation through E-Democracy. Citizen participation and demand for public goods is incredibly important in the agriculture sector: Because so few resources are available in remote locations, the quality of governance often depends on citizen involvement. ICTs hold great promise for enhancing democracy in rural areas, providing people with faster, real-time capacity to involve themselves in democratic initiatives, meaning that more stakeholders can affect local governance processes.  Information Kiosks in India  Virtual Communities  Government Responsiveness through Citizen Participation in Digitized Political Processes  Digital Media Forums in Developing Countries E C O N O M IC AND S E CT OR WORK 314 MODUL E 1 3 — ST RE NGT HE N I N G R U RA L GOVER NA NC E, INS TITUTIONS, A ND C ITIZEN PA RTIC IPATION US ING IC T OVERVIEW Electronic voting, online complaint lines, and mobile legisla- The widespread use of ICT in developing countries arrives at tive consultation are some of the most innovative forms of a critical time. Food insecurity, poverty, malnutrition, environ- democratic participation occurring around the world. mental degradation, and state failure are daunting trends that Because less than 25 percent of the population living in devel- need to be slowed and quickly reversed. One of the foremost oping countries is online, the benefits of using the Internet ways to reverse these trends is enlarging and improving the as the only tool for e-governance are limited. Initial invest- agricultural sector. Already, using ICT, the sector has reduced ment costs pose the most significant challenge to increas- transaction costs, increased rural participation in the value ing broadband accessibility: In 2009, an entry-level fixed chain, and raised producer incomes. Seeing the widespread broadband connection cost on average US$ 190 purchasing benefits of ICT, development institutions and governments power parity per month in developing countries compared to are now investing heavily in ICT opportunities, expanding the only US$ 28 per month in developed countries (International possibilities and scalability of interventions. Telecommunications Union 2010). Yet given that broadband Like ICT for agriculture, ICT for governance holds incredible Internet networks will continue to expand into rural areas, potential and has already proved successful in many coun- this module discusses public service provision using the tries. Governance—defined by the World Bank as the “tradi- Internet alongside mobile phones, the radio, and other tions and institutions by which authority in a country are exer- devices. It aims to highlight and describe the most promising cised for the common good� (World Bank n.d.)—is a vital examples (both in developed and developing countries) of component of rural development. How governments, civil ICT for governance and institutions as infrastructure catches society groups, and nongovernmental organizations (NGOs) up, with a specific focus on rural and agriculture issues. offer their services in rural areas determines the quality of life for community members, including the extent to which Framing the Governance and Accountability Challenge improvements in agriculture raise farmers’ incomes and Figure 13.1 illustrates the services that public agencies, non- reduce poverty. “Good governance�—which is participatory, governmental organizations (NGOs), and civil society groups, consensus-oriented, effective and efficient, accountable and as well as private enterprise, offer citizens, producers, or responsive, transparent, inclusive, and follows the rule of law producers’ organizations. The relationships that define these (ESCAP 2011)—is most difficult to provide in unconnected stakeholders are those that can be enhanced through ICT. and remote areas. It requires active citizen participation, gov- Services, partnership, regulations, and membership charac- ernment attentiveness, functioning accountability mecha- terize these relationships and define how rural institutions nisms, and the financial means to fulfill public demands. Yet function in remote communities. the expansive reach of ICT has made the provision of good governance more possible. For citizens and producers, public agencies provide services such as agricultural extension, land administration, and infra- Some of the earliest e-governance (electronic governance) structure; for civil society groups and NGOs, they provide initiatives began around the mid-1990s. With Internet as services such as legal frameworks. For private enterprises, the principal device (in which information would eventually public agencies provide regulation services such as business be disseminated through other mobile tools), governments registration. Civil society groups, NGOs, and private enter- in developed countries began establishing technological prise can provide similar services to rural farmers. Because windows of information and public services. As broadband of distance, limited resources, low human capacity, and Internet became more affordable and widespread, poorer widespread poverty, however, providing these services to countries tapped into this type of electronic government. rural citizens is not easy in developing countries. As the gap Innovative approaches to offering electronic services both between public agencies and the agrarian sector continues, in the agricultural and public service sectors as well as for service provision and good governance risk deterioration. the private sector are on the rise in Asia, Latin America, and Four main governance challenges, most strongly felt in rural even Africa. Mobile phones, radio, geographic information government offices, are briefly described below. These chal- systems (GIS), and other ICT expand government capac- lenges are addressed most effectively through the use of ICT. ity to reach out, target, and provide appropriate services to rural communities. Beyond service provision, governments, Human resource management challenges: civil society groups, and development institutions are now  Human capacity: Limited education results in increasing rural public participation through electronic means. restricted human capital in public agencies. IC T IN A GR IC ULTUR E S E C T I O N 4 — IMP ROVING P UBL IC SE RVICE PR O VI SION 315 FIGURE 13.1: Relationships Between Key Stakeholders in the Agrarian Sector NGOs/ Services, civil society groups partnership, and regulation Membership Membership Services Public Citizens and Producers/producer Services agencies consumers organizations Employment, Business products relations Services, partnership, and regulation Private enterprise Source: Authors.  Low performance: Incentives like good wages are By digitizing its services, the public sector improves its ability minimal in poorly resourced governments. to address the governance challenges listed above through  Poor supervision: Limited resources and staff reduce the mechanisms for transparency and accountability that ICT employee oversight. devices automatically invoke. For example, financial trans- actions through mobile phones or computerized systems Corruption and procurement challenges: discourage bribery and corruption because of their built-in  Corruption: Loopholes and poor enforcement create traceability. Similarly, putting information online in a central spaces for unwarranted financial gain. location ensures accurate and more equal knowledge trans-  Poor procurement: Unqualified staff and paper fer to all citizens, not just to those who are politically con- accounting result in poor transactions. nected. Using biometric data to transfer inputs or services to beneficiaries ensures that the targeted individuals are the  Rent seeking: Funds obtained unfairly by government intended recipients. Short messaging service (SMS) mes- through private assets. sages containing prices for certain crops reduce intermedi-  Bribery: Lack of legal mechanisms motivates political aries’ interference. As this module intends to demonstrate, and financial cheating. ICTs adopted to improve only farm practices and producers’ Targeting challenges: situations actually increase transparency in government processes, hold elected officials more accountable, reduce  Elite capture: Better-off and politically connected corruption, and boost citizen participation in the agrarian farmers capture public programs. sector (Katz, Rice, and Aspden 2001; Mercer 2004; Selwyn  Assessment: Low capacity to assess whether targets 2004). Table 13.1 summarizes the applications described in are met. this module.  Research: Low capacity to identify the most vulner- able or their needs. This module follows the outline in table 13.1, splitting the dis- cussion into three themes, with the most attention focused Bureaucratic procedures: on the first: (1) how the public sector can use ICT to improve  High transaction costs for clients: Resources services and policies, (2) how civil society groups and NGOs needed to travel to, wait for, and pay for services. can use ICT to reach beneficiaries, and (3) how democ-  High transaction costs for government: Resources racy and citizen participation can be improved through ICT. needed for logistics and travel to remote places. Each thematic section will present current trends, lessons E C O N O M IC AND S E CT OR WORK 316 MODUL E 1 3 — ST RE NGT HE N I N G R U RA L GOVER NA NC E, INS TITUTIONS, A ND C ITIZEN PA RTIC IPATION US ING IC T TABLE 13.1: Examples of ICT in E-Governance E-GOVERNANCE Organization E-services (examples) E-democracy Public agencies E-government to citizens: Citizen report cards, complaint Tax payment, biometric identification cards, government websites, irrigation management, lines, discussion forums, virtual digitized land administration, SMS extension services, mobile or radio pricing information communities, participatory budget- ing, chat rooms, mailing lists, E-government to business: opinion polls, citizen juries, online Regulatory information, procurement, automated tax payments, electronic toll collection focus groups, petitions, blogs, online media, social networks, E-government to employees or government: online video or news broadcasts Knowledge management systems, intranet, financial management systems, automated payroll, online timesheets Civil society and NGOs E-services to citizens: Agriculture websites, e-learning, radio broadcasts, online petitions, video-based information dissemination, SMS alerts, innovation hubs Source: Authors. learned, and benefits of using ICT, followed by summaries of interoperability is critical in infrastructure development. innovative practices from countries at a variety of electronic India’s choice to pursue a government-wide centralized readiness levels. administrative system reduces financial burdens over the long term and ensures that data and management systems are integrated over multiple departments. However, imple- KEY CHALLENGES AND ENABLERS menting a centralized system is much more difficult than The following sections highlight key challenges related to implementing singular systems. Oversight and technical sup- using ICT in efforts to improve the efficiency and overall port across diverse departments is a prerequisite, as are staff functioning of governance. It also discusses the enablers support, national leadership, and ample financial resources that can help to ease these challenges as interventions are (Reidl 2001). designed and implemented. Education and training: Computer literacy, outside of lit- Internal e-readiness: Human resources pose challenges eracy itself, is one of the biggest challenges to ICT devel- to e-government success. Staff and bureaucrats in public opment in rural areas. Countries implementing ICT for poor agencies often resist e-government development because communities must remember that training and education are they see it as a threat to job security (Jiang, Muhanna, likely to be a necessity in the initial stages. Without them, and Klein 2000). Internal e-readiness helps calm employ- users may struggle to use the Internet or other ICT appli- ees’ fears and prepares them for ICT interventions. The cations. The resulting frustration and reduced enthusiasm number of full-time IT employees and a firmly established IT about new technologies can spread quickly. For new users, department appear to be robust indicators of success- education increases both accessibility and confidence. Public ful e-government adoption (Norris and Kraemer 1996; extension services can help meet the need for education and Schwester 2009). To ensure internal e-readiness, countries training in the use of ICTs. introducing e-government should try to condition staff through training and conferences. Privacy and security: Privacy and security are also major Interoperability: The ability of a government website to challenges to e-government development (OECD 2003; connect people to information or to other websites is impor- Schwester 2009). Even in developed countries, securing tant to e-government development. As well as frequently citizens’ profiles, credit information, addresses, and prefer- updating their web pages, government agencies must pro- ences becomes a critical issue. Before implementing an vide clear, functioning links to other relevant information. e-government initiative, practitioners should consider privacy Interoperability can extend to culture relevancy and content. protection programs and inform the public about the risks Language is a major challenge. Providing government infor- and safety concerns related to using the ICT. Leaks in per- mation in only one language, or even two, may not suffice sonal information and increases in identity fraud are serious to reach citizens in the most rural and poor areas. Finally, threats to e-government success. IC T IN A GR IC ULTUR E S E C T I O N 4 — IMP ROVING P UBL IC SE RVICE PR O VI SION 317 Matching e-government projects to local infrastructure: Social access: Creating access for women (and other Investing in an e-government website when Internet access vulnerable groups) is usually the most difficult social task is limited for most households and businesses may not be a in ICT development. Democratic forms of participation smart financial commitment. E-government projects should like blogging often are unavailable to females who do not match the infrastructure capacity of the country or region. A have the time or cultural access to participate. If kiosks project aimed at connecting rural farmers to buyers through are intended to reach women, they should be placed in the web is ineffective if the rural communities do not regu- women-centric locations like weekly markets or hospitals. larly have electricity. A kiosk, perhaps powered by a genera- Similarly, broadcasts for farmers should be run late in the tor, or SMS alerts may be more appropriate. The Kosovo case evening when farmers have returned from their activities. demonstrates that ICT for governance does not have to be Even more important is that leaders and donors must an all-or-nothing proposition. Building ICT requires creative reflect on their intended objective. Is the ICT truly reach- solutions and gradual progress. Developing e-government in ing disadvantaged groups? Do observations prove that the step with expanding technology capacities will sustain the ICT contributes to a wide range of smallholder produc- effectiveness of the ICT. tivity? If not, strategy, targets, and objectives should be reconsidered. Sustained leadership: Strong leaders are crucial for consis- tent e-government development. Public officials or leaders Content analysis: Content analysis is another crucial ele- that are frequently “seen� are most effective in mobilizing ment of successful delivery of e-services by government citizen support for ICT. Increased and active leadership could and civil society. Internet, SMS alerts, newsletters, and help institutionalize the ICT in business development. Yet other ICTs must be relevant to the user. Content that may this type of “campaign support� for e-government initiatives seem relevant may in fact not be relevant depending on the is not the only important leadership role. Country leaders need. Technologies, climate change, and markets constantly must also consistently and strategically prioritize ICTs ahead shift the importance of messages. During a drought, radio of other development needs so that e-government attempts broadcasts on collecting water for irrigation might be more are not “stop-and-go� (InfoDev 2002). appropriate than others. These analysis activities are par- ticularly important in e-government because the information Investment and public-private partnerships: Financial provided by governments (such as market price information) planning and long-term revenue inflows are important to is not often up to date. Private sector initiatives offer more e-government as they develop (OECD 2003; Relani 2004; accurate and timely agriculture information compared to Schwester 2009). Generating revenue is crucial to sustain- the public sector. Thus one of the first steps in improving able ICT and public private partnerships should be pursued e-government services should be enhancing the quality of in order to maintain long-term growth and expansion. the information provided. Routine checks for information Governments can charge small fees to private enterprises accuracy are also critical. or citizens who use their services, yet modicum fees require many years to pass before returns on investment Userability: Userability is user-friendliness. Text options are significant. and clear links to other sites create this friendliness. The Cereal Knowledge Bank does an excellent job of fostering Interorganizational collaboration and coordination: A userability. Buttons like “home� and “back� make it easy major challenge to e-government success is coordination for people of all ages and skill sets to access information. between multiple public agencies. Almost all e-government The site offers downloadable printable information as well. services require interagency collaboration, particularly for Users can click on “small,� “medium,� or “large� text financial management. Yet this collaboration is difficult to options, providing reading material for a variety of eyesight encourage and facilitate. Simply computerizing internal capacities. Giving the user options is also part of usera- processes will not result in integration and flow if govern- bility. Lack of options and links to nonexistent websites ment agencies have a history of performing their duties frustrate users. in “rigid silos of departments� (Fuchs and Horak 2008). Haphazard computerization can actually worsen govern- Active participants and institutionalization: Participants ment effectiveness. Shared infrastructure like the same matter in ICT development for governance. Just because intranet or knowledge management system may ease the an organization delivers an e-government website, virtual ICT transition. community, or radio broadcast does not mean citizens will E C O N O M IC AND S E CT OR WORK 318 MODUL E 1 3 — ST RE NGT HE N I N G R U RA L GOVER NA NC E, INS TITUTIONS, A ND C ITIZEN PA RTIC IPATION US ING IC T actually use it, so community involvement and buy-in are Political and cultural environment: Institutions introducing an critical to success. For example, while a virtual community ICT should consider the political and cultural environment dur- or extension service may have hundreds of members, only ing design and implementation. This consideration is particularly a few of those members may contribute to the knowledge important in e-democracy projects. For example, if women do base or discussion (Kim n. d.). Requiring participation in mes- not normally participate or have a voice in government issues or saging, radio programs, and virtual communities in order politics, introducing an ICT for women without proper prepara- to maintain membership, or rewarding contributions, may tion, like training and community meetings, may have minimal incentivize participants to comment, respond to queries, positive effect. Saxena (2005) puts it well, stating that “while and add value to the community or cooperative. To further e-government is an automated government, the reverse does activate wide participation, practitioners must obtain com- not inevitably hold true. Introduction of automation into the munity acceptance and buy-in, secure links to sustainable public sector will not automatically create better or more open revenue flows, and maintain government support (Madon governance unless it is based on open and democratizing prin- 2004). Stimulating valuable social interaction and interest ciples.� In other words, simply computerizing government or with relevant groups and leaders will increase the prospects services is not the same as improving e-governance (Fuchs and of successful ICT integration. Horak 2008). Topic Note 13.1: PUBLIC AGENCIES AND THE PROVISION OF E-GOVERNMENT TRENDS AND ISSUES export markets. While improving service provision and rural Public agencies need to provide a wide array of public ser- livelihoods, these technologies also form more efficient rela- vices to rural producers and citizens. However, providing tionships between the government and citizens, producers, agricultural services like irrigation and drainage systems, private enterprise, civil society, employees, and other public market assistance, extension and advisory services, or other agencies. services like health and education is extremely complicated One way to clarify the opportunities and steps in an e- due to poor roads, few human resources, and corruption in government project is through the stages of e-government. rural areas. The public sector must also create a friendly busi- The simple framework below outlines how the public sec- ness environment for small and medium businesses, foreign tor can improve its digitized services over time. The stages investors, and innovative producers seeking to capitalize on in this e-government framework—publish, interact, and a business idea. transact—are described below (InfoDev 2002): Through ICTs, government agencies can provide services to  In the publish stage, a government might start with producers and private enterprise while enhancing the quality a website or two offering static information regard- of governance. E-government, or a government’s use of ICT ing public services. Hours of operation, addresses of to enhance public services, initially began as an intragovern- public agencies, and basic regulations or laws might mental communications tool (Moon 2002). Administrative be posted online. ICTs like knowledge management systems, financial deci-  In the interact stage, interests groups and citizens sion support systems, and intranets were and are still used can interact online with government officials, receive to improve the internal workings of public agencies. As tech- market information via SMS, and assist in irrigation nologies developed, the boundaries of ICT in government projects through ICT. expanded. Governments found that they could decrease  In the transact stage, producers can make financial bureaucracy, cut transaction costs, and spread information transactions through point-of-sale terminals, busi- to other stakeholders like citizens and businesses by digitiz- nesses can obtain licenses online, and citizens can ing public services. These advantages are quite pronounced buy or sell land through digital land administration. in the rural sector. For example, sending real-time price information through SMS increases producers’ bargaining Table 13.2 provides examples of e-government ICT with ref- power with traders, and tracking cattle through sensor tech- erence to the publish, interact, and transact stages. Country nologies traces the health of the animals, opening doors to examples are also included. IC T IN A GR IC ULTUR E S E C T I O N 4 — IMP ROVING P UBL IC SE RVICE PR O VI SION 319 TABLE 13.2: E-Government Stages STAGE TYPE OF ICT COUNTRY EXAMPLE Publish Website with ministry information Nigeria http://www.nigeria.gov.ng/ Market information systems India http://agmarknet.nic.in/ Databases and resources Brazil, EMBRAPA http://www.embrapa.br/english Interact Irrigation management Afghanistan (See Module 5, page 107) E-mail communication with government Singapore http://ele.ecitizen.gov.sg/news.htm Transact Rural finance system M-PESA, Kenya (See Module 7, page 157) Digital land administration Indonesia (See Module 14, page 363) Source: Authors. The e-government sector has continued to grow with the sectors’ sources of information, efficiency, and scaling expansion of ICT and infrastructure. A number of key trends opportunities. should be noted:  A change in legacy. Governments and development  A major trend toward a central interministerial institutions are recognizing that electronic public committee. These committees, often housed by services are not improved through ICT if they sup- the head of state or in the cabinet, lead and cre- port rather than redesign dysfunctional policies and ate national e-government policies and strategies. procedures. E-government is being viewed as a more E-government committees at the national level help complex overhaul in public service provision and gov- generate significant visibility, funding opportuni- ernment function rather than as a series of individual ties, and push both public and governmental digital departmental projects (Hafkin 2009). transformation. Designating an ICT national leader also helps ease state and local governments into the Finally, it is important to note that ICT projects specifically national strategy and is now occurring more broadly purported to resolve agriculture development also address in developing countries. However, these committees governance challenges. Rather than repeat the examples have a tendency to stagnate, existing more for show covered in other areas of the sourcebook, table 13.3 (on rather than progressive ICT action. the next page) cross-references ICT interventions from the public, private, and development sectors that are described  A shift from a computerized, technological in other modules. Their components are highlighted to dem- approach to a more service-driven approach. onstrate the positive effects that ICT-enabled agriculture has Governments are now looking into how technolo- on rural governance even when the intended objectives are gies can integrate with public services and institution strictly agricultural. building, rather than the opposite. The service-driven approach is much more effective than the technologi- cal approach, because it taps into public demand, which is often latent owing to limited access to new LESSONS LEARNED technologies and education about them. Public service providers and development institutions  An increase in private-public partnerships. Private assisting in the development of government-sponsored ICT firms are increasingly involved in e-government proj- projects should be aware of the challenges associated with ects due to the technical features involved as well as them. Though impact studies are limited, there is some evi- the profitability of some services. This participation dence of the difficulties that may present themselves dur- is critical to financing infrastructure that the govern- ing or after implementation. These effects can weaken the ment cannot afford, as well as to refining the public relationship between the rural sector and the government, E C O N O M IC AND S E CT OR WORK 320 MODUL E 1 3 — ST RE NGT HE N I N G R U RA L GOVER NA NC E, INS TITUTIONS, A ND C ITIZEN PA RTIC IPATION US ING IC T TABLE 13.3: ICT-Enabled Agriculture Interventions and Their Impact on Rural Governance CORRUPTION AND BUREAUCRATIC HUMAN RESOURCE TARGETING PROCUREMENT INTERVENTION CHALLENGES CHALLENGES CHALLENGES CHALLENGES Risk ILRI created index-based For private firms and govern- Human discretion, which A lack of data reduces When government agents Management livestock insurance to ment alike, it is too costly is often used for assess- the chances of targeting collect premiums or pay Module 11 provide insurance to 3 mil- to assess the damages and ing damages, is highly the right farmers during indemnities without a lion pastoralist households collect premiums in remote fallible. Satellite images a disaster. To ensure the digital system, opportuni- in northern Kenya. Satellite areas. Administrative and improve the capacity to insurance was priced ties for bribery or theft images that captured the logistical costs are mini- analyze and accurately fairly and would reach the increase significantly. Using amount of vegetation on mized by satellite imagery assess damages. It most vulnerable, analysts point-of-sale systems not the ground were used to and point-of-sale systems also creates opportuni- created an index that only reduces the logistical assess damages. Premiums as government workers ties for long-term data predicted livestock mortal- costs of providing insurance and payments are collected no longer have to travel to collection, which could ity based on the amount of but also monitors financial by a rural agent through remote locations. improve environ- vegetation on the ground. transactions, prevent- point-of-sale systems. mental or production This was used in tandem ing both government and projections. with the satellite images to producer losses. ensure fairness. Market Esoko is a market informa- Providing market informa- Incentivizing the private Users have the option of Through mobile applications, Information tion service in Africa set up tion through bulletins and sector to advertise customizing the technology farmers can observe price Module 9 through mobile phones that other conventional means through mobile tele- to meet their needs. By fluctuations and financial (1) delivers a wide range takes considerable financial phones and Internet tracking harvest activities transactions. Even without of market information and resources and time and is significantly increased or selecting market infor- a subscription, farmers can (2) serves as a platform for often unreliable. Esoko.com the sharing of informa- mation for certain products, request market data for the buying and selling agricul- allows any farmer with an tion on prices, market farmers are finding cost of one SMS message. tural commodities. Internet connection to reg- preferences, supply, and relevant information faster Removing intermediar- ister for a free account and demand. The burden of than a traditional extension ies’ opportunities to take access 800,000 prices from sending trained govern- service could provide. advantage of uninformed a diverse set of markets. ment staff to collect this Governments can use data farmers drastically reduces Users can also connect with information is lightened; on farmers’ digital interests the need for government buyers and advertise their more resources and staff to target individuals or intervention. products. time can be allocated to areas for specific types of other needs. training or input programs. Land The Indonesian National Land titling, an often Using computers Digitizing the land system Digital systems raise red Administration Land Agency has created centralized service in and laptops reduces allows more people to flags when companies or Module 14 an SMS-based property developing countries, is not paperwork burdens access land and make persons obtain land without inquiry service and a accessible for citizens living for staff. Entering data transfers, even in remote going through proper legal remote land titling program in the periphery. Insecure directly into an electronic locations. Agencies can channels. It is also easier called the People’s Land land rights are problematic system connected to ascertain which properties to prevent discrimination Title Service (LARASITA). in rural locations, resulting the central database are not included in the land against certain groups as The service, which uses a in lower yields and poor also reduces the time it system and go about reach- rural awareness of rights vehicle and a laptop with farming practices. Mobile takes to complete these ing them. Using the mobile increases. Web portals and wireless connectivity, has land titling allows citizens service-related tasks. system also improves tar- digital land systems provide brought land services to do not have to spend unnec- Data entries should also geting, particularly because tighter accountability five rural provinces that essary time and financial reflect the rural situation rural inhabitants are most mechanisms that prevent would otherwise not have resources to travel to the accurately. prone to exclusion in land corruption, which also access to them. main city to register their titling systems. enhances citizen trust. property. Irrigation The Program for the Digitized irrigation manage- DOQs can be used over Using ICT in irrigation Local users, who are active Management Management of Irrigation ment systems reduce the time to anticipate water systems improves public in monitoring the irrigation Module 5 Systems by Water Users, in time spent in the field challenges like increas- agencies’ ability to target. networks, can hold contrac- collaborations with others, for M&E. DOQs capture ing salinity. Creating Satellite images such as tors accountable and reduce used digital orthophoto information to help public a database with these DOQs can distinguish land waste in financial resources. quads (DOQs) to help the agencies plan and imple- images allows users to plots, water sources, and In addition, water fees are government and local com- ment better-functioning be more active in the which producers have the easier to assign if there is munities manage address irrigation systems. Where irrigation network. Active most or least access to a more accurate picture of problems of maintenance, GPS cameras and mobile participation usually water from the system. the water situation in rural drainage, canal structuring, phones are used, water increases public demand With this information, areas. DOQs can prevent system monitoring, and users can send pictures for good services, and public agencies can adjust public agency discrimination payment in the Dominican of maintenance issues or it may lead to better water subsidies and infra- in prices and water access. Republic. system breakdowns, also staff performance and structure to better target reducing staff travel. oversight. those farmers with the fewest water resources. IC T IN A GR IC ULTUR E S E C T I O N 4 — IMP ROVING P UBL IC SE RVICE PR O VI SION 321 worsen situations for farmers, and reverse positive trends in areas are much less likely to have access to mobile phones the development of sound governance. or computers than men. In general, this disparity occurs because women do not have the income (often controlled Because ICTs are “disruptive technologies� that restructure by men in the household) to purchase mobile phones or gain bureaucracies, redistribute power, and alter the confidential- the education to use them effectively. Contributing to the ity of information (Hanna 2009) practitioners should be wary challenge are social norms in rural communities. One study of political apprehension. ICT is not a panacea for develop- found that men put restrictions on how women use mobile ment challenges, especially those relating to good gover- phones, further decreasing women’s freedom to use phones nance. In fact, studies assert that the introduction of digital economically. Women’s incomplete understanding of how services into certain bureaucracies is prone to overlooking phones and even radio broadcasts could be used for agricul- manifestations of “neopatrimonial� behavior (patronage tak- tural and innovative purposes is a chief barrier to integrating ing place behind the facade of a modern state) that could women as users of ICTs. Most women see phones as secu- render ICT ineffective in improving governance (Berman and rity measures, not ways to access public services or improve Tettey 2001). livelihoods (E-Agriculture 2010). Evidence suggests that the gender disparity in ICT access decreases when women and Strained resources and an unstable state or emerging democ- men have similar educational backgrounds and incomes. racy can make the productivity of ICT even more difficult to Projects focused on increasing women’s primary education achieve. For example, because the results are not immedi- and basic computer skills should thus increase their effective ate, politicians do not always support e-government projects: use of ICT (Gillwald, Milek, and Stork 2010). Incentives to develop and begin implementing ICT are some- times limited in terms of reelection or political clout. Using Beyond these challenges are others related to infrastructure ICTs in societies with thin models of citizen participation and cost. As noted, initial costs for mobile and broadband may produce minimal change (Dahlberg 2001). As a result, Internet networks are so high that the public sector cannot e-government projects should be dependent on the institu- extend them to rural areas. Incentivizing the private sector tional, political, and administrative capacity of the country. to finance infrastructure can reduce this burden. In addi- The use of ICTs can also increase class divisions (Selwyn tion, public agencies might want to further consider how to 2004). The “digital divide� is a global, national, and local phe- link mobile phone applications into online service systems nomenon, even in developed countries (Jung, Qui, and Kim as many development institutions and private firms have 2001; Loges and Jung 2001; Bonfadelli 2002). This divide done. Increasing the number of applications that can be used is most clearly visible between the wealthy and poor. For through mobiles may improve rural access, as most rural pro- example, traders or wealthy farmers, who typically have ducers do not have access to the Internet. (See Module 2 on higher incomes compared to producers, also have more affordability and accessibility for more information on these access to mobile phones, which can put poorer producers connectivity issues.) at an even greater disadvantage. Recent studies show that where citizens with higher levels of education and income use employment-related ICT like databases and bookkeep- INNOVATIVE PRACTICE SUMMARY ing, those with lower education and less income use ICT Building Public Service Provision through for games and entertainment (van Dijk 2006). As a result of Internet Applications these social challenges and others, institutions evaluating Government portals are one of the most prominent forms ICT for governance should examine “effective access,� or of e-public services that agencies provide. Most government the users’ “actual engagement with, or use of, the technol- agencies begin their ICT development with these websites ogy� (Selwyn 2004). and, over time, develop their capacity to provide more ser- vices electronically or simultaneously through SMS. Some Gender disparities in levels of ICT adoption are an additional initiatives are designed and implemented in all ministries at social and economic concern (see Module 4 for more details once; others are designed and implemented one by one. on gender issues). Evidence shows that women in rural At first, government websites may provide only bits of E C O N O M IC AND S E CT OR WORK 322 MODUL E 1 3 — ST RE NGT HE N I N G R U RA L GOVER NA NC E, INS TITUTIONS, A ND C ITIZEN PA RTIC IPATION US ING IC T information, but after years of sustained investment (includ- The National e-Governance Service Delivery Gateway (http:// ing adequate investment in rural infrastructure), these portals www.nsdg.gov.in/administration/index.jsp), which serves as can offer hundreds of transaction services. a data exchange board between all government agencies, will help the Indian government track, monitor, store, and Website development is a continuous process in all quickly reply to citizen inquiries. Whereas many government countries, developing and developed. Those involved in portals develop with singular infrastructure, India chose an e-government initiatives in countries with few resources and infrastructure system that would allow for standards-based low capacity can look to other public agency websites for interoperability between agencies (see figure 13.2). A cen- ideas on how to improve or enhance their own efforts to tral system that acts like a behind-the-scenes routing ser- reach citizens through ICT. Both http://www.regulations.gov/ vice eases the transition from paper to electronic services, in the United States and http://ec.europa.eu/ in the European reduces the amount of overlap in agency efforts, minimizes Union are good references for governments trying to dis- costs, and improves information sharing between depart- seminate information on policy and law in their countries. ments. Importantly, integrated infrastructure benefits the citizen: services should look similar and follow the same types of procedures in all government agencies. India’s E-Governance Initiative India, revered as one of the most progressive countries As NeGP moves forward, citizens will be able to access in e-government, began the National e-Governance Plan public services from each relevant ministry through depart- (NeGP) in 2006. In the past five years, the project has seen mental websites with the gateway portal. Grievance redress, substantial national growth in providing electronic informa- online permits and applications, and other relevant services tion and services online. The NeGP includes both telecom- are currently being implemented, along with programs that munication and internal government systems infrastructure allow people to track the status of their submission and development, simultaneously building electronic public ser- protect their privacy. The project has also made substantial vice delivery and strengthening rural access to the Internet. efforts to reach out to the large rural populations. E-District NeGP is composed of almost 50 projects, spread out over is a service that allows rural citizens without computers or all ministries and line departments at the federal, state, and Internet to access services through community centers. In local levels. Each state also has the ability to select five addition, the Department of Agriculture and Cooperation and e-government projects, which are dependent on and tailored the Directorate of Marketing and Inspection (http://agricoop to the state’s economic and social development needs. .nic.in/ and http://agmarknet.nic.in/) have developed impres- These services are being generated through public (51 per- sive agricultural public services including a market infor- cent) and private funds (49 percent) funds (see http://www mation system, pages with technical advice, and even a .nisg.org/index.php). public grievance program dealing with agricultural issues. FIGURE 13.2: Singular Infrastructure versus Centralized Infrastructure in India NSDG Source: http://www.nsdg.gov.in/administration/. IC T IN A GR IC ULTUR E S E C T I O N 4 — IMP ROVING P UBL IC SE RVICE PR O VI SION 323 Finally, mobile government through SMS is an additional systems—both the Internet availability and computer train- e-government initiative. ing programs—benefit over 3 million people. Women and young adults with low incomes have preferential access to the services. In fact, over 50 percent of the users are female Success in Singapore (United Nations Department of Economic and Social Affairs Singapore’s e-government portal provides another useful 2009). example of e-government development. Now in the trans- act stage, the country’s e-government program is among the best in the world. Government workers were trained in ICTs as early as 1981, starting with a civil service portal INNOVATIVE PRACTICE SUMMARY Agricultural and Rural Information through through IBM. By 2006, data were shared across 13 minis- Ministerial Websites tries that were connected through an integrated central ser- vice system. Internet technology and penetration increased Making It Work in Malaysia rapidly in Singapore. Even 10 years ago, 90 percent of the population already had Internet access. The expansion of Government websites can be specifically related to agricul- government-sponsored “Citizen Connect� centers—placed ture as well. The Malaysian Ministry of Agriculture’s Third in multiple strategic rural locations around the country—are National Agricultural Policy for 1998–2010 was formed to partly responsible for this broad access. Singapore, through improve agricultural productivity and competitiveness fol- its efforts to connect all citizens to the Internet, even despite lowing price increases in imported commodities. The use of resource and infrastructure constraints, has experienced ICT was a major aspect of the 12-year plan (Mathison 2002), impressive ICT gains. For example, it only takes 20 minutes which has made substantial progress over the last decade. to register a business online, and the government offers In one of its major projects, the Ministry of Agriculture, almost all of its 2,600 public services online, making govern- along with farmers’ organizations, developed a portal that ment interaction easier and possible in remote locations. allowed agriculturalists to share information. The website (now at http://www.doa.gov.my/web/guest/home) provides The 2,600 services range widely in scope and subject. Rather a wide array of services, including technical information on than printing documents to turn in to public agencies, people Malaysian agriculture, registered agriculture service provid- can complete most services fully through the web. For exam- ers (like fumigators), pricing information for producers, open ple, they can apply for maternity leave, pay taxes, register forums through Agribazaar, permits, and archives. It also for university, make appointments with doctors, and search provides a bulletin service for advertisements and events. for information regarding housing (Hachigian and Wu 2003; All of the information can also be accessed by listening to a Riley 2003). Citizens can also apply for passports, change voice recorder easily visible on the website. Farmers can also addresses, and even register small court claims online (see contact officials to locate experts for technical assistance. http://www.smallclaims.gov.sg). Through SMS or through the website, farmers can also con- tact extension agents and report paddy pest outbreaks to the ministry. BiblioRedes in Chile Because of literacy and limited computer education, pro- The development of the now quite advanced web (and grams that help educate farmers and other citizens are SMS) portal was done carefully. The ministry did a base- crucial once network connections are available. Chile’s line survey in certain rural areas before implementation. Digital Equity Fund subsidizes broadband infrastructure This survey included questions on farmers’ economic in remote areas and funds a project called BiblioRedes. A status, electronic education, literacy, and agricultural chal- product of the Digital Literacy Campaign, the BiblioRedes lenges. Upon collecting the data, the leaders of the project project connected 101 of 121 public libraries in munici- found that 30 percent of respondents felt that they did not pal districts with low connectivity rates to the Internet. receive adequate agricultural information (through media, With this connection, even in isolated regions, a 14-hour television, radio, and other ICT). They also found that only “Digital Literacy� training program is available for new 15 percent of respondents owned a computer and 20 per- users to learn basic computer skills. A complementary cent were computer literate. Not only did this survey help course allows users to learn about other IT applications. shape the website and its services, but it also confirmed Chilean libraries are used often, and as a result, these that farmers would need additional support. The ministry E C O N O M IC AND S E CT OR WORK 324 MODUL E 1 3 — ST RE NGT HE N I N G R U RA L GOVER NA NC E, INS TITUTIONS, A ND C ITIZEN PA RTIC IPATION US ING IC T continues to survey farmers, which helps to update web IMAGE 13.1: Online Access to Public Data Such as the designers, experts, and the ministry on agricultural issues Ghana Living Standards Surveys Can in rural areas. Stimulate Research and Development Aggregating Research Information in Ghana Making research results available to the public is also essential to fostering innovative solutions to poverty and economic growth. Much internal research done in devel- oping countries sits in an office, restricting dissemination. Some countries are now actively posting data and country analysis on their websites and open access software (See TN 6.1 in Module 6 for more discussion on the dissemina- tion of research results.) For example, the Ghana Statistical Service, which is closely linked with the Ministry of Finance and Economic Planning, created a website for in-country research and data. The website offers aggregate informa- tion on macroeconomic variables, national surveys, and Source: Ghana Statistical Service (http://www.statsghana.gov.gh/ Publications.html). downloadable publications like the Ghana Living Standards Surveys (http://www.statsghana.gov.gh/Publications.html) (image 13.1). Many of these survey results focus specifi- cally on rural demographics, such as households engaged identification. Identity theft or fraud is a common problem in agriculture, household income, assets, credit, expendi- in all countries and poses many challenges to providing pub- ture, seasonal patterns, and home processing of agricultural lic services. For example, a sick person might try to access products. The data serve as a resource for development healthcare under a relative’s plans by using the relative’s partners and universities trying to address rural challenges. identification, or a farmer who takes a loan one year might They also inform local governments and actors, as well as try to pass as another person to receive another loan the donors looking for new areas for investment. following year. Today, credit markets, voting, and targeting public service delivery are prominent