Information, Communications and Technology (ICT) companies are increasing their offering to the agriculture sector to help address the myriad challenges bedevilling the sector.
Mobile service provider Airtel and Zeepay — a Mobile Financial Services (MFS) aggregator, have developed an innovative platform that allows members of farmer-based organisations that are registered on the platform to buy agro-inputs on credit and also access credit to improve their farms.
Under the Zeepay-Airtel programme known as Akuafo Nkosuo being piloted in the Ashanti Region, recognised farmer-based organisations will be registered onto the Zeepay-Airtel platform. They will then be able to buy farm inputs from other agro-chemical shops registered on the platform on credit, and later pay for the inputs when they harvest their produce and sell at the nearby grain council or warehouse.
This follows closely on the heels of a partnership between mobile service provider TiGo and BIMA — a micro insurance company, to introduce fertiliser-imbued insurance for farmers.
Andrew Takyi Appiah, co-founder of Zeepay said: “We are working with smallholder farming communities on being their mobile money aggregator. We have a platform for Ashanti regional farmer-based groups. We will be piloting the project with 405 farmer-based organisations.
“This will help the farmers build a cashless ecosystem where they can pay with their mobile phones on our platform. We are working with Airtel on this; Airtel will give the farmers a wallet and the farmers will give Airtel close user groups. The idea is that when we are done, Airtel will be able to see the farmers’ transactions and then give them accessibility to lending.”
The infusion of technology into the agricultural value chain is expected to help improve crop yields, increase the contribution of agriculture to the Gross Domestic Product (GDP), and make the sector more appealing to the teeming unemployed youth.
Indeed, a report by the World Bank Group said about 21 percent of the Ghanaian population has moved out of agriculture to other more productive economic sectors over the 18-year period between 1992 and 2010.
At the same time, employment in industry and services grew from 38 to 59 percent — making reallocation of labour the reason for more than one-tenth of all Ghana’s GDP growth over this period.
These findings come at a time when the contribution of agric to the economy has gone down over the years. In 1992, the share of agric to GDP was 23.6 percent, growing to about 41 percent in 1995.
But the Ghana Statistical Service reports that the contribution of agric to GDP declined from 29.8 percent in 2010 to 22 percent at the end of last year.
Ashanti Regional Director of Agric, Mr. Kweku Minka Fordjour, told the B&FT that: “US$1.8million worth of cereals and legumes were acquired by World Food Programme (WFP) in the Adwira area. Following that success story and in the spirit of promoting a cashless society, we got into talks with Zeepay and they are going to use their network to get farmers to pay for services and access services.
“It is going to involve agro companies that will buy into this programme; so if the farmer needs to say acquire fertiliser, if the farmer does not have money to buy the fertiliser at the time he needs it, once he is registered on the platform he can get it on credit from a service provider that is on the platform.
“So whether the farmer has money or not, if he needs fertiliser he just goes and picks it up and the system pays for it. Then when the farmer’s produce is ripe, he can take his produce to a grain inventory council and get paid. The system would have taken notice of the fact that a particular farmer has taken fertiliser from one of the providers or has taken tractor services from another provider, and then make the necessary adjustments and pay the farmers what is due him.”
Given the possibility of default by farmers, the programme has in-built mechanisms for checking and dealing with challenges that may arise.
“We are not dealing with individual farmers but farmer groups. The situation depends a lot on trust. The benefits of this system are so enormous that it’s not worthwhile for any farmer to attempt beating the system. There is also a manual way of officers following up to ensure you pay for what you use,” Mr. Fordjour said.
Zeepay is a mobile money payment app, it is used to acquire mobile money for payments at point of sale either via a smartphone or a PoS device. The software can be downloaded onto both PoS devices and smartphones of 4.0 and above.