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Farmer-Centered Design: Innovations in Sustainable Agriculture | SkollWF 2018

August 16, 2019


– I really welcome you
all to this session. We have a whole panel of
amazing social entrepreneurs who are using this concept
of Farmer-Centered Design to serve smallholder
farmers around the world. Our moderator is Shalu Umapathy, managing director of
IDEO’s economic prosperity practice and herself, an expert in human-centered design for social good. You can learn more about
Shalu at school.org and with that, I’m gonna hand
it off, have a great session. – Thanks Alissa. What’s up everybody, how’s it going?! Energized after lunch,
we’re gonna keep you awake, you’re gonna be so excited. We have the most amazing panel here, so this is the session to remember. So I wanted to kick us off, so ideo.org is a human-centered design organization, so I wanted to kick off the session talking a little bit about what it means to do human-centered design. What we’ve done a little bit of and we’ve learned a little bit of at ideo.org. And then the structure
of the session is that then each panelist will give
a short presentation from the eyes of the farmer or the
person that they’re serving. To, kind of, talk about
what their service provides, what the change is in their lives. And then we’re all gonna sit
up and answer a few questions. I would love to make this
an interactive session, so I think since it’s being recorded if you do have a question in the middle, like, let’s pause for a minute so that we can move the mic over to you. And yeah, I think, let’s get started. So ideo.org is a non-profit organization, we’ve spun out of the for profit company IDO about seven years ago,
and we use the process of human-centered design and we work on challenges around poverty alleviation, both in the U.S. as well as abroad. And then let’s go to the
next, do I have a clicker? That would key, okay. So what is human-centered design? It’s a creative approach
to problem solving. One that starts with people and ends with solutions that are
tailored to their needs. We believe that great design, when we start the design process, we, kind of, start with the
user, what is desirable to them, what’s exciting, what aligns with the vision of success for them in life. And then we also layer in,
what is viable from a business perspective and what is
feasible from a technology lens. And at the intersection
of those three circles is where true innovation
that’s transformative can come. And the human-centered design process is one that is not linear. Sometimes the sketch of this is actually a giant scribble, but
we start the process, getting inspired, and betting ourselves with the communities that we’re serving. We do designed research which is all about playing games and learning. And then once we start to see the patterns of what’s possible, you
start to converge around, what are the opportunity areas. Once we’ve, kind of,
identified a few different opportunities areas of
what the solution might be. We then, kind of, go
big again and brainstorm about what the possible, kind of, radical expressions of
that solution might be. And then finally, once we’ve
prototyped it and tested it and iterated on it, we, kind of, converge on the idea or the theme or the system that we believe will
have a greater success and put it out into the world. One of the things that
we’ve learned a lot about is that the difference
between what people say and do and what they think and feel. There’s a farmer example of, when I did an interview with a farmer and I was asking, what’s the most important
thing to being a farmer? And he said, oh it’s like
you have to teach me, and then it’s the practice of learning, and then I can be a great farmer. And then I said, well here’s $5, or the equivalent of it, are
you gonna go take a class? And he said, no I’m gonna go buy seeds, what are you talking about? So it’s how do you get to the deeper level of what’s real for them,
what’s immediate for them, what’s important to them right now? And how does that align
with the longer term vision. I talked how we used unique approaches in doing design research,
there’s an example of a card sorting game
where we talk to a farmer about, what are the different ways of them connecting to market? So is it that they use an
institution on the ground, is it the dude with the truck, is it, what are the different ways? And then having them prioritize
which is the most important to them, which is the
most accessible to them, which one is their dream,
and why is it not possible? And by using, kind of,
games and something tangible to respond to, we find that
in our research process, we can get to much deeper
level conversations around what is broken in
the system around them, and what actually is part
of getting to a solution. Prototyping is another thing
that is my favorite part of the human-centered design process. We take, kind of, all the
nuances of what we heard when we did research and