identity challenges in It should be noted that web portals specifically purposed to agriculture development. help rural farmers are often largely ineffective due to lack of access and regularly updated information. This is even more pronounced for government websites attempting to provide Bangladesh Takes on Biometrics market and price information (more information on these Biometric ID cards, which are like laminated identification government challenges can be found in Module 9). Rather cards but with a microchip or barcode, are being used in than abandon Internet portals that do provide worthwhile developing countries like Brazil, South Korea, India, Senegal, and open-access information to some farmers, governments and Bangladesh for public services like voting and employ- should pursue SMS dissemination through web-to-phone ment programs (image 13.2). In Bangladesh, the Bangladesh software, while continuing to build regularly updated and reli- Election Commission, the Bangladesh Army, and international able content. organizations took part in designing, funding, and implement- ing a biometric identification system for 80 million Bangladeshi voters in just three years. During this time, huge training activi- INNOVATIVE PRACTICE SUMMARY ties took place to build capacity in election workers, and more Using Biometrics to Provide Rural Services than 15,000 computers were delivered to voting registration Websites offering research, services, and information are centers. The Bangladesh project had 14 stages, including but not the only ICT that government can use to improve the not limited to form distribution and data collection, data veri- provision of public services in rural areas. Biometric cards fication, data export to server, proofreading/editing, prepara- are up-and-coming examples of government-sponsored tion of proof voter list and verification, card preparation and ICT in developing countries. Fingerprints, iris scans, and handing over for distribution, card distribution, correcting mis- electronic passports are all useful applications for accurate takes in cards, and data safeguarding and distribution (Islam IC T IN A GR IC ULTUR E S E C T I O N 4 — IMP ROVING P UBL IC SE RVICE PR O VI SION 325 and Grönlund 2010). The IMAGE 13.2: Biometric Identification Can Replace Traditional Forms of Identification project used an Automated Fingerprint Identification System, as well as a multi- biometrics Face-fingerprint Recognition System that has proven to be very effective in capturing human traits (Jain and Ross 2006). The combined software package produced a two-dimensional barcode with fingerprint templates, along with a card including the person’s name, gender, birth date, photo, and signature. While the project had no shortages of trials, overall the biometric card initiative in Bangladesh was considered a success. Strategic planning Source: Simone D. McCourtie, World Bank. and innovative methodologies helped the project deal with The use of these cards is expected to extend (and has challenges like geography. Enumerators reached even the already in some pilot areas) and improve agricultural and rural most rural areas using various types of transportation, includ- employment programs. An example of this is the National ing walking, human haulers, speedboats, and helicopters Rural Employment Guarantee Act (NREGA), established in (Islam and Grönlund 2010). The UN stated that the biometric 2006, which guarantees 100 days of annual employment at project produced the most credible election in the history of minimum wage rates to all rural adults who are willing to Bangladesh (UNDP 2008), maintaining a 98 percent accuracy perform unskilled manual work. The act involves all levels rate (UNDP 2009). The success of these biometric identifica- of government, including the local (panchayat) institutions tion cards has also generated discussion about future uses. that are primarily responsible for registering households, Although use of the cards is now limited to conventional issuing and distributing job cards, allocating employment, means (e.g., matching a person’s card to his or her features and monitoring the job sites. Applicants to the program must through physical examinations), the World Bank is exploring be issued a job card: Once it is issued, recipients can seek new and cost-effective ways to use the cards for broader employment from a local NREGA program officer (Raabe purposes, like agriculture or rural public services, through et al. 2010) (http://nrega.nic.in). electronic means. Despite the benefits resulting from the program (includ- ing that more than half of the program’s beneficiaries Biometric Innovation in India belong to Scheduled Castes and Tribes, and more than half Over the next few years, over 1.2 billion people will be issued are women), it has also had its fair share of challenges. personal biometric cards that include simple data like birth Corruption by job card issuers, electoral politics that limit dates and sex and in the future, more complex data like criminal citizens’ ability to get access, misappropriations in pay- records, credit histories in India (image 13.2) (see http://uidai ment, and substantial delays in issuing cards are only some .gov.in/ for more information). Called “Aadhaar,� the unique of the problems experienced. In the last four years, more 12-digit identification numbers, which costs around 3USD than 1,200 complaints regarding program irregularities have each, will allow all citizens to gain access to public services come to the Ministry of Rural Development (“Biometric like banking and education anywhere in the country through Cards to NREGA Workers on Anvil,� 2010). However, bio- the biometric data and online verification systems. Already, metric cards and devices provide opportunities to address 30 million people have been given a number (Polgreen 2011). these challenges. Biometric cards, instead of job cards, are E C O N O M IC AND S E CT OR WORK 326 MODUL E 1 3 — ST RE NGT HE N I N G R U RA L GOVER NA NC E, INS TITUTIONS, A ND C ITIZEN PA RTIC IPATION US ING IC T being piloted in Andhra Pradesh and Bihar to better identify Many one-stop shops facilitate business start-ups. Business and ensure payments and accessibility. Wage dispersion will start-up involves numerous formalities—registration for also improve through the use of biometric ATMs (Patowary taxes, pensions, and insurances, screening procedures, 2009). These ATMs require fingerprint authentication so opening bank accounts, and obtaining environmental cer- rural employees can receive wages by way of a thumbprint tificates (de Sa 2005). Even in developed countries, these scanner instead of a personal identification number. This formalities take time. procedure will help to reduce delays, improve transparency, and reduce irregularities. One-stop shops are most effective online, but some countries can provide only start-up information and docu- Some issues in using biometric data should be noted. Aging ments online; entrepreneurs must travel to a city to com- or accidents that cause burning or deformities reduce the plete their business registration. In 2005, Kosovo provided biometric software’s ability to accurately capture all citizen e-government services in this manner. Forms could be down- groups (Giné, Goldberg, and Yang 2010). Costs can also be loaded from an e-government website that also specified the underestimated. The London School of Economics found sequence of procedures and costs, but the transactions had that in India, the government grossly underestimated the to be completed at a central location in the capital. Now the 10-year rollout costs (Giné, Goldberg, and Yang 2010). Also, Kosovo government is establishing completion locations in some societies do not support the use of biometrics. A sur- each of the municipalities. Reform efforts like these, along vey in the United Kingdom concerning biometrics found that with others aiming to expand business capacity, have led to 55 percent of respondents felt that biometrics infringed on a 47 percent increase in registered businesses from 2005 to civil liberties (Giné 2010). Another problem is rollout costs. 2009 (World Bank 2009). For just this fiscal year alone, Aadhaar will cost around US$ 326 million (Polgreen 2011). Vietnam has worked for many years to develop quality e-commerce systems. In 2000, the Ministry of Planning and Investment began building a useful website for busi- INNOVATIVE PRACTICE SUMMARY nesses, particularly foreign investors. The first experiments E-Government to Business with e-commerce technology occurred in Ho Chi Minh City E-government to business is also important to ICT develop- and Hanoi (Desai and de Magalhaes 2001). Working to sim- ment and economic growth. Public agencies can use ICT to plify administrative procedures, the government created an bring foreign investment, expand small businesses, and link online, one-stop shop for private enterprise (Vasavakul 2002). farmers to buyers. Financial transactions like paying taxes can This website (in English and Vietnamese) now includes be carried out online. Electronic markets can facilitate sales license and permit applications as well as standardized and purchases. Businesses can also obtain regulatory informa- forms for the various departments with which firms must tion and permits or licenses through government-sponsored interact during or after registration (Wescott 2003) (For one- ICT. Often businesses already conduct online transactions stop shop information, see http://www.dpi.hochiminhcity (e-commerce) with other firms. If the government also pro- .gov.vn/invest/index.html and http://www.business.gov.vn/ vides online services to businesses, many of the same ben- mastertop.aspx?LangType=1033.) efits are gained. E-government services for firms diminish red While this one-stop shop certainly expanded capacity for for- tape and improve regulatory clarity. As a result, businesses are eign investors, small businesses in rural locations struggled more competitive and efficient—qualities that are particularly to access similar e-government services. A survey conducted important to the agricultural sector. in 2006 (five years after the one-stop shop was implemented) showed that most users living outside of the main cities had Providing Regulatory Information to Small and Medium poor telecommunications services; one interviewee stated Enterprises that the “connection in the rural Internet shop is very slow. Between 2003 and 2008, 24 governments created websites Many times I wanted to send a message but had to drop since dedicated to serving private enterprises, which use these “one- waiting so long� (Nguyen and Nguyen 2006). This rural-urban stop shops� to register, pay taxes, obtain licenses, and com- and domestic-foreign disparity increases the digital divide plete other business processes (today, there are even more). and reduces the participation of rural smallholders. Though The service is often very efficient, cutting delays in bureaucratic foreign firms have access to one-stop shops, rural owners procedures like registration by 50 percent (Djankov 2008). of small and medium enterprises must resort to slow, costly, IC T IN A GR IC ULTUR E S E C T I O N 4 — IMP ROVING P UBL IC SE RVICE PR O VI SION 327 IMAGE 13.3: One-Stop Shops Using ICT Can Increase Efficiencies in SME Start-Ups but not limited to corporate income tax, value added tax, national pension scheme, and company registrations. The automated payment software facilitates a computerized rela- tionship between the banks, business, and government.1 Mauritius uses a Value Added Network, which is a secured private network between banks and the government, operated by a trusted domestic service provider. When a firm registers for the service, the bank will remove cash from the businesses and send it to the government. The govern- ment will then send an e-mail receipt to the business. Identity Source: Tran Thi Hoa, World Bank. management software is also used, offering syntax checks, bureaucratic procedures. Development partners like the user validation, and integrity checks, all of which are important World Bank have been working to expand the one-stop shop to building user confidence. service to Vietnam’s small and medium enterprises by pro- viding specific electronic and physical contact sites (image This transaction scheme has a number of outstanding ben- 13.3). (See http://www.business.gov.vn/index.aspx for gov- efits. Taxes and business fees are crucial to economic devel- ernment efforts to help small and medium enterprises and opment; in fact, in Mauritius “income taxes and VAT consti- IPS “Vietnam’s One-Stop Shop for e-Government Services� tute around 34 percent of government recurrent revenue� in Module 14 for application to land administration.) (Lollbeharree and Unuth 2001). The benefits of this faster electronic process include:  Easing pressure on government during busy times like Securing Efficient Payment Systems and Tax Services tax periods. Automated payment software systems are very useful  Reducing employee numbers on government payrolls e-government technologies. In 2000, the Contribution Network and preventing staff from making multiple data entries Project (http://mns.mu/index.php) was implemented as a for records (even in developing countries, paper tax public-private partnership between the Mauritian Government, forms typically enter a computer system at some point). Bank of Mauritius, and the World Bank. As an e-government to business service, the Contribution Network Project pro-  Speeding up cash flow. vides one channel for all payments that Mauritian firms need  Generating revenue for sustainability. to make to a variety of departments (Heeks 2002). A decade later, the Mauritius Revenue Authority (http://www.gov.mu/ Initial investment costs can be quite high for automated pay- portal/sites/mra/index.htm), a product of the Contribution ment systems like these, but the returns on the investment can Network Project, in collaboration with the Companies Division surpass them. Setting up the main facility for the Contribution (http://www.gov.mu/portal/site/compdivsite/menuitem Network Project required a capital investment of around .e24cd2cc6b820a052eada 810f6b521ca/) collects revenue US$ 250,000. Employers then bear the costs for hardware, from both business and citizens electronically. connection to the network, and training (this totals around Businesses small and large can set up an account to automati- 1 For more on automated payment systems, see Sumanjeet (2009) cally pay a variety of government-required expenses, including and Frederick (2009). E C O N O M IC AND S E CT OR WORK 328 MODUL E 1 3 — ST RE NGT HE N I N G R U RA L GOVER NA NC E, INS TITUTIONS, A ND C ITIZEN PA RTIC IPATION US ING IC T US$ 1,410). There are communications fees based on the monitors traffic volumes, which help to predict potential volume of data transmitted—currently employers are charged maintenance needs. about US$ 0.18 per kilobyte (Lollbeharree and Unuth 2001). Indian businesses face serious obstacles to smooth transporta- tion. The logistics of getting people and goods from Point A to Increasing Efficiency in Transportation and Logistics Point B constitute almost 10 percent of the country’s GNP, out Businesses, particularly agribusinesses, face major chal- of which almost 40 percent is transportation (Sriraman 2009). lenges in transportation infrastructure. Poor road conditions Moreover, the use of vehicles to transport goods has grown like potholes and soft shoulders cause terrible accidents and in past decades. Road quality and accessibility are important traffic. The resulting high transaction costs reduce firms’ factors in transport development, but another challenge is the and growers’ international competitiveness (Sriraman 2009). speed of transport. Truck drivers carrying goods, especially Import costs rise and trade declines when road infrastructure over state lines, are stopped and checked, fined, taxed, and is poor; studies have shown that a 10 percent increase in questioned. These activities slow traffic and increase transac- transportation costs lead to a 20 percent decrease in trade tion costs for both the government and the agribusiness. volumes (Limao and Venables 2000). Transport costs can reduce the marketing value of rural producers’ goods to such India is one of the first developing countries to imple- an extent that it is not cost-effective for businesses to pur- ment electronic tolling systems. The National Highways chase them for export. Similarly, transport costs for imported Development Project, chiefly funded by toll fees, began a commodities can double shipping charges and make them long-term investment in improving road conditions on the unaffordable for rural citizens. In both cases, private enter- country’s National Highway Network. The primary initiative prises are deterred from reaching out to rural locations. of the project was to expand automated tollbooths. The gov- ernment chose radio frequency identification (RFID) technol- Developing countries have adopted toll roads to overcome ogy, which uses electromagnetic waves to exchange data some of these challenges. Toll roads provide funding to between a terminal and an object, like a vehicle, and cost maintain and expand roads, but collecting tolls and fines is less than other options (table 13.4). (For more information quite difficult. Toll operators can pocket fees and bribe driv- on RFID, see Shepard (2005) and Banks et al. (2007).) A ers for still more cash. Drivers can refuse to pay, and with- number of activities can be tracked with RFID, such as activi- out strong vehicle identification schemes, governments ties involved in supply chain management, passport or other cannot ensure that they are properly fined. Electronic toll identification control, and animal identification. For India’s collection is a more efficient way of collecting road fees. It toll roads, RFID is coupled with a national, unified, central reduces the scope for bribery and loss of revenue by track- management system; a legal framework to handle violators; ing cash and vehicle flow, decreases waiting times, and vehicle classifications; and a prepaid system for interested TABLE 13.4: Comparing Costs for Electronic Toll Collection, India ETC TECHNOLOGY COST SUPPLIERS IN USE COMMENTS Active Microwave 5.8 About Rs 2000 per OBU Limited Yes (Japan) Due to higher bandwidth and data speed, sup- GHz About Rs 5 Lac per Reader ports many ITS applications DSRC Passive Microwave 5.8 Rs 1000 for OBU Multiple Yes (Europe) Very Simple OBU GHz  Rs 2L for Reader Infrared ISO-CALM Rs 1000 for OBU Limited Yes (Austria and Can be easily extended to a contactless card  Rs 2L for Reader Malaysia) and useful for other ITS applications Passive RFID About Rs 100 per Tag Multiple Yes (South America, Allows tamper resistant “stickers� About Rs 2 Lac per Reader Georgia, US) Small, light, very cheap, almost unlimited life RFID Active RFID About Rs 1000 per On Board Unit (OBU) Limited Yes (Florida) On-board transmitter, higher range, expensive Finite life as the battery has to be replaced GNSS/CN About Rs 2 Lac per Reader Limited Yes (in Germany) Too sophisticated and due to absence of toll plazas, About Rs 2000 per OBU enforcement on violations is very difficult in India. Source: Nilekani 2010. Note: ETC = electronic toll collection; OBU = on-board unit; DSRC = dedicated short-range communication; GNSS/CN = global navigation satellite system and cellular network; Rs = rupees; 1 lac = 0.1 million; ITS = intelligent transportation systems. IC T IN A GR IC ULTUR E S E C T I O N 4 — IMP ROVING P UBL IC SE RVICE PR O VI SION 329 users (Nilekani 2010). Users can also pay their bill through over data entry and reporting, and common processes for mobile phones and credit cards. Technologies like RFID are transactions like procurement. In the long run, the systems not limited to federal government. In India, for example, should be able to interface with other financial software like Gujurat State has computerized its 10 internal checkpoints, payroll. Financial systems have extensive applications—they a step that dramatically increased state tax revenue and track incoming revenue, monitor debt, and enable resource reduced corruption (ADB 2003). management and audit operations (USAID 2008). An impor- tant feature is that they can also help federal agencies inte- Not only do technologies like RFID dramatically reduce trans- grate with local ones to monitor financial flows. action costs for travel, they also create more opportunities to extend e-government to businesses and citizens. Once RFID is A recent in-depth, qualitative study (Ezz, Papazafeiropoulou, established, it can be applied for tracking stolen vehicles, paying and Serrano 2009) conducted on an IFMIS in Bezuck2 illus- vehicle taxes, and paying driving or parking fines (Nilekani 2010). trates the challenges in implementing integrated financial systems. The IFMIS included a variety of public agencies— Even more important, these technologies benefit rural sec- the Central Bank, a number of ministries, and the Bezuck tors. If businesses have smoother transport facilities and Information Support Center (ISC), a prominent think tank reduced road costs, they are more likely to travel further that guides cabinet leaders on economic, social, and politi- to buy or sell agricultural products. Similarly, the revenues cal decisions. In the early 2000s, the agencies above were gained from toll collection can be applied to infrastructure for mandated to interact and collaborate with the ISC to improve rural feeder roads. financial decision making. The ISC introduced an IT sys- tem to facilitate this process by tracking and documenting the various agencies’ transactions. As financial processes INNOVATIVE PRACTICE SUMMARY became digitized, the historical challenges to collaboration E-Government to Government became more apparent. Roles of certain ministries were This section discusses internal e-operations concerning not clear, and many employees did not understand the new government-to-government interactions. These ICT initia- system’s capabilities. Some traditional decision-making pro- tives are equally important to e-government–citizen and cesses were interactive, some were sequential, and others e-government–business relationships, because public agen- depended on another person’s completed tasks. Because of cies that use ICT to service other organizations or people this complexity, ministries struggled to use the new ICT to usually are required to use it themselves to make the ICT make financial decisions. Another challenge was overlap in IT effective. E-government to government involves “agency to support. Ministries have their own IT departments with their agency� interactions mentioned briefly in the NeGP exam- own procedures to deal with technology troubleshooting ple. E-government to government or employees is essen- (Ezz, Papazafeiropoulou, and Serrano 2009). Despite these tially an advancement of human resource and administration difficulties, the agencies’ attempt at financial integration led capabilities. For employees within a government agency, ICT to training for over 50,000 government employees (United projects can include human or knowledge management sys- Nations Department of Economic and Social Affairs 2009). tems, purchasing requisitions, payroll processing, position applications, and department transfers (Fang 2002). It is vital Decentralizing E-Government to Local Levels that internal e-government projects integrate service delivery Established in 2005, the Ministry of Local Government in channels and common interministerial infrastructure and do Uganda in collaboration with DFID and the International not continue to reinforce fragmented ones (OECD 2003). Institute for Communication and Development began to pilot e-government at district headquarters and subcounties. Improving Internal Public Financial Systems Called DistrictNet, the digital system aimed to improve data Integrated financial management information systems (IFMIS), and voice communications between district-level officials or the computerization of public expenditure management, are and the sublocal government actors below them. The sys- designed to support and track budget decisions and execu- tem was implemented in 76 districts in all regions, initially tion, fiduciary responsibilities, and financial reports in various focusing on 11 subcounties. Before the ICT was introduced, government bodies (USAID 2008). They help lock agencies into a single, common platform for data storage and sharing. 2 Bezuck is a name invented to preserve the country’s anonymity, IFMIS involves standard data classification, internal controls because of the challenges in implementing ICT. E C O N O M IC AND S E CT OR WORK 330 MODUL E 1 3 — ST RE NGT HE N I N G R U RA L GOVER NA NC E, INS TITUTIONS, A ND C ITIZEN PA RTIC IPATION US ING IC T subcounties collected data through hard-copy forms in the took subcounty officials to respond to district queries, the communities and sent the forms to district headquarters. volume of data exchanges, use of IT systems, and informa- This process yielded little data, caused backlogs of three to tion requests by citizens (United Nations Department of six months in paperwork, and caused data to be lost during Economic and Social Affairs 2009). paper shuffles (United Nations Department of Economic and Social Affairs 2009). Data are still collected on paper at the community level, but they are digitized by the subcounty and electronically The objectives of digitizing some of these processes forwarded to district planners, who analyze it and provide included increased coordination between district headquar- feedback to their local government counterparts. Impact ters and subcounties, reduced travel between these loca- studies show that feedback is better and timelier, owing tions, improved technical skills, and increased availability of to more accurate, digital data transmission. Because the information. To meet these goals, voice and data links were Ministry of Local Government is no longer involved in the established between district headquarters and subcounty district analysis, staff can focus their energy elsewhere. governments. Because many subcounties lacked electricity, Significant challenges to implementing the system included other energy sources were used to create the links. A valu- low levels of professional technical knowledge and low able aspect of the project was that it measured the initial computer literacy within the local government (Jager and results through a variety of indicators, such as the time it Reijswoud 2003). Topic Note 13.2: CIVIL SOCIETY AND THE PROVISION OF E-SERVICES TRENDS AND ISSUES more specific groups or needs and fill voids in public service, Civil society organizes in groups that are not part of the local, whereas government must sometimes function as a public state, or federal government. These groups include a wide service catchall. The environment, gender, agriculture, and range of institutions such as unions, trade associations, education are all important niches for civil society operations, self-help groups, and NGOs. They can operate on a local, depending on the context. grassroots scale with a small, restricted membership or Civil society groups are a growing presence in rural areas; of have a presence in multiple countries and communities. these groups, the most active are domestic and international Their serious involvement in economic, social, and political NGOs. The innovative practice summaries focus on these development makes them important participants in the rural organizations because they have been so active in rural agricul- governance discussion. Moreover, ICTs are important to their ture. Over the last decade, other civil society organizations— efficiency and ability to contribute to growth. producer groups and self-help groups particularly in relation Civil society groups can use ICTs to improve the lives of to agriculture—have become increasingly involved. Their use beneficiaries and internal management, especially given of ICTs, though related, is addressed in Module 8 on farmers’ that ICTs are widely recognized for their role in promoting organizations. democracy, fostering compliance with human rights accords, and improving livelihoods (Ganie-Rochman 2002; Hadiwinata 2003). They provide many digitized services similar to those LESSONS LEARNED of public agencies. Civil society groups can facilitate the Civil society groups can improve rural governance dramati- interactions between producers and extension agents or cally, especially through ICTs. Civil society groups, which traders. They can partner with government and contribute are often present in their beneficiaries’ communities, have to electronic voting and toll collection systems, or they can more opportunities to influence cultural and social dynamics independently broadcast radio programs on agricultural tech- than federal or even local government. This role is important, nology or business. Yet civil society also has the opportunity because culture, upbringing, values, and norms influence the to use ICT in more sensitive activities. These organizations extent that a person or farmer may desire to use ICT. For can publish information on political figures, political parties, example, younger people are usually more adept with new or new legislation. They can more easily direct their efforts to computer technologies, the Internet, or SMS applications, IC T IN A GR IC ULTUR E S E C T I O N 4 — IMP ROVING P UBL IC SE RVICE PR O VI SION 331 yet in rural societies where senior staff or family members ideas transform into tangible tools, they struggle to gain have authority and the most access to information, younger attention and capital, limiting their viability as a business or citizens with the ability to learn these new technologies service. mLabs seeks to improve this situation. In five differ- often are not permitted to do so (Mercer 2004). At other ent regions (East Africa, southern Africa, the Caucasus, East times, older people are not confident enough to experiment Asia, and South Asia), infoDev is establishing centers with with new technologies. Civil society groups, especially if the tools needed to experiment with and expand innovation, they are local organizations, can facilitate the knowledge including agriculture innovation. transfer from youth to senior community members. Again, ICT to enhance governance or even agricultural productivity mLabs (image 13.4) will provide entrepreneurs with high- is not just a matter of physical access and ownership, but quality equipment, stable Internet connections, and techni- also a matter of obtaining social access (Flor 2001; OECD cal and business training. These services will allow users to 2003; Madon 2004). test ideas, scale software capabilities, expand scope, and hone the skills needed to capitalize on their tool or applica- The most positive institutional reforms have grown out of tion. Through events, competitions, and business mentoring, public demand. Limited understanding of ICTs and their innovators will also have easier access to investors. mLabs economic usefulness can restrict the demand for and suc- provides an innovative civil service: a hub that allows cre- cess of these technologies in the agrarian sector. Creating ativity, risk, failure, and success, coupled with the necessary demand for ICTs is often easiest when community leaders tools and support needed to build new instruments that can take a stand and engage both local citizen groups and local service the population. This kind of hub is critical to develop- politicians. Local civil society organizations can nurture lead- ment, particularly because local entrepreneurs know their ership figures and create forums for citizen education and communities’ needs better than external providers. awareness. mLabs are in incipient stages, starting with an investment of approximately US$ 380,000 each. This suggests that mLabs are largely unsustainable without additional and regu- INNOVATIVE PRACTICE SUMMARY Providing ‘Hubs’ for ICT Innovation lar financing. While uncertain, mLabs does have a business model that may address common financial constraints. Firstly, NGOS can offer dynamic services by creating ICT hubs “to depending on the business model used in that location, local channel the information that the farmers need or use to programmers, entrepreneurs, developers, or designers can help their work� (Mercer 2004) into one place. When NGOs become members of the mLab. Membership is based on the and development partners offer Internet or ICT support in services desired—some memberships are free and others a central rural location, many people, including farmers, can access e-services more easily. These hubs not only increase farmers’ knowledge communication with others, but they IMAGE 13.4: mLab in East Africa Assists Agricultural also help the government achieve results. Governments can- Entrepreneurs not provide overly ambitious public services in developing countries. The participation of development organizations in providing e-services may help to reduce the pressure on underresourced public agencies and promote innovation in rural communities while providing relevant and context- specific information to local people. InfoDev, in collaboration with a variety of other partners, has very recently developed an innovative hub: the mobile applications lab (or mLabs) (http://www.infodev.org/en/ TopicBackground.34.html). Considering the rapidly expand- ing telecommunications infrastructure, mobile applications, and electronic public services, spaces that allow innovation and entrepreneurship to thrive are critical resources. In many developing countries, innovation is thwarted by financial, human, and technological constraints. Even where good Source: Tim Kelly, World Bank. E C O N O M IC AND S E CT OR WORK 332 MODUL E 1 3 — ST RE NGT HE N I N G R U RA L GOVER NA NC E, INS TITUTIONS, A ND C ITIZEN PA RTIC IPATION US ING IC T are fee based. “Incubatees,� which are at the highest level systems and various cropping methods. Useful for nutrition of membership, are members that are actually pursuing a and crop development, the website contains a glossary on business idea. Incubatee fees will vary based on location— rice as well as downloadable handbooks on disease, hybrid some will charge a monthly fee and others will allow free production, rice morphology, and natural disasters. The use of the lab under the conditions that the lab receives an Cereal Knowledge Bank provides information on extension, equity stake in the company. These incubatees will have full like how to create an extension system, needs and oppor- use of the lab and its services; they can also work for a paid tunity assessments, and a checklist for extension start-ups. salary within the mLab. Without going into great detail on the remaining levels of membership, mLabs expects to collect The site demonstrates a high degree of user-friendliness, or fees or receive income on companies that land in commercial userability, a critical aspect of successful ICT implementa- markets. Additionally, mLabs will reach out to the private and tion. Text options and clear links to other sites create this public sector. Due to its entrepreneurial nature and mobile friendliness. Useful buttons (“back,� “home,� and “help�) focus, the mobile applications generated in mLabs are likely are at the top of each page and clearly marked, making it to attract seed investment (for more information on mLabs’ easy for people of all ages and skill sets to access informa- business plan and sustainability prospects, see http://www tion. Moreover, the Knowledge Bank maintains information .infodev.org/en/Article.705.html). on 13 countries. By clicking on the country flag, users can access the information in the country’s official language. mLabs East Africa is currently the furthest along in develop- Giving the user options is also part of userability; a lack of ment. The lab has recently selected its first set of incubatees, options and links to nonexistent websites frustrate users. which includes entrepreneurs focused on agriculture and market information systems (see http://www.ihub.co.ke/ Through ICTs, development organizations can also provide blog/2011/06/first-set-of-incubation-clients-selected-for-mlab- online networking opportunities to citizens and farmers to east-africa/ for further information on these start-ups, which increase their learning. Networking leads to empowerment, include mFarm and Zege Technologies). These start-ups, while gives citizens a voice, and makes it easier to disseminate receiving the opportunity to gain visibility, capital, and technical technology in agricultural communities. The Indian Society of assistance, also receive the benefit of contributing to their com- Agribusiness Professionals (ISAP) is a civil society institution munities, country, and social and economic development (with that was established in 2001. A network of agricultural profes- the caveat that these hubs and technologies become popular sionals in India and other developing countries, it now hosts and widely known). mLabs, and the few similar to them (see over 15,000 associate members, including 1,500 agri-experts, Grameen AppLabs for innovative approaches on application 525 partner NGOs, 1,050 researchers, and over 824 individual development: http://www.grameenfoundation.applab.org/ users (according to its website, http://www.isapindia.org/ section/index) have the potential to improve agriculture public Default.aspx). One of the world’s largest agricultural networks, services and others by giving underresourced and contextually- ISAP aims to serve farmers, rural entrepreneurs, and gradu- based entrepreneurs the opportunities to grow. ate students who do not find appropriate employment (Singh 2006). Its goals, as summarized on its website, include improv- ing the livelihood pattern of smallholders through improving access to affordable technologies and market-related informa- INNOVATIVE PRACTICE SUMMARY tion, extension services and advice, access to market capital E-Learning through the Web and SMS and risk management tools, as well as network development. Like government, civil society groups can also provide agri- culture information through websites tailored to particular The network has a number of projects to achieve these goals. technologies or needs. The Cereal Knowledge Bank is an It offers training and conferences on commodity futures and innovative, interactive website on rice, wheat, maize, and trading; to date, ISAP has trained almost 80,000 farmers at cropping systems (http://www.knowledgebank.irri.org/). The 2,064 locations in India. The network also offers programs to International Rice Research Institute and International Maize upgrade skills. The most innovative aspect of ISAP is its mem- and Wheat Improvement Center, who launched the website bership program and network solutions. For free, individuals in January 2008, offer useful tools for improving rural agri- can apply for basic registration, which gives them access to cultural productivity. Users can click on a large button enti- online web sources like “Ask the Expert,� job search engines, tled “Maize Doctor� to receive diagnostic tips. The Cereal an online query redress service, and technology assistance Knowledge Bank also offers information on rice evaluation for commercializing products. For Rs 600, an individual can IC T IN A GR IC ULTUR E S E C T I O N 4 — IMP ROVING P UBL IC SE RVICE PR O VI SION 333 receive an annual subscription to Weekly Market Newsletter A user interface that uses words and icons (image 13.5) in Hindi, access peer-to-peer networks, and obtain a 15 per- allows nonexpert civil society groups to record a variety of cent discount on advertisements (posted on the ISAP site) and important data. The software can be installed on either a conference fees. These individuals can also participate in the PDA or smartphone to collect large amounts of field observa- ISAP consortium for consulting to receive or obtain referrals. tions with spatial references through a GPS. Using a touch For various prices, other development agencies, academic screen, the technology can be customized to fit users’ needs institutions, government agencies, agribusinesses, and over- and improve efficiency in data collection (for example, users seas organizations can receive the same access. can select which icons or lists they would like shown on the screen). The software can also be customized to local Finally, the ISAP network connects producers to buyers. languages. With an icon-based, simple screen, local people The organization involves producers, traders, NGOs, and can use the technology to collect complex data. When the farmers groups, thus obtaining end-to-end solutions in sup- data are transferred to computers, interactive maps show ply management. Through its networks online and activities detailed patterns of ecological features like animal traffic or on the ground, ISAP provides training on markets and gives agricultural areas. Analyzing these patterns has high potential technical advice on production and postharvest management to project future trends, especially if data are collected in a to farmers. By tracking these farmers, private enterprises variety of locations (CTA n.d.). are assured of quality products because they know that the farmer or cooperative in question attended ISAP training. CyberTracker is used all over the world for many purposes. In Africa, it is used primarily to track animals and plants, with the intention of monitoring ecosystem changes caused by climate change. The technology can also be used to monitor crop growth and livestock movement. Local people, even if INNOVATIVE PRACTICE SUMMARY Collecting Data to Protect Local Knowledge they have little or no education, can be paid to track ecological and Ecosystems change using the technology, because the interface is so user friendly. Aside from creating jobs in the rural sector, the technol- Public agencies are limited in their ability to collect relevant ogy captures invaluable local knowledge that is being lost as data in all rural locations, but new ICTs make easy data collec- indigenous populations disperse and new technologies enter tion possible through civil society groups. CyberTracker (http:// rural areas. Rural indigenous populations gain a more effective www.cybertracker.org/), originally created to track animals position and voice in policy dialogue. Civil society groups work- and plants for conservation, has created opportunities for ing to improve understanding of local needs in agriculture can poor, rural, and illiterate people to collect useful information use CyberTracker to capture relevant data cost-effectively, with on a variety of subjects. The technology is open-source soft- few outside resources. They can also use the technology to ware developed in South Africa by CyberTracker Conservation capture social data through digitized surveys (CTA n.d.). in collaboration with the European Commission. IMAGE 13.5: CyberTracker Gives Users Icon and Word Options Source: CyberTracker (http://www.cybertracker.org/). E C O N O M IC AND S E CT OR WORK 334 MODUL E 1 3 — ST RE NGT HE N I N G R U RA L GOVER NA NC E, INS TITUTIONS, A ND C ITIZEN PA RTIC IPATION US ING IC T Topic Note 13.3: INCREASING CITIZEN PARTICIPATION THROUGH E-DEMOCRACY TRENDS AND ISSUES Digital democracy—a “collection of attempts to practice Waves of new ICTs have opened opportunities for citizen par- democracy without the limits of time, space, and other physi- ticipation in various types of regimes and locations. In fact, cal conditions, using ICTs� (Nugent 2001, cited in Schwester experts feel that one of the most promising digitized applica- 2009)—is not synonymous with electronic voting (as per- tions of ICT is to foster broad participation, local innovation, ceived in the past). Considering the taxonomy described and social learning (Hanna 2009). This potential, coupled with earlier, ICT can help citizens influence government decisions citizens’ recent ability to increase their voice in state affairs in many ways (Macintosh 2004). With ICT, institutions can and organize more effectively through ICT tools (like recently disseminate information faster through cell phones, radio, or witnessed in the Arab Spring), motivates this discussion, as online. To participate in a policy meeting with the Ministry does the fact that citizen participation and demand for pub- of Agriculture, farmers can use an ICT application like Skype lic goods is incredibly important in the agrarian sector. The and eliminate typical logistical concerns (such as organiz- quality of governance in remote locations often depends on ing housing and travel reimbursements for 30 participants). citizen involvement, because so few resources are available Virtual communities, web complaint lines, e-mail correspon- to reach those locations. dence between government officials and citizens, participa- tory budgeting, online media, and web-based political infor- Electronic democratic projects can be designed and mation sharing are all vectors of digital democracy. Fostering implemented by a wide array of institutions. Using ICT to citizen participation through ICT allows citizens to form and improve democracy is just like using more traditional media find groups that have similar interests; for example, agrarian to improve democracy. Town hall meetings, complaint communities can share information on crop diseases, pests, call lines, public surveys, petitions, and newspapers are prices, and technologies. In addition, these communities can all communications media. Residents of a village facing discuss and subsequently act on policies that directly affect an economic downturn can meet in a central location to their activities and livelihoods. Though ICT for citizen partici- discuss possible community-based options. Political parties pation is most heavily concentrated in wealthier countries, can organize a petition, and newspapers can present useful these tools are proliferating to poor countries. Botswana is facts on the activities of politicians or proposed legislation. in the top 25 percent of all countries using electronic means Each of these media has improved its methods through of participation, and five African countries have open web technologies such as the Internet and SMS. Now people forums to discuss political topics (Hafkin 2009). around the world have faster, real-time capacity to involve themselves in democratic initiatives, meaning that more stakeholders can affect governance processes (Heeks LESSONS LEARNED 2001). The challenges faced by institutions trying to use ICTs to The ICTs used to foster citizen participation can involve a vari- improve citizen participation are similar to those faced by pub- ety of complex processes. A practical taxonomy for these lic agencies and civil society. Technical and infrastructure chal- processes, or what ICT can help to create, is described lenges are especially strong for voice conversations, because below (Macintosh 2004): poor network connections hamper effective dialogue.  Information: One-way relationship; institutions Unlike e-government and civil society projects intended to produce and deliver political information to citizens improve public services, institutions using ICT to enhance through ICT. democracy may need to address more serious social and  Consultation: Two-way relationship; institutions invite political difficulties. For example, increasing citizen participa- citizens to give feedback on issues; public agencies tion shifts the relationship between government and citizens set the agenda and manage the process through ICT. from vertical relationships to horizontal ones (Ndou 2004).  