SDG
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Solution catalogue

FarmNet

Opening up Urban Markets to Rural Farmers

Farmers in East Africa have difficulties selling to urban businesses as a result of limited visibility of market demand. Our solution focuses on improving the livelihoods of farmers through a platform that strengthens the existing value chain linking farmers with the intermediaries and urban businesses to address the mismatch between supply and demand, improve the cost-efficiency of business transactions, and increase opportunities for all parties.

Problem

We address the global challenge of linking rural and urban areas (SDG goal 11.a).

In East Africa, rural farmers have difficulties selling produce to local urban businesses. Some of the main issues underlying this are 1) farmers prefer transactions with immediate payment, 2) urban markets prefer to do business with legal entities (many farmers do not have this status), 3) farmers do not know what to grow, 4) farmers cannot grow the volume to meet the market‘s demand, and 5) farmers lack the means of transportation to send produce into
urban areas.

Currently, 1) an urban business first reaches out with their request to an intermediary they know and then 2) the intermediary reaches out to each farmer separately.

Based on research and interviews, the unique insight was that prior solutions that tried to close the supply-demand gap of produce failed because they attempted to remove the intermediary, who serves as the source of connection, information, and logistics.

Solution

We developed a solution that helps fill the supply-demand gap by easing the flow of information without disrupting the current supply chain.

Our solution is a online platform where urban businesses place their orders for produce. The orders state the business’ address, the type of produce requested, the quantity, the delivery date and business location.

This information is then sent out as a broadcast SMS to all farmers in the region. Farmers then individually respond to confirm the portion of quantity that they can fulfill. An intermediary that handles the farmer registration and logistics follows up to pick up and deliver produce to city business.

As such, farmers sell more, intermediaries earn by driving sales, businesses get reliable delivery of goods. FarmNet gets a small cut for facilitating the transaction.

Everyone wins.

Innovation

Previous solutions included the creation of co-ops (i.e. Cheetah Development) to replace the intermediary and buy the produce from the farmer; but due to the lack of a personal relationship, some farmers may not trust the co-ops and prefer the intermediary they already know.

Most other solutions aim to remove the intermediary from the equation:
M-Farm, a Kenyan business, followed this path but turned out to be unsuccessful exactly because of this
reason.
Farmily, an online marketplace in India, faces challenges due to local farmers not being able to access online platforms.
Lastly, eNAM in India provided pricing information to farmers over SMS and increased their bargaining power but did not communicate demand information.

Our approach does not disrupt the current ecosystem and aims to maximize benefits for all parties. It is about reducing risks by increasing farmers’ visibility. It is also sensitive to the means of communication used by each party in the value chain.

Impact

The platform will allow urban businesses to expand their networks with intermediaries and consequently reach more farmers. It will result in a data bank, which in the medium term, will fill the supply-demand gap by informing farmers on what to grow.

The improved flow of information will empower farmers, and increase their visibility and bargaining power. This will reduce risks and create a system where all parties win.

In the longer-term, it could incorporate a system for transportation sharing. It could further facilitate profit-sharing circular economy models between farmers and urban businesses by reusing food waste from urban businesses as fertilizer, feed for livestock, etc. and by investing in R&D in rural areas to repurpose surplus/waste to open up new lines of businesses.

The SDG indicator that can be used to measure our solution is number 11.a, which is focused on links between urban, peri-urban and rural areas to improve livelihoods through local economic development.

 

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