start to get tangible about what the solution might be. So on the left-hand side is an
example of how we started to, it’s in the adolescent
reproductive health space, where we’re trying to explain
the different contraceptive methods to teens ’cause
there was so many myths and misconceptions about
what the reality was about each of the different methods. So we said, okay what are some ways of bringing delight and
fun, but real clarity around what each of those methods mean? The middle is a prototype
with a partner in Nepal that provided maternal health services. And we learned that,
when it comes to caring for the newborn kids, it’s actually the older siblings that take care of them. So how are we actually
informing the older kids about the day-to-day health
of their younger siblings? And so we just, kind of, build
a learn by yourself tablet, set of screens, stuck it on
a water tank in the community and just watched and saw,
what did people absorb, what did they learn by
just interacting with this, kind of, delightful
thing in their community. And then based on what we
learned, we can then refine and come up with an actual solution. And then on the left-hand
side, or right-hand side, that’s an example of a project where we worked on gender-based violence. We we’re working with, oh my
gosh, I forgot the name, Kenya, but they have an amazing set
of programs on the ground. And so one of the things
they did was, they said that there are many incidence of
gender-based violence in their communities, but no one was reporting it because anonymity was really important, responsiveness from the community workers was also really risky
if they did not respond then were they not providing services? So one of the prototypes
we tested was, kind of, a drop your note in the box of, if you encountered issue
in, kind of, a corner of the community where no one
would actually be able to see if you’re, kind of, walking in and out. So these are just ways of
when you know a problem, you know some of the examples
of the circumstance around them, how do we prototype
what the solution might be? And, kind of, bringing us back
to the context of farmers, there’s a few lessons
that I wanted to share. And many of you know this,
so it won’t be shocking, but the income expense mismatch. So farmers often times put
everything that they’ve got into getting to a great harvest. Which means investing in
great seeds and fertilizer, but then there’s a pretty long horizon till they actually get the payback, and they actually won’t know
what the payback is going to be at the end of the harvest season. So when you offer them
a product or a service in the middle of that
timeline, or you suddenly, that farmer has school
fees that they have to pay for their kid, they’re
making the decision between, how much do I think I’m gonna
make, is my kid actually going to be able to go to school,
do I have food for my family? It’s a really, I think that
they do some of the most complex mental math of any
population I’ve ever had to see. So that’s been amazing to learn about. There’s also this question of,
individual versus community that we see an interesting
tension between. So if I am going to
participate in a program, or in a benefit, it should be something that is offered to my community ’cause it shouldn’t be an individual, an individual should not get, identified and only invested
in, it should be something, but I at the same time do
not want to take the risk of my community on. I’m trying to think of an example. So we were doing a
market connection program for farmers in Kenya, where I was talking to a farmer about, well
what if the price of yours, your product was the same for
everyone in you community? So that we can, kind of,
simplify the grading, process to be able to connect to market. And the farmer was
like, no, no, no because that lady that’s two doors
down, her crop is really bad and she would bring down
the price of my crop. And then said, but then so
should she not be in the program? She said, no, no, no everyone
should be part of the program, so there’s, like, this
interesting tension of community benefit but
also, kind of, individual especially when it comes to money. When it comes to trying new
things, see is believing. We, no matter what the AG technology is, we do a test blot, we show it to farmers, we demonstrate that the thing works before we expect them to take the risk on trying something new. Why should they spend their precious resources on something that is unknown. So those are just some of the, some of the high level learnings. So let’s switch gears into
having folks present one by one. If you guys have burning
questions in between each of the presentations, we
can take those as well. Is there any, kind of, upfront
questions that folks have? Okay, let’s keep moving. So the first one that’s
up, where’s my notebook? Sorry I should have memorized that. Aloysius are you cool to go? Oh, you’re already
mic’d, you’re good, cool. So the prompt that I
had given Aloysius was, – 10 minutes
– it was from the perspective, not just the time, come on!