Active participation: Partnership relationship; citizens Even decentralized and democratic governments have a fairly actively engage in setting the agenda and creating vertical power hierarchy, or a top-down structure. In many content for policy making through ICT. instances, ICT changes this structure rapidly (Fang 2002). IC T IN A GR IC ULTUR E S E C T I O N 4 — IMP ROVING P UBL IC SE RVICE PR O VI SION 335 Giving citizens increased access to govern- IMAGE 13.6: Rural Kiosks Can Lead to Information Sharing Between ment information, allowing quick transfer of Agrarian Communities knowledge through cell phones or e-mail, and providing space for a real-time public forum reduces the vertical structure found in most governments and increases the horizontal one. This horizontal shift can dramatically challenge a societal structure (Saxena 2005). While this shift is generally a positive step toward citizen representation, it may provoke a far-reaching backlash from politicians, policy makers, elitists, traditional authorities, and others, reducing the effec- tiveness of the ICT for citizen participation. Some of these negative consequences are currently being witnessed in the regime changes occurring in the Middle East and North Africa. Using ICT for democratic projects also Source: Ray Witlin, World Bank. increases the visibility of cultural chal- lenges. Teaching rural citizens how to use ICT is a challenge employment news, and a landholder’s book of land rights in itself, as is fostering their understanding of participation. and loans. Yet Gyandoot also provides ICTs that enhance If digital exercises in participation are meant to be inclusive, democracy, partly because it is an intranet system—all of the addressing perceptions of equality within the community is kiosks are connected to allow citizens to share information. also necessary. Women, youth, and other vulnerable groups An online rural newspaper updates citizens with local political are often excluded from political decision making within information like public expenditures and raises awareness in communities. Extending their participation to higher levels their villages. Complaint lines, expert opinions on legal mat- with new technologies is not effective unless root societal ters, and e-mail are also available. dynamics are explored and addressed. Gyandoot has had its successes and challenges.3 First, pro- viding services like price information and village auctions INNOVATIVE PRACTICE SUMMARY online and directly to farmers removes the intermediar- Information Kiosks in India ies who commonly take advantage of rural impoverished The Gyandoot project (see http://www.gyandoot.nic.in/) citizenry (Meera, Jhamtani, and Rao 2004). Second, kiosk in drought-prone, rural Madhya Pradesh in India is a solid operators performed well. Third, almost 80 percent of users example of both e-government services and e-democracy. were satisfied with Gyandoot services. Finally, high rates of Thirty-eight government-owned telekiosks were established satisfaction match the fairly high rates of government action. in central locations like village markets and major roads in Sixty percent of complaints put forth through the Gyandoot Dhar district (Cecchini and Raina 2004), where 60 percent of system were addressed within one week; according to one the population lives below the poverty line (Jafri, Dongre, and survey, district administrators felt that officials’ performance Tripathi 2002) (image 13.6). Rather than using expensive local improved dramatically and immediately because they knew area networks and very small aperture terminal technologies, citizens could file complaints (Jafri, Dongre, and Tripathi the kiosks, which each serve approximately 25–30 villages 2002). through cybercafés (Meera, Jhamtani, and Rao 2004), oper- ate through a dial-up network with modems from existing telephone lines. E-government services within the cyber- 3 Though some of these figures are dated, they are worth includ- cafés include regularly updated price information, computer ing because the real impacts of many ICT e-governance initia- training, application for income and domicile certificates, tives have not been widely studied. E C O N O M IC AND S E CT OR WORK 336 MODUL E 1 3 — ST RE NGT HE N I N G R U RA L GOVER NA NC E, INS TITUTIONS, A ND C ITIZEN PA RTIC IPATION US ING IC T On the other hand, individual access to Gyandoot kiosks generating information on politicians, candidates, and policy. is fairly low. One survey showed that many kiosks served The United States has numerous websites that provide politi- only one to four people per day (Cecchini and Raina 2004). cal information and express views on elected representa- Electricity outages and distance to the kiosk often caused tives. DNet (http://dnet.org/) and Project Vote Smart (http:// this problem. Socioeconomic factors also posed challenges www.votesmart.org/) are led by NGOs. DNet provides infor- for Gyandoot. All surveys cited here found that most users mation about candidates’ positions on election issues. It also were wealthier male community members. Start-up and gives media reports, and encourages candidates themselves intranet costs of more than Rs 2.5 million (Bhatnagar and to post statements, biographical data, and endorsements. In Vyas 2001) were also expensive. Compared to user fees at some cases, citizens can communicate directly with candi- Rs 5 to Rs 25 per service, incoming revenues could not cover dates via e-mail and host live interviews. Discussion boards the initial expense. can also be generated for citizen-to-citizen communication. In developing countries, political communities like these INNOVATIVE PRACTICE SUMMARY are slowly coming online and may help generate more Virtual Communities public awareness and participation. As early as 2004, the The proliferation of virtual communities is another result of Tanzanian National Assembly introduced a website for par- expanding Internet connectivity. Presently tens of thousands liamentary decisions and data. Called POLIS, the site pro- of virtual communities interact via web-based technology. vides citizens with the proceedings of parliament and other Virtual communities are groups of people who join and par- government activities (http://parliament.go.tz/POLIS/Bunge/ ticipate in online organizations, usually for a specific purpose, Polis.asp?Menu=0). Full texts of legislation, fact sheets, practice, circumstance, or interest (Kim n.d.). The people and information like parliamentarians’ voting records are in the community may never interact with one another in housed in this portal. Easy navigation tools including the MP person, yet with open-source technology they can connect, Profile Database, Bill Tracking System, Session Management discuss, and act on local, national, and international issues. System, and the Act and Documents Management System help citizens find information (United Nations Department Types of virtual communities range widely. People create of Economic and Social Affairs 2009). To achieve further communities for commerce (such as eBay and craigslist). transparency in rural areas and for illiterate citizens, future Development organizations create databases that members initiatives could include mobile phone applications or POLIS can access for research. Political groups can create websites radio broadcasts. for activists to sign petitions or receive information on events. Practitioners can also set up “communities of practice� and INNOVATIVE PRACTICE SUMMARY organize continuous dialogue on projects or provide useful Government Responsiveness through Citizen job-related material. These communities can help sustain Participation in Digitized Political Processes conversation. For example, after a conference or workshop, Government responsiveness is one of the foundations of interactions between participants usually cease. Yet some effective democracy. Innovative ICTs give governments the have found that forming an online community of practice opportunity to respond more efficiently and broadly through after the event helps to retain long-term participation (Kim issue-based and policy-based forums. Participation in political n.d.). Online communities could have potential for public processes ranges from expressing online grievances to elec- agencies and civil society groups in developing countries. tronic consultation to participatory budgeting. The following Often participants in meetings organized through ministries section provides an example for each of these interventions. are required to travel to the capital. After the meeting or workshop adjourns, they return to their rural communities. If The Government Information Agency in South Korea is con- ministries could create a portal, or community of practice, for sidered the best-practice example for implementing this type these participants, facilitating future meetings and continu- of ICT. Even before 1990, Koreans could access a number ing conversation over a sustained period of time might be of online services, including registering births and locating easier. relevant economic statistics (Sang, Tan, and Trimi 2005). In addition to a frequently updated webpage, secure e-signature Political virtual communities are also shaping democ- system, and personnel management system, the website racy, holding great potential for creating transparency and also provides transparent and timely responses to citizens’ IC T IN A GR IC ULTUR E S E C T I O N 4 — IMP ROVING P UBL IC SE RVICE PR O VI SION 337 inquiries. (For more information on electronic signatures, Results were promising. After votes were in, public expen- see Gupta, Tung, and Mardsen (2004).) If someone requests diture was allocated from the central government to the information related to a specific government policy, public provincial government and was then used in local projects officials collect the applicable information and post results determined by the citizens within the given district. In some within the week (Holzer and Manoharan 2004), demonstrat- cases, over 80,000 dollars was invested in an intervention ing fast and reliable government responsiveness. such as a school building, health clinic, roads, or irrigation structures. In most cases, this was the first time that any real In addition, Korea has created e-People (see http://www investment was made in the districts. .epeople.go.kr/jsp/user/on/eng/intro01.jsp), an anticorrup- tion portal that uses cloud computing, complaint lines, Despite the success of the pilot, there are many challenges petitions, and discussion forums to reduce corruption and ahead. Implementing construction efficiently is challenging boost citizen engagement in the country. All government in rural areas because the work is often done in remote areas ministries and local government departments, along with with few qualified staff. SMS hot lines or phones with cam- 448 public-sector organizations are on e-People. The site era capacity could be an option to address this challenge. receives over 100,000 hits per day, and over 8,000 com- Scalability is also in question: once initial donor support plaints were documented in 2010 alone. When a complaint ends, public and governmental support for the project (which is made, it is categorized and forwarded to the relevant requires time and capital) may fade. SMS messaging is too agency, where the agency has opportunity to respond. expensive for citizens to pay, and public subsidization may be Citizens (and foreigners or diasporas, who are also allowed necessary for a number of years. (Source for all information: to use the site) can check the status of their complaint and Weber, Maketa, and Tiago 2011). evaluate the response given as well. Users can also view a record of the complaints sent by others, allowing them to choose whether to withdraw or submit a similar complaint. INNOVATIVE PRACTICE SUMMARY This option reduces the amount of petitions going to the Digital Media Forums in Developing Countries agencies while also helping the government assess the Media outlets also provide space for ICT initiatives to enhance magnitude of the problem. good governance. Traditional newspapers that have created online websites generate real-time public participation through Participatory budgeting, which is gaining traction around comments and letters. Live chat sessions are also possible the world, occurs when communities and citizens directly through online newspapers, and experts or writers can respond determine how a portion of the public expenditure will be to readers’ comments to carry on discussions about the topic. used. The first phase of a pilot project recently completed in These online and interactive news sources and chats are not the Democratic Republic of Congo has had remarkable suc- limited to more technologically capable countries. Zimbabwe, cess despite what would appear to be great hurdles. The Bolivia, Nicaragua, the Philippines, and Ghana are only a few of World Bank in partnership with the provincial government the many developing countries providing media online. forged a partnership with Airtel, the largest cell provider in DRC. Airtel provided geographic information and premium Online independent newspapers can be effective in strict numbers to the team. After districtwide deliberations, where political regimes with low freedom of speech. One such discussants debated and selected five to six main priorities newspaper, Malaysiakini (http://malaysiakini.com/), made for their district, a short list of numbered priorities was cre- an enormous impact on governance in a country where the ated. Before voting day, SMS messages were sent to the ruling party dominated the media. The newspaper provides district’s Airtel users (almost 300,000 people), directing information in four languages. Information includes alterna- voters on how to participate. On voting day, users sent a tive views on local politics (Pang 2006), and articles explore four-digit code that represented their district to the premium trade issues, government budgets, mining, foreign direct number. Once they received the short list of priorities for investment, migration, religion, and agricultural develop- their district and responded, they received a confirmation of ment. New legislation, politics, and corruption are frequently their vote. Their votes were documented in real time in an debated. When serious news arises, the online news source online database, which was connected to a GPRS modem also sends subscribers SMS alerts. with a very low bandwidth. Conventional means of voting were also made available for those without cell phones or an In the last few years, the website has received almost Airtel subscription. 40 million page views and 800,000 video downloads per E C O N O M IC AND S E CT OR WORK 338 MODUL E 1 3 — ST RE NGT HE N I N G R U RA L GOVER NA NC E, INS TITUTIONS, A ND C ITIZEN PA RTIC IPATION US ING IC T month (Malaysiakini 2008). Its success stems largely from to improve public access to information and opinion. Blogs the fact that it is only online. Online media cost less than provide writers a space to express personal views or experi- print media (Pang 2006), and the site is subscription based. ences and give readers the opportunity to learn from first- Users pay approximately US$ 40 to access the daily content. hand accounts. Most bloggers live in wealthier countries, but This fee may be high for rural citizens, yet civil society groups blogging is becoming more common in poorer ones. could help to pay this price to make the information available to poorer people through a hub like a telecenter. A significant Global Voices, an international nonprofit, offers a space for limitation is that because the newspaper is not produced in a bloggers and readers in almost 20 languages. With a com- traditional print format, it cannot receive press accreditation, munity of over 300 bloggers and translators, the organization so its journalists cannot enter political spaces and attend aims to “aggregate, curate, and amplify the global conver- potentially important meetings (Pang 2006). sation online� (http://globalvoicesonline.org). Global Voices partners with authors to produce relevant, region-specific An organization in Tanzania, Daraja (http://www.daraja.org/), is blogs in countries all over the world. Readers can access also experimenting with ICT and media to achieve improve- blogs written on specific subjects like agriculture. Of course, ments in local government and boost citizen inclusion in many bloggers on Global Voices tend to be urban and more political processes. The new organization intends to build educated than rural farmers. As a result, the organization links between government and communities on critical topics began an outreach project called Rising Voices. Twice a year, in Tanzania. One such project involves water services: over the initiative holds a microgrant competition to select new half of Tanzania’s rural water points are malfunctioning despite media outreach projects. Recipients of these grants teach increases in government funding and population growth. ICT techniques to communities that are poorly positioned to The three-year “Raising the Water Pressure� program uses take advantage of tools like blogging. local populations and the media to place political pressure on government officials in rural areas. Through mobile phones, There are certainly constraints to blogging in developing citizens can send feedback or grievances about their local countries, especially rural areas; lack of electricity and low water supply. This information is forwarded to the appropri- bandwidth are typical challenges. Blog tools are often in ate district officials and the local media. Local media can then English, which limits who can use them, but the number interact with district officials to determine their plan of action of blog tools is expanding quickly. A number of providers regarding the poor water service (image 13.7). like Wordpress, Google, and Aeonity offer free hosting and troubleshooting help for users. In fact, Weebly has a “drag The use of mobile phones also increases the voice of the common citizen or vulner- IMAGE 13.7: ICT Can Support Well Water Infrastructure Monitoring able group who may not receive access to the government. Since its inception, 500 texts have been sent to the water database, upon which 100 have been for- warded onto the district officials. Only 100 have been forwarded due to challenges with illegibility; illiteracy is a major barrier to the program’s success. However, in the cases where grievances were passed to government officials, reactions have been positive. Daraja also plans to assist local governments in technical capacities in order to build a positive relationship with local officials (Taylor 2011). (For more infor- mation on this project, see http://www .daraja.org/our-work/rtwp.) Blogging is another innovative and inex- pensive form of ICT used internationally Source: Curt Carnemark, World Bank. 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This module identifies how ICT is more effectively supporting land markets and land reform activities, explores how more open approaches to Public Sector Information policy and innovative business models are making investments in ICT more sustainable, recognizes how ICT is an essential component of good governance, and details how interoper- able ICT approaches to Land Information Infrastructure extend and integrate land administration services into the wider e-government arena. Topic Note 14.1: Supporting Land Markets with ICT. Innovative and competing public and private property informa- tion services help buyers and sellers make intelligent decisions and allow policy makers to monitor market trends. These services also provide transparency and thereby discourage corruption.  ICT-based Property Value Estimate Information Services  European Land Information Service Topic Note 14.2: ICT Support for Land Management, Planning, Development, and Control. Governments have established e-planning portals that allow citizens to access land-use control information, including access to zoning devel- opment plans and planning regulations. Public Participation GIS is being applied to participatory community planning to help neighborhood community groups and individuals use mapping and spatial analyses in community development and public participation.  E-Planning Portal in Denmark  Virtual Landscape Theatre Topic Note 14.3: ICT Support for Land Reform. Using GIS to manage the spatial complexities of managing, analyzing, deriving, and communicating new, fair distributions of parcels has become an important tool for land reform. ICT sup- ports the entire life cycle of land reform, from identification of current owners and patterns of tenure through analysis of reallocation options to the provision of registration.  Sweden’s Large-Scale Land Consolidation Projects  Turkey Land Consolidation Project Topic Note 14.4: ICT Support of Good Governance in Land Administration. ICT significantly supports good gover- nance in land administration by facilitating open, transparent access to land records for all. These records can now be obtained through mobile phones, either through web- or SMS-based information services, greatly improving the outreach of land administration services, especially to groups that were long excluded from such information. The World Bank’s Land Governance Assessment Framework offers guidance on the role of ICT.  ICTs and the Land Governance Assessment Framework  Improving Public Access to Land Administration Services in Indonesia (continued) E C O N O M IC AND S E CT OR WORK 344 MOD ULE 14 — ICT FOR LA ND A D MINIS TR ATION A ND MA NA GEM ENT Topic Note 14.5: Public-sector Information Policy Supporting Effective ICT-based Information Services. Land administration agencies and policy makers must ensure the maximum exposure and reuse of land administration infor- mation in the public domain. Progress has been made in making copyright, licensing, and pricing arrangements as simple and consistent as possible. Governments have also developed Open Government Licenses, which provide a single set of terms and conditions for anyone wishing to use or license government information.  A Policy Framework to Support Lao PDR’s National Land and Natural Resource Information System  Vietnam’s One-Stop Shop for E-Government Services Topic Note 14.6: Sustainable Funding of ICT in Land Administration. A number of countries have found that land registration systems and even the cadastre can finance themselves. Public-private partnerships are also being employed to spread the cost of development and maintenance more equitably among those who benefit from the systems.  ICT Derived Efficiencies in Kyrgyz Republic Benefit Land Office Staff  Philippines—A Public-Private Approach to ICT Financing and Risk Sharing Topic Note 14.7: Designing Scalable and Interoperable Land Information Infrastructures. Data model standards help ensure that land information can be easily ported across generations of ICT, open interoperability standards allow same-generation systems to work well with each other, and web services provide a standard means of interoperation among diverse software applications.  Combining Open-Source Solutions with Open Geospatial Consortium Standards  Kyrgyz Republic’s Open-Source Strategy and GIS Solutions  Social Tenure Domain Model OVERVIEW  Weak land markets, conflicts over ownership, land Good land administration creates accurate, accessible, grabs, and social disharmony. interoperable, timely, secure, and complete information  Reductions in yields, diminished food security, nega- about land and property in an affordable and efficient way tive impacts on the environment. that promotes confidence between the public, its commer-  Lack of an essential policy tool that can assist gov- cial enterprises, and government. The records commonly ernments in creating a civil society with democratic held for land administration are also the foundation for inte- norms. grated spatial information systems that link multiple users in  Reduced potential for economic growth as the large the provision of government services by electronic means amount of capital typically invested in real property (e-government). They often provide the key data needed by is never formalized and integrated into the financial all local and central government organizations and, to a lesser system. extent, by the public. Figure 14.1 illustrates examples of the benefits of good land ICT has an increasingly fundamental role to play in improving administration (UNECE 2005), ranging from guarantee of the operation of land administration and in making informa- ownership and security of tenure through support for envi- tion services more readily available in support of land mar- ronmental monitoring to improved urban planning, infrastruc- kets and urban and rural economic development. ICT can ture development, and property tax collection. Agriculture provide innovative outreach channels to the poor and disad- productivity, though not explicitly featured, is also greatly vantaged to ensure that land administration and its benefits increased where good land administration practices exist. are more inclusive and can be pro-poor. Significantly, land administration information is providing fundamental refer- Where countries lack robust and tested land administration ence information, such as property addresses and transpor- systems, significant dysfunctions can occur, including the tation networks, which enables the integration of wider spa- following examples: tial information systems managed by the public and private IC T IN A GR IC ULTUR E S E C T I O N 4 — IMP ROVING P UBL IC SE RVICE PR O VI SION 345 FIGURE 14.1: Benefits of Good Land Administration of determining, recording, and disseminating information about ownership, value, and use of land, when implementing Improved land management policies� (UNECE 1996). Typically it is the Improved environment Improved formal governance structures within a nation that define and housing stewardship security of delivery tenure protect rights in land. Recognition is growing, however, that Improved Facilitated public land nonformal or customary institutions can and should play a safety reform role in defining and protecting land rights and that they need Improved Improved to be included in the ongoing development of land adminis- service land resource tration. The following sections describe the elements of land delivery management Modern administration systems, with an emphasis on the range of Improved land information they encompass. administration Land spatial disputes land-use system reduction planning Land Tenure Systems Improved Land management market The term land tenure refers to the way in which land rights of state stimulation are held. There are formal systems, laid down in statutes, lands Improved Improved public and informal systems conducted in accordance with cus- land market confidence in tom and tradition. All formal systems are subject to state- monitoring Increased conveyancing Credit imposed restrictions such as planning legislation that limits security revenue generation the use rights associated with any area of land and restric- tion of ownership by foreigners (McAuslan 2010). The most Source: Adapted from UNECE 2005. common formal systems include what in some jurisdictions is called “freehold� or “fee-simple� or “full title� (titulo or sectors. This integration facilitates the building of spatial dominio pleno), which represents the fewest restrictions on data infrastructures (SDI) linking multiple users and allow- the landowner’s ability to do what he or she likes with the ing the delivery of a wide range of integrated e-government land, and “leasehold,� under which these rights are held for services. (See http://inspire.jrc.ec.europa.eu/ on the Europe- a limited period. wide SDI program; http://www.anzlic.org.au/ on Australia- New Zealand SDI; and http://www.fgdc.gov/nsdi/nsdi.html Informal systems operate in traditional areas and where for US SDI information.) formal systems have not been put in place or have broken down, as in squatter camps and other informal settlements. This is an unprecedented moment for ICT in support of land Traditional systems often impose restrictions on the dis- administration and management as geospatial information posal and use of land, which according to custom is usu- improves and increases worldwide. The three core ICT ally regarded as belonging as much to deceased ancestors technologies for land—the Internet, global navigation satel- and future generations as to the present stewards of the lite systems (GNSS), and geographic information systems land and therefore not a commodity that is open to market (GIS)—are converging and creating huge opportunities to forces. Customary law is, in general, not written but estab- manage land and property using ICT in much more thor- lished through long usage (Delville 2010). Sometimes, as ough, inexpensive, and effective ways. It is still early in this in Uganda, customary law is recognized in formal statutes, process, and most countries are not fully prepared to take although in many countries this is still not the case. The inclu- advantage of ICT and this convergence in technology, nor are sion of informal systems of land rights is a challenge for land countries fully ready to embrace the bottom-up potential of administration agencies. the emerging technology. This module provides some guid- ance and examples of how some jurisdictions are increas- Land Registration ingly taking advantage of the new technology. A major component of any land administration system is a record of landownership. Because of the uncertainties that Elements of Land Administration can arise over who owns the land and under what condi- Land administration has been defined by the United Nations tions, in many societies it became customary to document Economic Commission for Europe (UNECE) as “the process the transfer of land rights in the form of legal deeds and E C O N O M IC AND S E CT OR WORK 346 MOD ULE 14 — ICT FOR LA ND A D MINIS TR ATION A ND MA NA GEM ENT certificates. To provide additional security, official copies of The Cadastre these records were kept in deeds registries, or what in some Records of land parcels began to be collected long before countries are called land books. Historically, the deeds sys- the invention of land titling. They were known as cadastral tem was inefficient in that it did not prove who the owner records and were designed principally as an aid to tax col- was; it merely showed that two parties had exchanged a lection. They identified each taxable parcel of land with the deed of sale. Today, many deeds registries and land book name of the taxpayer on a cadastral map. The taxpayer is not systems have been computerized, with data on land rights necessarily the owner, and hence in much of Europe there linked to records of the land parcels, their addresses, and was and still is a dual system: The data on land ownership owners. appear in land books under the ministry of justice and are often managed by the courts, whereas the data on location, To improve on the deeds system, two versions of what is shape, and size of parcels are registered in the cadastre, known as a land titling or title registration system emerged usually managed under the ministry of finance. In the great in the nineteenth century, one in England and the other in majority of countries in Latin America, registries are under Australia (where it was known as the Torrens system). A the judiciary, whereas cadastres are under the executive. title is a proof of ownership. In both countries the basis for the register became the parcel of land, to which the name The original meaning of the term cadastre has been extended of the owner was attached. Given the address or other to include a variety of land records, with the land parcel, lot, reference to any particular parcel, plot, or lot of land, one or plot at the heart of the systems. For example: could look for it in the register and find the owner and vice  Fiscal cadastre, a register of properties recording versa. The certificate issued when this process is complete their value. is known as a certificate of title and is normally guaranteed  Juridical cadastre, a register of parcels of land by the state. according to their ownership or use rights. Although quick and easy to operate, registration of title does  Land-use cadastre, a register of land use based on assume that there has been a survey of the land so that its individual parcels. physical location, size, and shape can be described. It also  Multipurpose cadastre, a register that includes many assumes that prior to compiling the register, the true owner attributes of land parcels and addresses the wide of the land and the nature and extent of the land rights range of issues identified in figure 14.1. have been established. The process for doing this is known as adjudication, which is a legal procedure that may entail Increasingly the cadastral and land book records are com- investigations on the ground. Survey and adjudication can be puterized and linked electronically, though not necessarily time-consuming, expensive processes. Once the informa- institutionally. In some cases—as in the Netherlands, where tion has been compiled, however, the mechanics of handling land records are integrated fully under the Dutch Kadaster— the records can be fully computerized, and the system can one organization manages both types of record. Similarly in operate cheaply, efficiently, and effectively. Albania, Czech Republic, El Salvador, Honduras, Indonesia, Lao People’s Democratic Republic (PDR), Lithuania, Romania, The registration of deeds, land book systems, and registra- Serbia, Slovakia, and Thailand, one agency—typically the tion of title are often referred to as “land registration.� While department of lands or a cadastre agency—undertakes base many registration systems focus on the private ownership of mapping for cadastral purposes, development of standards land, either in outright ownership or in long-term leasehold, for adjudication, cadastral surveying, registration functions, they can include other forms of tenure such as land-use rights and policy coordination. Many other countries, such as and shorter-term leases. These variations are important for Croatia and Slovenia, have retained separate organizations. countries where immovable property is technically “owned� by the government but where there are privately held land- In Latin America, a lack of institutional integration is often use rights. As a result of modernization and computeriza- regarded as the single most significant challenge to achieving tion combined with rigorous quality control procedures, the ICT improvements to land registration. Land registration ser- distinction between these systems is now minimal, each vices are often a major source of revenue for the judiciary, who mirroring the conditions on the ground, no longer requiring are often extremely autonomous and reluctant to hand over investigation of the history of a parcel and giving in effect a their earnings to another part of government. In some cases, guarantee of ownership. such as Brazil and Haiti, these services are carried out by private IC T IN A GR IC ULTUR E S E C T I O N 4 — IMP ROVING P UBL IC SE RVICE PR O VI SION 347 agents who are similar to, but more powerful than, notary pub- telecommunications. In the context of land administration, lics and are equally reluctant to surrender their autonomy. the terminology may be even a little broader and also covers surveying and positioning technology, including global naviga- Land Valuation and Taxation tion satellite systems (GNSS) such as the Global Positioning As noted, the cadastre has been most commonly used to System (GPS); measuring equipment such as total stations support a system of land and property taxation. A land- and and electronic theodolites; Light Detection and Ranging property-based tax is cheap to administer, transparent, hard (LiDAR), digital aerial photography, and satellite data acquisi- to avoid, and imposes political accountability at the local level. tion systems and imagery processing; GIS; land data records In many countries, taxes on land and property provide a sig- management systems built on relational database manage- nificant source of revenue for local government, accounting, ment systems, workflow management systems; wide and in some cases, for as much as 40 percent of all subnational local area networks; wireless technology; data storage sys- tax revenue. tems, including data warehouses and Data as a Service on the Internet; and web services delivered by Internet. The Land is both a cultural and an economic asset. In an economic diversity of uses for ICT in land administration is remarkable. sense, its value is determined from market information in countries where formal land markets exist. Land information The evolution of ICT and location information infrastructures infrastructures and GIS technology are used increasingly (also known as land information systems or services) in to support valuations and mass appraisals in which com- underpinning land administration is illustrated in figure 14.2. parisons can be made between all properties in a country. The initial phase focuses on large-scale programs for captur- Aside from recording and transmitting relevant information, ing data by scanning records or conducting field surveys, with ICTs can provide transparency, leading to a reduction in the corresponding computerization of internal land administration amount of fraud that can occur. Much of the cost of compil- processes. The next series of phases are all outward facing, ing land registers can be more than recouped from enhanced improving the level of customer services and increasingly tax collections. providing online services. Initially this effort involved provid- ing extranet services to key customers; as Internet services Land Management and Development Control matured, they supported an increasing number of information Many land administration systems are regarded as a sup- services and e-transactions. Finally, as interoperability among port to land management and planning/development con- government agencies improves, radical changes and efficien- trol, which are seen as separate functions. Others see land cies will be achieved in delivering e-government services management as the end product of a process in which the based on land administration. resources of land are put to good use, and hence, an integral Several key ICTs support land administration. Database part of land administration. Often land administration officials management systems, usually of the relational variety, will check and record building permits and notify the relevant provide robust and secure repositories to manage the sig- authorities when regulations are breached. With the growth nificant volumes of land information (textual and geospa- of the multipurpose cadastre and extensions to the use of tial) in a distributed environment and to support efficient the information recorded in land administration systems, searching and querying of the information. The associated the line of responsibility between agencies is becoming digital record management systems efficiently store and blurred. In land consolidation projects, for example, where retrieve raster scanned documents such as paper deeds. the shape and size of parcels are redesigned, close coopera- Lastly, GIS supports the capture and editing of geospatial tion between the recording agencies and the implementing information such as parcel boundaries and interfaces to agencies is essential and is helping to make land consolida- the land information repositories and wider national spatial tion part of the wider rural development agenda. ICT has a data infrastructures (NSDI) to support spatial analysis and crucial role to play in sharing and analyzing land information visualization, including a map-based interface for web infor- among agencies and in communicating and testing change mation services. scenarios with the citizens involved. Location Information Infrastructure Land Administration Supporting Business ICT is an umbrella term that encompasses all forms Since 2005, 105 economies have undertaken 146 reforms of computing, information technology, Internet, and making it easier to transfer property (table 14.1 provides E C O N O M IC AND S E CT OR WORK 348 MOD ULE 14 — ICT FOR LA ND A D MINIS TR ATION A ND MA NA GEM ENT FIGURE 14.2: Evolution of ICT in Land Administration computerized registries, transferring property takes about ICT in land administration Surveying and data capture half as much time. Twenty-nine of 30 high-income OECD economies have electronic registries, and 85 percent allow 1970 Manual Traditional surveying online access to information on encumbrances, either for all or for professionals such as notaries. Eleven, including 1980 Internal data capture Scanning and digital France, the Netherlands, and New Zealand, offer electronic and computerization records management registration.2 DBMS/DRMS Total stations 1990 Internet-based TABLE 14.1: Where Registering Property Is Easy GNSS information services and Where It Is Not 2000 Transactions with High-resolution satellite MOST BUSINESS LEAST BUSINESS customers over Internet imagery and digital FRIENDLY RANK FRIENDLY RANK aerial photos Saudi Arabia 1 Angola 174 2005 Interoperability Open data sources Georgia 2 Guinea-Bissau 175 with other government New Zealand 3 Liberia 176 agencies (e-gov/NSDI) United Arab Emirates 4 Belgium 177 2010 Web and mobile-phone- Armenia 5 Eritrea 178 based services and Belarus 6 Nigeria 179 e-transactions with customers and suppliers Lithuania 7 Timor-Leste 180 Source: Authors. Norway 8 Micronesia, Fed. Sts. 181 Note: DBMS = database management system; DRMS = digital record man- Slovak Republic 9 Marshall Islands 182 agement systems, NSDI = national spatial data infrastructure, and GNSS = global national satellite systems. Azerbaijan 10 Brunei Darussalam 183 Source: Doing Business database, http://www.doingbusiness.org/data/ exploretopics/registering-property. examples of countries ranked by the ease of such transac- Note: Rankings are the average of the economy’s rankings on the proce- tions). Globally, the time to transfer property fell by 38 per- dures, times, and cost to register property. cent and the cost by 10 percent. The most popular feature of property registration reform in those six years, implemented Emerging Trends in ICT for Land Administration in 52 economies, was lowering transfer taxes and govern- Recent advances and convergence of technologies applied ment fees. This reform reduced the cost by 3.1 percent of to land administration are creating new opportunities to gen- the property value on average. Sub-Saharan Africa was the erate greater efficiencies in delivering land administration most active, with 22 economies lowering costs. The second services, to reach out to excluded segments of society, and most popular feature, implemented in 32 economies, was to integrate land administration information into the wider streamlining procedures and linking or improving agencies’ e-government arena. This section summarizes some emerg- systems to simplify registration. These measures reduced ing opportunities. interactions between customers and agencies—saving two procedures on average—while maintaining security and Surveying and Satellites controls.1 Advances in global positioning, mapping, and imaging tech- Worldwide, 61 percent of economies have an elec- nology present some of the most promising opportunities tronic database for encumbrances, including almost all for ICT to support land administration services. By 2015, Organisation for Economic Co-operation and Development multi-constellation GNSS will provide around 100 satellites (OECD) high-income and Eastern European and Central for global positioning. These new GNSS signals and constel- Asian economies. But in Sub-Saharan Africa and South Asia, lations will provide better accuracy and reliability, leading to more than 80 percent retain paper-based systems. This positioning to within centimeters in a mobile environment. lag in automation makes a difference. In economies with This capacity opens up the potential for GNSS technology to reach a wider range of stakeholders, including citizens. 1 “Registering Property.� Doing Business, http://www .doingbusiness.org/data/exploretopics/registering-property, accessed May 2011. 2 Ibid. IC T IN A GR IC ULTUR E S E C T I O N 4 — IMP ROVING P UBL IC SE RVICE PR O VI SION 349 The costs of surveying (and the time it takes) have prevented for free; examples include Google (http://earth.google.com/ many poor communities from being surveyed—the cost of and http://maps.google.com/) and Microsoft (http://www the survey surpassed the value of their land. Fortunately, .bing.com/maps/). Prior to investing in ICT to update land this situation is changing. National mapping agencies are administration services, it is essential that legislation and introducing Continuously Operating Reference Stations, policies surrounding information transparency and access networks of geodetic-quality GNSS receivers that make data are updated, wherever possible. This step will ensure more- available for precise positioning for national survey and map- efficient investments in ICT and delivery of effective land ping programs, including cadastral surveying. This position- administration services by removing many current restric- ing infrastructure increases the efficiency and consistency tions, such as restrictions on involving foreign firms in valida- of cadastral surveys and has multiple applications. A new tion or requirements that all orthophotos must be produced generation of ground-based LiDAR, mounted on vehicles, is within a country. also emerging as next “big� advance in surveying. Boundary features can be captured very quickly to an accuracy of Integration with Wider Agendas for E-Government around half of a centimeter, just by driving around. Normally and National Spatial Data Infrastructure Initiatives such precision is not required, although some surveyors may Most countries are developing initiatives to widen access to claim that it is necessary. However, the location of physical and use of geospatial information, but their maturity and suc- features does not necessarily coincide with the location of cess vary across the regions. In Latin America, for example, legal boundaries, which means adjudication supported by Chile, El Salvador, and Honduras are more advanced than human interpretation is still needed and can be costly and others. A good example of this type of initiative is Australia time consuming. and New Zealand’s Spatial Information Council, which is Finally, although aerial photographs have been used in responsible for coordinating the collection and transfer of recording boundaries since the 1950s (in Kenya, for exam- land-related information between the different levels of gov- ple), digital cameras, high-resolution (less than 1 meter) ernment; and promoting the use of that information in deci- satellite imagery, digital terrain models, and new software sion making. NSDIs involve the cooperation of public and pri- techniques are increasing the availability of reasonably vate organizations to implement interoperable technologies, priced orthophotos, presenting opportunities for more cost- data standards, and business approaches within a policy effective, efficient, and participatory ways of registering the framework that facilitates the sharing and reuse of geospa- boundaries of land rights. These approaches have been used tial information (Williamson et al. 2010). This effort normally successfully in Ethiopia (Lemmen and Zevenbergen 2010), supports the discovery of geospatial information at first Rwanda, Thailand, and Namibia. In Namibia, however, the but eventually supports web-based services based on that systematic registration of communal land rights was 32 per- information—in other words, Data as a Service. Over time, cent cheaper than surveying with handheld GPS (Kapitango the myriad versions of similar data sets will be harmonized and Meijs 2010). to generate and to reference common base themes in the data, such as transportation networks, property addresses, administrative boundaries, and land ownership, substantially Information Transparency increasing interoperability. Land administration information is Under governments’ transparency, accountability, and citizen a fundamental component of NSDIs. Participation in NSDIs participation agendas, public-sector information policy is promotes the culture shift for government agencies to share changing (see Module 13 on governance for more examples interoperable land and property information and leads to of e-government interventions). Increasingly, public-sector more integrated and effective e-government services for data sets once intended for internal consumption, accessed land administration, as experienced in Vietnam (Warnest and for a fee, or restricted owing to security concerns are pro- Bell 2009d). GIS technology provides the framework within vided as open data, free to be used for other purposes, NSDI to manage, integrate, and spatially analyze multiple under “data.gov� initiatives (see http://www.data.gov.uk/ sources of geospatial information. for an example). Although few countries currently release land ownership and rights information under their open data More Sources of Open Data, Both Formal initiatives, primarily because of concerns related to revenue and Crowdsourced generation and privacy, it is just a matter of time until the wider economic benefits are understood by more countries. Crowdsourcing is the term for citizens contributing content, The private sector already makes much mapping available and its roots lie in the increasing convergence of three E C O N O M IC AND S E CT OR WORK 350 MOD ULE 14 — ICT FOR LA ND A D MINIS TR ATION A ND MA NA GEM ENT phenomena: (1) the widespread use of GPS and image-based Zealand’s University of Otago. The initiative, involving the mapping technologies by professionals and expert amateurs; extension of the Open-Source Cadastre and Registration (2) the emerging role of Web 2.0, which allows more user software development concept (FAO and FIG 2010) and its involvement and interaction (for example, “wikis,� which follow-on project, Solutions for Open Land Administration, allow any number of interlinked web pages to be created will eventually offer governments a choice between licens- and edited via a web browser, and standards-based authen- ing often restrictive and costly proprietary software and pro- tication processes to contribute information to the web); and moting the development of free, nonproprietary applications (3) the growth of social networking tools, practices, and and communication software. (See the Solutions for Open culture. Within land administration, there is growing recogni- Land Administration, http://www.flossola.org). tion that the current surveyor-based paradigm is not scalable to meet demand. Around 70 percent of land and property Open-source GIS solutions are being implemented in land is unregistered, and this figure is increasing as urbanization administration in Bavaria, Bosnia and Herzegovina, Cambodia, generates ever-higher levels of informal settlements and Ghana, the Kyrgyz Republic, and Samoa, and in Solothurn, slums. One option to fill this gap is for surveyors to partner Switzerland. They underpin the initial prototyping of the with citizens and communities to provide crowdsourced land Social Tenure Domain Model (Lemmen et al. 2007). Open- administration information. For example, community-sup- source land registration and cadastral solutions are likely to ported mapping recently occurred under the OpenStreetMap succeed in countries where the government embraces the (http://www.openstreetmap.org/) initiative in Nairobi’s Kibera idea of using open-source software for its information sys- neighborhood, one of Africa’s largest slums. (See “Audio tems and supports its use in education and research. Such a Slideshow: On the Map,� BBC, http://www.bbc.co.uk/news/ national context makes it easier to find local ICT specialists technology-12164081.) Different levels of authentication who are familiar with free, open-source products and form can be applied to crowdsourced data, from simple conflict the human resource base to maintain systems. checks to legal validation, to ensure citizens obtain some Although the total ownership costs, including license, main- level of security of tenure along the continuum of rights. tenance, and support costs will probably be lower than costs for proprietary systems, the costs are not to be underesti- Free, Open-Source Systems mated, especially the costs surrounding software integra- Proprietary software has traditionally supported land admin- tion. Open-source software may make maintenance easier istration systems, even though they have recently embraced (problems can be solved without external support and with open standards. Over the past decade, however, free, open- advice from international user and developer communities) source systems have come to prominence. Licenses for and cheaper (the absence of license fees releases funds to these programs give users the freedom to run the program maintain and further develop the system). The use of free, for any purpose, to modify the program, and to redistribute open-source software will not change the fact that a proper copies of either the original or modified program without business plan is the key requirement for introducing ICT sys- having to pay royalties to previous developers. The promise tems for land administration (FAO and FIG 2010). of open-source software is better quality, higher reliability, more flexibility, lower cost, and an end to proprietary vendor Risk-Sharing Relationships Between Clients and Suppliers lock-in. (See the Open Source Initiative, http://opensource .org/docs/osd, and the Open-Source Geospatial Foundation, Under the traditional approach to investing in ICT to support http://www.osgeo.org.) The development of systems based land administration, the client assumed all of the risk: The on open-source software also encourages local capacity client issued a tender for ICT and selected the best value building. The obvious advantages of open-source develop- proposition; the chosen supplier would deliver and provide ment can be seen in the emergence and success of major support for the ICT solution. If the delivered solution defined projects like the Apache HTTP server (now running more by the client is delivered satisfactorily to specification but than half of all websites globally). is subsequently found to be inappropriate or ineffective in operation, then the fault lies solely with the client. Under The use of open-source solutions for land administration will a number of new partnership arrangements, however, risk increase in developing countries that cannot afford the high is shared more equitably. For example, the Government of costs of licensing commercial solutions. A cooperative effort the Philippines is engaging the private sector under public- among IT experts to foster open-source software develop- private partnerships and outsourced service provision mod- ment and accessibility is led by FAO with support from New els to build computerized land information infrastructure, IC T IN A GR IC ULTUR E S E C T I O N 4 — IMP ROVING P UBL IC SE RVICE PR O VI SION 351 applications, and land-related e-services. A private consor- of the Internet and mobile phones, the implementation of tium is delivering a Build/Own/Operate system that govern- fully web-based conveyancing, more local participation in the ment will fully own after an agreed “concession� (payback) planning and development dialogue, and support for custom- period is concluded (Warnest and Bell 2009c). These private ary land rights. sector delivered solutions may increasingly consist of some open-source components. Web- and Mobile Phone-Based Information Services Online access to information services related to land admin- Cloud Computing for Land Information Infrastructure istration is expanding with the expansion in broadband infra- Cloud computing is a set of services or resources offered structure and the use of mobile phones to deliver Internet and by different providers through the Internet. Characteristics of SMS-based services; Indonesia is one example of a country the cloud are (1) the cloud provides storage space for your that had taken this approach (Warnest and Bell 2009a). files; (2) the cloud provides software to process files (word Agencies that previously excluded many people, especially processor, photo editing, e-mail, contact management, cal- in rural areas, are becoming more open and rapidly building endar); (3) the cloud automatically backs up files, and copies public trust through the provision of simple, transparent, and of files are stored in different geographical areas; and (4) data accessible services. can be accessed by multiple users at the discretion of the creator of the data. Within the land administration context, an Mobile phones have made a bigger difference to the lives agency could place its entire land information infrastructure, of more people, more quickly, than any previous com- including data, on the cloud and directly manage and main- munications technology, and their use is growing most tain it over the Internet through web services. Customers significantly in developing countries. Mobile phones are would also access it over the Internet and be unaware that it connected to phone networks at ever-higher bandwidths, was on the cloud. The cloud is the next computing paradigm, which has opened real-time access to the Internet and and many land administration agencies will start to adopt information services. For those living outside of the main it over the next five years, once confidence in security and cities, mobiles may be their only means of accessing the portability is built. Internet. The main advantages of this approach are that clients can E-Conveyancing outsource the burden of maintaining servers and applica- Many land administration agencies are transforming paper- tions, scale systems up or down on demand, access their based conveyancing systems into a fully electronic proce- data and services from anywhere with an Internet con- dure, using electronic documents, applications, and signa- nection, and substitute regular, predictable operational tures. (Developments in England and Wales are described expenditures for occasional heavy expenditures on ICT (for at http://www.landreg.gov.uk/e-conveyancing/.) The aim is servers, for example). Cloud computing requires a robust, to reduce the delays and anxiety that can be experienced high-bandwidth broadband connection to the Internet and in current land and property transactions. Fully electronic has real benefits, but there are also reasons for caution. conveyancing procedures are enabled by encouraging open Risks include loss of service and data if the provider has access to property information and providing a mechanism downtime or goes out of business, regulatory problems for all payments relating to the transactions in a chain of when personal data are stored internationally, security property transfers to be paid simultaneously and electroni- concerns when users lose control of how their data are cally, with automatic registration on completion. The imple- protected, one-sided service agreements that give users mentation of this kind of system assumes that stakeholders little redress in the event of a calamity, and lock-in depen- have the capability to support all aspects of their transactions dency on proprietary cloud applications (Thompson and electronically, however. Waller 2011). Fostering Citizen and Community Participation Extended Scope of Land Administration Solutions Greater involvement of citizens in a dialogue with plan- In many countries, land administration services have been ning officials and property developers around development notoriously difficult for some segments of the population opportunities and development control should legitimize to reach and have focused exclusively on supporting formal political decision making and ensure that it is combined with land rights. ICT has changed this scenario through the rise responsibility for the financial, social, and environmental E C O N O M IC AND S E CT OR WORK 352 MOD ULE 14 — ICT FOR LA ND A D MINIS TR ATION A ND MA NA GEM ENT IMAGE 14.1: Women Use GIS Instruments to Map Land and Measure Soil Qualities KEY CHALLENGES AND ENABLERS Work on improving land administration systems goes back many years. As a result of all this activity, a number of lessons have been learned, as discussed in the following sections. A legal framework is needed to underpin ICT-based land administration services. As ICT and e-government services are introduced into land admin- istration, the legal framework underpinning land administra- tion needs to change to allow for electronic signature and new electronic services, such Source: Work funded by AgCommons, a program executed by the CGIAR. that computerized information/ records are accepted as being consequences of development. Many governments have legal and valid. Significant legal changes will also be required established e-planning portals that allow citizens to access to support the recognition and inclusion of customary tenure information related to land-use control, including zoning within the formal land markets and land tenure systems. This development plans, planning regulations, and general land- transition needs to be well planned, as passing new legisla- use information. A new generation of web-based GIS initia- tion can be time consuming. The capacity within countries to tives in public participation provides citizens with tools to implement legal framework reforms is also necessary and may analyze proposals, suggest and evaluate alternatives, and affect the design of legal reform strategies. frame an online discussion of alternatives (Zhao and Coleman 2006) (image 14.1). It is necessary to create a land policy framework to let the land administration function more effectively. Land administration products and services must be aligned with Support of Social and Customary Tenure a country’s current needs. These requirements must be Until recently, land information infrastructure supported only defined in land policy, describing how governments intend the management of formal land rights, but a recent initia- to deal with the allocation of land and land-related benefits tive led by UN-HABITAT and the International Federation of and how land administration systems are supposed to facili- Surveyors (FIG) has developed a Social Tenure Domain Model tate the implementation of the policy. Such implementation (Lemmen et al. 2007), which was piloted in Ethiopia. The includes the rules for land tenure and land tenure security, Social Tenure Domain Model is a specialization of the Land the functioning of the land market, land-use planning, devel- Administration Domain Model, which is in its final stage of opment, land taxation, management of natural resources, reaching the status of a global International Organization for land reform, and so on. The formulation and subsequent Standardization (ISO) standard (Lemmen and Zevenbergen monitoring of land policies requires access to appropriate 2010). (See http://www.gdmc.nl/publications/2010/Spatially_ land information. ICT in land administration has a key role in Enabled_Society.pdf.) The inclusion of social tenure support supporting and informing policy makers. in land information infrastructures will result in more secure tenure for many, and it directly supports the UN-HABITAT The poor do not necessarily benefit. Computerization of “continuum of land rights� approach, which advocates reg- land administration without outreach to otherwise discon- istering a range of informal rights rather than formal rights nected segments of the population can further disadvan- alone (UN-HABITAT 2008). tage the poor. However, innovation in ICT and modeling IC T IN A GR IC ULTUR E S E C T I O N 4 — IMP ROVING P UBL IC SE RVICE PR O VI SION 353 of customary tenure is supporting outreach to rural areas,  Insist that the land administration change program has for instance in Indonesia. In many countries, although the political support and a sufficient time horizon to deal middle classes, entrepreneurs, and rich have benefited with the existing problems. from relatively easy and cheap methods to transfer land and secure title, the poor have been excluded by the costs Existing problems with land administration information and, more often, insufficient understanding of the benefits. can greatly increase system modernization costs. The Hardly anyone disputes the need for secure tenure and that costs of implementing modern land administration solutions citizens in rural and urban areas should have guaranteed in countries of the former Soviet Union have been greatly rights to the land that they legitimately use. Not everyone, reduced compared to others since they were starting with however, agrees that state-backed certificates of title pro- fewer legacy issues to contend with. In other regions exist- vide the best solution. Even where land titling is required ing land administration systems are being modernized with to support a formal land market, titling may benefit the rich inherent problems that significantly increase the costs and but not the poor. Some form of land titling along the con- time frames for implementation. One of the most serious tinuum of land rights may be necessary to bring about all issues is the poor quality of the data on immovable prop- the potential benefits that land administration can provide, erty with textual and geospatial data out of date. This can be but land titling alone will not suffice to do so. Other institu- further compounded by the number of land disputes in the tional arrangements and social and economic support need courts, and the number of potential disputes that are lying to be in place. dormant, which might be triggered by the process of adju- dication. Simply eliminating the existing land administration Modernizing land administration can be challenging. system is usually not an option. The modernization program Significant legacy issues often exist, and professional and must be built around data upgrading and quality maintenance political biases are normally encountered. These can have mechanisms, along with streamlined processes for resolving serious detrimental effects on the modernization program disputes, preferably through dedicated land dispute resolu- unless the associated risks are understood and mitigated tion structures. Automation by itself brings less transforma- effectively. Here are some general principles in designing tive change in these cases, but can be the start of a long new land administration modernization programs: process of evolutionary improvement.  If there is a no possibility to reduce multiple agencies involved, focus on improving coordination among Governments should accept and plan for high costs and them with formal memorandums of understanding long time frames. The implementation of a fully operational agreed. land administration system involves high costs and can take  Begin the land administration change program with many years before the majority of properties are registered. a business case and associated business cases to For example, the early Thailand project involved loans of sustain it. US$ 183 million over 18 years, covering capacity building, surveying and mapping, and the high costs of early ICT  Adopt an approach that uses the same land admin- solutions. More recent initiatives have been less expensive, istration regime for urban and rural land, even if the especially when starting from scratch—where the cost institutions must be different. However, there may be impacts of poor quality of the data on immovable property variations in precision of cadastral surveys and devel- and large numbers of active and dormant land disputes can opment control standards, for example, between city be mostly avoided. In the Kyrgyz Republic, more than 2.5 centers and remote rural areas. million properties (more than 90 percent of private proper-  Build in an effective and dedicated dispute resolution ties in the country) were entered into a new registry system system that leaves the courts as a last resort. under a seven-year project costing less than US$ 12 million.  Try to ensure that the land administration system A second four-year project costing about US$ 7.5 million is benefits all and that barriers to entry are low. currently making further improvements in the quality of the  If the existing data are in poor condition and decades spatial data and overall ICT capacity, but the registry system out of date, there needs to be a plan and budget for is already highly functional. The process of surveying and data improvement and ongoing maintenance. registering each individual land parcel can be expensive and  Bring land professionals (surveyors, lawyers) into the time consuming and, in some countries, open to corruption. process as partners and try to mitigate their inclination There is a need to understand the local context, to assess to lobby against introducing pragmatic change. existing judicial capacity, to prioritize implementation, adopt E C O N O M IC AND S E CT OR WORK 354 MOD ULE 14 — ICT FOR LA ND A D MINIS TR ATION A ND MA NA GEM ENT the faster and more innovative ICT techniques, reduce red Planners should avoid the fallacy that ICT is a silver tape and multiple procedures, and engage communities in bullet. ICT is an enabling infrastructure requiring appropriate, the process. Changes in ownership due to transfers or inheri- significant, full-life investment. Technology is changing rap- tance must be undertaken at the same time as new titles idly, and what was appropriate five years ago may not satisfy are being brought into the registers, so that as the project today’s demands. Land records may need to stand the test progresses, more staff can be taken off first registration and of time over centuries, so sustainable methods for archiving put onto record maintenance. Certificate of Title holders do material are essential. Simply investing in new technology not necessarily report changes, for instance, in areas where without understanding citizen, state, and commercial cus- customary tenure still operates alongside the formal title tomer requirements; training staff; adequately testing and system. Failure to carry out record maintenance at the same piloting solutions; building capacity; and simplifying the busi- time as new titles are being added will cause records to be ness processes may not achieve the desired effect and can outdated before the system is complete. Full-life costs of a lower staff morale and customer satisfaction. ICT may also land administration system must include its maintenance. fail to achieve some of its objectives if delivered in isolation. Although significant evidence has been gathered around Business models should support continual investment the world that property titling and registration will enhance in ICT. Business models for land administration systems access to credit, it does not always do so (box 14.1). must directly generate revenue, obtain guaranteed state funding, or share the financial investment and risk with the private sector to ensure that ICT is sustainably maintained BOX 14.1: Outcomes of Automating Land Registration and replaced. However, choosing the appropriate business in Andhra Pradesh model is not easy, as it may change over time as the land Did the gradual computerization of land registry sys- market matures. Guarantees of funding over the long term tems across Andhra Pradesh’s 387 sub-registry offices are unlikely from governments. The generation of revenue influence access to credit? Quarterly data on credit dis- depends on information policies for the public sector, which bursed by all commercial banks over 11 years (1997– often restrict access to land information, thus reducing 2007) were aggregated at the sub-registry office level potential benefits and income streams as well as transpar- and examined in light of the date when the land reg- ency. The recent financial crisis has precipitated crises in istry system shifted from manual to digital records. property markets around the world, significantly reducing Computerization had no credit effect in rural areas but the number of land administration transactions. The result led to increased credit supply in urban areas. A marked has been reduced revenue streams for many land admin- increase of registered urban mortgages following com- istration agencies and their ICT partners, leaving them in a puterization supports the robustness of the result. At financial predicament. Projects need to start with a strategy the same time, estimated impacts from reduction of and a corresponding, robust business case, updating it as the stamp duty (a tax levied on legal instruments and needed. transactions such as those involved in sales of land or Effective and mature land administration systems need mortgages) are much larger, suggesting that, without computerization. The driving rationale behind the increas- further changes in the property rights system, impacts ing use of ICT for land administration is that the volume, of computerization will remain marginal. complexity, and expected processing times of transac- Source: Deininger and Goyal 2010. tions can no longer be handled in an efficient and trans- parent manner through manual processes. The increasing demand by the general public and the private sector for Home-grown ICT solutions should be used where open access to land administration information cannot be possible. Within World Bank-financed projects in Europe met without ICT. For example, ICT can support greater and Central Asia, land information infrastructures have been access to and sharing of information, improve data quality developed either through large contracts bid out to the pri- and completeness, increase security and transparency of vate sector or through building systems in-house. The inter- operations and information (potentially reducing the risk nal approach has generally been more successful, because of corrupt dealings in land), increase revenue generation systems can be built in a modular form as agencies build around new services, and provide a basis for monitoring their own capacity to use and manage the different modules and evaluation. and technology. Another advantage of in-house development IC T IN A GR IC ULTUR E S E C T I O N 4 — IMP ROVING P UBL IC SE RVICE PR O VI SION 355 is that agencies can retain their own specialists (or use local FIGURE 14.3: Sustainable Development Needs Both companies) to amend and maintain the software rather than Urban and Rural Inputs being locked into their supplier’s source. Large internationally bid contracts have proven very difficult to manage, very time Sustainable urban/rural living conditions consuming to tender, and very slow to produce a function- ing system. Moldova was one of the first in the region to establish a system developed by the cadastre agency’s own staff with technical support, packaged software, and equip- ment financed by a World Bank loan. As it upgraded the sys- Urban/rural tem, the agency used part of the credit to hire international Urban Rural interrelationship consultants for advice on the design and latest technology, yet the agency remained in the leading role (World Bank 2009a). Successful in-house development processes for ICT Good governance Good land policy solutions have also been implemented in El Salvador and Honduras. Where in-house capacity is not available the work Land & natural Institutions & Capacity building resource can be outsourced, but it is necessary to assess the capacity governance & development infrastructures of land agencies to manage large contracts and the capacity Source: FIG 2004. of the private sector to handle the work. Another option is to complete the work incrementally as capacity is built. Public Access to Land Administration Services in Indonesia� Professional and institutional compartmentalization in Topic Note 14.4) that can provide land administration ser- must be eliminated. Professional and institutional com- vices to remote rural communities (Warnest and Bell 2009a). partmentalization can lead to a fragmented view of land. Cooperation, especially between ministries responsible for Significant investment is needed in capacity building. To land registration and those for the cadastre, often has been realize the full benefits of ICT investments in land administra- lacking. The lack of institutional cooperation reflects a lack of tion, countries must implement an effective program to build cooperation between professions, notably the lawyers and technical and management capacity across the public and the surveyors, with each group taking a different view of the private sectors and civil society. The public sector has signifi- land and hence of priorities. Failure to take a holistic view and cant issues with building the capacity of, and retaining, ICT fundamentally change business processes leads to ineffi- professionals, especially in developing countries. Younger ciencies, higher costs, and time delays and ultimately height- professionals, having received ICT training in government ens the cost and complexity of offering services to citizens. It service, often move to the private sector where the short- is important to keep institutional arrangements as simple as term rewards tend to be higher. The rollout of ICT in land possible (World Bank 2009a), because simplicity will enable administration can strongly benefit from partnership with more integrated and effective ICT and e-government solu- the local private sector and corresponding capacity building tions. Single cadastre and registration agencies work best, for professionals. Finally, government needs to coordinate but they are not always politically feasible, and failure to awareness and capacity-building programs for the public, as agree on a single agency should not prevent projects from an increasing number of government services are electronic. going forward. Human capacity to carry out and sustain reforms in land administration, including the management of large ICT con- Land administration must operate efficiently in various tracts, is a long-term activity and should be built into project settings. From a land administration perspective, there design from the start. should be a unified land system for both urban and rural areas (see figure 14.3). There should be one land law and one set Early investment is the key to positioning infrastructures of procedures to accommodate the needs of all regions in a to realize benefits in a wide range of land applications. country, including customary tenure in rural areas. Many rural Historically, national triangulations (measurements) have communities, which make up the agrarian sector of a coun- formed the basis for consistency in land surveying. Today, try, are geographically excluded from land offices, reducing sophisticated positioning infrastructures not only constitute levels of registrations in rural areas. Innovative ICT solutions the basis for land surveying and place-based land information are supporting mobile land offices (see IPS “Improving in all its forms, but support a wide range of land applications. E C O N O M IC AND S E CT OR WORK 356 MOD ULE 14 — ICT FOR LA ND A D MINIS TR ATION A ND MA NA GEM ENT The performance of land administration has proven to be perspective has led, for example, to multiple purchases of enhanced strongly by applying appropriate ICT tools, includ- the same remote-sensing imagery by different agencies and ing satellite imagery, aerial photographs, and GNSS. Early the generation of multiple base maps with varying specifi- investments in this positioning infrastructure are crucial and cations. Apart from the simple collaboration approach, the significantly reduce the cost of data capture. adoption of interoperability standards and web services is promoting the implementation of shared services leading to ICT investments should be shared through interagency the creation of national spatial data infrastructures (NSDI). collaboration. Too often, investments in ICT are isolated This approach allows different agencies to access and use within projects and do not consider the possibility of the the same geospatial information, reducing the initial and con- wider sharing and reuse of the resources. This narrow tinuing maintenance costs. Topic Note 14.1: SUPPORTING LAND MARKETS WITH ICT TRENDS AND ISSUES variety of forms of taxation on what is essentially wealth. The Land markets allow capital to be released and hence influ- market can also encourage changes in land use and stimulate ence productivity and efficiency in agriculture and the level moves toward the optimal use of resources. In theory, market of investment in industry. An efficient land market underpins forces should result in the “highest and best use� of the land, the capacity of banks and other financial organizations to lend although in practice other factors may prevent this outcome. money and for landowners to invest. The form and success ICT plays a key role in providing information to stimulate, of any land market depends on a number of external factors support, and monitor land markets. ICT can be used for the (figure 14.4). The relationships between these elements and following purposes: the market operate in two directions: They influence the day-  Provide a single point of access to all the relevant land to-day activities within the market and they in turn are influ- and property information. enced by it. A successful market stimulates economic growth for individual landowners by releasing capital for investment  Record and analyze all land held by the state. In many in other fields. It can also benefit government by facilitating a countries the state is the largest landowner, but all too often it fails to manage its assets in an efficient and FIGURE 14.4: Influences on the Land Market effective manner.  Monitor the performance of property prices and make relevant information available to the public and private Politics land and property companies, and policy makers. (For examples on residential property, see http://www People & Sustainable .zillow.com/ for the United States and http://www culture development .zoopla.co.uk/ for the United Kingdom.)  Map the location of formal property sales.  Compare property values as part of a mass appraisal for land and property taxation (UNECE 2002), and Land market The economy monitor changes in land use that may affect the tax- Tenure & legal & financial able value of property. framework services  Provide transparency and thereby discourage corrup- tion in the land market.  Monitor the gender and other demographics of those Land use & taking part in land transactions to discourage prejudice Fiscal environment against women and minority groups. policies controls Following the initial phase of computerization in land admin- Source: Dale, Mahoney, and McLaren 2010. istration agencies, when land records are digitized and land IC T IN A GR IC ULTUR E S E C T I O N 4 — IMP ROVING P UBL IC SE RVICE PR O VI SION 357 BOX 14.2: Augmented Reality in Real Estate Marketing Smart phones deliver innovative location-based services Example of Augmented Reality in Real Estate Marketing for mobile real estate marketing. Using a smart phone, a person can walk up to the front of a house for sale, aim the phone’s camera at it, and within seconds view and capture all the information about the real estate list- ing. The viewer can see pictures of the property, watch a video walkthrough of the property, browse informa- tion about the property (such as the selling price), email the information, and contact the listing agent. This kind of mobile marketing is achieved using an augmented reality browser such as Layar (http://www.layar.eu/). The mobile phone opens a window into the virtual real world where you can directly point at features and obtain the associated information. Source: McLaren 2010; source for figure, http://buildar.com/. and property transactions supported, land administration INNOVATIVE PRACTICE SUMMARY agencies normally start to provide information services on ICT-based Property Value Estimate Information land market activities and trends, such as statistical trends Services in house prices by geographical region. In many countries In mature land markets, a number of innovative land and this land and property information is then made available property information services allow users to identify proper- to the private sector for other uses, either under a charge- ties for sale or rent that meet their specific requirements, able license or free. The release of this information usually obtain an estimated market value, and to select and contact requires amendments to public-sector information policy a range of professional and financial services to support their and associated legislation. Once the information is in the transaction. Good examples can be found at http://www public domain, the private sector innovates and starts to .zillow.com/ in the United States and http://www.zoopla deliver new information services to the land market. These .co.uk/ (figure 14.5) in the United Kingdom. services include locating a property to buy or rent in a spe- cific area, identifying the price paid for properties sold in an FIGURE 14.5: A Property Information Service in the area of interest, estimating the market value of a property, United Kingdom and receiving an e-mail or SMS alert if a property of a cer- tain type, cost band, and location comes on the market. Some information services encourage owners of proper- ties to enter more detailed information about their proper- ties so that more accurate valuations can be estimated. GIS technology is also used to determine the amenities in an area of interest to support property-buying decisions. These applications are increasingly available on mobile phones, and some are starting to use augmented reality, in which a user can point the device at properties and obtain corresponding information (see box 14.2). These innova- tive and competing public and private information services reflect an open, transparent, and competitive land market that needs to be supported by effective ICT within land administration. Source: Zoopla.co.uk. E C O N O M IC AND S E CT OR WORK 358 MOD ULE 14 — ICT FOR LA ND A D MINIS TR ATION A ND MA NA GEM ENT At the heart of these information services are computer-based INNOVATIVE PRACTICE SUMMARY value estimate systems often known as automated valuation European Land Information Service models. The Zoopla valuation algorithm, for example, continu- The European Land Information Service (EULIS) (http://eulis ously analyzes property data from multiple sources—includ- .eu) is an online portal for professionals to access land and ing government, estate agents, surveyors, and users—on all property information from land registries across Europe. It is 27 million homes in the United Kingdom. The model looks also a hub of information on land registration conditions in at the relationships between transaction prices and property each country. EULIS’ long-term mission is to underpin a sin- characteristics (type, style, number of bedrooms, and other gle European property market through cross-border lending, variables) and uses these patterns and trends to estimate involving 23 organizations representing the land registries present values. The algorithm uses previous sale prices for of 20 member states. Currently, the land registries of five the specific property and recent transactions nearby, changes countries are connected to EULIS: Austria, Ireland, Lithuania, in market values for similar local properties, various character- the Netherlands, and Sweden. istics of the property in question and those around it, current asking prices for specific properties and others in the local The main applications of this cross-border land and property area, the size of the property in question relative to those information service are as follows: around it, and the current values of comparable properties.  Second home searches. Europe is becoming smaller The model works on an extremely local level and adapts to the because it is easier to travel, live, and work across specific information available for each property, thereby creat- borders. EULIS makes it possible for solicitors and ing a custom approach to valuing each property. In effect, tens estate agents to check out property and land in other of thousands of models work together, each optimized for the countries for their clients, paving the way for second accuracy of the small set of properties they exist to serve. New home purchases. data are received continuously from a variety of sources, and  Business acquisition. EULIS investigates premises the systems are built to absorb this information quickly into the and land on behalf of international businesses seeking valuation process, allowing estimates to take advantage of the to acquire sites for their operations. most recent data. Each day the valuation algorithm knows more  Credit checks. A risk assessment is required when than it did the day before. Estimates are found to be within citizens request credit or make other financial commit- 10 percent of the actual transaction price in the majority of ments. Lending institutions can use EULIS to confirm cases. The estimated valuations allow users to identify proper- ownership of any assets such as land and property ties within their price range and support their property bid price. proposed as collateral for such commitments. Topic Note 14.2: ICT SUPPORT FOR LAND MANAGEMENT, PLANNING, DEVELOPMENT, AND CONTROL TRENDS AND ISSUES A new generation of GIS-based tools is now available, sup- In countries fortunate to have mature ICT infrastructures, ported by maturing spatial data infrastructures, to enhance governments have established e-planning portals that allow the interaction experience and effectiveness with the citizen. citizens to access land-use control information, including Public Participation GIS (PPGIS) is being applied to participa- tory community planning (Zhao and Coleman 2006) to help  access to zoning development plans, planning regula- neighborhood community groups and individuals use map- tions, and general land-use information; ping and spatial analyses in community development and  submission of development applications; public participation. A new generation of web-based PPGIS  access to proposed developments, associated draw- initiatives is providing users with tools to analyze existing ings, and their current status; proposals, suggest and evaluate alternatives, and frame an  submission of comments associated with proposed online discussion of alternatives within a geospatial context. developments to be used as material evidence in the decision-making process; and The ease and increasing use of mashups (websites or applica-  access to the results of development control decisions. tions that seamlessly combine content, typically sourced from IC T IN A GR IC ULTUR E S E C T I O N 4 — IMP ROVING P UBL IC SE RVICE PR O VI SION 359 third parties via a public interface, into an integrated experi- areas and coastal protection zones Once the citizen has iden- ence) and wider access to open geospatial data allows com- tified the development plan of interest, the system provides munities, citizens, or pressure groups to create an accessible direct access to an electronic copy of the lokalplan and can simulation of the proposed development. This environment display and generate a list of all properties (cadastral parcel can then form the basis for dialogue among stakeholders. numbers) impacted by the development plan. The e-planning portal also allows citizens to provide direct feedback on pro- Mobile phones are also opening channels for citizen participa- posed development plans during the statutory eight-week tion in the development control process and have significant consultation period. Citizens preparing to build or extend potential to increase constituents’ participation. For example, their house can use the system to determine what plan- citizens can register for mobile phone alerts on specific types ning restrictions apply in their area. This open, transparent and/or locations of new development proposals and can text e-planning portal also serves as an authoritative legal objections to development proposals to the planning authorities register. It is an excellent example of land registration and with associated authentication (Enemark and McLaren 2008). cadastral information services being integrated into wider e-government services. INNOVATIVE PRACTICE SUMMARY E-Planning Portal in Denmark INNOVATIVE PRACTICE SUMMARY One of the most advanced and participatory e-planning por- Virtual Landscape Theatre tals is in Denmark (see http://plansystemdk.dk). The solution For many citizens the use of PPGIS environments is either provides public access to all statutory land-use plans such as too advanced for their use or they are on the wrong side of municipal plans and development plans (called a lokalplan), the digital divide. However, there are emerging virtual and both adopted or proposed, across Denmark. The map-based augmented reality techniques that allow citizens to access interface provides a range of navigation tools, including sophisticated GIS and visualization technology through address, cadastral parcel number, municipality, and area poly- mediators. One such example is the Virtual Landscape gons (see figure 14.6 showing the region of Aalborg). The Theatre, developed by The Macaulay Institute in Scotland, areas of the development plans can be displayed in combi- that uses cutting edge virtual reality technology to recreate nation with cadastral maps, topographic maps, orthophotos landscapes and provide a forum for people to visualize and and other kind of land-use constraints, such as conservation assess impacts of proposed change (The Macaulay Institute FIGURE 14.6: Example of E-Planning Portal Source: http://plansystemdk.dk. E C O N O M IC AND S E CT OR WORK 360 MOD ULE 14 — ICT FOR LA ND A D MINIS TR ATION A ND MA NA GEM ENT 2011). By allowing groups of people the opportunity to view, facility in which people can be immersed in computer mod- debate, and offer informed opinions, the planning process els of their environment to explore landscapes of the past, benefits from a greater understanding of what is really val- present, and future. Small groups have the opportunity to ued in the landscape and what isn’t. The Virtual Landscape experience landscapes by moving around the virtual world Theatre is composed of a mobile curved-screen projection and can provide feedback by means of a voting handset. Topic Note 14.3: ICT SUPPORT FOR LAND REFORM TRENDS AND ISSUES  Map informal settlements, using aerial photography or The term land reform has different meanings in different satellite imagery, to plan any upgrades. regions or countries. At its simplest level, land reform  Support the creation of forest inventories and associ- refers to the various processes involved in altering the ated valuations by using laser scanning. pattern of land tenure and land use of a specified area. It Land reform is costly and time consuming. There must be a is most often applied to rural areas to allocate more land strong business case or political driver for its implementation. for settlement by landless people, to provide stability in For example, large cooperative farms in Ukraine were broken up the pattern of land settlement through land tenure reform, and distributed to citizens as part of political and market reforms, or to consolidate land holdings and increase agricultural but it is still forbidden to buy and sell agricultural land, and there efficiency by redistributing an existing pattern of land par- is no formal land market. Prior to land reform in Moldova, parcels cels. For example, in Latin America it typically means land were so fragmented that agriculture was very inefficient, and no redistribution from large haciendas or latifundia to smaller active land market existed; now the land market is very active. farms, while in South Africa land reform also involves res- titution of lands and land tenure reform. The procedures Land consolidation is becoming an integral part of rural devel- adopted in land reform can be applied to urban areas and opment. ICT enables a more holistic approach that takes into used to address some of the problems of informal urban account the broader environmental requirements, leisure and settlement. other social needs, rural business development, and other fac- tors. Now it is also common to include land consolidation in urban ICT supports the entire life cycle of land reform, from identifi- settings to promote business districts and urban development. cation of current owners and patterns of land tenure through For example, Germany currently does more urban land consoli- the analysis of reallocation options to the provision of land dation than rural consolidation. The FAO advocates a voluntary registration. ICT can be used to: approach to land consolidation based on buying, selling and  Identify owners, extent of ownership, land use, and land exchanging parcels in a coordinated way (for a recent successful values in areas where land consolidation is planned. example, see Republic of Moldova 2009). Other approaches are  Design new parcels using GIS, in which all landown- more formal and involve significant, compulsory intervention, as ers voluntarily trade land parcels or are allocated an in the examples from Sweden and Turkey that follow. area that is as equivalent as possible to the size and quality of their existing holdings. The GIS is also used to support the citizens’ participation in the design and INNOVATIVE PRACTICE SUMMARY evaluation of reallocation options, speeding up the Sweden’s Large-Scale Land Consolidation Projects consultation and decision process. Sweden consolidates land through formal, large-scale proce-  Calculate levels of compensation when necessary as dures that rely on compulsory rules in the Property Formation a result of adjustments to the status quo or when land Act. An intervention can cover 2,000–54,000 hectares, has to be expropriated for state purposes. involve up to 2,000 participating landowners,3 and normally  Help in planning new infrastructure such as roads, takes five years to implement. Appeals of the principal deci- underground services such as drainage, and other sions are rare; since 1990, only 33 landowners have appealed subsurface and above-surface utilities. to the court and only seven appeals have been upheld. This  Assist in the preparation of plans for land allocation to positive result comes from strong mediation and negotiation landless or otherwise dispossessed people. with landowners and effective use of ICT.  