– Oh yeah, cool. (audience laughing) It’s the most important thing right, so. – [Shalu] Nooo, come on. Because this is a
farmer-centered design panel, like, from the lens of the farmer or the person that is your customer, how do they see your service? So that was the prompt, you
can say whatever you want now. – All right, cool, so. (audience laughing) All right, so my name is
Aloysius from Farmerline, I’ll give a brief introduction to Farmerline, and then lessons learned. So we started this
business five years ago, and when we started we
had one thing in mind. Quality farmers information at all times on your mobile phone. We started with $600 that
we got from a competition in Ghana, and we started with 10 years software engineering experience
and then 10 years of, between my co-founder and
I, 30 years on the farm and rural experience and
so that’s all we had. I believe it’s a build
software, $600 and also being very close to farmers
and having an understanding of hard work and how to
their communities operate. In many years down the
line, we know to build a product, we started
with an SMS application, that clearly didn’t work
because most of the farmers that we work with prefer to consume content in their native
languages, so they prefer audio versus SMS in West Africa,
so we switched to that. But in, like, many years down the line, we working across 11
African countries right now in a team of what 32 what, we’ve profiled and set, well 20,000 farmers and have mapped over 700,000 acres of farmland. We have two offices in
Ghana, but it’s more about getting our technology
services to organizations and business that work with farmers. I don’t go too much into what Farmline does or any sales speech,
but let me just go, really deeply into three things that we learned over this time. The first lesson, we built
our product for six months, we took our first trip to the field, I remember I finished college in 2012. My co-founder just finished his masters, we went and met a group of 450 agriculturist intentional
officers in Ghana, we showed them our technologies,
we showed as many SMS. And then our evaluation
to them was that you have all this research and all
this knowledge in your office, you’re budgets for going
down to the community to do extension work keeps
going down 40% every year. So we have a technology
that can compliment that, and it was just purely SMS. And then they tore us apart, they said cell phone was gonna take their work away, and they also said, the idea
sucks, it wasn’t gonna work. And they gave us one valuable lesson, instead of, like, to spend years building, the relationship that you
have with the farmers, the trust that you have is extremely important and farmers value that. They use that to determine
how they consume information that they give them, and secondly, if you send information by
SMS, it just wouldn’t work. So then we decided to build for us, it took us a year to figure that one out. And the whole idea was,
take the same experience that farmers get when they speak to officers and put it on a mobile. So that mean they speaking your
local languages, they talk. So what we did was, in
complements to in person training, field training, field workshops,
we can also send very short audio messages to farmers
in their native languages to help them, to remind them to take actions at the right time. Remember we’ve also learned
that the voice message itself will not replace extension entirely because in person training
is still very important. You still have to
demonstrate certain types of technologies to farmers,
so voice actually help. And that lesson came from farmers. We also saw that the cost of communication via voice was actually cheaper than SMS, which was really shocking
because the idea, you think, like, SMS is like
four cents, right, per message. And then voice is, like, very expensive. But when you want to
communicate, let’s say, one page of content to a farmer, it takes about 15 to 30 seconds, right? And then if you want to see this via SMS, it takes about 15 sets of SMS, right? Which is, like, four times 15. So it’s actually cheaper at
the end to communicate by voice than SMS, and that’s what
we learned from farmers. And now we are distributing resources to farmers using data and technology, and it was inspired by
one visit to the field where we met a group of cacao farmers. And then we realized that
cacao farmers have been taking credit to the, you,
know, cash advance, for years. So we said there’s no financial inclusion, no it’s been happening for years. It’s just at a community level
it’s not been documented, it’s not digitized,
there’s no transference, so you don’t get to see that. So farmers actually go to these agent, they take money in advance, and then they pay back when the harvest is ready. This agent make a credit decision based on the sales history and
also the relationship. So imagine I’m your
agent, you are a farmer, you come to me, you want to get credit, you sold five box to me last year, this year you sold to me three box, I can anticipate that
when I give you a loan of half a box or one
box, you can pay me back because you have two
more box to sell to me. So this informal credit score happens in the agents mind, and basically what we started doing around that