Maintain records of state land that is being held in 3 The information in this section was provided through personal anticipation of future needs. communication with Mats Backman, Telia. IC T IN A GR IC ULTUR E S E C T I O N 4 — IMP ROVING P UBL IC SE RVICE PR O VI SION 361 In 1995, Sweden introduced a customized GIS to help imple- of the parcels have access to irrigation and transportation ment its land consolidation reforms. The system, GISOM, networks. is based on ESRI products and other database and analysis tools; it manages layers of information from the land registry, Land consolidation was initiated in the 1980s, when legisla- cadastre, cadastral index map, and photogrammetric and tion was passed to support the Ministry of Agriculture and field data. Additional GIS applications have been developed Rural Affairs in its responsibility to prepare and implement to match the requirements from authorities and landowners, land consolidation projects. Further land consolidation legis- including valuation methodology, reallotment design, and lation was passed in 2005 to empower other government decision support. The valuation methodology in forest land ministries to implement land consolidation projects involving, consolidation projects ranges from the complete enumera- for example, irrigation and transport infrastructure. The pri- tion of trees to the use of aerial photointerpretation com- vate sector is involved in implementing the projects. bined with laser scanning, which is now very successful. Turkey faces the tremendous challenge of consolidating The use of GIS allows landowners to view proposed reallot- approximately 8 million hectares in eight years. The govern- ment designs and show them the consequences of changes ment plans to meet this challenge through a major national in geographical location and size of the proposed reallotment. It land consolidation program, primarily intended to resolve agri- also allows changes to the reallotments to be made in real time. cultural issues. Under a project with the Netherlands, Turkey Normally landowners wish to decrease the monetary compen- has developed a land consolidation approach, supported with sation in land consolidation as much as possible. The use of GIS ICT, which can be scaled to meet the ambitious targets of the has made it possible to match their desires to a great extent. national land consolidation program. A key component of the approach is a GIS-based solution, called TRANSFER, to support reallotment design within project areas. TRANSFER uses a INNOVATIVE PRACTICE SUMMARY variety of data sets to support reallotment, including soil maps, Turkey Land Consolidation Project productivity maps, digital terrain models, proximity to villages and roads, ownership boundaries, and owners’ preferences for Turkey’s rural population is growing rapidly. Because most new allocations. Figure 14.7 shows a project area before and rural dwellers cannot pursue livelihoods in sectors other after land consolidation. The result features a new parcel pat- than agriculture,4 agricultural land is often split into succes- tern, minimizing parcel transfer in accordance with the wishes sively smaller farms. Consequently, most farmers operate of villagers (the average parcel size is bigger than before); new on highly dispersed parcels whose small size is not suitable roads (placed to minimize impact on agriculture and provide for irrigation and mechanization. On average, only 50 percent access to all new parcels); a new irrigation scheme accessible to all new parcels; and a reduction in the number of parcels per 4 This section draws on information from Jansen et al. (2010). farmer, which reduces transportation between parcels. FIGURE 14.7: Parcels Before and After Land Consolidation with New Irrigation Network Before After Source: Jansen et al. 2010. E C O N O M IC AND S E CT OR WORK 362 MOD ULE 14 — ICT FOR LA ND A D MINIS TR ATION A ND MA NA GEM ENT Topic Note 14.4: ICT SUPPORT OF GOOD GOVERNANCE IN LAND ADMINISTRATION TRENDS AND ISSUES BOX 14.3: Reducing Corruption in Land Offices The need for good land governance is reinforced by three The mobile phone can play an important role in reducing broad global trends. First, increased and more volatile com- corruption associated with financial transactions in the modity prices, population growth, and the resulting increased land sector. For example, in Pakistan’s Jhang District, all demand for rural and urban land make it all the more impor- clerks were asked to submit a list of their daily transac- tant to define and protect rights over land resources as a tions, giving the amount paid and the mobile numbers of precondition for the broad sharing of benefits from economic the buyers and sellers. Supervisors then called buyers development. Second, climate change is likely to have and sellers at random to find out whether they had been particularly damaging effects on land in areas traditionally asked to pay any extra bribes or commissions. After considered hazardous or marginal. Adequate land-use plan- charges were brought against one clerk who had asked ning, together with geospatial tools that use land administra- for a bribe, service improved markedly. This two-way tion information to manage disasters, can help mitigate or interaction with clients opens opportunities for essential adapt to these problems. Finally, global programs to provide feedback and quality checks. resources for environmental services (for example, reduced Source: “A Special Report on Telecoms in Emerging Markets,� The deforestation) are likely to affect behaviors at the local level Economist, 2009. and thus accomplish their objectives only if local land rights are recognized and resources are transferred effectively to right holders (Deininger et al. 2010). Aside from investing in broadband and mobile phone infra- Good governance requires a legal framework and a will to structures to extend coverage, land administration agencies enforce it. Legislation that, for example, outlaws gender dis- need to ensure that the national public sector information crimination is often flouted in practice when it comes to land policy supports open and transparent land records. They ownership and inheritance, which is why organizations such must also launch awareness programs to raise interest in and as the Huairou Commission were established (see http:// knowledge of the new information services. These informa- huairou.org/issue and http://huairou.org/land-housing). Good tion service initiatives are good opportunities for leveraging governance is essential, because land administration is often investment and knowledge from the private sector through perceived as one of the most corrupt sectors in government. public-private partnerships. Although individual amounts may be small, petty corruption on a wide scale can add up to large sums. In India the total amount of bribes paid annually by users of land administra- tion services is estimated at US$ 700 million (Transparency INNOVATIVE PRACTICE SUMMARY ICTs and the Land Governance Assessment International India 2005), equivalent to three-quarters of Framework India’s total public spending on science, technology, and the environment. For an example of how ICTs can stem corrup- Guidelines on how to achieve good governance have tion in land transactions, see box 14.3. been prepared by the World Bank. The Land Governance Assessment Framework (World Bank 2010) addresses five ICT significantly supports good governance in land admin- thematic areas: legal and institutional framework; land use istration by facilitating open, transparent access to land planning, management and taxation; management of public records for all. Until recently land records were available only land; public provision of land information; and dispute resolu- on paper in land offices or to a few large customers over the tion and conflict management. Given that ICT in land admin- extranet. These records can now be obtained through mobile istration generates statistics to determine many of the Land phones, either through web- or SMS-based information ser- Governance Indicators, land administration computerization vices. As the example from Indonesia indicates, ICT can projects need to be guided by the role of ICT in the Land greatly improve the outreach of land administration services, Governance Assessment Framework. The following are especially for groups that were long excluded from such some of the areas where ICT can support Land Governance information, and the cost of providing services has fallen. Indicators within this framework. IC T IN A GR IC ULTUR E S E C T I O N 4 — IMP ROVING P UBL IC SE RVICE PR O VI SION 363 LGI-2(iv): A high percentage of land registered to physical LGI-12(v): All the information in the public land inventory is persons is registered in the name of women either individu- accessible to the public. ally or jointly. ICT can provide efficient Internet access to public registers ICT can increase the involvement of the so-called Third Sector that are transparent and searchable by a number of criteria, of nongovernmental and local organizations, including those including map-based searches. representing women. Transparency and analysis of land administration information will highlight any gender imbal- SMS-based property enquiry services via mobile phone ances in ownership across a country. Online communities remove the need for intermediaries to access land adminis- (for example, http://www.womenandhumansettlements.org/ tration services and provide simple, transparent, and acces- and http://www.huairou.org/) allow grassroots women’s orga- sible services that can rapidly build public trust. nizations to share experiences and advance their capacity to LGI-16(i): Most records for privately held land registered in collectively influence local to global political spaces on behalf the registry are readily identifiable in maps in the registry or of their communities. cadastre. LGI-5(iv): Information related to rights in land is available to ICT can provide efficient access, including Internet informa- other institutions that need this information at reasonable tion services, to public registers that are transparent and cost and is readily accessible, largely due to the fact that land searchable by a number of criteria, including map-based information is maintained in a uniform way. searches. ICT can overcome the historic separation between the land LGI-18(iii): There is significant investment in capital in the registry and the cadastre by providing electronic linkages system to record rights in land so that the system is sustain- between both organizations. ICT can also be a catalyst for able but still accessible by the poor. better interoperability and integration with other depart- ments of government, although there must be political will to ICT can provide innovative channels to deliver services to make this happen. ICT can also reinforce links between the many who had previously been excluded, especially in rural public and private sectors. In recent years, many land admin- areas. Mobile phones can be used to deliver Internet- and istration functions and activities from surveying through the SMS-based services, and remote access to the Internet can provision of ICT to the delivery of various land information support mobile land offices. services have been shared with the private sector, often through formal public-private partnerships. INNOVATIVE PRACTICE SUMMARY LGI-7(i): In urban areas, public input is sought in preparing Improving Public Access to Land Administration and amending changes in land use plans and the public Services in Indonesia responses are explicitly referenced in the report prepared With World Bank support, Indonesia’s National Land Agency, by the public body responsible for preparing the new public Badan Pertanahan Nasional (BPN), has set out an exciting plans. This report is publicly accessible. and ambitious plan for land reform, with ICT at the center. ICT and especially GIS can provide effective forums for pub- Improving public access to land services is a priority of the lic consultation, allow more scenarios to be presented, and BPN Karanganyar office in Central Java, where involvement extend the normal outreach of the consultations. in the land office computerization project triggered innova- tive uses of ICT to build public trust in land administration. LGI-10(i): The assessment of land/property values for tax The office has expanded its services to include an SMS- purposes is based on market prices with minimal differences based property inquiry service, known as Interactive Land between recorded values and market prices across different Information. This service removes the need for intermediar- uses and types of users, and valuation rolls are regularly updated. ies to access BPN’s services. It is simple, transparent, and its accessible services rapidly build public trust. ICT can compare property values as part of a mass appraisal for land and property taxation, monitor changes in land use The BPN Karanganyar office has also developed the People’s that may affect the taxable value of property, and compare Land Titling Service (LARASITA), a mobile land office (see prices paid for similar properties. image 14.2) that travels to villages to provide to BPN’s E C O N O M IC AND S E CT OR WORK 364 MOD ULE 14 — ICT FOR LA ND A D MINIS TR ATION A ND MA NA GEM ENT property services to previously dis- IMAGE 14.2: LARASITA: A Mobile Land Office in Indonesia connected communities. The mobile office (a modified van) is equipped with laptops connected to the main database in BPN’s Karanganyar office through wireless connectivity (WLAN), a 2.4 GHz wireless antenna installed on top of the van and on top of a 60-meter tower behind the BPN office. This infrastructure enables the LARASITA van to operate in real time within a 20-kilometer radius of the tower. The head of the BPN Karanganyar office observed that “as long as we can bring BPN presence and services closer to the people, and provide the right information, then LARASITA has achieved its mis- sion.� BPN rolled out LARASITA to an additional five provinces in 2009, increasing its outreach significantly. Source: Warnest and Bell 2009a. Topic Note 14.5: PUBLIC-SECTOR INFORMATION POLICY SUPPORTING EFFECTIVE ICT-BASED INFORMATION SERVICES TRENDS AND ISSUES index.html.) This change involved close dialogue with Since open, transparent access to land administration infor- partners in the private sector and reduced the over- mation is a prerequisite for developing effective land mar- heads of public-private partnerships. kets, reducing corruption, and building a trusting relationship  A number of governments recently introduced with civil society, it is essential that land administration agen- transparency agendas that emphasize the need for cies work closely with policy makers to ensure the maximum governments to be accountable to taxpayers and have exposure and reuse of land administration information in the driven programs to publish key government data sets public domain. Recent progress in making copyright, licens- through the establishment of a single access point for ing, and pricing arrangements as simple and consistent as government data. In parallel with this development, possible includes the following developments: governments have also developed Open Government  Many countries release land administration infor- Licenses, which provide a single set of terms and mation, at a charge, to the private sector to allow conditions for anyone wishing to use or license freely innovative information services to be created. Such available government information. This form of licens- services require robust copyright, licensing, and pric- ing allows developers and entrepreneurs wishing to ing arrangements, but if these arrangements are too use government data to create new applications with- complex and too variable across customers, they will out any formal application for permission. It is normally deter uptake, innovation, and potential revenues. The interoperable with other internationally recognized National Mapping Agency of Great Britain recently licensing models, such as Creative Commons overhauled and greatly simplified its licensing agree- (box 14.4). Although these government open data ments with partners. (See “Licenses and Agreements initiatives have not yet influenced land administration Explained, Ordnance Survey (United Kingdom), http:// domains, inevitably they will come under increasing pres- www.ordnancesurvey.co.uk/oswebsite/licensing/ sure to release their data as open data. This move will IC T IN A GR IC ULTUR E S E C T I O N 4 — IMP ROVING P UBL IC SE RVICE PR O VI SION 365 BOX 14.4: Creative Commons Supports Open rely on paper-based processes. However, new approaches Government Licenses to computerizing land records and delivering e-government services are helping expand the land information services Creative Commons (http://creativecommons.org) devel- offered to Lao PDR’s urban and rural communities. ops, supports, and stewards legal and technical infra- structure that maximizes digital creativity, sharing, and In 2004, with support from UNDP, Lao PDR’s Science, innovation. The infrastructure consists of a set of copy- Technology, and Environment Agency (STEA) developed the right licenses and tools that create a balance inside the ICT for Development Project under the Office of the Prime traditional “all rights reserved� setting that copyright law Minister. The project’s main objectives were to develop a creates. The tools give everyone from individual creators policy framework for the management, standardization, and to large companies and institutions a simple, standard- exchange of national digital information to implement the ized way to keep their copyright while allowing certain government’s ICT master plan and strategy for 2006–2010. uses of their work—a “some rights reserved� approach A critical component of a national information base is infor- to copyright—which makes their creative, educational, mation on land and natural resources. Lao PDR’s comprehen- and scientific content instantly more compatible with the sive strategy for land information coordination and manage- full potential of the Internet. The combination of the tools ment centers on the development of the Lao Spatial Data and the users is a vast and growing digital commons, a Infrastructure, a framework of land information, access poli- pool of content that can be copied, distributed, edited, cies, data standards, and ICT infrastructure that will benefit remixed, and built upon, all within the boundaries of a range of users and agencies. Two key organizations are copyright law. A recent example of an Open Government building the LSDI: the National Geographic Department and License was created by the National Archives in the STEA. LSDI is being piloted in Vientiane Capital City. United Kingdom, where it is now being adopted by agen- cies providing open geospatial information services. As part of this effort, the second phase of the Lao Land Titling Source: “Open Government License for Public Sector Information,� National Archives (United Kingdom), http://www.nationalarchives.gov Project (2004–2009) developed a computerized national land .uk/doc/open-government-licence/, accessed May 2011. information service to serve as the backbone of an efficient land administration system. The planned national information service will give registry officials access to a complete, reli- able land inventory linked to information on who has rights test the sustainability of their business models, as rev- over land. This information will be stored in an interoper- enue streams from selling data and information services able database available online, seamlessly linking textual will be challenged. Land administration agencies must and mapping information. The land information service will work closely with their governments to ensure the fine free government agencies from paper-based processes and balance between supporting the transparency agenda make it possible to deliver the full range of land services in and the financial sustainability of their organizations. each land office and online. Kiosks in rural districts will enable communities to access government land services online. Policies ensuring that copyright, licensing, and pricing arrangements are kept as simple and consistent as possible LSDI is viewed as an increasingly important factor in Lao will enable strong business interoperability and generate PDR’s socioeconomic development. Integrating land use, cooperation and shared services among government agen- ownership, planning, agricultural, and environmental data cies and their partners. Two examples—one from Lao PDR themes, the LSDI will eventually support all land-related gov- and the other from Vietnam—emphasize the important role ernance and management activities at the central and local of public information policy in e-governance. Information for levels. The far-reaching benefits will include improved natural the examples comes from Warnest and Bell (2009b, 2009d). resource management and environmental protection, which are vital given the increasing pressure on Lao PDR from inter- national investors. Success in implementing the comprehen- INNOVATIVE PRACTICE SUMMARY sive strategy for land information coordination and manage- A Policy Framework to Support Lao PDR’s National ment has been achieved by consolidating responsibilities Land and Natural Resource Information System for land under one organization, formulating and approving In Lao PDR, land registry officials, decision makers, and urban land policy, implementing institutional and regulatory reform, planners use a variety of ad hoc and often nonstandardized building institutional capacity, and strengthening project GIS and mapping applications and in many instances still management mechanisms. E C O N O M IC AND S E CT OR WORK 366 MOD ULE 14 — ICT FOR LA ND A D MINIS TR ATION A ND MA NA GEM ENT INNOVATIVE PRACTICE SUMMARY each department in the province is connected via fiber optic Vietnam’s One-Stop Shop for E-Government networks to the provincial Data Integration Center. Services The government of Vietnam views land reform as a core com- The integrated land and house management information sys- ponent of its gradual market reforms (doi moi), which are rec- tem established in Nam Dinh City is a successful example of ognized as one of the most important drivers of Vietnam’s rapid the synergy between land administration, house management, growth and poverty reduction. The Vietnam Land Administration and ICT. The city’s new Center for Land and House Information Project (VLAP), approved in March 2008, will develop a land and Registration is a one-stop shop for critical and highly information system and deliver government land services demanded land services, extending from land titling and urban online. In this way, VLAP will provide greater accessibility and land plans to construction permits, management, and taxation. community participation in Vietnam’s land administration sys- ICT removed the walls between the local government agen- tem, improving transparency and strengthening accountability. cies involved in these procedures, such as the departments VLAP focuses particularly on modernizing the land registration for land, house management, and taxation and the people’s system and improving the delivery of land registration services. committees in 25 wards. They have been able to review and streamline their business processes and maintain close collab- One of the most active e-government initiatives, the Bac oration through online data exchanges and process monitoring. Ninh land information system, is providing online services and electronic service centers in rural districts. Just 30 kilometers The prime minister has approved a Strategy for Information from Hanoi, Bac Ninh Province is Vietnam’s smallest and most Technology Application and Development for Natural densely populated province, with an estimated population of Resources and Environment to Year 2015 with a vision to 1 million. Twenty-one local area networks have been estab- 2020. A central element of the proposed reforms is the lished to serve government agencies, and an additional seven development of a system for accessing, retrieving, and dis- to serve rural districts outside the capital city. Remarkably, tributing land information nationwide. Topic Note 14.6: SUSTAINABLE FUNDING OF ICT IN LAND ADMINISTRATION TRENDS AND ISSUES Sustainable Business and Organizational Models Land administration systems need to be a revenue-generating, The experience of a number of western countries and increas- self-sustaining activity. Most land administration agencies ingly of countries in Eastern Europe, Latin America, and Asia have adopted computerized technology, the life span of which (including Central Asia) shows that land registration systems is rarely more than four years and often less. The more an and even the cadastre can finance themselves. These agencies agency becomes capital intensive, the more it needs to spend can achieve full cost recovery by charging for the goods and on maintaining and replacing its ICT. services they provide, once the necessary basic investment has been made and services have been made more efficient. It is generally agreed that the state has primary responsibil- ity for ensuring that appropriate policy, legal, and institutional There are two elements in financing a land information frameworks for land administration are in place and that infrastructure: the building of the infrastructure and its main- the formal land market operates efficiently. But should land tenance. Building a national cadastre and land registration administration be operated only by the state, and should it be solution is expensive. The cost of rebuilding an out-of-date paid for wholly by the state? Should there not, for example, cadastre can run into many millions of dollars, depending on be a partnership with the private sector to charge for ser- the size of the country and the precision of the survey data. vices based on the concept that those who benefit most Such an investment is hard to justify unless it can be shown contribute most to the cost? Strategic and business planning to generate sufficient revenue when it has reached a critical are needed to develop modern business models for land mass of transactions. For this reason, one of the first tasks in administration and for services to be provided in a business- modernizing land administration is to understand the differ- like, cost-effective manner. ent types of users, determine their specific requirements for IC T IN A GR IC ULTUR E S E C T I O N 4 — IMP ROVING P UBL IC SE RVICE PR O VI SION 367 services, and create a business case for the corresponding consortium has been contracted to deliver a Build/Own/ investments in ICT. This type of strategic planning is often Operate system for the Land Registration Authority over anathema to traditionally state-funded, output-based organi- an estimated 10-year project period. In such partnerships, zations such as land administration agencies. after the agreed concession (payback) period is concluded, the government fully owns the land administration infra- It is generally accepted that building a land administration structure. Until that time, revenue generated through an infrastructure needs a substantial level of support from the agreed fee structure will be retained by the consortium state or external funding sources. Maintaining the system is a (Warnest and Bell 2009c). different story, and experience suggests that self-sufficiency is possible. Where there is no attempt at cost recovery and all There are risks associated with these long-term public-private operations are paid for by the state, there is always a risk that partnerships, as the assumptions underpinning the agree- the funds needed to improve service and replace equipment ments will inevitably change over the extended time frames. will not be provided, especially when government funds are A good example is the recent global financial crisis, which in short supply. With governments currently trying to reduce has depressed land and property markets and reduced the the burden of public services on their state treasuries, it is revenue streams that support ICT investments and service a good opportunity to establish self-funding, autonomous, provision. It is therefore essential that these public-private business-oriented agencies. El Salvador, Kyrgyz Republic, partnerships have flexibility for change over their life cycle to Macedonia, Serbia, and Singapore have all planned autono- accommodate new business realities. mous, self-financing land administration agencies, while Lithuania, Moldova, and Georgia have attained self-financing When setting fee rates within a self-sustaining business agencies. The registration agency in Kazakhstan was obliged model, the danger is that the cost of transactions will deter to be self-financing from the day it was established. some people from registering property transfers, with the result that an informal land market runs in parallel with the formal one. The cost of transactions needs to be kept at a Leveraging Knowledge and Finance from the Private level that will encourage citizens to engage with and benefit Sector from land administration. While underpricing may encourage New models are being adopted for involving the private use of the data and generate volumes sufficient to achieve sector in sharing the investment and risk in designing, lower unit costs through economies of scale, there will come implementing, and sometimes operating land administra- a time when nonusers, including the poor, are effectively tion infrastructure and associated services. The complexity subsidizing the rich. and management requirements of these large, lengthy ICT programs are frequently underestimated. As discussed, Behavioral Change Requirements some of the earliest investment in ICT for land adminis- tration featured large, internationally bid contracts that The idea that a government agency should operate as a proved difficult to manage, involved lengthy tendering peri- business making at least a marginal profit has required a ods, and ultimately were slow to deliver operational solu- significant cultural shift that is often very difficult for those tions. In-house development has generally proven more who have been accustomed to a central government successful and allows agencies to either retain their own service-driven environment. In reality it should improve specialists or use local companies to build and sustain local the provision of services, based on what people want and capacity. This approach is easier to manage, is more com- need rather than on what those in authority think is good patible with incremental implementation, and (importantly) for the general public. Agencies become more accountable is very effective at amending and maintaining the solution to the public and develop an improved understanding and downstream. identification of those products and services that are of a commercial nature and those that are essentially a public An innovative approach is to engage the private sec- good. The downside of the commercial approach is that tor under public-private partnerships. For example, the financial incentives that benefit individual agencies may be Register of Scotland (http://www.ros.gov.uk/) has formed incompatible with “joined-up� government and attempts to a 10-year partnership with a technology provider under encourage cooperation between government departments. which it shares the ICT investment but the agency still Yet if each department works to its own business plan and delivers the services. Another model of public-private part- the maximization of its own income, the common good can nership has emerged in the Philippines, where a private become marginalized. E C O N O M IC AND S E CT OR WORK 368 MOD ULE 14 — ICT FOR LA ND A D MINIS TR ATION A ND MA NA GEM ENT INNOVATIVE PRACTICE SUMMARY organizations or consortia.6 The Philippines has adopted ICT Derived Efficiencies in Kyrgyz Republic this approach for a 10-year project to computerize 159 local Benefit Land Office Staff and provincial Registries of Deeds, 16 regional Registers, Kant Registration Office is one of Kyrgyz’s most successful and the central Registry of Deeds office in Manila. The land registration offices and is financially self-sufficient, with the project is implemented by the private consortium LARES, status of a state enterprise.5 Growth in business increased reve- which will deliver a Build/Own/Operate system for the nues from its services (land transactions, information, and other Land Registration Authority. The International Finance services) from around US$ 90,000 in 2005 to US$ 265,000 Corporation, part of the World Bank Group, is one of the in 2008. Fees are the standard (low) fees set by Gosregister, financiers, providing US$ 22 million. The project aims to the national coordinating agency. Despite the low fees, the digitize all Land Registration Authority records. Local and revenues cover all operating costs, including salaries, utilities, wide area network infrastructure will be installed to enable materials, and renewals of equipment and furnishings. (Start-up interagency and public online access to land information investments, however, were financed by Land and Real Estate and land titles. The revenue generated from the new sys- Registration Project.) The land registration office itself has tem will accrue to the consortium until the agreed conces- funded the progressive digitization of old paper records. sion period ends, at which time the government will fully own the system. Kant Registration Office pays its staff well above government rates and adds bonuses quarterly and on special holidays. The The Philippines has also been successful with ICT innovations director has nearly tripled staff members’ salaries in the last four for e-government and online land services. Outsourcing ser- years. She believes that such salaries develop trust and provide vice provision to the private sector is the Philippines’ leading incentives for quality work. As fees are modest in comparison strategy for harnessing ICTs to communicate with citizens to those charged in most countries, financial self-sufficiency has and conduct business effectively. The telecommunications been achieved primarily through gains in efficiency. company SMART developed an innovative “I-Connect� SMS- based customer management service. The potential benefits of I-Connect are many when coupled with land information infrastructure technologies such as those in Leyte, Quezon, INNOVATIVE PRACTICE SUMMARY and the longer-term Land Administration and Management Philippines—A Public-Private Approach to ICT program. It is anticipated that readily accessible online land Financing and Risk Sharing services and property inquiries via mobile phone will improve One approach for the public sector to finance ICT is to public perceptions of government and confidence in land share the risks and rewards of ICT investments with private administration. Topic Note 14.7: DESIGNING SCALABLE AND INTEROPERABLE LAND INFORMATION INFRASTRUCTURES TRENDS AND ISSUES prematurely obsolete. A robust, extensible architecture Implementing land information infrastructures to support should be defined, tested, and available early in the project. land administration is a complex process, normally achieved There are no turnkey solutions. However, there is a great over a number of years. Many countries will take up to 10 deal of practice and experience worldwide in implementing years to achieve comprehensive coverage with a rich set of ICT for land administration and there is no need to rein- e-services. Over this period, a number of disruptive technolo- vent the wheel. The following issues have been dealt with gies will arrive to challenge and potentially change the choice in other countries, and there is much to learn from those of ICT. This section aims to identify approaches to ensure experiences. An ICT solution should never be developed in that investments in ICT possess the scalability and interoper- isolation from trends and experience worldwide. ability that will potentially sustain the solution over the life cycles of new technology and reduce the risk of becoming 6 Information in this section is drawn from Warnest and Bell 5 Information in this section is drawn from World Bank 2010. 2009c. IC T IN A GR IC ULTUR E S E C T I O N 4 — IMP ROVING P UBL IC SE RVICE PR O VI SION 369 Data Model Standards platforms and/or frameworks. Web services are character- The major investment component in land information infra- ized by their great interoperability and extensibility, as well structure is in the collection and maintenance of land registra- as their descriptions, thanks to the use of XML (Extensible tion and cadastral information. It is imperative that this informa- Markup Language). Today, XML is one of the most widely tion be easily ported across generations of ICT. This possibility used formats for sharing structured information—between is gradually being achieved through interoperable data model programs, between people, between computers and people, standards. For example, European countries implement- both locally and across networks. Web services can be ing the EU INSPIRE Directive must be able to make specific loosely coupled to achieve complex operations. Programs data themes discoverable and accessible through adherence providing simple services, which can be built on different to data specifications (that is, data model standards). One hardware and software platforms, can interact with each of these themes is “cadastral parcels.� (See http://inspire other to deliver sophisticated added-value services (see .jrc.ec.europa.eu/documents/Data_Specifications/INSPIRE_ http://www.w3.org/standards). DataSpecification_CP_v3.0.pdf.) Another initiative in setting As an example of how web services can be used, a message data model standards is the Social Tenure Domain Model could be sent from a home location application to a web- under the wider Land Administration Domain Model developed service-enabled properties-for-sale search website, such as by UN-HABITAT and FIG (Lemmen et al. 2007), which provides a real estate price database, with the parameters needed for a standard model for social/customary tenure that ISO is ratify- a search. The property-search website would then return an ing and adopting. The Land Administration Domain Model is XML-formatted document with the resulting data, such as being used to support Solutions for Open Land Administration prices, location, and features. Because the data are returned (SOLA) Project (see http://www.flossola.org ). in a standardized format, they can be integrated directly into the application. The home location application could Open Interoperability Standards then send messages to other web-service-enabled sites to The implementation of shared information services within the obtain other property information on local amenities, crime concept of an NSDI has only been possible through the agree- statistics, public transport facilities, and similar parameters. ment and adoption of open standards. ICT has a vast array of The information can be integrated easily into the home loca- open standards, but within the geospatial domain, the Open tion application to support decision making. Service-oriented Geospatial Consortium, Inc. (OGC) is a nonprofit, international, architecture and web services are increasingly used in voluntary, consensus standards organization that is leading the designing modern land information infrastructures to support development of standards for geospatial and location-based incremental development, extension, and ease of integration services (http://www.opengeospatial.org/). OGC standards with other web-based information services. are technical documents that detail interfaces or encodings. Software developers use these documents to build open interfaces and encodings into their products and services (see INNOVATIVE PRACTICE SUMMARY IPS “Combining Open-Source Solutions with Open Geospatial Combining Open-Source Solutions with Open Consortium Standards�). Ideally, when OGC standards are Geospatial Consortium Standards implemented in products or online services by two software GeoServer, MapServer, and Deegree are open-source map engineers working independently, the resulting components server products focusing on Internet mapping applica- “plug and play� with other components compliant with the tions using Open Geospatial Consortium (OGC) webGIS same OGC standards. OGC works closely with the ISO TC 211 standards. These OGC interoperability standards—such as Geographic Information/Geomatics and submits OGC standards WMS, WFS, and WFS-T—allow the cross-platform exchange for ISO approval and adoption (see http://www.iso.org/iso/iso_ of geographic information over the Internet.7 Using these catalogue/catalogue_tc/). When bidding for land administration standards, map data stored in ArcSDE or Oracle Spatial and ICT, it is essential that the statement of requirements explicitly PostGIS databases, for example, can be accessed over the specifies the use of the appropriate OGC/ISO standards in the Internet with a standard web browser or GIS client software. design of the solution to ensure interoperability of the solution. With WMS, map data can be accessed and displayed as an image that can be overlaid with GIS data from other data Service-Oriented Architecture and Web Services sources to produce composite maps. With WFS, users can Web services provide a standard means of interoperation among diverse software applications, running on a variety of 7 Information in this section drawn from FAO and FIG 2010. E C O N O M IC AND S E CT OR WORK 370 MOD ULE 14 — ICT FOR LA ND A D MINIS TR ATION A ND MA NA GEM ENT access the actual geographic features in vector format, while systems. Starting from a base of a few projects, the process WFS-T allows features to be created, deleted, and updated. should result in consistent economic growth. MapServer, GeoServer, and Deegree are server-based “map For example, the Land and Real Estate Registration Project in engines� that display spatial data (maps, images, or vector the Kyrgyz Republic was implemented to support the devel- data, depending on the OGC web service) over the Internet opment of markets for land and real estate through the intro- to users based on their requests. MapServer has proved to duction of a reliable and well-functioning land and real estate be a very mature and reliable product to distribute maps from registration system. The open-source approach adopted by GIS data sources over the Internet through the WMS, WCS, the project appears to be successful. For example, open- and other OGC interoperability standards. GeoServer and source GIS software piloted by the Bishkek Land Registration Deegree are more recent projects built with Java technology. Office is being rolled out to the other 46 land registration While comparable to MapServer in many ways, GeoServer offices (World Bank 2011). The project has also been success- and Deegree go further by supporting transactional WFS ful in the sense that the value of annual property sales rose services, allowing users to insert, delete, and modify geo- from US$ 120 million in 2002 to US$ 1.5 billion in 2007, and graphical data at the source from remote locations. In land the annual value of new mortgages increased from less than administration solutions, this functionality would allow nota- US$ 100 million in 2002 to US$ 1.3 billion in 2008. ries to sketch new parcel boundaries resulting from property transactions on a digital map in their preferred GIS client soft- From this experience, the open-source initiative appears to ware and send this new boundary information in the GML have potential to focus implementation of the national ICT data format to the cadastral database on the WFS-T server. for Development strategy and enable rapid ICT development in Kyrgyz Republic. This model may be applicable in other A number of European cadastres already use WMS and/or developing countries that view ICT as a strategic tool for WFS to give citizens access to public cadastral data sets over economic development. the Internet, and are thus following the INSPIRE principles to provide public access to spatial data sets that are collected by the government. With the availability of high-quality, open- INNOVATIVE PRACTICE SUMMARY Social Tenure Domain Model source Internet mapping tools, other national cadastre agen- cies are expected to follow this trend. In developing countries, large portions of land remain untitled, with less than 30 percent of cadastral coverage conforming to the situation on the ground.9 Where there is INNOVATIVE PRACTICE SUMMARY little land information, there is little land administration and Kyrgyz Republic’s Open-Source Strategy management. Conventional land information systems cannot and GIS Solutions adequately serve areas that do not conform to the land par- The Kyrgyz Republic has adopted a national strategy, “ICT cel approach applied in the developed world. A more flexible for Development,� which envisions ICT as an engine for system is needed for identifying the various kinds of land economic development throughout the country.8 The major tenure in informal settlements. This system has to be based components of the strategy are e-commerce, e-government, on a global standard, and the local community must be able e-education, and the public sector. In all of these areas, open- to manage it. The Social Tenure Domain Model (STDM) intro- source technologies provide a mechanism for achieving duces new, unconventional approaches in land administra- strategic goals and overcoming the digital divide. ICT-based tion by providing a land information management framework development requires active growth in the local community that integrates formal, informal, and customary land systems of the IT professionals, and open-source projects provide local as well as administrative and spatial components. IT professionals with very effective opportunities to accumu- late and share experience. As local capabilities develop and STDM relies on tools for recording all forms of land rights, as support for open-source systems grows, government and all types of rights holders, and all kinds of land and property industry can rely more on local firms to build cost-effective objects or spatial units, regardless of the level of formality. open-source solutions. In this iterative process, the more The thinking behind STDM goes beyond established conven- open-source systems a country uses, the greater the growth tions. For example, traditional or conventional land adminis- of the local ICT industry and the greater the possible savings tration systems relate names or addresses of persons to land for government and industry in building more open-source parcels via rights. An alternative option provided by STDM 8 Information in this section is drawn from Abdrisaev et al. (2005). 9 Information in this section is drawn from FAO and FIG (2010). 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March 7–17, 2011. Internal World Bank report, Washington, DC. New Delhi. Zhao, J., and D. J. Coleman. 2006. “GeoDF: Towards a SDI-based UNECE (United Nations Economic Commission for Europe). 1996. PPGIS Application for E-Governance.� Proceedings of the GSDI Land Administration Guidelines. Geneva. 9 Conference, Santiago, November. GSDI, http://www.gsdidocs UNECE (United Nations Economic Commission for Europe). 2002. .org/gsdiconf/GSDI-9/papers/TS9.3paper.pdf, accessed May 2011. Mass Evaluation Systems of Land (Real Estate) for Taxation IC T IN A GR IC ULTUR E S E C T I O N 4 — IMP ROVING P UBL IC SE RVICE PR O VI SION 373 Module 15: USING ICT TO IMPROVE FOREST GOVERNANCE TUUKKA CASTRÉN (World Bank) and MADHAVI PILLAI (World Bank) IN THIS MODULE Overview. Information communication technology (ICT) applications can be harnessed to enhance public participation and transparency, make law enforcement more efficient, and improve forest management. The module uses the World Bank Framework for Forest Governance to assess the potential of ICT applications to address different aspects of forest governance. Topic Note 15.1: Pillar 1—Transparency, Accountability, and Public Participation. Approaches to increasing transpar- ency, accountability, and public participation for forest management through ICTs include e-government services and open government applications, advocacy campaigns through text messaging and Internet social networking sites, com- munity radio, crowdsourcing, and collaborative and participatory mapping.  Participatory Mapping in Cameroon  The Central Vigilance Commission Website—India  PoiMapper in Kenya Topic Note 15.2: Pillar 2—Quality of Forest Administration. Comprehensive forest management information systems have been seen as the ideal solution, yet it is possible to deploy smaller-scale ICT solutions to manage information requirements in key areas, such as management of fires, inventories, and wildlife tracking.  Fire Alert Systems Integrating Remote Sensing and GIS  Kenya: Solving Human-Elephant Conflicts with Mobile Technology Topic Note 15.3: Pillar 3—Coherence of Forest Legislation and Rule of Law. Effective law enforcement systems in the forest sector usually follow the steps of prevention, detection, and suppression. Technology has an important part to play in each of these steps in the efforts to curb illegal logging, transportation, and processing of timber and illegal trade in wildlife.  Ghana National Wood Tracking System  Liberia: LiberFor Chain of Custody Topic Note 15.4: Pillar 4—Economic Efficiency, Equity, and Incentives. ICT applications can promote business trans- actions with the private sector, as with the online auction of public timber, or e-auction. ICTs such as RFID chips can increase productivity and improve efficiency in the supply chain.  RFID Chips for Efficient Wood Processing OVERVIEW focus is on institutions, their interaction with stakeholders, The management of forests is very dependent on informa- and how their performance can be strengthened. It does tion, knowledge management, and the capacity to process not cover forest inventories and technical resource assess- information. This module presents lessons learned on the ment. While the module is intended to be comprehensive use of ICT to promote good forest governance.1 The main on particular subjects, it does not present all possibilities and current practices of ICT use in forest governance. The objective is to demonstrate the range and diversity of 1 The module builds on the 2011 World Bank report “Forest Gov- ernance 2.0—A Primer on ICTs and Governance,� available at approaches and feasibility of using technology in forested http://www.profor.info. areas (see image 15.1). E C O N O M IC AND S E CT OR WORK 374 MOD ULE 15 — US ING ICT TO IMPR OVE FOR ES T GOV ER NA NC E Forest Governance as a Development Challenge IMAGE 15.1: Scanning Barcodes in Forests Enhances Good governance is a vital ingredient in development and Forest Management sustainable resource management (Collier 2007); invest- ments in sustainable development are widely recognized to yield better development outcomes within conducive governance environments. Poor governance in the forest sector manifests itself in several ways. Forest crime—such as illegal logging, arson, poaching, or encroachment—is a problem in many areas. In many countries, corruption in the forest sector and rent seeking has caused forest agencies to lose both revenue and credibility. It has created an uneven playing field for legitimate private sector actors due to price undercutting and unreliable access to forest resources. The unpredictable business environment has also led to short- term profit maximization and has discouraged socially and environmentally responsible long-term investments in the forest sector. The Impact of Poor Forest Governance Poor governance in the forest sector is an impediment to achieving good development outcomes within the sector. In developing countries, an estimated 1 billion rural poor depend at least partially on forests for their livelihoods, and about 350 million live in and around forests and are heavily Source: Helveta Ltd. dependent on them for economic, social, and cultural needs. importance of good governance. Forests ensure the sustain- In developing countries, illegal logging in public lands alone ability of environmental services—biodiversity conservation, causes estimated losses in assets and revenue of more carbon sequestration, and watershed protection. All these than US$ 10 billion annually, more than eight times the total services are at risk if forests are not managed in a sustain- official development assistance dedicated to the sustainable able manner. management of forests. As much as US$ 5 billion is lost to governments annually because of evaded taxes and royal- Pilot projects around the world are currently testing differ- ties on legally sanctioned logging. In addition to financial and ent approaches to REDD+. Some projects are focusing on economic costs, the equity impact of poor forest governance increasing the involvement of and benefit sharing with indig- and illegality are considerable. These rough global estimates enous and local communities, especially in terms of mapping give an idea of the magnitude of the problem but mask coun- and measuring forest boundaries, degradation, and carbon try-specific variations. Despite the grim global estimates, levels. Interesting examples are the Community Carbon proj- the situation has improved in some countries. For example, ect in Mexico (Peters-Guarin and McCall 2010) and the Surui a recent Chatham House mapping shows that illegal log- Indigenous Peoples project in the Brazilian Amazon.3 Both ging has fallen more than 50 percent in the past 10 years in projects experiment with smart phones/PDAs with preloaded Cameroon, the Brazilian Amazon region, and Indonesia.2 software for data collection on biomass from sample plots and boundary demarcation using global positioning system Using ICTs to Reduce Emissions from Deforestation (GPS) functions. These projects are training local communi- and Forest Degradation ties to update data and use simple interfaces on the devices All schemes to reduce emissions from deforestation and to convert the data into carbon estimates. forest degradation (REDD+) emphasize the fundamental 3 The Amazon Conservation Team, Google Earth Outreach, and the Moore Foundation, (http://www.amazonteam.org/index 2 Information in this section was drawn from World Bank 2006a .php/233/The_Sete_de_Setembro_Indigenous_Reserve) & (http:// and Lawson 2010. www.google.org/earthengine/). IC T IN A GR IC ULTUR E S E C T I O N 4 — IMP ROVING P UBL IC SE RVICE PR O VI SION 375 A pilot project in Ethiopia4 also tried to have farmers access BOX 15.1: The Building Blocks of Forest Governance the international carbon offsets market and receive payments and Their Principal Components directly, through a mobile phone. In this case, smallholders near Bahir Dar were asked to measure the diameters of Pillar I: Transparency, accountability, and public trees on their land twice a year and put the information into participation a text message, which was sent, along with each farmer’s  Transparency in the forest sector unique identification code, to the regional Watershed Users’  Decentralization, devolution, and public participa- Association office. Standard software computed the amount tion in forest management of carbon stored on each farm as well as the change from the  Accountability of forest officials to stakeholders previous measurement; any increase in stored carbon diox-  Accountability within the forest agencies ide was converted into cash using the going rate of carbon dioxide on international markets, and farmers were paid by Pillar II: Stability of forest institutions and conflict their local association. management  General stability of forest institutions The Pillars of Forest Governance  Management of conflict over forest resources It needs to be recognized that even legal activities may lead Pillar III: Quality of forest administration to unsustainable management of resources and that good  Willingness to address forest sector issues governance and legality do not always deliver sustainability. The opposite also holds true: not all technically illegal activi-  Capacity and effectiveness of forest agencies ties are unsustainable. Development outcomes in forestry  Corruption control within the forest sector depend on many factors both inside and outside the sector.  Forest monitoring and evaluation To help improve forest governance, the World Bank has Pillar IV: Coherence of forest legislation and rule of law developed a conceptual framework for forest governance  Quality of domestic forest legislation that consists of five pillars or building blocks, each with two to seven subcomponents (World Bank 2009a) (see  Quality of forest law enforcement box 15.1). This module analyzes each principal component  Quality of forest adjudication and assesses how information management and ICT can  Property rights recognized/honored/enforced be used to promote the specific dimension of forest gov- Pillar V: Economic efficiency, equity, and incentives ernance. It is clear that governance cannot be promoted  Maintenance of ecosystem integrity—sustainable by knowledge management and technology alone: funda- forest use mentally, it is a matter of political choice and the capacity to implement those choices. Therefore, the mere introduction  Incentives for sustainable use and penalties for of information technology will not lead to reforms and good violations governance if the overall environment is not conducive.  Forest products pricing  Commercial timber trade and forest businesses Information Management, Development,  Equitable allocation of forest benefits and Governance: The Role of ICT  Market institutions New technologies have dramatically changed the way this  Forest revenues and expenditures information is collected and applied in the forest sector. For Source: World Bank 2009a. example, World Bank experiences from Eastern Europe and South Asia demonstrated the importance of appropriate management and generation of information and the need for These lessons gradually resulted in forest management information on financial and operational issues, as well as information systems (FMIS) becoming an essential ele- performance assessment of state agencies. Public access ment in forest sector institutional reform programs. These to this information is a prerequisite for greater accountability systems were tried in forestry projects in countries as (World Bank 2008, 2005). diverse as Argentina, Bosnia and Herzegovina, Kazakhstan, Russia, Romania, Vietnam, and several states in India (World 4 Personal communication, project team. Bank 2008). The systems focused on forest administration E C O N O M IC AND S E CT OR WORK 376 MOD ULE 15 — US ING ICT TO IMPR OVE FOR ES T GOV ER NA NC E in the narrow sense and lacked cross-sectoral linkages.5 “back office� processes largely remained unaltered. Based Information system development has also been integrated on these findings, it would be easy to assume that forestry into wider forest sector reform programs, as described in the departments did not need information technology to improve following section and box 15.2. their functions. However, it would be more appropriate to con- clude that information management needs were insufficiently Experience of World Bank Support to Forest assessed before executing such a large-scale introduction of Management Information Systems new technologies. Other important reasons these projects Implementation completion reports for a sample of recent were not as effective include the following: World Bank forestry projects show that the introduction of  FMIS components were too big and complex. computerized information management systems to facilitate  Government staff were less familiar with the technical institutional reform had limited success. side of information management and thus drawing up specifications for consultants’ to develop the systems For three forestry projects in India, the report notes that was difficult. the project objectives for FMIS implementation were not  Delays in award of contracts meant that the systems achieved or were limited in their success due to delays in could not be tested by the client till the end of the assigning the consultancy contracts and lack of technical project period. capacity.6 More positive outcomes have been noted in proj- ects in Romania and Bosnia and Herzegovina.7 In Romania,  Insufficient attention to “change management� to the report found that “the full system has been installed and generate “buy in� from staff at all levels. tested in headquarter and field office.� The project in Bosnia has had a positive outcome, and the reason for this seems BOX 15.2: Vietnam—Management Information System to be a phased approach. The initial focus was on develop- for the Forestry Sector ing overall IT capacity, followed by the introduction of more specialized capabilities such as geographical information sys- The Management Information System for the Forestry tems (GIS) mapping tools. Sector (FORMIS) aims to introduce modern approaches to information management in the Vietnamese forest While forestry administrations seem to have welcomed com- sector. This includes technological solutions for informa- puters, the link between technology, information manage- tion integration, remote-sensing technologies, and mobile ment, and institutional reform was not always maintained. The technologies. FORMIS will contain a number of subsys- most important reason often was the lack of clarity in how to tems and modules to provide information for steering and get the best from the technology. There was inadequate anal- managing the forestry sector toward sustainable forest ysis on how technology could be used to improve information management. The FORMIS information strategy will also management to improve core business processes. Technology guide the Ministry of Agriculture and Rural Development was seen as a means to spruce up the “front office� while in aligning IT investment in other development projects to obtain a harmonized, cost-effective system. 5 See, for example, the Bosnia and Herzegovina case study in World Bank (2008). FORMIS is expected to reduce the fragmentation of infor- 6 The report for the Andhra Pradesh Forestry Project notes that “the project has, in the latter stages, obtained up-to-date GIS mation by harmonizing standards within the agriculture hardware and software and established a new Geomatics Cen- ministry. The project will come up with consistent data tre . . . However, the system has only been fully operational in structures, standardized and consistent data collection the latter stages of the project.� The report for Uttar Pradesh Forestry Project notes that “the main weaknesses at (project) methodologies, and centralized coding systems. The frag- entry were . . . an expectation that the implementing agency mented nature of existing forestry information is partially would manage large consultancies (such as the Forest Manage- caused by a case-by-case approach when planning and ment Information Systems (FMIS)) when its capacity in this area was limited. Other shortcomings were in the development of the building information systems, without having a strategic FMIS which was rudimentary and not a full-fledged planning tool overview. The project pays particular attention to the ini- at project closure.� The Madhya Pradesh Forestry Project report tial planning of the information strategy and the informa- found that “another shortcoming in sector management was the failure to deliver an improved macro-level planning process sup- tion system architecture of the systems to be built. ported by a FMIS and associated capacity building.� Sources: Development of Management Information System for For- 7 Romania Forest Development Project (P067367) and Bosnia- estry Sector (FORMIS): overall work plan (March 3, 2010, unpublished); Herzegovina Forest Development and Conservation Project Fowler et al. 2011; Vietnam Development Report 2011. (P079161). IC T IN A GR IC ULTUR E S E C T I O N 4 — IMP ROVING P UBL IC SE RVICE PR O VI SION 377 ICTs in Forest Governance: Experience hand, the growth of mobile phone connectivity in the country from Three Countries is being exploited by illegal loggers and poachers. Three detailed country reports were prepared to analyze what The experience from Uganda also demonstrates how linking lessons could be drawn from the experiences of countries with ICT and e-readiness assessment with extensive governance different forest governance challenges and different stages of diagnostics provides a good basis for reform. advancement in the application of ICTs in development. The country reports are from Finland, Ghana, and Uganda. The important example from Uganda is the spontaneous development of ICT applications through radio and SMS in Finland is one of the world’s leading countries in applying ICT response to governance challenges (see box 15.5). Other across all levels of society and different economic sectors. initiatives led by the private sector are using technologies Forests have held a remarkable role in Finnish society for to optimize plantation management and processing. Thus, over a century. Alongside the rapid overall development of Uganda is an example where the government has created the ICT, forest sector actors have actively developed and applied space for ICT applications to be widely used, but has not really different ICT solutions to improve efficiency. Conventional provided direct support. It is an environment where low-cost, ICT applications have been developed to support decision innovative applications would thrive and where radio is still making and to improve the efficiency of the wood supply. the most influential technology to reach the rural population. During the past decades, the importance of communication between forest actors and the general public has become In the case of Ghana, while the country has made a lot of prog- an emerging requirement, and new solutions have been ress with Internet and mobile connectivity in general, appli- introduced in response. ICT solutions in Finland are currently cations in the forest sector are lacking. The National Wood in a transition period to second-generation solutions, with a Tracking System, which aims to establish a system for tracing large proportion of solutions and e-services being revised the chain of custody, is a notable exception. The system is and improved. The major drivers for this are the changes still being piloted and when complete will enable the forest in the operating environment and the rapid development of department to trace timber slated for exports all the way back hardware and communication possibilities. to the stump, thus meeting its requirements to certify legal timber under the Voluntary Partnership Agreement with the In general, the readiness for ICT solutions in the Finnish for- European Union. However, it is a donor-driven system, which est sector is very high, which reduces the need for capacity does raise questions regarding its sustainability after external building and technical support in introducing new solutions. funding ends.8 The key success factors for ICT solution development and application processes are the involvement of the stakehold- ers, adequate capacity, and a high level of trust between the Developing a More Integrated Approach government and the private forest owners. For developing The three main interlinked drivers of change toward a more countries, the Finnish model presents two important les- integrated approach in forest sector information manage- sons: (1) good outcomes from ICT solutions can be expected ment are as follows: only through a good communication strategy and upfront 1. Technological change and convergence: Enables involvement of stakeholders and (2) piloting with a smaller exploring data from anywhere in the world and col- user group is beneficial for the final product quality. laborating with others. The Uganda report shows that the country has put in place 2. Increased openness, transparency, and partici- the legal and policy architecture for expanding the role of pation: The forest sector can no longer work in ICTs in all spheres of development. However, in general, isolation and needs to share information with other the forest sector has been lagging behind in adopting these stakeholders. technologies. The high cost and specialized technical skills 3. National e-strategies and e-development pro- needed for traditional remote sensing and GIS applications grams: Forest sector information systems develop- have been a limiting factor. However, corruption, illegal log- ment needs to have a whole-government approach. ging, and other forest crimes are notable governance prob- lems in the country. The lack of avenues for citizens to hold 8 Information in this section is drawn from Country Reports for Finland, Uganda, and Ghana—unpublished consultant reports, their public office bearers accountable has been cited as one available at http://www.profor.info/profor/knowledge/information- of the governance challenges in the sector. On the other management-and-forest-governance. E C O N O M IC AND S E CT OR WORK 378 MOD ULE 15 — US ING ICT TO IMPR OVE FOR ES T GOV ER NA NC E ICT experiences in the forest sector have not been system- summarizes the relationship of ICTs to the five pillars. The atically studied, but new applications are being piloted in only pillar in the World Bank framework that has not been various countries, and there is a wealth of experience from specifically addressed is “Stability of Forest Institutions and the field. Experience with ICTs in other sectors such as bank- Conflict Management.� This is closely related to the four ing, agriculture, fisheries, and public-sector governance has other pillars. If issues such as transparency, quality of admin- also generated lessons on how ICTs can be effectively used istration, and economic efficiency are ensured, conflicts in to improve governance and service delivery. This module the sector can be reduced. explores the range of ICT applications available and relevant for forest governance, using a sample of field experiences. While most of the cases are directly from the forest sector, KEY CHALLENGES AND ENABLERS non-forestry cases have been included for their relevance to Though there is great potential for using ICT to improve for- the forest sector. The discussion is focused on understand- est governance, there are no ready-made or easy solutions. ing what works under real-world conditions, the potential This section looks at the operational challenges that confront for replication and scaling up, and what can be learned from national forest agencies and practitioners when using ICT for other sectors. forest governance. It also reviews the key enablers that can help to overcome these challenges. Some of the following To understand how ICTs can best serve forest governance discussions address issues generic to all agricultural ICT and needs, this module uses the World Bank framework for e-government initiatives, while others deal with issues spe- forest governance (see box 15.1) to classify the selected cific to forestry. examples. Information is a key cross-cutting requirement for all the pillars of forest governance. The role of ICTs in improv- Be familiar with national ICT policies and e-readiness. ing information management under each pillar is explored Projects can be developed in countries with low readi- with the help of field examples through the subsequent ness, but they must be designed accordingly. E-readiness Topic Notes (each Topic Note represents a pillar). Table 15.1 is an essential factor ensuring that e-services can be used TABLE 15.1: Pillars of Forest Governance and ICT PILLAR OF GOVERNANCE WHAT IS THE INFORMATION MANAGEMENT PROBLEM? WHICH ICT APPLICATIONS CAN HELP? I. Transparency,  Insufficient access to key information on forest management, land  E-government and open government applications Accountability, and tenure, concessions, etc.  Advocacy and awareness campaigns through text messaging Public Participation  No forums for public to share ideas, alert forest managers, or and Internet social networking sites register complaints.  Community radio  Lack of information or public consultations on planned development  Crowdsourcing to increase public participation projects and major land use changes.  Collaborative and participatory mapping II. Stability of Forest (Applications presented under other pillars.) Institutions and Conflict Management III. Quality of Forest  Costly and difficult to gather detailed information for forest invento-  Forest cover and carbon stock assessment with CLASlite and Administration ries and carbon estimation. airborne LiDAR  Extensive damage from forest fires and insufficient advance infor-  Real-time fire alerts mation for forest managers to take action.  Wildlife tracking and conflict management  Conflicts between humans and wildlife; wildlife poaching. IV. Coherence of Forest  Difficult to monitor movement of logs from forest areas.  Technologies for surveillance and deterrence—computerized Legislation and Rule  Information for legality verification is easily tampered with. check posts and GPS of Law  Technologies for tracking timber—chain of custody systems  Lack of awareness of forest laws.  Surveillance of all critical areas for illegal activities is expensive.  Legal information management systems: Global Legal Information Network  Mobile and online crime reporting services V. Economic Efficiency,  Lack of transparency in auctions, sales and allocations of licenses  Online timber sales, licenses, and auctions Equity, and Incentives for planting.  Logistics  Accurate information on distance and time needed to optimize  Mobile phone or PDAs for carbon estimation and receipt of timber transportation and increase cost efficiency. payments Source: Authors. IC T IN A GR IC ULTUR E S E C T I O N 4 — IMP ROVING P UBL IC SE RVICE PR O VI SION 379 and that investments in new systems provide the desired public agencies or voluntary nongovernmental organizations outcomes. The existing and potential capacity needs to be (NGOs). Working at the local level ensures that applications assessed and mapped, and applications need to match the are responsive to local needs and that there is uptake of the capacity. Development programs may also have components models being developed. to strengthen the e-readiness in partner forest organiza- tions; this needs to happen in full alignment with national Information and communication technologies can e-government development strategies. Particularly in envi- improve forest governance, but operation, maintenance, ronments with weak capacity, there is a risk of systems and project design issues must be addressed. All cases being developed independent of each other, adding to the show that if planned properly, both mobile and Internet appli- difficulties associated with building e-government systems cations can be developed to improve various aspects of gov- across sectors. ernance. Moreover, these systems can be combined with others to provide a full range of services to public and forest Define the problem clearly, assess the information needs, professionals. But having appropriate technology alone is not and compare possible solutions. Defining the problem to adequate. One needs to consider two issues crucial to the be addressed is a fundamental requirement for any project, long-term sustainability of the applications: (1) Project design and ICT projects are no exception. ICTs are tools or enablers, has to be appropriate and focused on meeting demand and and having good devices alone is no assurance that forestry (2) operational and maintenance issues must be addressed. management will be improved. Therefore, it is essential to Recurrent issues like power supply (for recharging laptops, properly identify the underlying causes and effects before mobile phones, and PDAs), spare parts (such as replacement looking for a technological solution. The objective is also to batteries), and service also need to be addressed. find the most cost-efficient and feasible solution. Mobile and Internet applications provide many benefits, but tradi- Some services are consumer driven and can become tional communication channels may also be appropriate. financially self-sustaining, while others are public goods Particularly in environments where access to information and need to be financed from public sources. In designing networks and electricity is limited, lower-tech solutions may projects, consider costs, long-term financial sustainability, be needed. If no systematic feedback systems are required and scalability. Many pilot studies and applications are funded or the information is not time sensitive, conventional strate- and subsidized by international donors, NGOs, or national gies like public posters, community meetings, or radio can governments. However, particularly for commercial services, also help disseminate important information. the long-term sustainability of an application depends mainly on end-user participation and out-of-pocket expenditures. Determine the best entry points and the appropriate These costs arise from the purchase of various information technology. In ICT, the gradual introduction of new services technology services, such as sending responses to text mes- based on existing ones can be also beneficial. In particular, sages, in which cases the total cost depends on the cost of systems that are aimed at the public and where extensive a text message. Very few pilot projects have focused on the end-user training cannot be provided should be based on financial sustainability of the models, including how much familiar user interfaces. Another decision that needs to be investment is required. To be sustainable, programs need made when selecting entry points is the type of technol- to consider scaling up and replication. This is exceptionally ogy to be used. Technology choice depends heavily on the important to forestry because the sector is inherently public- existing capacity: mobile phones and even smartphones are service oriented. For example, law enforcement is a public much more common in poorer developing countries than good and should be financed from public resources. Well- Internet-connected computers. functioning business models and reliable revenue streams are critical to public forest management (image 15.2). Design culturally appropriate and relevant content. Services provided have to be locally adapted and relevant and Address data security and privacy issues, and develop meet the requirements of the target audience. The key ele- risk mitigation to prevent misuse of technology and ment is to ensure that applications do not require language inaccurate data. Having access to ICTs to track illegal activi- skills that are not widely available. Particularly in areas with ties facilitates better law enforcement; the converse could low literacy rates, it is essential that e-applications form part also be true. Loggers and wildlife poachers may intercept of a more extensive service package where illiterate users communications between forest authorities and voluntary can also access the information through various agents that informers, and text messages can be used to mislead law help them with the applications. This can be arranged through enforcement agencies. Consequently, law enforcement E C O N O M IC AND S E CT OR WORK 380 MOD ULE 15 — US ING ICT TO IMPR OVE FOR ES T GOV ER NA NC E IMAGE 15.2: Long-Term Investments Are Critical to Scaling Up Interventions communities, who may have little formal knowledge of the sector and poor or no access to information networks. Also, within the commu- nities, access may be unequal and women or poor may be excluded even if local elites have some access and knowledge. To avoid any potential unintended exclusion of key stakeholders, it is essential that any information system develop- ment plan include a comprehensive stakeholder or client mapping. This needs to assess what the informa- tion needs are and how to provide the required information services, including training. Ensure buy-in from forest authori- ties at all levels. Ensuring adoption Source: Douglas Sheil, CIFOR. of an e-governance agenda in forest agencies may also happen through bodies need to be prepared to counter disinformation, have other means. It may require strong normative guidance from at least comparable resources, and be capable of investigat- national e-government programs and agencies and may also ing criminal activities. If ICT applications are developed to require the provision of financial incentives. Often, increased encourage public participation on forest law enforcement— use of new technology is driven by efficiency gains and cost for example, by opening hotlines for reporting corruption, savings. If these can be clearly analyzed and demonstrated, illegal logging, poaching, or other forest sector crimes—it is agencies have incentives to stay engaged and expand the critical that the identities of sources not be disclosed, as this use of ICT. Even if many NGOs and international organiza- could jeopardize their personal safety. tions have been developing innovative models, if the right authorities are not involved, the new systems have limited Ensure that there is adequate information on the value if their operators do not have access to relevant infor- resource (for example, forest inventories and resource mation and data. Frequently, donor-funded projects have assessments) or readiness to improve data collection. been able to equip the project implementation units with Having adequate data to be processed in the system is a modern hardware and software while other departments precondition for transparent information sharing. The lack of remained much more poorly equipped. If wide-scale ICT data cannot be overcome by any investment in technology. reforms are expected to happen, it is essential that relevant Nevertheless, these investments do not need to be sequen- agencies be upgraded in a way that allows for their participa- tial. In most cases it is possible to collect inventory informa- tion. This requires adequate investment funding for upgrad- tion while developing ICT applications. ing hardware, system development, and human capacity building. Identify the right stakeholders and ensure their partici- pation and avoid local elite capture; include indigenous Users are able and willing to use new technologies but peoples, women, and rural poor. The forest sector, by its they need to be aware of the service and motivated to nature, has diverse stakeholders with varying levels of com- use it. Even models that are fully functional from a technical petence. Large enterprises, senior management, and tech- perspective may fail to deliver or perform below expectations nical specialists in forest administrations and international if users are not aware of them or do not have the right incen- NGOs have better knowledge than rural and indigenous tives. It is essential for clients to be able to provide feedback IC T IN A GR IC ULTUR E S E C T I O N 4 — IMP ROVING P UBL IC SE RVICE PR O VI SION 381 and to be genuinely involved. Making information available support. In many cases, the underlying technology already by the forest authorities serves several purposes: informa- exists and only applications need to be developed. The tion is a basis for public consultations and inclusive decision examples discussed in the Topic Notes clearly demonstrate making. However, even limited dissemination is beneficial; that many of the forest applications have been developed if authorities disseminate information through websites, for on existing platforms based on a demand-driven innovation. example, the information is available to the media and NGOs These have been used in a number of ways to increase public for scrutiny, even if the public only has limited access to the participation and surveillance of forest areas, to monitor fires, information. and to reduce human-wildlife conflicts around protected areas. Applications using mobile phones, radio, and the Internet Additional observations and practical implications from the field can be deployed quickly with minimal technological examples in the Topic Notes are summarized in table 15.2. TABLE 15.2: Summary of Field Examples PILLAR OF GOVERNANCE SUITABLE ICT APPLICATIONS ISSUES TO BE CONSIDERED Transparency, Accountability,  E-government and open data initiatives  Applications are mostly Internet and mobile phone based, technologically and Public Participation  Advocacy and awareness campaigns through text less challenging, and cheaper to deploy. Cell phone applications would be messaging and internet social networking sites more useful in forested areas.  Community radio  Legal and political support is necessary for e-government and open data initiatives, and these applications are best led by government agencies.  Crowdsourcing to increase public participation  NGOs and civil society can establish and manage mobile phone applica-  Collaborative and participatory mapping tions, community radio, and participatory mapping.  Costs to users/communities need to be offset through funding from donors/ private sector. Community radio (FM) stations can be set up for US$ 5,000– US$ 15,000 and managed by community members; SMS can be purchased at bulk rates from cell phone companies.  For mapping applications, GPS capability is necessary; PDAs (US$ 800– US$ 1200) or smartphones (US$ 150–US$ 200) can be used, depending on how rugged the device needs to be. Quality of Forest  Forest cover and carbon stock assessment with  These applications are for government agencies. Administration CLASlite and airborne LiDAR  Satellite imagery is now available at lower or no cost; recent developments  Real-time fire alerts through MODIS have simplified software for interpretation. However, technical training is  Wildlife tracking and conflict management through essential to interpret images and generate maps. mobile phone applications  The LiDAR approach for carbon assessment is still in the early stages, and costs are estimated at US$ 0.10/Ha. Currently, the Carnegie Institution for Science (Department of Global Ecology) is the main provider of the LiDAR technology for forest cover and carbon assessment.  CyberTracker software is free to download onto PDAs and can be tailored for different uses: tracking wildlife, movement of logs, location of specific tree species, etc. It is a good technology for working in collaboration with communities.  Fire alerts from MODIS and through Fire Alert system are free text and e-mail services. Coherence of Forest  Technologies for surveillance and deterrence: com-  Comprehensive chain of custody systems are expensive operations. They Legislation and Rule of Law puterized checkpoints and GPS tracking of vehicles are useful where the benefits of legality assurance outweigh the costs,  Technologies for tracking timber—chain of custody such as in timber exporting countries. Costs of these systems could be systems shared between industry and government as benefits accrue to both.  Legal information management systems: Global  Less expensive crime reporting hotlines could be set up to work through Legal Information Network voice and text messages. All crime reporting systems need to assure citizens anonymity and safety.  Mobile and online crime reporting services Economic Efficiency, Equity,  Online timber sales, licenses, and auctions  These applications would work well in situations where the forest sector is and Incentives  Logistics fairly advanced in the use of information technology. While the government agency may need to set up and maintain the applications initially, some services such as online auctions and inventory data, which are used by the industry can have a user fee to offset the cost to the public sector. E C O N O M IC AND S E CT OR WORK 382 MOD ULE 15 — US ING ICT TO IMPR OVE FOR ES T GOV ER NA NC E Topic Note 15.1: PILLAR 1—TRANSPARENCY, ACCOUNTABILITY, AND PUBLIC PARTICIPATION TRENDS AND ISSUES to receive information from the site’s users. A very advanced Information availability is a precondition for transparency, example is the website of the Forestry Commission of the accountability, and efficient public participation. Enhancing United Kingdom. This site provides users with information, the accountability of the government and its institutions, access to relevant policies and procedures, and links to wider including forestry institutions, is a key issue in all countries. e-government applications in the country (see box 15.3). Transparency and access to information are essential if pub- lic-sector forest institutions are to be held accountable for BOX 15.3: Website of the Forestry Commission, United their performance. Making the public aware of forest sector Kingdom policies, laws, and the rights and responsibilities of citizens and the state is the first step in increasing transparency and The Forestry Commission of the United Kingdom is one accountability. Public participation and support for forest of the best examples of e-government in action in the activities can be increased by actively seeking public opin- forest sector. The commission’s website (http://www ion and suggestions on government actions through easily .forestry.gov.uk/) not only disseminates information on accessible avenues. Approaches to increasing transparency, the forests under its jurisdiction, but also serves as accountability, and public participation through ICTs include a platform for interaction with citizens, including the following: e-commerce services. The site is user friendly and, from  e-government services and open government a governance perspective, has a number of features: applications  Information on all aspects of forestry (educational,  advocacy campaigns through text messaging and recreational, scientific, and industrial). Internet social networking sites  Up-to-date statistics on timber production, sales,  community radio inventory.  crowdsourcing—mapping for the people, by the  Information search feature through the land infor- people mation search, which is a map-based tool giving  collaborative and participatory mapping. information about land designations.  Information on grants and licenses for planting E-Government and Open Government/Open Data and felling, with a feature for online comments on Applications individual applications. Open government, open data, and e-government initiatives  Environment Impact Assessment register shows are meant to increase access to government-owned informa- details of the decisions that the commission tion and increase transparency and accountability in general. makes after assessing the potential environmental Open government and open data initiatives are giving more impact of work to carry out afforestation or defor- access to information that would otherwise be out of bounds. estation or to build forest roads or quarries. On the other hand, e-government solutions are designed  Online auctions through the e-timber sales portal. from the perspective of increased efficiency, reduced cor- In addition to these interactive features, the site pro- ruption, and better service delivery. While open government/ vides the commission’s policies and standards for sus- data may not strictly be the same as e-government, all of tainable forest management, the government’s policies these approaches use ICTs to make governments more on freedom of information and the rights of citizens to transparent and efficient. information held by state agencies, and the process of consultation the commission follows before planting or Websites are the first and simplest point of communication felling in any woodland. The commission also carries with the public in the digital world. Several ministries of for- out an annual survey where public opinion on forestry is ests and the environment have websites with information gathered and posted on its site. on key policies, programs, and organizational responsibilities; Source: http:www.forestry.gov.uk. however, only a few have interactive features that allow them IC T IN A GR IC ULTUR E S E C T I O N 4 — IMP ROVING P UBL IC SE RVICE PR O VI SION 383 Australia, New Zealand, and the United Kingdom have open government or open data policies to share information with BOX 15.4: Advocacy and Awareness Tools the public. There are numerous benefits of having access to such large volumes of public data. For example, budget infor- FrontlineSMS is free, open-source software that turns a mation for the forest sector could be used to monitor per- laptop and a mobile phone into a central communications formance of the state agencies’ projects; data on harvesting hub. Once installed, the program enables users to send volumes and area could be used by interested civil society and receive text messages with groups of people through organizations to monitor whether harvest levels are sustain- mobile phones. Its features include the following: able and whether critical ecosystems are being protected.  No Internet connection is required.  A phone and SIM card can be attached and the While open data policies are primarily initiated by govern- local mobile phone service operator paid per SMS ment agencies, the Open Budget Initiative demonstrates as usual. that it is possible for civil society organizations to generate  All phone numbers and records of all incoming and demand for open data policies. The Open Budget Initiative outgoing messages are stored. is a global advocacy program to promote public access to budget information and the adoption of accountable budget  Data are stored on the user’s computer, not on systems. It is anchored in a biennial Open Budget Survey external servers. that evaluates whether governments give the public access  Messages can be sent to individuals or large to budget information and opportunities to participate in the groups and can be replied to individually, which is budget process at the national level. To measure the overall useful for fieldwork or during surveys. commitment of the countries surveyed for transparency and  Easy to install and requires little or no training to for comparisons among countries, the Open Budget Index use. (OBI) was developed, which is a score assigned to each  Developers can freely take the source code and country based on the information it makes available to the add their own features. public throughout the budget process. The OBI was initiated  It can be used anywhere in the world by switching by the NGO International Budget Partnership. The OBI could the SIM card. also be applied in the forest sector, and NGOs could initi- Source: http://www.frontlinesms.com/. ate an OBI for the forest sector in their country. The role of ICTs in this case could be to increase access to information through websites or mobile phones.9 The Central Vigilance Commission of India is another example of a “partial� open government initiative. Advocacy and Awareness Campaigns through Text Messaging and Social Networking Sites E-government services have been high on the agenda of The large number of mobile phone subscribers in develop- many countries for over a decade. The primary motive for ing and developed countries and the relatively simple tech- launching e-government services from the perspective of nology for setting up mass text messaging systems (see the government is often to improve the efficiency and cost- box 15.4) are helping NGOs and advocacy groups reach out effectiveness of operations; reducing corruption is often to greater numbers than is possible through traditional mass not stated as one of the objectives. However, studies have media. NGOs have used text messages effectively in their shown that e-government programs have a great impact on campaign for a new forest law in Argentina and to generate user perception of corruption and transparency. For example, public pressure on a food company to stop it from sourcing the World Bank (2009a) found that in India, users’ perception palm oil from companies that cut down primary rain forests of corruption in the electronic land registration and records to make room for oil palm plantations. Sites such as http:// services called Bhoomi, CARD, and Kaveri was lower when www.mobileactive.org connect NGOs and advocacy groups compared to the older manual systems. (For discussion of using mobile technologies for social change and help them ICT in land management, see Module 14.) with information on the latest trends, do-it-yourself guides, and reviews of mobile applications. 9 http://www.internationalbudget.org/what-we-do/open-budget- The growth of text messages in advocacy campaigns could initiative/. be attributed to the following: E C O N O M IC AND S E CT OR WORK 384 MOD ULE 15 — US ING ICT TO IMPR OVE FOR ES T GOV ER NA NC E  Mobile phones are carried everywhere as a personal BOX 15.5: Uganda—Environment Alert: Civil Society accessory and are kept switched on almost 24 hours Organizations Use ICTs in Advocacy each day, so the target audience is almost always Campaigns accessible.  Messages targeted at individuals are more likely to In 2007, the government of Uganda wanted to give generate a response than those broadcast to a mass away a third of the Mabira Central Forest Reserves to audience. a sugar company after the government was asked to remove the reserve status of the forest and allocate the  Responding to a text message is easier and quicker land to the company. At the same time, sensitivity to than making phone calls or sending letters, especially environmental matters had been heightened in Uganda when the responder does not have to pay for sending by the campaigns about the impact of the loss of forests the message. on floods, unpredictable weather, and rising food prices.  