is to document this process, and put it into an app and
then make it available, show the decision making process
and the repayment process, and make it open for other
people who want to extend various forms of credit to farmers or to people in the Lesmar to use. And that is actually powering our AI and data driven innovation
around Lesmar distribution. And that innovation came from just seeing what is happening in the community. So when we started that,
the whole idea was, you know, give credit ’cause farmers need financial services, credit is a way to go. I’m not saying credit is not great, but it is what we’ve
learned from our work. For every thousand people
that we try to reach with high quality and affordable input, only 256 of them actually
got it on credit. So we’re curious, we
actually give you for free and you pay back when you have the money, why you not getting on credit? Three of them got it through savings, 400 actually bought it instantly. What we saw was that,
income and expense mismatch, if it’s a straight match between what farmers are spending
and how much they have, and then the services
you’re giving to them to actually pay for it down to being debt. People have a sense of
progress, for most farmers that we worked with, it’s
not about being in debt, but it’s about having the ability to purchase services directly
themselves or save towards it between one month or three months. So that was a shock for
us, so the incentive for us as a company’s, like, how do we keep using opposition
as a technology company that has a belief to
aggregate all these farmers, aggregate their data, and use
this information to broker a great deal that actually helps them to get quality product,
riding their community but in at a great price point. Last year it was 20% below
market price and we think that as we keep growing that
price will keep going down. And what will happen is that
the farmer will move from somebody who is a take off services to somebody who will have choices. Because if the cost of
distribution to them goes down, many more people will play in the market, and when many more people
play, the farmer will have a choice, and then when there
are choices prices goes down, quality’s insured because
they have information. So this is where we’re headed right now, and all these things
are really inspired by our working farmers, that’s
why we have two models. We license our technology to
organization for companies across 11 countries, but
most of those technologies come from our direct work
with farmers in Ghana. So that’s basically an
introduction to Farmerline and some of the lessons that we’ve learned working from farmers, with farmers. – [Shalu] One question for you, when you think about
the farmers experience, does the farmer know that
you’re coming up with this credit scoring for them,
or is it a surprise that comes with surprise
you can get this loan if you didn’t have it,
yeah how does it play out? – Yeah so they actually started from, so the agent actually
finances this cash advance, this demand based on their own cashflow, based on their own pocket money. So the agent actually still
takes their information into the app, makes a recommendation, and takes an audio recording of a farmer just like a voice
signature to setup actually because we realized that if you
sign a paper in a community, no one cares about the paper,
you can take them to court, nothing will happen, but
if it’s a voice recording, where you can play, and
say, hey you took this thing that you said you’re gonna pay
back at this rate, it helps. The farmers don’t care
about the credit score much, they don’t care about that,
all they care about is that, I come to you, I want
credit, you don’t ask me for collateral, you don’t
ask me to join a group, but for some reason you
give me the product, at a fair price, at a fair
rate, and I’m able to pay back to this person I’ve been
working with for years. – That’s cool
– Yeah. – [Shalu] Great. – All right. – [Shalu] Okay, thank You. (audience clapping) – Debbie from Proximity
Design is gonna go next. – Three minutes? – [Shalu] Three to five, three to five. – Where’s the clicker? – [Shalu] Oh, I have it here. – So this is one of our customers, farmer, his name is Uma mom,
and we work in Myanmar. He’s 80 years old and that’s his son. And he was telling me that
for most of his adult life, since he was a young
boy, he had hauled water with a rope and bucket on his shoulders, every day, that’s how they irrigated. The markets had nothing
that they could afford, and government was nowhere
to be found, no aide sector, so they’re severely
neglected, a group of people, and this is the backbone of the country. So until, a few, about eight years ago, we showed up in his
village with affordable irrigation products that we had designed, and he took a bet on our foot pumps, and he was able to double
his acreage and income. Then he graduated onto using drip irrigation that we had designed. And this is his latest purchase from us, a solar powered pump. Well he now owns eight
acres and farms eight acres, and he was saying that
for most of his life, everyday he would sweat
so much that he could ring out the sweat from his