Mobile phones allow two-way interaction, and feed- back can be received almost instantly. As a result, civil society organizations used ICTs to alert individuals about official actions that would affect them NGO campaigns have started using Internet social networks adversely and to mobilize them to save the Mabira such as Facebook and Twitter to target the youth, who are Forest. Environmentalists took their fight to discussion the primary users of these networks. For example, an inter- groups on FM radio stations and used text messages to national NGO carried out a two-month campaign through campaign against buying the company’s sugar until the Twitter, Reddit, Facebook, and online video against an inter- plan to grab part of Mabira Forest was dropped. national food company during 2010 for its use of palm oil from The text messages were particularly effective. The com- suppliers linked to rainforest destruction. As a result of the pany saw a decline in sales, and some retail businesses campaign, the food company announced in May 2010 that it withdrew their products from store shelves entirely. will partner with the Forest Trust, an international nonprofit Environmentalists argued that apportioning part of the organization, to rid its supply chain of any sources involved in Mabira Forest would bring more adverse effects than the destruction of rain forests.10 This approach may be more the sugar shortage. Opposition politicians also picked feasible in medium- and high-income countries where there up the slack and started criticizing the government for is more access to the Internet than in low-income countries the lack of concern. In this particular example, text mes- (see more on how civil society and NGOs can participate in sages helped in alerting people what would happen next e-government in Module 13). In many developing countries, if they did not join the movement to stop the forest give- text messaging is still the primary means of data collection away. The campaign of the civil society organizations and dissemination. A combination of media can be used suc- was complemented by other actions in the country and cessfully, as the example from Uganda demonstrates (see strong reaction from the international development part- box 15.5). ners. Eventually, the plan was withdrawn. Source: Uganda country report (available at http://www.profor.info/ profor/knowledge/information-management-and-forest-governance). Community Radio The use of radio to broadcast development issues is not new. However, community radio is relatively new, and over communicating political and religious messages. In the poor- the past decade several community radio stations have been est areas of the globe, radio is the medium of choice, far out- established around the world to help women and marginal- stripping other mass media in terms of audience numbers. ized groups to build networks and gain access to information For instance, in West Africa, radio ownership dwarfs that of on health, livelihoods, farming, weather, and markets, as well all other communication equipment, including TV and mobile as to educate communities on democracy, citizen rights, and phones. In Africa in general, between 80 and 90 percent of gender issues. households have access to radio.11 Radios are relatively cheap and easily repaired and widely Radio programs can be combined with other media as well. available, even in the poorest regions. In several African Radio browsing of the Internet is a more recent format that countries, radio broadcasts are the primary medium for 11 Statistics for 11 countries for which consistent data were avail- 10 http://www.mongabay.com and http://www.greenpeace.org. able, Myers (2010). IC T IN A GR IC ULTUR E S E C T I O N 4 — IMP ROVING P UBL IC SE RVICE PR O VI SION 385 combines the power of the Internet with the reach of the radio. were presented in the form of drama in several local dialects During the program, the presenter browses the Internet with and were listened to in community meetings, where the a local expert (for example, a forestry or agriculture extension questions raised by the key characters were discussed by official or a community development expert) and together they the gathering. This technology could serve forest communi- describe, explain, and discuss the information in the languages ties in other countries as well, to keep them aware of policy used by the community. This has been successfully demon- changes and developments that can affect their resources strated by the community media centers piloted by UNESCO in and their lives. Box 15.6 summarizes how community radio Sri Lanka, Bhutan, and Nepal, among others. Similarly, mobile can help promote better forest governance. (See IPS “Farm technology is being combined with radio programming, where Radio International Involves Men and Women Farmers� in listeners can call or text message the program. Module 6 for more on participatory radio.) With the availability of bandwidth on WorldSpace satellite radio subscription through First Voice International or RANET, Crowdsourcing to Increase Public Participation community radio stations in remote locations can access news Combining a web-based platform with inputs from text and entertainment programs on other stations. However, the messages increases the versatility of information gathered. main benefits of community radio are in programming that is Information can be instantly geo-referenced and provide an in local languages, in formats that communities relate to, and overview to a decision maker on where activities should be on issues of local importance. For example, in Papua New prioritized. In addition to increasing transparency and public Guinea, a mix of community radio and digital audio program- ming has been used to convey messages on forest manage- 12 http://ictupdate.cta.int/en/Feature-Articles/Digital-audio-in- ment and sustainable land management.12 The programs Papua-New-Guinea. BOX 15.6: How Can Community Radio Benefit Forest Governance? Fighting corruption and increase awareness of citizens’ rights: In Malawi, the Development Communications Trust broadcasts “village voice� recordings from a network of radio clubs around the country. These programs report (among other things) on local-level delays, corruption, malpractice, and mismanagement by service providers, including interna- tional NGOs and local authorities and politicians. These problems are then broadcast on national radio, and the ministry, individual, or organization responsible is invited to reply on air in a context of a mediated dialogue with the community in question. The Development Communications Trust says that 70 percent of radio club problems are resolved satisfacto- rily after they have been aired nationally. It is currently supported by UNDP, Oxfam, and the Malawi national AIDS body. Reporting on corruption and governance: In Sierra Leone, KISS-FM in Bo and SKY-FM started a series called “Mr. Owl� to report on local police corruption. This resulted in increased pay for the police and the establishment of a commu- nity affairs department. A voter education program, “Democracy Now,� resulted in higher voter turnout in the station’s listening area compared to other parts of the country. Increasing women’s empowerment: USAID’s Women in Governance pilot program in Mali distributed more than 500 Freeplay radios to women’s listening groups in April 2004. The radios were designed for rural African conditions and can function without batteries. Instead, batteries can be charged manually by winding or through solar power. Increasing awareness of environmental issues and public participation in policy development: In September 2009, Developing Radio Partners (DRP), a U.S. NGO, launched a year-long pilot project called “Our Environment, Our Future� that brings residents the information they need in the way they can best use it. DRP is working with 99.6 Breeze-FM, a community-oriented private station in Chipata, Zambia, to help six radio stations in rural Zambia and Malawi create and broadcast local environmental programming. It also encourages innovative use of mobile phones to expand the stations’ interaction with listeners, using the text messaging software FrontlineSMS (box 15.4). The project is helping build skills in environmental reporting and in developing relevant content on topics such as the impact of deforestation on local agriculture, sustainable farming methods, and many others. Sources: Myers 2010; USAID 2005; http://developingradio.org. E C O N O M IC AND S E CT OR WORK 386 MOD ULE 15 — US ING ICT TO IMPR OVE FOR ES T GOV ER NA NC E participation, it can also serve as a means to track account- Technologies (IT) in Combating Illegal Logging� was started ability of civil servants. This application gained popularity in 2008 by developing a broad network of active citizens and after Ushahidi became a success story in the aftermath of NGOs to support the integration of a web-based platform for the Kenyan riots in 2008, as a means of keeping citizens information alerts about instances of illegal logging into the informed on safety and security through information reports work of Bulgaria’s forestry administration. from individuals. The success of Ushahidi has led to its rep- lication in other countries for other purposes (see box 15.7). Crowdsourcing can be used for many different purposes. While it is a useful and cost-efficient way of collecting infor- A similar application by the Blue Link Information Network in mation, there needs to be a way to ensure that the data Bulgaria was initiated to gather information on illegal logging, entered are valid and have not been fabricated. The manag- which was simultaneously posted on the website, to show ers of the urban forest map in San Francisco, California, have authorities where the illegal activities were concentrated. The built in some specific algorithms to raise red flags in case of project “Expose and Improve—The Power of Information dubious data inputs. They also propose carrying out random verifications in the field (box 15.8). Alerta Miraflores in the BOX 15.7: Public Participation and Crowdsourcing municipality of Miraflores in Peru is an expansive system for of Data tracking and reporting incidences of crime. Ushahidi, which means “testimony� in Swahili, is a platform designed to take input from hundreds of peo- ple by mobile phone or e-mail. It uses free software BOX 15.8: Citizen-Powered Urban Forest Map called FrontlineSMS that turns a laptop and a mobile of San Francisco phone into a text-broadcasting hub. As an SMS is sent An example of crowdsourcing, this project is a collabora- from a hot zone, the message syncs with the Ushahidi tion of the government and nonprofits and businesses software and shows up in a web administrator’s inbox. and citizens of San Francisco to map every tree in the city. The web administrator can decide to send a text mes- Citizens can create an account and upload a tree’s loca- sage back to the sender to verify the information, send tion, its diameter, and a photo of the tree following instruc- out a blast alert to large numbers of people, or post the tions on the website. There is a link to an online guide information onto a web page with location information called “Urban Tree Key� to help in identification of the trees. from Google Maps (or do all three). Ushahidi is free, and although it was primarily developed as a quick The project is the first of its kind, and there has been information-gathering and broadcasting tool during the concern regarding the quality and authenticity of the riots in Kenya in 2008, it has quickly been adapted for data entered by the public. The collaborators intend to uses other than crisis response. The following programs overcome this challenge by carrying out field verification use the Ushahidi platform to gather information from of random samples of data. people and then show on a map where the events are Sources: http://www.urbantreekey.org; http://www.urbanforestmap .org; Friends of the Urban Forest (http://www.fuf.net). happening and how large an area is affected:  Wildlife Trackers is a citizen science project in Kenya. Collaborative and Participatory Mapping  Stop Stockouts is an initiative to track near-real- Maps are vital for decision making in forestry. While public- time stockouts of medical supplies at pharmacies sector forestry institutions prepare maps to record changes in (in a medical store or health facility) in Kenya, cover with data from satellites, day-to-day changes at a smaller Uganda, Malawi, and Zambia. scale are often not recorded or not available in easily acces- The Ushahidi platform combines the benefits of the sible formats to a wider audience. Mapping devices and soft- Internet and mobiles phones and could be used to gen- ware have been out of reach for nonspecialists until recently. erate near-real-time information on forest crimes, fire, However, new software makes it possible to put the power of wildlife sightings, and so on. The advantage of mobile creating and updating spatial information in the hands of field SMS-based data inputs is immense in remote and rural staff and local communities (see image 15.3). Open-source areas. programs make this more affordable for application develop- Source: http://www.ushahidi.com/. ers. Communities can partner with forest agencies to help create and update information on forest maps. Information IC T IN A GR IC ULTUR E S E C T I O N 4 — IMP ROVING P UBL IC SE RVICE PR O VI SION 387 IMAGE 15.3: User-Friendly Tools Allows Local Participation in Forest Mapping Moabi is a collaborative mapping system that enables groups and individuals to build a large database for sharing, viewing, editing, and dis- cussing spatial information relevant to REDD+. The system has been developed by the World Wildlife Fund (USA) and is current being applied in Democratic Republic of Congo. Moabi allows policy makers, research institutions, and carbon project devel- opers to view, download, and edit relevant spatial data. It will facilitate on-the-ground monitoring of activi- ties such as illegal logging, mining, and the bush-meat trade. By using mobile mapping devices, data can be collected and directly uploaded to the system either through the Internet or mobile phones. To compensate for slow Internet connectivity, data Source: Helveta Ltd. can be sent to proxies who will upload the data, making it available on boundaries, use rights and planned developments, and to global users. The site is built on open-source, widely used small-scale logging or clearing for agriculture have implications free software such as Google Maps and Drupal, which is a for land-use management and governance. Information pre- web content management system. This helps ensure that sented on maps is a powerful visual tool for decision making. the design is flexible, easily customizable, and functional on a It also increases transparency, which is essential when the wide variety of computers and web browsers. interests of several stakeholders are involved. Any registered user in Moabi can post data to the website, Collaborative mapping is a tool to facilitate spatial data collection but the data can only be approved by a peer review mem- and analysis. This tool is more appropriate for the forest sector ber. Users will be able to view both approved and unap- than basic crowdsourcing, as it allows mapping of points of inter- proved data in the system and provide ratings on comments est and other geo-referenced information such as specific routes on any material posted. The system provides users with and areas. It can be useful for the staff of forest departments, incentives to contribute information by recognizing regular NGOs, and national-level planning and policy-making bodies. contributors through elevated status or promotion to the peer review panel. For mobile phone contributors, incen- With the availability of open-source and simpler software for tives may be offered through phone credit awards. Moabi desktop computers, even nonspecialists can view and upload is being developed with funding from a donor. However, data to maps. Greater accessibility to data is expected as a once the first pilot is successfully tested in the Democratic result of high-speed Internet services around the world, and Republic of Congo, it is thought that subsequent replica- data on forest cover, deforestation rates, density, and so on tions can be developed with a smaller budget of US$ 30,000 are now accessed by a wide range of audiences. Collaborative to US$ 50,000.13 mapping has the potential to increase and widen the scope of stakeholder participation in project design and manage- Moabi has a high level of utility in forest governance, to ment and to facilitate the viewing and updating of project increase transparency and public interest and participation in data. Three applications relevant for forestry are discussed: development activities that could lead to deforestation and ille-  PoiMapper gal logging and to promote law enforcement. This application  World Wildlife Fund’s Moabi  CI Earth’s Participatory Mapping 13 WWF (USA), pers. comm. E C O N O M IC AND S E CT OR WORK 388 MOD ULE 15 — US ING ICT TO IMPR OVE FOR ES T GOV ER NA NC E will be more useful when it allows data collection and uploads computers with the specially developed icon-driven software via mobile phones to offset the lack of Internet connectivity CI Earth, which requires no literacy skills, to create forest inven- in rural areas. However, the peer review process for informa- tory maps. Data are captured using CI Mobile and GPS reader tion displayed on the portal may become a point of contention technology. CI Mobile combines handheld data entry with between different stakeholder groups, and it would be impor- data from GPS, RFID, and barcode readers to gather accurate tant to ensure the integrity of the peer review process. records of how assets are being managed and processed in the forest or factory. CI Earth uses a CI Mobile interface config- Participatory mapping is used extensively by development ured to record data types that are relevant to the particular user agencies and NGOs around the world. However, custom- or region. CI Earth data are synchronized with CI World through izing a handheld PDA with icons and images and training any locally available means of Internet connection, ranging members of local and indigenous communities in its use from satellite to dial-up modem. GPS-referenced data are then are important advances in this area. Helveta Ltd., an inter- made available within CI World in chart form and through GIS national corporation that develops and deploys supply chain applications such as Google Earth and ESRI’s ArcView. and asset management software for timber and agrocom- modities has pioneered the use of its Control Intelligence (CI) The communities are meant to use the devices during their Earth software to create maps of forest inventory in an online daily expeditions to the forest, recording their use of the environment accessible by all registered users. resources and their observations of illegal logging activi- ties. These data are then transferred to a secure website This innovative project is not without its share of problems. via satellite to a data center in the United Kingdom and can An interim review pointed out a number of concerns, mainly be accessed by authorized users and translated into maps. with project management and coordination between project Accurate manipulation of these devices will thus create partners and improvements in technology, such as more reliable data and maps that can define resource use, docu- appropriate methods of recharging the GPS batteries, for ment customary areas, and expose illegal logging practices. which the communities currently travel long distances, and So far, data have been collected south of Dimako in eastern to improve the icon designs.14 Cameroon. Logging activities were monitored both in and outside communal forest areas where Baka Pygmies cur- The use of handheld computers by local communities shows rently reside or hunt. Forest communities in the Mbalmayo that technology can be customized for all needs, and that region recorded bulldozer tracks that indicated industrial it need not be a barrier for illiterate members of the com- logging activities near illegally felled trees found outside of munity. However, the handheld devices currently used in the the legal commercial logging boundaries. Data gathered by project cost between US$ 800 and US$ 1200, putting them local communities assisted a logging company operating in out of reach for most forestry departments. The need for the area in identifying which communities it should consult such expensive devices may be justified by the nature of the over management plans for local forest areas as part of their task—extensive data collection in remote locations neces- Forest Stewardship Council certification process. sitating the need for rugged devices—but the appropriate technology has to be selected on a case-by-case basis. The CI Earth software with handheld computers has also been used in Nigeria to monitor biodiversity in the Afi Mountain Wildlife Sanctuary, which is home to a subpopula- INNOVATIVE PRACTICE SUMMARY tion of the critically endangered Cross River gorilla.15 Participatory Mapping in Cameroon This project has been implemented in a partnership among local and indigenous forest communities across the southern INNOVATIVE PRACTICE SUMMARY forest zone of Cameroon and the Forest Peoples Programme, The Central Vigilance Commission Website—India University College London, Centre pour l’Environnement et The Central Vigilance Commission (CVC) was designed to le Développement, and Helveta Ltd. Local forest-dependent be India’s top vigilance institution, free of control from any communities were trained in using GPS-enabled handheld 14 Interim evaluation report of project, “Enabling Independent 15 The source of information within this section is http://corpo- Monitoring of Forest Resources by Local and Indigenous Forest rate.helveta.com/uploads/news/20100107015150-Helveta%20 Communities� (unpublished, November 2009). Cameroon%20CaseStudy_2009.pdf. IC T IN A GR IC ULTUR E S E C T I O N 4 — IMP ROVING P UBL IC SE RVICE PR O VI SION 389 executive authority. It monitors all vigilance activity under the INNOVATIVE PRACTICE SUMMARY central government and advises various authorities in central PoiMapper in Kenya government organizations in planning, executing, reviewing, The PoiMapper (“Poi� stands for “point of interest�) is and reforming their vigilance work. The CVC is a statutory being piloted by Plan in Kenya to develop a geospatial data- body, and its website (http://cvc.nic.in/) contains the follow- base for project planning and management. Plan Kenya ing sections and features: field staff upload answers to preloaded questionnaires on  Information on its role, responsibilities, and strategies mobile phones and take photos to record the status and to combat corruption. use of development infrastructure such as schools, drinking  Communication directly with the public through water sources, and clinics. Information collected includes messages and speeches to bolster confidence in the the number of school-age children and population without institution. access to sanitation facilities; each point of interest, such as  Instructions for how any citizen can lodge a complaint a school, is tagged with GPS referencing. This information is against corruption, without fear of disclosure or reprisal. uploaded to the PoiMapper portal, where it is overlaid on a  Central Vigilance Officer’s List: Each organization is digital map to provide the agency with a spatial overview of expected to nominate a senior officer to whom an its projects. This database provides the management of Plan employee can take a complaint on corruption. Kenya a comprehensive overview of its projects in the field, and facilitates better planning for available resources. One  Statistical reporting of the achievements of the CVC feature of this application is that it allows organizations to and its annual report. share their data, especially when working in the same region.  Details of convictions of public servants by the courts, along with information on officers against whom PoiMapper, as a mobile geomapping, data management, an inquiry has been initiated or a penalty imposed. visualization, and sharing solution that can be integrated This section also highlights the performance of with open-source portal tools such as Drupal or Vaadin and various departments responsible for conducting map engines such as Google Maps or Geoserver. It runs on investigations. standard low-end GPS-enabled phones as well as on smart- phones. It enables mapping of A decade ago, publishing names of officers undergoing inqui-  places, such as location of schools and water points; ries on charges of corruption on the CVC website created a stir in the media, but it quickly caught the public’s atten-  routes, such as roads and water pipes; tion. Despite the low level of access to computers and the  areas, such as community boundaries, forests, fields; Internet, the information has been widely disseminated by  structured survey data, such as numbers, text, radio and print media throughout the country. Thus, the site exclusive, and multiple choice; and has had a wider impact than what could be expected based  multimedia. on India’s computer density alone. PoiMapper can be used in offline mode for work in locations Given the explosion in mobile phone ownership and wide- where connectivity is unavailable and allows viewing of data spread use of the Internet, the CVC has stepped up its on digital maps on a web browser. It eliminates the need use of ICTs. The “Blow Your Whistle� site is a technology- for expensive hardware and license investments or the need supported anticorruption initiative of the CVC. The site for software licenses. The application allows open access of allows citizens to report through mobile phones and the the stored data and the possibility to integrate open-source Internet by uploading text, audio, and video files. Known as analytics tools such as Pentaho for data mining (image 15.4). Project Vigeye, the system requires registration, and once a complaint is filed, the complainant can log in and check The system requires a subscription fee and registration for the status of the complaint. The “Blow Your Whistle� site users to download the software and upload their data to the also has discussion forums and podcasts on corruption in portal. It will be tested for use in the forest sector through a the country, videos, and links to other resources.16 pilot in Vietnam. Having offline and online capabilities is an advantage in the forest sector, where access to the Internet 16 The source of information within this section is http:// or cellular networks is often erratic. The cost of the application blowyourwhistle.in/pages/about-us/. as a software-as-a-service is a monthly fee per active user. The E C O N O M IC AND S E CT OR WORK 390 MOD ULE 15 — US ING ICT TO IMPR OVE FOR ES T GOV ER NA NC E IMAGE 15.4: POIMapping in Kenya required and US$ 150 with embed- ded GPS, making them affordable for certain project-specific applica- tions. Field staff already use mobile phones, and the application, if useful for project management, is no more complicated than text messaging. Multiple users can browse and update the same information, and previous versions of data are main- tained for tracking purposes. Data are accessible via a web browser, with appropriate authorization. Once an organization registers on the PoiMapper website and creates its account, the software can be downloaded to the mobile phone. Questionnaires relevant to the organization’s work can be created and downloaded to the Source: Plan Kenya. mobile phones. Existing data from a particular location on the portal price depends on volume, whether a project is associated with can be downloaded, and only new fields can be updated, it, and in which country it is used. The current default pricing which makes the system fast and efficient. The applica- is US$ 15 for NGOs and local users in developing countries tion is available for a monthly subscription fee per user, and US$ 30 for commercial organizations and users in devel- which allows the organization to store its data and edit oped countries. The developer currently requires a minimum them on the PoiMapper portal. At this stage, PoiMapper monthly engagement of US$ 750 (25 users) to set up a new does not have options for data input through icons, which database and support agreement. The price of mobile phones can be developed if needed, but this would restrict the on which the system works starts from US$ 50 if GPS is not type of data that could be collected or monitored.17 Topic Note 15.2: PILLAR 2—QUALITY OF FOREST ADMINISTRATION TRENDS AND ISSUES how to input data, how to perform regression analysis, and High-quality professionals and good information manage- how to generate reports in the program.18 ment are key requirements for effective forest manage- Not all online training courses have been sustainable. For exam- ment. Distance learning programs are now available on the ple, in Chile, the Catholic University of Chile developed exten- Internet from a wide range of universities around the world. sive online professional development courses and modules for In addition, some public-sector forest service websites host forestry professionals called UC Virtual. After some time, these customized training packages online. For example the U.S. had to be discontinued due to lack of user demand.19 Forest Service has several online training programs on a num- ber of technical tasks, ranging from basic statistics to cruis- ing and scaling. One application on this site is the “Timber 17 The source of information within this section is http://www .pajatman.com. Theft Program,� which uses regression analysis to estimate 18 http://www.fs.fed.us/fmsc/measure/index.shtml. standing tree volumes from stumps. Demonstrations include 19 Gurovich (2006) and pers. comm. IC T IN A GR IC ULTUR E S E C T I O N 4 — IMP ROVING P UBL IC SE RVICE PR O VI SION 391 Information management, and more specifically, spatial maps and images that make the presentations more appeal- information management is the second key requirement for ing and make it easier for nonspecialists to comprehend the forest administration. In Finland, MESTA is a free, Internet- long-term outcomes of the proposed management actions. based software application that is used to prepare and discuss forest management plans with communities (see The quality of forest administration also depends on good box 15.9). Similarly in the United Kingdom, the Forestry policy and administration, financial and human resource man- Commission found that discussions over management plans agement, law enforcement and land tenure, and timber sales with communities were more productive when the commis- and revenue management—all of which require unhindered sion was able to present digital plans with three-dimensional information flows both within the forestry department and with other parts of the government, as well as with the pri- vate sector and citizens. Comprehensive forest management information systems have been seen as the ideal solution BOX 15.9: MESTA—Participatory Forest Management to enhance the capacity of public-sector forestry institutions Application to manage these information flows. However, it is possible MESTA is open-access Internet software developed and to deploy smaller-scale ICT solutions to manage information funded by Metla (a Finnish forest research institute). It requirements in key areas, such as management of fires, was first developed to serve as a tool for Metsähallitus inventories, and wildlife tracking, without investing thou- (a state entity that manages state forests and most pro- sands of dollars in hardware and software. Four such applica- tected areas) for participatory forest management, but it tions are discussed below: has become available to private forest owners for evalu-  Real-time fire alerts ating different management strategies. Developed for  Forest cover and carbon stock assessment with holistically evaluating different decision alternatives, it is CLASlite and airborne LiDAR based on the definition of so-called acceptance borders  Google Earth Engine for decision criteria (for example, the minimum income  Wildlife tracking from the forest cuttings). The strength of the software is that it can facilitate the Real-Time Fire Alerts illustration of the effects of different strategy alterna- One innovation in forest management is the near-real-time tives at stakeholder meetings. A better understanding fire alert system that has been developed by combining of the different alternatives and corresponding results NASA’s Moderate Resolution Imaging Spectro-radiometer can help one stakeholder group in accepting the needs (MODIS) data with GIS. The Fire Information for Resource of another stakeholder group. Through the evaluating Management System (FIRMS) by the University of Maryland process, the stakeholders will get information concern- analyzes the data from MODIS and presents it in a form that ing potential costs and benefits. is easy to use by field personnel. The system can deliver MESTA has been used in participatory forest manage- e-mail alerts to subscribers with information on likely fires in ment by Metsähallitus in eastern and western Lapland, their area of interest. where decision making often requires difficult compro- mising on different objectives and needs, such as com- A more focused alert system is being developed by bining logging with nature-based tourism. Conservation International. The Fire Alert System has been developed for use in specific biodiversity hot spots around Compared to other methodologies of evaluating differ- the world and is currently piloted in Madagascar, Bolivia, ent management alternatives, MESTA allows the study Peru, and Indonesia. This system delivers alerts on fires of alternatives with less input information and knowl- within a few hours after the NASA satellites sweep the edge on the subject. Therefore, it is considered to be earth. The Fire Alert System is a fully automated analysis and efficient, especially when used in communicating with alert system that delivers a range of products tailored to a stakeholder groups that have less direct contact with user’s specific needs. forestry. Source: Finland country report (available at http://www.profor.info/ There are some other highly advanced fire management sys- profor/knowledge/information-management-and-forest-governance); http://mesta.metla.fi/index_eng.cfm. tems such as the one used by the New South Wales Rural Fire Service in Australia, which received a Meridian Award E C O N O M IC AND S E CT OR WORK 392 MOD ULE 15 — US ING ICT TO IMPR OVE FOR ES T GOV ER NA NC E in 2007 (http://www.meridianawards.com). HeliFIRE turns 1. Mapping of vegetation type and forest condition MapInfo Professional into a purpose-built application for the using freely available satellite data and CLASlite. airborne mapping of fires. Using a GPS connection, HeliFIRE 2. Large-area mapping of forest canopy three- becomes a moving map application, showing the user’s dimensional structure using airborne LiDAR. current position. Fire features such as active/non-active fire 3. Conversion of LiDAR structural data to aboveground edge, fire trails, threatened properties, water sources, and carbon density estimates using LiDAR-carbon met- firefighter locations can be recorded accurately as the aircraft rics along with a tactical use of field calibration plots. flies over the features. This information is transmitted imme- 4. Integration of the satellite map with the airborne diately via the Internet to users on the ground who make the LiDAR data to set a regional, high-resolution baseline response decisions. carbon estimate. A second application, MapDesk, turns this information into CLASlite runs on standard Windows-based computers and updated fire maps. This custom application from MapInfo can map more than 10,000 km2 (at 30 m spatial resolution) Professional has several features that have been standard- of forest area per hour of processing time. While CLASlite ized to allow the quick generation of maps with minimal is highly automated, its user guide recommends a level of training. Information derived from these applications is deliv- training corresponding to the complexity of the forest area. ered to all 70,000 personnel, many of whom are volunteers, as well as to other agencies and the broader community.20 These custom systems are expensive to build and maintain. IMAGE 15.5: Satellite Imagery Can Map Levels of But the e-mail and text message updates such as the ones Vegetation, Forest Cover, and Forest sent by FIRMS are free. Degradation Forest Cover and Carbon Stock Assessment with CLASlite and Airborne LiDAR The Carnegie Institution for Science’s CLASlite (Carnegie Landsat Analysis System-lite) is a software package designed for highly automated identification of deforestation and forest degradation from satellite imagery. Outputs from CLASlite include maps of the percentage of live and dead vegetation cover, bare soils, and other substrates, along with quantitative measures of uncertainty in each image pixel (see image 15.5). CLASlite converts satellite imagery from its original (raw) for- mat, through calibration, preprocessing, atmospheric correc- tion, and cloud-masking steps, and then performs a Monte Carlo Spectral Mixture Analysis to derive high-resolution output images. Its algorithms easily identify and accentuate areas where clearing, logging, and other forest disturbances have recently occurred. CLASlite does not provide a final “map� but rather a set of ecologically meaningful images identifying forest cover, deforestation, and forest degrada- tion that can be readily analyzed, processed, and presented by the user. The new approach involves four steps undertaken in con- cert to produce a rapid high-resolution assessment of forest carbon: 20 http://www.meridianawards.com/hall-of-fame/view/combating- bushfire-wild-land-fires-in-the-state-of-nsw-australia/. Source: CIFOR. IC T IN A GR IC ULTUR E S E C T I O N 4 — IMP ROVING P UBL IC SE RVICE PR O VI SION 393 According to the developers of the system, the cost using a  New features that will make analysis easier, such as combination of commercial and free data sources is approxi- tools that preprocess the images to remove clouds mately US$ 0.10 per hectare and is likely to fall further. Free and haze. licensing of CLASlite is granted to nonprofit/noncommercial  Collaboration and standardization by creating a com- organizations in Latin America following completion of techni- mon platform for global data analysis. cal training. The CLASlite website21 reports that as of June 2010, more than 150 governmental institutions, NGOs (non- Google Earth Engine can be used for a wide range of commercial), and academic or research institutions have been applications—from mapping water resources to ecosystem trained in the use of CLASlite. services to deforestation. Initial use of Google Earth Engine is most likely to support development of systems to monitor, The developers of CLASlite have also tested airborne Light report, and verify efforts to stop global deforestation. Detection and Ranging (LiDAR) in conjunction with remote sensing and ground mapping to carry out carbon stock During the United Nations Framework Convention on Climate assessments, to establish it as a low-cost and efficient Change, COP 16, in Cancun in December 2010, it was method of assessing carbon in different types of tropical announced that 10 million CPU-hours a year over the next two forests (see Module 5 on productivity for more on LiDAR).22 years would be donated on the Google Earth Engine platform to strengthen the capacity of developing world nations to track the state of their forests, in preparation for REDD. The Mapping in the Cloud: Google Earth Engine Earth Engine was developed in collaboration with the Gordon Google Earth Engine is a technology platform that puts an and Betty Moore Foundation, the U.S. Geological Survey, unprecedented amount of satellite imagery and data— Mexico’s state forest agency (CONAFOR), scientists of the current and historical—online for the first time. It enables Carnegie Institution for Science, the Geographic Information global-scale monitoring and measurement of changes in Science Center at South Dakota State University, and Imazon Earth’s environment. The platform will enable scientists to to develop and integrate their desktop software to work use Google’s extensive computing infrastructure to ana- online with the data available in Google Earth Engine.23 lyze this imagery. The images of Earth from space contain a wealth of information. Scientific analysis can transform these images into useful information—such as the locations and Wildlife Tracking and Management extent of global forests, detecting how forests are changing Conflicts between humans and wildlife are common where over time, directing resources for disaster response, or map- communities live in or near wildlife sanctuaries and parks. ping water resources. The challenge has been to cope with The following applications prove that ICTs can be used for the massive scale of satellite imagery archives and the com- wildlife tracking and management with the assistance of putational resources required for their analysis. As a result, communities. Even simple mobile text messages sent on many of these images have never been seen or analyzed. a regular basis to communities to keep them updated on Now scientists will be able to build applications to use these the movement of wild animals can go a long way in helping data on Google Earth Engine and will be able to take advan- people stay safe and in turn not harm the wildlife. “Push to tage of the following features and benefits: talk� is a rather infrequently used feature of mobile phone  Landsat satellite data archives over the last 25 years networks in developing countries. However, there is an for most of the developing world available online, interesting example of its use to alleviate conflicts between ready to be used together with other data sets, includ- humans and elephants in the Laikipia District of Kenya. This ing MODIS. A complete global archive of Landsat is case demonstrates that park management, communities, expected to be available soon. and the private sector can, assisted by the innovative use of  Reduced time to do analyses, using Google’s comput- mobile phones, come together to find a viable solution for ing infrastructure. By running analyses across thou- management of wild elephants and crops. sands of computers, for example, unthinkable tasks are now possible for the first time. 21 http://claslite.ciw.edu/en/index.html. 23 Information in this section is drawn from Google Blog (http:// 22 The sources of information within this section are Asner et al. googleblog.blogspot.com/2010/12/introducing-google-earth- 2009, http://claslite.ciw.edu/en/index.html, and http://claslite engine.html) and http://www.unep.org/stap/Portals/61/docs/ .ciw.edu/documents/CLASlite_PeruREDD.pdf. SFM/20.Moore.pdf. E C O N O M IC AND S E CT OR WORK 394 MOD ULE 15 — US ING ICT TO IMPR OVE FOR ES T GOV ER NA NC E Another example of ICTs being employed to track wildlife is hot spot/active fire location represents the center of a 1 km CyberTracker, a free software application that was developed (approx.) pixel flagged as containing one or more hot spots or to enable indigenous communities with little or no literacy fires within that pixel. FIRMS is currently being transitioned to track wildlife in game parks. The software uses icons and to an operational system at the United Nations Food and pictures to guide data inputs and works on handheld comput- Agriculture Organization. ers with GPS capability. One of the longest ongoing uses of CyberTracker is at Kruger National Park in South Africa, Conservation International’s Fire Alert System where rangers collect vast amounts of data on, among other things, the movements and behaviors of key species, The Center for Applied Biodiversity Science at Conservation fires, availability of water, illegal presence and activities of International, International Resources Group, Madagascar’s humans, and the presence of new or invasive species of Ministère de l’Environnement, des Forêts et du Tourisme, plants. CyberTracker has been piloted in several countries in and USAID have teamed up with the MODIS Rapid Africa, mainly for recording and monitoring wildlife and biodi- Response System and FIRMS to develop an e-mail alert versity data to aid research and management (CyberTracker system for fires in or around protected areas and areas of Conservation 2007). high biological importance. This system currently focuses on some biodiversity hot spots: Madagascar, Bolivia, Peru, and Indonesia. The Fire Alert System is a fully automated analysis and alert system that delivers a range of products tailored INNOVATIVE PRACTICE SUMMARY Fire Alert Systems Integrating Remote Sensing to a user’s specific needs. These include simple text-based and GIS e-mails containing the coordinates of active fires within pro- tected areas, areas of high biodiversity, different vegetation Remote sensing and GIS are now being integrated to pro- and land cover types, administrative units, or user-defined vide timely information on large-scale fires in the tropics. The regions. The e-mails can include JPEG attachments show- Moderate Resolution Imaging Spectro-radiometer (MODIS) ing a satellite image of a protected area with the active fire that flies on NASA’s Aqua and Terra satellites as part of the depicted as red squares, ESRI shape files for importing into NASA-centered international Earth Observing System pro- GIS software, and KML files for importing data into Google vides the data. Both satellites orbit Earth from pole to pole, Earth. Each e-mail alert also provides information on the time seeing most of the globe every day.24 and date of satellite observations and a confidence value for each fire detected. Subscribers may select from a range of The Fire Information for Resource Management System background images and maps. The next phase of this sys- While NASA’s MODIS Rapid Response system provides tem will include multivariate/multicriteria analysis, which near-real-time images and data on global fires in the public enables more flexible user customization, and an advanced domain on the Internet, forest managers in the field would report generator. be unable to find the time and technical skills to analyze the In addition to fire response and management, the Fire Alert data quickly. The University of Maryland developed the Fire System is now being extensively used to monitor and inform Information for Resource Management System (FIRMS) to enforcement officials of suspected illegal activity such as ille- serve MODIS fire observations to this community. FIRMS gal logging and encroachment taking place in protected areas. displays active fires detected in near-real time using thermal and mid-infrared data from the MODIS instruments; this means the data are processed and available on the web four to six hours after the satellite passes over. Subscribers INNOVATIVE PRACTICE SUMMARY can sign up for e-mail alerts on fires in their area of interest. Kenya: Solving Human-Elephant Conflicts The Web Fire Mapper of FIRMS is an open-source, Internet- with Mobile Technology based mapping tool that delivers locations of hot spots and The Laikipia District is home to the second-largest population of fires. These can be viewed on an interactive world map wild elephants in Kenya. There is competition for land between showing hot spots or fires for a specified time, combined the wealthy farmers who own large ranches and private con- with a selection of GIS layers and satellite imagery. Each servancies, small agriculturists, and the elephant herds whose natural habitat and corridors have been made inaccessible by 24 Information within this section is drawn from Davies et al. 2009 human activity. The frequent encounters between people and and https://firealerts.conservation.org/fas/home.do. elephants have caused human and elephant deaths. IC T IN A GR IC ULTUR E S E C T I O N 4 — IMP ROVING P UBL IC SE RVICE PR O VI SION 395 To find a viable solution to this situation, the GSMA human-elephant conflict: 73 percent of the users in the pilot Development Fund in collaboration with the University of said that the technology provided early warning of elephant Cambridge Laikipia Elephant Project, the Laikipia Nature raids and allowed the farmers to take preventative actions. Conservancy, Laikipia Wildlife Forum, Safaricom, Wireless Sixty-five percent of the users also reported that the system ZT, Nokia, and Nokia Siemens Networks devised a closed- helped prevent theft of livestock and recover stolen livestock. group communication network between the park staff, Twenty-one percent also reported that management response ranch owners, and farmers in the district with special push- improved, especially by the Wildlife Service staff. An impor- to-talk mobiles. This technology combines the functionality tant observation by one user was that group communication of a walkie-talkie or two-way radio with a mobile phone and increased pressure on the government staff, because several enables communication between two individuals or a group members listen in to a request for intervention. Thus, account- of people, as needed, with the push of a single button. With ability of the Wildlife Service staff seems to have increased. stakeholder consultations and training, the pilot project initi- The use of this technology was also appreciated by the Wildlife ated communication between the Kenya Wildlife Service Service, which reported that receiving reliable information staff, ranch owners, farmers, and NGOs that normally would over a larger area helped it to be more effective in the job. not take place in a systematic way. The pilot was meant to reduce human-elephant conflict, by facilitating early commu- While the results of this pilot were very encouraging, the nication between the stakeholders regarding elephant move- service was not rolled out on a larger scale. Cellular operators ment and seeking the help of wildlife rangers when needed. did not find this technology commercially attractive in Kenya. Nevertheless, the pilot proves that “push to talk on cellular� has The results of this pilot proved that improved communica- benefits in specific situations and could be used in other loca- tion between the various stakeholders significantly reduced tions where similar challenges in wildlife management exist.25 Topic Note 15.3: PILLAR 3—COHERENCE OF FOREST LEGISLATION AND RULE OF LAW TRENDS AND ISSUES usually follow the steps of prevention, detection, and sup- In the forest sector, various types of resource use, both com- pression. Technology has an important part to play in each of mercial and noncommercial, are governed by various laws. these steps in the efforts to curb illegal logging, transporta- At the same time, forests have several characteristics that tion, and processing of timber and illegal trade in wildlife. A make them prone to timber theft and other illegal activities:26 variety of ICT applications can be used to improve deterrence and response measures, and these have been discussed in  owner absent detail in previous World Bank reports.27 A few innovative  potential witnesses indifferent or hostile to owner ones are reviewed here:  easy to bribe way out of trouble  asset unsupervised/unguarded  prevention—e.g., crime mapping, corruption hotlines  loot easy to sell  detection—e.g., timber tracking, chain of custody sys-  owner/manager unaware of inventory and value tems, checkpoints, satellite images, GPS surveillance  police untrained, underequipped, uninterested  suppression—e.g., crime databases, case manage- ment systems  staff untrained and underpaid  lax business practices/procedures Mobile and Online Crime Reporting Services Many of these vulnerabilities can be addressed through Governments around the world are increasingly involving ICTs. Effective law enforcement systems in the forest sector citizens in crime reporting through e-government services to 25 Information within this section is drawn from Graham et al. 2009. 26 Magrath, William. 2009: Presentation at World Bank—FAO work- shop on forest law enforcement and governance in Asia–Pacific, 27 See, for example, Magrath et al. 2007, Asia–Pacific Forestry Kuala Lumpur, November, unpublished. Commission 2010, and Dykstra et al. 2003. E C O N O M IC AND S E CT OR WORK 396 MOD ULE 15 — US ING ICT TO IMPR OVE FOR ES T GOV ER NA NC E report incidences of corruption and crime. Members of the in the system since its launch in July 2009) and by support- public can send text messages, leave a voice message or ing NGO experts in the preliminary checks on the registered send e-mails to report incidences of corruption and crime. alerts. Alerts are checked against a checklist of indicators Allowing citizens to report crime to the authorities is a cost- to verify the criminal character of the case before submit- effective and reliable way of preventing crime. The website ting it to the authorities. Established environmental NGOs in of India’s Central Vigilance Commission has a similar sys- Bulgaria have demonstrated their genuine interest and active tem where anonymous callers can report corrupt officials of support of the project by providing expert advice on forestry state agencies. The example from a crime prevention proj- issues, participating in preliminary checks, and lobbying for ect in Peru shows how citizens can effectively contribute the integration of the online platform into the work of the to law enforcement and crime reduction in a municipality. Bulgarian forestry administration. While this project was The municipality of Miraflores in Peru and has developed a developed and executed by an NGO, it could be easily under- system called Alerta Miraflores to manage crime, using an taken by forest law enforcement agencies. The system could Internet and phone-based system that does the following: enlist the services of interested NGOs and citizens to report  gives citizens a way to report incidents to local secu- suspicious activities that can trigger additional investigation rity officials to record and take action by the forest agency. The ability to receive information via  captures data electronically and displays the informa- mobile text messages or voice messages helps the system tion on reports and maps to let public safety officials to be used by anyone.28 pinpoint the areas from which citizens are calling, A key issue to be solved is the confidentiality of information define priorities, and dispatch the closest officers and safety of the informants. It is essential that all information  allows municipal officials to manage citizen security is dealt with very carefully both to ensure the safety of the proactively, respond more rapidly, and analyze results individuals who report crimes and to ensure that the report- ing system is not used for spreading unfounded allegations. By improving its ability to rapidly respond to reported inci- dents, providing timely feedback to citizens, and capturing Tracking and suppressing illegal logging and trade in endan- detailed crime information, the municipality was better gered wildlife often needs information beyond the borders able to prevent crime and increase citizen security. Alerta of a single country. The United Nations Office on Drugs and Miraflores has reported a 68 percent drop in robberies since Crime has developed a series of software applications to 2003, and a 30 percent reduction in assaults and a significant help countries collect, analyze, and share intelligence and reduction in overall crime. information on international crime (see box 15.10). The tools and methods used in this project have a lot to offer to the forest sector. One application was used by Technologies for Surveillance and Deterrence the Blue Link Information Network’s project in Bulgaria While there are several sophisticated technologies available called “Expose and Improve—The Power of Information for crime detection, only some are specific to the forest Technologies (IT) in Combating Illegal Logging.