longyi, his wrap around. But today his sole job is
to sit under the shade tree and drink tea, and he
gets up every half hour and swivels the solar panels. So I’d say after decades
of back breaking drudgery this is a well deserved lifestyle. So we basically designed for a small plot farmers like Uma mom. All of our staff live and work in Myanmar, embedded, and we see farmers everyday, have conversations with them. So we see that they’re severely
neglected by the markets and the government and aide sectors. And we’ve come up over
the last 14 years with unique platform of three
things that we think that really boost farmers
productivity and incomes. And one is farm technologies,
we design and create products that will make
efficient use of their resources, water, labor and so those
are our AG technologies. And then we also provide agronomy services to help farmers close the yield gap and deal with climate change
risk, pests, and disease. These are, like, best
fit, curated practices. And then we also provide farm finance that’s designed for their cash flow and so they can make
investments in their farm. This is not a generic bundle
that we give to farmers, it’s customized, more a customized menu, then farmers can choose
along their stages, various stages, their
journey out of poverty. So in a given year, last year we had about 100,000 new farm households
use our products and services. I’d say three things that are needed to have design be effective for farmers is number one, empathy’s not enough, you need deep knowledge of farming. And farming is very complicated, a lot of variables, and
very individualized. So you need people with deep
knowledge of farming systems, farm productivity,
profitability, so we’ve seen many designers come and try to
design products for farmers, but on the team, there needs to be that kind of expertise from farmers. Secondly, a lot of the
new technologies we see that are benefiting large farmers, they just don’t scale to small farms. So we have to really design intentionally to match the small farm
production economics. And that’s really tough
to do because they, two acre farmers gonna be
able to afford only a fraction of what a large farmer
in the west can afford. So this is a huge challenge that requires intentional and focused design effort. And thirdly, yeah farming is a very tactile livelihood or activity, and farmers… I think everyone from Monsanto down want to have a digital
relationship with farmers, and they want to do it,
everyone’s rushing to do it, but the reality is that
farmers, at least the farmers we’re dealing with are very
much still using analogs and want in person, seeing is believing. And so we rolled out a soil
testing service this year, and we wanted to be able
to deliver their reports, their soil diagnostics by mobile phone, the farmers are still insisting on seeing a paper copy of that report. So we’re having to
really use a combination of digital and in person channels. So that’s it for, and yeah three minutes. (audience laughing and clapping) – [Shalu] Next up we have
Jehiel from Hello Tractor. – Thank you (laughs) Good afternoon, everybody. I’m Jehiel from Hello Tractor, and at Hello Tractor we
use farmer-centered design, but we also, kind of, because
we work in a complex ecosystem supporting smallholder
farmers with mechanization, we also do tractor owner-centered design, and tractor dealer-centered design, and tractor OEM or
manufacture-centered design. And we do this work because
across the emerging markets, particularly subterranean
Africa and South Asia. Farmers plant late, they under cultivate their land and they lose income. And they do that because they
don’t have access to the power that they need, and that can be human, animal or, of course, tractors. And so our job is to make it profitable for those that can afford
to invest in a tractor. Make it profitable for them
to serve smallholder farmers. But because farmers are
the pull in our market that’s where we focus
a lot of our attention, and that’s actually the
more difficult part. So some of the reoccurring themes that you see here on this panel are organizing smallholder farmers into economically efficient
clusters or groups. What we do at Hello Tractor
is we sell our technology to tractor owners, we also
work with tractor manufacturers and dealers operating in the market. They buy our technology,
they fit that technology on their tractor, the
tractors that they sell. And through our apps they can see what their tractor is doing at all times. They can locate the tractor,
they know what the operator is doing, or if they’re misusing the tractor. And then the most important piece is, we have an app that
connects that tractor owner to farmers in need of tractor services. And like Debbie mentions, the
technology as a stand alone product really doesn’t
work, and we tried that. We used to have this SMS booking platform, for those that are familiar
with Hello Tractor and our work, and it was an absolute
failure in the sense that, a farmer, first of all,
is not gonna transact such a large quantity over SMS. It would be like us transacting our mortgage over a text message. In fact, it would be like our mortgage for the entire year over
text message, right? That’s a big decision to make, and so what we did was incorporated
feedback from our customers and pivoted to a booking
agent network system. Where booking agents had an
app, and they can coordinate clusters of demand within their community. So you now have an individual
that has relationship capital within their community,
coordinating that demand, and then pushing it to the
tractor owners on our platform. Giving the tractor owners the opportunity to earn revenue serving that demand. We’ve done quite a few other
pivots on our platform as well. Which we can get into during the Q & A, one of which, we used
to sell our own tractor. We thought that was a fantastic idea because in markets like
Nigeria, where we launched, there are no tractors,
you got six tractors per 100 square kilometers of arable land, that’s about the size of
Maryland, which is a huge area. So we thought, wow we can sell tractors, empower smallholder farmers
with tractor ownership, and then connect those tractor owners to the farmers in their network so they can monetize that
asset as a business. But the farmers didn’t
have access to credit, so we coordinated
commercial loans for them. They didn’t have the money
for the down payment, and then we were like, oh my
god, so we just spent two years setting up loans for
these farmers and we like to use market based solutions,
so we went to the commercial banks, they didn’t have the
down payment for the loan. But at the end, they
really just needed access to tractor service, they didn’t, they never really asked
to be tractor owners. In fact, they didn’t want
to take on that risk, they’re willing to do it, but they didn’t want to take on that risk. But there was liquidity in the market to support tractor
ownership at the SME level, even at the private equity
level, which we have some private equity funds
buying tractors on the platform. But the point was to make sure
that the farmers had access to timely and affordable tractor services. So by giving private capital, the technology to derisk the investment, we could then deliver the services that the farmers ultimately wanted. And that service is 40
times more efficient than manual labor and
it’s a third of the cost. And we’ll continue to
incorporate that farmer-centered design, but also tractor
owner-centered design, even dealer-centered design
to make sure tractors are fixed on time, to make
that ecosystem functional. Was that under two minutes? (audience laughing)
– No you did great. – Thank you. (audience clapping) – [Shalu] Thomas, you good to go? The next is Thomas from PULA. – Hi everyone, I’ll need a minute. – [Shalu] Just go. – Great, I’m Thomas
Njeru, co-founder of PULA. At PULA we develop and
distribute insurance and farm advisory solutions
to smallholder farmers. By end of 2017, we had about 600,000 farmers
across nine countries. I spent the first 18 years of my life in a smallholder farm, in
the slopes of Mount Kenya. And virtually everyone in the village was a smallholder farmer, my
mother and everyone around. The sad reality about
smallholder farmers is that they’re always one drought away from destruction, from poverty. They’re always one disease outbreak away from total destruction. Why, because most of them, they just rely, the whole village relies on farming right? And they don’t have any form of insurance. So immediately you can think
that, all I need to do is go sell insurance to
these smallholder farmers. Try selling or talking about
insurance smallholder farmers. Those are their faces. (audience laughing) First of all, what is insurance? I give you money, then if it doesn’t rain you give me back money. And continue having conversations. Trust issues, why don’t I wait and see. Or, I think I’ve done well, so far. And sometimes actually, after
you have that conversation, when the calamity strikes they call you, can I get that product we talked about? Of course it’s too late. The problem is that,
the smallholder farmers can not link the value of insurance to the challenges they
face on a day-to-day basis. So the solutions they come up with, probably will pray, hope
for the best, right? So at PULA, what do we do, how do we go around the problem of? One, we package insurance with products that farmers actually want. Products that farmers wake up
in the morning and go to buy because if you think that
a farmer will wake up to go buy insurance,
forget about it, right? This is seed, your fertilizer,
your credit, right, no, no. And we make it as simple as possible. So for instance, in case
of seed, for every bag of seed that is packaged
when leaving the warehouse, it’s, sort of, bundled
with an insurance voucher attached to the package of the seed. So when the farmer goes to the shop, the shop assistant helps the farmer to register using their mobile phone. And the point of registration,
you have the farmers landmark allocated to a satellite grid which monitors the amount of rainfall, where the farmer is located,
where the farm is located. And after three weeks, in the case, for instance for maize,
then if there’s no rain, then you give the farmer
another bag of seed. And all you need to do is
send the farmer an SMS, and they can go and collect