� Individuals participate by registering alerts (30 alerts have been logged 28 http://www.spasigorata.net/ and http://www.bluelink.net/en/. BOX 15.10: UNODC’s “Go� Family of Products The Information Technology Service of the United Nations Office on Drugs and Crime (UNODC) specializes in the develop- ment, deployment, and support of software applications for use by member states in a range of UNODC’s program areas. The Government Office (“go�) family of products are part of UNODC’s strategic response to crime, particularly serious and organized crime. The “go� family includes integrated investigative case management and intelligence analysis tools for financial intelligence units, law enforcement, investigative, intelligence, regulatory, prosecution, and asset recovery agencies, and for courts and other government agencies involved in the criminal justice process. All the software prod- ucts include multifaceted integration and can function as stand-alone applications or together to form one global system, depending on the needs of the country. The application of systems able to interface with each other encourages inter- agency and cross-border cooperation and information sharing at the national, regional, and international levels. (continued) IC T IN A GR IC ULTUR E S E C T I O N 4 — IMP ROVING P UBL IC SE RVICE PR O VI SION 397 BOX 15.10: continued Source: http://goidm.unodc.org/goidm/en/products.html. sector. The computerization of checkpoints in Gujarat, India, be in a position to monitor vehicle movement inside forests, is a good example of how technology can lead to better law forest authorities could use similar means to track vehicle enforcement and increased revenues for the state. movement in unauthorized locations. A slightly different approach for surveillance—with the help of GPS—has been tried with success in fisheries in West Technologies for Timber Tracking and Chain of Custody Africa under the Sustainable Fisheries Livelihoods Program, Systems sponsored by FAO and the UK Department for International Radio frequency identification (RFID) holds considerable Development. Community surveillance of fishing grounds in promise for use in systems tracking the timber supply chain. Guinea has succeeded in reducing illegal incursions by indus- RFID uses radio waves to exchange data between a reader trial trawlers by 59 percent. Members of the fishing com- and an electronic tag attached to an object, for the purpose munity on Guinea’s northern coast use GPS technology to of identification and tracking. Some tags can be read from track poachers. The fishermen can calculate the exact loca- several meters away and beyond the line of sight of the tion of a poaching trawler using a handheld GPS receiver and reader. radio the information to the nearest coast guard station. The GPS coordinates generate an alert if the trawler is in within On average, an appropriate RFID chip costs from US$ 0.07 the prohibited zones.29 The fisheries example has a lot of to US$ 0.15. An important advantage of RFID systems for relevance for the forest sector; while communities may not log tracking is that signals can be read rapidly, remotely, and under difficult conditions. RFID labels can potentially store a large amount of data with a high level of security. The labels can be difficult to counterfeit or tamper with and can provide 29 Lowrey, Peter. 2004. “SFLP: Arming Fishermen with GPS a high level of covert security. These devices can significantly to Combat Poachers.� ICT Update No.16, February (http:// ictupdate.cta.int/en/(issue)/16); http://www.fao.org/english/ facilitate data capture, data processing, and security audits. newsroom/focus/2003/sflp4.htm. It is possible to encode RFID labels at all stages of the wood E C O N O M IC AND S E CT OR WORK 398 MOD ULE 15 — US ING ICT TO IMPR OVE FOR ES T GOV ER NA NC E supply chain from the field to the end user. RFID labels can More technologies and two examples of timber tracking are enhance logistics and inventory functions. discussed in IPS “Ghana National Wood Tracking System� and IPS “Liberia: LiberFor Chain of Custody.� Microtaggant tracers are microscopic particles composed of distinct layers of different colored plastics that can be com- bined to form a unique code. Millions of permutations are Legal Information Management Systems: Global Legal possible by combining several colors in different sequences. Information Network Codes can be read in the field with 100-power pocket micro- The Global Legal Information Network (GLIN)31 is an electronic scopes. These tracers can be used together with other labels online tool that gives access to authentic and updated official to provide additional security and to aid investigations of log legal information at a low maintenance cost. The system has theft or log laundering. They do not represent a stand-alone been developed by the U.S. Library of Congress to improve labeling technology. access to original legal texts. In Gabon, GLIN has been used by the government to publish the primary sources of the law and Chemical and genetic fingerprinting offer promise for the all environmental legal information. The government chose to future but are currently too expensive and have not been become a member of GLIN to provide the stakeholders (for- fully developed for routine use in wood supply chain track- est administrations, private sector, donors, civil society, NGOs, ing systems. They are likely to prove most useful in prov- and so on) with a modern legal archiving system. The system ing the origin of wood in investigations of log theft or log helps to strengthen the rule of law and to start a discussion laundering. among stakeholders. Experience from courts and government institutions has shown that the Internet was their only source GPS tracking devices for vehicles can be used to track of access to reliable, up-to-date legal information. movement of vehicles and can quickly point to vehicles in unauthorized locations. The GPS vehicle tracking unit can have a wireless modem that is able to communicate with INNOVATIVE PRACTICE SUMMARY global tracking systems30 (image 15.6). Ghana National Wood Tracking System The Ghana National Wood Tracking System (WTS), devel- 30 Information in this section is drawn from http://gpstrackit.com/ faq and Dykstra et al. 2003. oped by Helveta Ltd., provides a timber legality assur- ance system that is an important IMAGE 15.6: Tracking through Barcodes, RFID, GPS, and Other Technologies tool in reducing illegal logging—a Improves the Chain of Custody key initiative under the EU–Ghana Voluntary Partnership Agreement. The system addresses the trace- ability of wood in on-reserve areas destined for export. However, a chain-of-custody system should track all wood and wood products in circulation in a given market. Otherwise the system makes it easy to “launder� illegal wood— that is, mix it with legitimate sources. The system uses hand- held computers in remote forest areas in conjunction with plastic barcoded tree and log tags to cap- ture data such as species, diam- eter, length, and geospatial loca- tion. WTS is based on an existing 31 http://www.glin.gov and PROFOR Source: Tuukka Castrén. (2010). IC T IN A GR IC ULTUR E S E C T I O N 4 — IMP ROVING P UBL IC SE RVICE PR O VI SION 399 system from Helveta Ltd. called CI World. It consists of INNOVATIVE PRACTICE SUMMARY four main components: Liberia: LiberFor Chain of Custody  identification and tagging of individual products or LiberFor is a public-private partnership developed in 2007 consignments using barcoded labels or RFIDs to implement a tracking system for the forest product sup-  incorporation of these tag numbers onto the statutory ply chain. The chain extends from the stump to the point of forms used for declarations, inspections, and other export to prevent illegal timber from entering the supply chain relevant records and reports and being exported. The system is currently managed by a  use of electronic technology for data collection and private international company, but management will be gradu- transmission ally transferred to the Liberian Forest Development Authority.  development of a database to receive, analyze, and The system will be able to monitor all timber flows in Liberia report all wood production and movements and ensure the integrity of regulatory documents and sam- WTS allows Ghana to demonstrate compliance and control pled field checks. It will also prepare all the timber sales and across to their timber supply chains and secure access to pre- taxation invoices and monitor payments made by logging mium markets in the European Union and United States. Trees companies to the government. Ultimately, after checking that are numbered (engraved on the tree), and next to the numbering all requirements have been met and payments have been is a white tag that has a barcode with the corresponding number. made, LiberFor issues an export permission for the timber. A PDA equipped with GPS, scanner, camera, and data input is Forests cover 45 percent of the total land area in Liberia, handed out to the enumerators who venture into the reserve and they are an essential source of revenue and economic with the field rangers and supervisors. The stock enumera- development for the country. After coming out of a 14-year tion involves numbering and tagging the yet-to-be harvested civil war, the country needed to build a system to manage timber with a barcode near the base of the tree. When har- its forest resources professionally and in an sustainable way. vested, the timber would also have a replica number and bar- Previously, illegal logging had been a key driver of corruption code, allowing tracking of the timber through the process to and financial, social, and legal problems. For example, in 2006 export. Information collected includes the following: approximately US$ 64 million of logging revenues were in arrears and only 14 percent of revenues were accounted for.  Allocation of reserves, compartments, and lots  Consortium holding The new chain-of-custody system has been designed to  Consortium harvesting schedule and by whom ensure that there is no return to the past uncontrolled log-  Plant species and how harvest is done ging in the country. Like WTS in Ghana, LiberFor is based on the Helveta platform. Its main components are as follows:  Where to mill  CI Earth—mapping  Due diligence on taxes • block maps  GPS position of trees • stock surveys The timber flows monitored and verified are standing • plantation compartment maps trees in the lots or compartments in the forest reserves;  TracElite—chain of custody the system has not yet proceeded to tracking the timber • tree felling through logging and processing, import to processing, • cross-cutting, dressing, and log registration and local sales or export. WTS will enable the tracking of individual logs and consignments of processed products. • transport of logs and wood products It will include product labeling, physical inspections, and  Performance management documentation checks electronically. The use of ICT in • data reconciliations this case allows a more comprehensive review of all wood • data verifications movements than paper-based systems alone can provide, • random samplings and inspections which is the current method.32  Document management • concession registrations 32 Information in this section drawn from the Ghana country report, available at http://www.profor.info/profor/knowledge/ • invoicing and regulatory document information-management-and-forest-governance. • management tag control E C O N O M IC AND S E CT OR WORK 400 MOD ULE 15 — US ING ICT TO IMPR OVE FOR ES T GOV ER NA NC E The system has tagged and located approximately 440,000 trees, base in the forest, which is a precondition for sustain- verified approximately180,000 trees in the system, and invoiced able forest management. more than US$ 11 million in revenue, mainly from areas fees. The LiberFor chain-of-custody system is being operated on With the new system, the Liberian Forest Development a build-operate-transfer basis by SGS Liberia. While the sys- Authority will be able to do the following: tem is technically functioning and able to meet the require-  Manage the supply chain for all wood products from the ments of law enforcement and revenue collection, there are point of origin to the export gate or domestic markets. severe concerns regarding the sustainability and feasibility of the system. Both public and private sector stakeholders have  Manage the conditions for release of timber export permits. raised concerns that the system is extremely complicated,  Ensure that taxes and fees related to timber produc- has increased transaction costs unnecessarily, and is inap- tion and trade are collected. propriate for the Liberian context. The main concerns were  Invoice and monitor payments by logging companies based on the need to have a 100 percent inventory (above a to the government through an information sys- threshold size) of the logging sites (as opposed to only col- tem involving the forest administration, Ministry of lection information on commercial species), inappropriate Forestry and Central Bank. design of the tags, and dependence on LiberFor inspectors.  Strengthen the capacity of the Liberian Forest One issue of concern is that the system runs on Helveta Development Authority. servers in the United Kingdom rather than in Liberia. Long  Help both the Forest Development Authority and pri- distances and limited international bandwidth may lead to vate concession holders to better know the resource reliability issues.33 Topic Note 15.4: PILLAR 4—ECONO MIC EFFICIENCY, EQUITY, AND INCENTIVES TRENDS AND ISSUES has a help feature that tackles most of the common problems Timber sales and auctions and concession-allocation pro- faced by users. The site explains the different types of auctions cesses are prone to unfair practices, collusion, and nontrans- and allows bidders and nonbidders to view sales events, which parent decision making. This ultimately has an impact on increases transparency. All terms and conditions are posted, so both state revenues and private sector competitiveness. In that bidders are fully informed before bidding. In addition, there general, participatory design and proper enforcement of the are links and phone numbers to provide help. As a truly online law should result in more equity and economic efficiency. auction, the sale closes automatically when the bid closes and Thus, technologies aiding law enforcement could be consid- the winner is informed, with no further need for paperwork. ered tools for enhancing equity and efficiency as well. Bidders cannot see other bidders’ quotations, and losing bid- ders are only given the name of the winning bidder on request. The system has been operational since 2004, and about one- Online Timber Sales, Licenses, and Auctions third of the Forestry Commission’s annual production of about There are examples of ICT applications that are designed to 6 million m3 is sold on the open market, indicating that elec- promote business transactions with the private sector. One tronic sales are an effective model. Cost-benefit analyses car- such example is the online auction of public timber, or e-auction. ried out by the commission reveal that approximately £100,000 Most forest agencies in developing countries do not have inte- are being saved annually as a result of electronic sales.34 grated and well-functioning forest management and informa- tion systems that would enable e-auctions. Even in developed The commission also operates an online grants and licences countries there are only a few instances of fully online systems. system that provides private forest and farmland owners an opportunity to apply for grants to plant trees or seek per- The Forestry Commission of the United Kingdom has an mission to fell trees on their lands. The system enhances advanced online auction system (image 15.7). The auction transparency by displaying all applications on the website, process is fully online and integrated into the e-government 33 Information within this section was provided by the LiberFor team. service of the United Kingdom. This site is simple to use and 34 Pers. comm. IC T IN A GR IC ULTUR E S E C T I O N 4 — IMP ROVING P UBL IC SE RVICE PR O VI SION 401 linking each application by a case number to the map, which methodology. According to this methodology, each felled tree shows the location of the proposed activity. has a unique code through an embedded microchip connected to a database. The chip or tag can also include information about the log parameters, felling location, and time of felling. This infor- Logistics mation is used in subsequent stages of the production chain to Two examples from Finland demonstrate the use of track- optimize process exploitation. Within the project, a new type of ing devices to improve efficiency and productivity. One proj- RFID tag was developed. By using new, pulping-compatible raw ect, called Indisputable Key, used RFIDs to reduce waste material, the tag does not affect any of the processing options. and increase the usable volume of wood from the harvest, The project also resulted in the development of transponders while the Metka project was aimed at reducing transporta- that could read and modify tag data in harvesters and in tools tion costs to increase productivity. Transportation costs are such as large metallic saws, which had been problematic with optimized when only those piles of bioenergy wood that the old transponders. The system was designed to be usable in have dried to the right moisture content are transported all possible field conditions within the European Union, from the by the company. Both examples could be adapted to any northern icy conditions to the southern warm and dry conditions. wood-processing unit around the world. The increased efficiency of the timber supply is achieved through the ability to source the raw material from the har- INNOVATIVE PRACTICE SUMMARY vesting point all the way to the most profitable producing unit. RFID Chips for Efficient Wood Processing Currently, the forest industry consumes timber in bulk without The multinational development project Indisputable Key was a taking full advantage of the different characteristics of wood three-year EU-funded endeavor with a total budget of €12 mil- harvested from different origins. By being able to identify dif- lion. It was launched in 2006 and held its final seminar in March ferent sources, manufacturers can take into account the dif- 2010. The primary objective of the project was to decrease the ferences in timber quality in the processes. The quality aspect proportion of timber that is wasted or used for lower-value end is noticed in market transactions through premiums for better products than the initial timber quality would have warranted. timber quality. The methodology and technology behind the The data management is based on Individual Associated Data system are fully transferable to any geographical area. IMAGE 15.7: Online Timber Sales in the UK Source: UK Forest Commission. E C O N O M IC AND S E CT OR WORK 402 MOD ULE 15 — US ING ICT TO IMPR OVE FOR ES T GOV ER NA NC E Metka and Distributing MODIS Active Fire Data.� IEEE Transactions on Geoscience and Remote Sensing 47(1): 72–79. Metka is a development project that uses an RFID tracking system. The project’s objective is to develop an operational Dykstra, Dennis P., George Kuru, Rodney Taylor, Ruth Nussbaum, William B. Magrath, and Jane Story. 2003. Technologies for Wood tracking system for local bioenergy supplier Vattenfall; the Tracking: Verifying and Monitoring the Chain of Custody and Legal client benefits from increased profitability of wood-based Compliance in the Timber Industry. Washington, DC: World Bank. bioenergy production. The software developer Protacon European Commission. 2007. FLEGT Briefing Notes: Forest Law built the information database, basing the system on exist- Enforcement, Governance and Trade. Briefing note number 01. ing Oracle-based stock management software. The tracking Fowler, M., P. Abbott, S. Akroyd, J. Channon, and S. Dodd. 2011. system is built on RFID tags attached to the bioenergy wood “Forest Sector Public Expenditure Reviews: Review and piles when harvested. The cost efficiency of the system is Guidance Note.� Program in Forests (PROFOR). achieved by using cheap, low-capacity bulk tags. This makes Graham, M. D., C. Greenwood, G. Kahiro, and W. M. Adams. 2009. it possible to track low-value items as well. The tag allows “The Use of ‘Push to Talk’ Mobile Phone Technology to Reduce the company to follow the chain of custody more carefully Human Elephant Conflict, Laikipia District, Kenya.� Working and to optimize the processes to reduce the transportation Paper 2, Laikipia Elephant Project, Nanyuki. costs. Another benefit from the information in the tags is the Gurovich, Luis A. 2006. “UC Virtual: A New Educational ICT Based ability to optimize the drying time of harvested wood in order Platform for Professional Updating of Knowledge and Abilities for to minimize the transportation costs and maximize the calo- Agricultural and Forestry Engineers in a Virtual University Campus.� Journal of Information Technology in Agriculture 1(1): 1–9. rific value per transported units. This has a remarkable effect on the chain profitability. The system has been taken into ICT Update No.16, February 2004. Wageningen: Technical Centre for operational use by Vattenfall. At the moment, the system is Agriculture and Rural Cooperation. in use in the areas of two forest management associations Lawson, Sam. 2010. “Illegal Logging and Related Trade: Indicators of and by two operators. The total number of vehicles and for- the Global Response.� Chatham House briefing paper. London: Chatham House. est tractors using the system is about 10.35 Magrath, William B., Richard Grandalski, Gerald L. Stuckey, Garry B. Vikanes, and Graham R. Wilkinson. 2007. Timber Theft Prevention: Introduction to Security for Forest Managers. Washington, DC: REFERENCES World Bank. (When the source is a personal communication, website, or Myers, M. 2010. “Why Radio Matters.� Developing Radio Partners, unpublished report, it is mentioned in the footnotes and not Washington, DC. listed in the references.) Peters-Guarin, Graciela and Michael K. McCall. 2010. Community Carbon Forestry (CCF) for REDD: Using CyberTracker for Asia-Pacific Forestry Commission. 2010. Forest Law Enforcement Mapping and Visualising of Community Forest Management in and Governance: Progress in Asia and the Pacific. Bangkok: UN the Context of REDD. Kyoto: Think Global, Act Local (K:TGAL) Food and Agriculture Organization. Report. (available at http://www.communitycarbonforestry.org) Asner, G. P. 2009. “Tropical Forest Carbon Assessment: Integrating Program on Forests (PROFOR). 2010. Rapport de Fin de Mission— Satellite and Airborne Mapping Approaches.� Environment GLIN Gabon. http://www.profor.info. Research Letters, 4. United States Agency for International Development (USAID). 2005. Asner, G. P., D. E. Knapp, A. Balaji, and G. Paez-Acosta. 2009. “Automated Women’s Participation in Decision-Making at the Local Level Mapping of Tropical Deforestation and Forest Degradation: Increased. Final report CLASlite.� Journal of Applied Remote Sensing 3: 1–11. Vietnam Development Report 2011: Natural Resources Management. Collier Paul. 2007. The Bottom Billion: Why the Poorest Countries Are Failing and What Can Be Done About It. Oxford: Oxford World Bank. 2005. “Forest Institutions and Transition: Experiences University Press. and Lessons from Eastern Europe.� ECSSD, Washington, DC: World Bank. CyberTracker Conservation. 2007. “CyberTacker Monitoring Programme.� Cape Town: CyberTracker Conservation (available ———. 2006. “Strengthening Forest Law Enforcement and at http://www.cybertracker. Governance: Addressing a Systemic Constraint to Sustainable Development.� Washington, DC: World Bank. Davies, D. K., S. Ilavajhala, M. M. Wong, and C. O. Justice. 2009. “Fire Information for Resource Management System: Archiving ———. 2008. Forests Sourcebook. Washington, DC: World Bank. 35 Information in this section is drawn from the Finland ———. 2009a. “Roots for Good Forest Outcomes: An Analytical country study (available at http://www.profor.info/profor/ Framework for Governance Reforms.� Washington, DC: World knowledge/information-management-and-forest-governance) Bank. and http://www.indisputablekey.com. IC T IN A GR IC ULTUR E G L O S S A RY 403 GLOSSARY 2G, 3G, 4G. Second-, third-, and fourth-generation [developments Chain traceability. Recording and transferring product or process data in mobile wireless technology]. 2G mobile wireless has basic through a supply chain between various organizations and loca- functionality: voice and short messaging service (SMS); 3G has tions involved in the provenance of food. See internal traceability. advanced functionality: general packet radio service; and 4G has Cloud computing. A model for enabling ubiquitous, convenient, broadband functionality: long-term evolution (LTE). on-demand network access to a shared pool of configurable Active infrastructure sharing. The shared use of electronic infra- computing resources (e.g., networks, servers, storage, applica- structure such as network components (for example, access tions, and services) that can be rapidly provisioned and released node switches), radio transmission equipment, and core net- with minimal management effort or service provider interaction. work software systems. See passive infrastructure sharing. Cloud computing permits organizations without the resources to invest in extensive computing power to rent this service from Aerial photography and orthophoto mosaic. An image (once a a provider and access it remotely. (Based on http://en.wikipedia photograph, now a digital image) of the ground taken from an .org/wiki/Cloud_computing?oldid=0, accessed August 2011). airplane, helicopter, or radio-controlled aircraft at a given altitude. Aerial images are presented as an orthophoto mosaic that is an Commercial supply chain. In agriculture, a supply chain in which a alternative to a map. These images are higher in resolution (deci- private agribusiness is sourcing agricultural produce from farm- meter) than satellite images, proving useful for those who want ers or selling products to farmers in accordance with a profit- more details of the terrain such as crop conditions or land use. seeking business model. Often used interchangeably with sup- ply chain and value chain. Agricultural innovation system (AIS). A network of organizations, enterprises, and individuals focused on bringing new products, Commodity futures exchange. A market in which multiple buyers new processes, and new forms of organization into economic and sellers trade commodity-linked contracts on the basis of use, together with the institutions and policies that affect their rules and procedures set out by the exchange. Such exchanges behavior and performance. typically act as a platform for trade in futures contracts (stan- dardized contracts for future delivery of a commodity). (Based Application. A software program or groups of programs enabling on a definition by the United Nations Conference on Trade and users to perform particular operations. They consist of systems Development.) software (operating systems for managing computer resources, for example) and programs such as those for data processing, Crowdsourcing. Shorthand for leveraging mass collaboration word processing, and a multitude of functions that run on systems through ICTs by distributing tasks to or requesting information software. An IT application for managing dairy cooperatives, for from a large group of people or community (“crowd�) through example, relies on numerous kinds of applications running on the an open call or message. operating systems of any number of devices and the Internet. See Data mediation. The process of using many data sets to produce http://www.webopedia.com/TERM/A/application.html. a single, coherent set of information. Data mediation software Basis risk. In index-based insurance, the imperfect relationship organizes different types of data (such as hourly versus daily) and between the policy holder’s potential loss and the behavior of the synthesizes different approaches to classification (for example, index. One farmer’s loss from drought may not perfectly match the use of different classification vocabulary), helping to medi- that of all others; some farmers will lose more and some less. ate differences between data sources—particularly those on the internet. Biometric cards. Identification cards with a microchip or barcode that contains information on the physical characteristics of the Data mining. The extraction of stories or patterns from large holder. These cards can help prevent fraud and identity theft by amounts of data. Data mining can find four major patterns: providing a more accurate means of identification. clustering (discovering groups), classification (forming a struc- ture), regression (finding a function), and associations (finding Broadband. Specifically, a signaling method that handles a rela- relationships). tively wide band (spectrum) of electromagnetic frequencies. More generally the term refers to a telecommunications signal Digital divide. Differences in the capacity to access and use ICTs or device of greater bandwidth than another standard or usual among individuals, men and women, households, geographic signal or device (and the broader the band, the greater the areas, socioeconomic groups, ethnic groups, and so forth. The capacity for traffic). The wider (or broader) the bandwidth of a capacity to access ICTs encompasses physical access as well channel, the greater the information-carrying capacity, given the as access to the resources and skills to participate effectively as same channel quality. (Based on http://en.wikipedia.org/wiki/ a “digital citizen.� (Based on the definition in http://en.wikipedia Broadband#Internet_access, accessed July 2011.) .org/wiki/Digital_divide, accessed July 2011.) E C O N O M IC AND S E CT OR WORK 404 GLOS S A RY Digital orthophoto quads. Digital maps that combine the geometric that allows mobile phones to function smoothly with the fixed information of a regular map with the detail of an aerial photograph. network infrastructure. FMC seeks to optimize transmission of all data to and among end-users, no matter their locations Digital soil mapping. The creation and the population of a geo- or devices. (Based on the definition in http://searchmobile graphically referenced soil database generated at a given resolu- computing.techtarget.com/definition/fixed-mobile-convergence, tion through field and laboratory observation methods coupled accessed July 2011). with environmental data through quantitative relationships. A variety of technologies, including satellite, remote sensors and Genetically modified (GM). A genetically engineered or modified cameras, can be used to survey soil and collect data to create organism (GMO) in which the genetic material has been trans- digital soil maps. formed using the techniques of genetic engineering. Examples include cotton that has been genetically transformed to resist a Digital terrain model. A digital representation of an area’s terrain particular herbicide. Many countries strictly control the produc- on a GIS that provides accurate position and elevation coordi- tion, use, export, and import of GM plants and animals. nates. Such models can be used for meticulous engineering projects such as roads, drainage, gravity-fed irrigation works, and Geographical information systems (GIS). Geographic data col- detention reservoirs. At the field level, digital terrain models can lected through computer hardware and software to capture, monitor and improve areas affected by waterlogging or flooding. store, update, and display all forms of geographically referenced information by matching coordinates and time to other variables. E-government. A government’s use of ICT to enhance public services. Data sets formed by GIS constitute “layers� of information (for E-Learning. is the use of electronic technologies to deliver, facili- example, on topography, population size, or agricultural house- tate, and enhance both formal and informal learning and knowl- hold income) that can be merged and analyzed to establish rela- edge sharing at any time, any place, and at any pace. tionships and produce maps or charts that visualize geographical traits. Elite capture. When better-off or politically connected farmers cap- ture public programs. Georeference. To establish the position of something through its geographical coordinates. Enterprise resource planning (ERP). Software integrates the many functions of an enterprise into a single system. It centrally stores Global positioning system (GPS). A satellite-based positioning many kinds of organizational data and manages data transmis- and navigation system with three basic components: satellites sion and use between departments within the organization and that orbit the earth, control and monitoring stations on the earth, external partners, such as suppliers. ERP is more of a methodol- and the GPS receivers owned by users. GPS receivers pick up ogy than a piece of software, although it does incorporate sev- signals from the satellites, including precise orbital information eral software applications under a single, integrated interface. (latitude, longitude, and ellipsoidal GPS altitude) of a given object or location, as well as the time. E-readiness. The ability to use ICT to develop or improve one’s economy or situation through proper preparation. Index-based insurance. Insurance that substitutes individual loss assessments with an indicator that is easy to measure (such as Farmer-led documentation (FLD). A process in which local com- weather) as a proxy for the loss. Weather indices have been used munities take the lead role in the documentation process. The in insurance products protecting against drought and loss of results are used by community members for learning within the inputs. Vegetation has been used in livestock insurance products community (internal learning) and exchange between communities as an indicator of livestock losses. See also weather-based index (horizontal sharing) and communities, development agents and insurance and basis risk. policymakers (vertical sharing). See www.prolinnova.net/fld.php. Infomediary. An infomediary works as a personal agent on behalf of Feature phones. A modern low-end phone that is not a smartphone. consumers to help them take control over information gathered Feature phones do not run a mobile operating system like smart- about them for use by marketers and advertisers. (Based on http:// phones but run on specialized software enabling them to access en.wikipedia.org/wiki/Infomediary, accessed September 2011.) various media formats in addition to offering basic voice and SMS functionality. They substitute for multiple ICT devices that Internal traceability. Data recorded within an organization or geo- are also available as standalone appliances (digital camera, voice graphic location to track a product or process. See chain traceability. recorder, flashlight, radio, and MP3 player). Rural consumers pre- Laser scanning, or light detection and ranging (LiDAR). An fer the combined devices because of their affordability. (Based on active airborne sensor using a set of laser beams to measure http://en.wikipedia.org/wiki/Feature_phone, accessed July 2011.) distance from an aircraft to features on the ground. Airplanes Financial inclusion. The delivery of affordable financial services to and helicopters can be used for laser scanning. The data from disadvantaged and low-income segments of society. Research laser scanning are three-dimensional at very high accuracy, and on financial exclusion and its direct correlation to poverty has they also allow ground elevation under the tree canopy to be made the availability of banking and payment services to the measured. entire population without discrimination a prime objective of Market intelligence. Information relevant to the markets that a pro- public policy. (Based on http://en.wikipedia.org/wiki/Financial_ ducer (or company) wishes to reach. Gathered and analyzed spe- inclusion, accessed July 2011.) cifically for making strategic decisions that will help to maximize Fixed-mobile convergence. The increasingly seamless connectiv- profits in relation to market opportunities, market penetration, ity between fixed and wireless telecommunications networks, and market development. Market intelligence is necessary when devices, and applications. Also refers to any physical network entering a new market (foreign or domestic). IC T IN A GR IC ULTUR E G L O S S A RY 405 Mobile application. Software on a portable device (such as a (3) animal or plant life from pests, diseases, and disease-causing mobile phone handset, personal digital assistant, or tablet com- organisms; and (4) a country from other damage caused by the puter) that enables a user to carry out one or more specific tasks entry, establishment, or spread of pests. Such measures include that are not directly related to the operation of the device itself. national control of contaminants, pests, and diseases (vaccina- Examples include the ability to access specific information (for tion programs, limits on pesticide residues in food) as well as instance, via a website), make payments and other transactions, international controls to prevent their inadvertent spread (for play games, and send messages. example, the rejection of insect-infested food shipments that pose a risk to domestic food production). Nanotechnology. The ability to engineer new attributes through controlling features at or around the scale of a nanometer (one- Satellite imagery. An image of Earth taken from satellites in orbit. billionth of a meter, or about 1/80,000 the width of human hair). Satellite imagery can be spatial (size of surface area); spectral (wavelength interval); temporal (amount of time); and radiomet- Passive infrastructure sharing. The sharing of nonelectronic ric (levels of brightness). Each type of images captures a variety infrastructure, equipment, and services at mobile network base of variables about a given area of varying size. The resolution (in stations, including the site space, buildings, towers, masts, and meters) of these images depends on the satellite system used antennas; power supply, back-up batteries, and generators; and its distance from Earth; weather can interfere mainly with security; and maintenance. satellite systems utilizing visible wavelengths of light. Precision farming (precision agriculture). Farming based on Side-selling. A farmer sells produce to a buyer other than the observing and responding to variations within a field detected agreed buyer. Farmers may fail to honor contracts with buyers through ICTs such as satellite imagery. Precision farming also for a number of reasons (buyers pay late, or prices in the local makes use of GPS, GIS, and variable rate technology to match market are higher than the original price agreed with the buyer, practices more closely to the needs of crops, soils, animals, or for example). fisheries. Smartcard. A pocket-sized (usually plastic) card with embedded Primary wholesale market. Market large enough to dominate trade integrated circuits containing volatile memory and microproces- in some goods over a large area. (Based on http://www.merriam- sor components. They include credit cards, identification cards, webster.com/dictionary/primary%20market, accessed July 2011.) and the SIM cards used with mobile phones. As discussed in Radio-frequency identification (RFID). Uses radio waves to trans- this sourcebook, one of their most influential roles has been to fer data between a reader and an electronic tag attached to a extend the use of mobile phones in financial transactions such as product, animal, or person for identification and tracking. The purchases of subsidized inputs, conditional cash transfers, agri- technology uses hardware (readers) and tags (also known as cultural credit, and agricultural information services. (Based on labels) as well as software. Most tags contain at least two parts: http://en.wikipedia.org/wiki/SmartCard#Cryptographic_smart_ one is an integrated circuit for storing and processing information cards, accessed July 2011). and the other is an antenna for receiving and transmitting the Smartphone. A high-end mobile phone that offers more advanced signal. (Based on http://en.wikipedia.org/wiki/Radio-frequency_ computing ability and connectivity than a contemporary feature identification, accessed July 2011). phone. A smartphone runs a complete mobile operating system Risk. Imperfect knowledge where the probabilities are known. and combines the functions of a personal digital assistant (PDA) Traditional risks to agriculture in developing countries include and a mobile phone. Today’s models typically serve as portable inclement weather, pests, disease, outbreaks, fire, theft, media players and camera phones with high-resolution touch- and conflict. Newer risks include commodity and input price screen, global positioning system (GPS) navigation, Wi-Fi and volatility. Risks can be idiosyncratic—affecting only individual mobile broadband access. (Based on http://en.wikipedia.org/ farms or firms or covariate, affecting many farms and firms wiki/Smartphone, accessed July 2011.) simultaneously. SMS (short messaging service). A service to send text mes- Risk coping. Actions that help the victims of a risky event (such as a sages via mobile or fixed-line phones, usually limited to around drought, flood, or pest epidemic) cope with the losses it causes. 160 characters. They include government assistance to farmers, debt restructur- Soil carbon sequestration. Transferring carbon dioxide from the ing, and remittances. atmosphere into the soil through crop residues and other organic Risk mitigation. Actions that prevent events from occurring, limit solids (like mulch), is one technique to restore carbon levels in their occurrence, or reduce the severity of the resulting losses soils. (for example, pest and disease management strategies). Soil organic carbon. Carbon held within the soil as a result of the Risk transfer. Actions that transfer risk to a willing third party, at decay of once-living plants and animals. The amount of carbon a cost. Financial transfer mechanisms trigger compensation or within soil is used as a measure of soil organic matter; soils with reduce losses generated by a given risk, and they can include high levels of organic matter are better at holding water and con- insurance, re-insurance, and financial hedging tools. tain more nutrients. Sanitary and phytosanitary (SPS) protection. Measures, includ- Spatial modeling (among other models). Closely related to spa- ing regulations and agreements, to protect: (1) human or animal tial analysis or statistics, models are an attempt to simulate real- health from risk arising from additives, contaminants, toxins, or world conditions and explore systems using their geographic, disease organisms in food, drink, and feedstuffs; (2) human life geometric, or topological properties. from risks associated with diseases carried by plants or animals; E C O N O M IC AND S E CT OR WORK 406 GLOS S A RY Spectrum rights. Rights to specific parts of the radio spectrum goal is to have at least one point of access per settlement over used for radio transmission technologies and applications. The a certain population size.) As a policy objective, UA is used pri- radio spectrum is typically regulated by governments and in marily in developing countries, which seek to expand geographic some cases sold or licensed to operators of private radio trans- access to ICTs by the population at large, often for the very first mission systems (for example, cellular telephone operators or time. UA obligations provide for a minimum level of coverage, broadcast television stations). (Based on http://en.wikipedia.org/ especially of remote communities. wiki/Radio_spectrum#Broadcasting, accessed July 2011). Universal service (US). A concept underpinning the definition of Subscriber identity module (SIM). An integrated circuit that securely access to ICTs, US occurs when every individual or household stores the service-subscriber key used to identify a subscriber on can have service from communications networks, accessing ser- mobile devices (such as mobile phones and computers). A SIM is vices privately at home or increasingly through portable wireless held on a removable SIM card, which can be transferred between devices. US focuses on upgrading and extending communication different mobile devices. (Based on http://en.wikipedia.org/wiki/ networks so that a minimum level of service is delivered, even Subscriber_Identity_Module, accessed October 2011.) in the least accessible areas. As a policy objective, US is used primarily in developed countries and generally pursued by impos- Supply chain. The set of buy-sell interactions as goods flow from ing universal service obligations on network operators. For some raw materials through production to the final retailer where con- services, a goal of US is too ambitious at present in a develop- sumers can buy them. Often used interchangeably with com- ing country, because the services must be affordable as well as mercial supply chain and value chain. available. Goals may be cast in terms of the proportion of the Supply-chain management (SCM systems). Software running on population that can afford private service. networked computers and handheld devices to perform some or all Userability. The degree to which an ICT application is user friendly— of the following functions: store information about suppliers; trans- a critical aspect of successful ICT implementation. mit an order to the supplier (in an agricultural supply chain, often the farmer); monitor production and quality; transfer payments; and Value chain. The whole ecosystem of players involved in producing track goods from the farm gate to the warehouse or retailer. and marketing an article, from the retailer back to the producer. Often used interchangeably with commercial supply chain and Technology neutrality. A leading regulatory policy principle for supply chain. ensuring the affordability of ICTs, technology neutrality is the principle of refraining from specifying technology requirements Variable rate technology. Technology enabling farmers to vary the within telecommunications licenses. rate of an input applied to a crop. This technology uses a variable rate control system in combination with application equipment Telecenter. A public place where people can use digital technolo- to supply inputs at the precise time and/or place where they are gies (computers, the Internet, even mobile phones) to gather required. Components of the technology include a computer, information, create, learn, and communicate with others. Some software, differential GPS receiver, and controller. See precision centers are established specifically for people to learn these farming. essential digital skills; others simply operate profit; but telecen- ters often help to support community, economic, educational, Weather-based index insurance. Insurance that substitutes indi- and social development—reducing isolation, bridging the digital vidual loss assessments with an indicator that is easy to measure divide, and creating economic opportunities. (Based on http:// (in this case, weather) as a proxy for the loss. Weather events or en.wikipedia.org/wiki/Telecenter, accessed July 2011). visible vegetation have served as typical indicators. This practice reduces the cost of assessing damage and problems of adverse Traceability (product tracing system). The information system selection, because the insured cannot influence the index or the necessary to provide the history of a product or a process from loss assessment. origin to point of final sale. Traceability is used in the food sec- tor primarily for food safety, but agrifood and nonfood sectors Web 2.0. Web 2.0 sites (unlike websites where users passively such as forestry and textiles have instituted traceability require- view content) incorporate applications that facilitate participatory ments for product identification, differentiation, and historical information sharing, interoperability, user-centered design, and monitoring. For food products, traceability systems involve the collaboration through the Internet. Examples include social net- unique identification of products and the documentation of their working sites, blogs, wikis, video sharing sites, and hosted ser- transformation through the chain of custody to facilitate supply vices. (Based on http://en.wikipedia.org/wiki/Web_2.0, accessed chain tracking, management, and detection of possible sources September 2011). of failure in food safety or quality. WiFi. Wireless local area network that allows various devices to Uncertainty. Imperfect knowledge where the probabilities are not connect to the Internet remotely. known. Many losses expected from risks inherent in modern Wireless sensor network. A group of small sensing devices, or agrifood systems are related to uncertain events for which there nodes, that capture data in a given location and send it to a are no known probabilities. base station in the network, which transmits the data to a cen- Universal access (UA). (also termed “public,� “community,� or tral computer that performs analysis and extracts meaningful “shared� access) occurs when everyone can access communi- information. cations networks somewhere, at a public place. (Generally the IC T IN A GR IC ULTUR E A G R I C U L T U R E A N D R U R A L D E V E L O P M E N T Agriculture and Rural Development (ARD) This is a joint publication with: 1818 H Street, NW Washington, D.C. 20433 USA Telephone: 202-477-1000 Internet: www.worldbank.org/ard