another bag of seed. Exactly the same place they
bought the bag of seed. So you have all set of technologies supporting that whole process going on. And we do that with
fertilizer, similar process with vet products as well as credit. Now, one of the things as
we go along in the process of designing for the
customer, we realized that at the point of registration,
we are able to collect very targeted, localized data, farmer data that allows us to give very
target advice to farmers. And this is process for planting
at the size of their farm. Their mobile number, their
location, so this data allows us to give very synchronized
advice to the farmer. Think about it, of giving
the farmer information, from the point of planting, very relevant information
through digital means. If you’re planting, this
is the best way to plant. If this is the time that
you think you’re supposed, rather you’re supposed
to apply the fertilizer, then this is the best way
to go about it, right? Which I think, one, it provides value to farmers every single season. The challenge with insurance is that for instance it might
pay once in ten years. So the farmer needs to understand,
what’s the value in this insurance if they have
to wait for ten years to appreciate the value of insurance. So the beauty of combining insurance and advice is one, the
farmer builds a trust, they can see the benefit,
that you’re caring. You remember that insurance is a concept of peace of mind, someone who cares. And secondly is that it, sort
of, improves their retention that the farmer now
sees the value that the subsequent season, they
will ask for the insurance. We’ve had cases where
the farmer buys insurance this year and then the
subsequent year, they’re like, last year was okay so why
should I buy this year? So then you need to have
a continuous benefit that the farmer experiences so that even when in good years,
they have an incentive to purchase in subsequent years. One of the products that we sell, it’s called replanting insurance. And it’s very different
from traditional insurance in the sense that traditional insurance usually pays at the end
of the season, right? But this one pays in the sense that, if for instance, within
two weeks of replanting, of planting then you have crop failure, or diminution failure for that matter, then we pay immediately, we
give you another bag of seed within a week and that allows
you to not miss the season. You can immediately replant
and not miss a full season. This is Christina, 27 year old in Malawi. She had total diminution failure in the 2017/2018 season. And we we’re able to
reimburse about 29 bags of seed within a week, and
she was able to replant. And that’s her farm a couple
of weeks after replanting. So she didn’t have to miss the full season just because of one week of a catastrophe. That’s all an element
of working backwards, and this came from the farmers asking, why do you have to wait
to the end of the season, why don’t you pay us now,
so that we can replant. We are a for profit, we
target to double the number of farmers from 600,000 to
1.2 million farmers in 2018. Just closed our first seed round to build systems as well as build a team and reach five million farmers in 2020. So if my last request, if
any one of you is interested to come to Africa and sell insurance to these smallholder
farmers, please talk to me. (audience laughing and clapping) – [Shalu] And we have Kola
Masha from Babban Gona. – Good afternoon everybody. – [Audience Member] Good afternoon. – Excellent. So my friends, we have a problem in Africa, and that problem
is rising in security. At the University of
Sussex, there’s a group of researchers that have been studying trends in global insecurities since 1997. Their data clearly shows that from 2007 to 2016, the number of conflict events
in Africa went up seven fold. Just think about that, seven fold in a ten year period of time, why is this? Well we believe fundamentally
as oxygen is to fire so are unemployed youth to insecurity. And we have a tremendous number of unemployed youth in Africa. Young women, like
Sandra, who on a Saturday morning in March 2014, woke
up excited at the prospects of getting a coveted job at the
Nigerian Immigration Service. She kissed her daughter goodbye, left her home, never to return. She was trampled to death that day, as thousands of people showed up for just a few open positions. Now, if we fast forward, in the next 20 years alone in Nigeria, 80 million youth will be entering the Nigerian workforce. Four times the number that
entered in the last 20 years. We have no time to try
to fix this challenge. So to do my part in 2012,
I moved to a small village in Northern Nigeria, my
friend Jenny actually visited us back then, it’s a
really tiny little place. And with an idea, that could we unlock the power of agriculture
as job creation engine, to create jobs for
millions of young people. We went village to village
trying to convince farmers of this idea, and we failed willfully. Barely able to recruit about a 100 brave souls, but we persevered. We kept doing what we promised, and slowly we gained their trust. With a passionate and
committed team over a period of four years, we
grew to become Nigeria’s single largest maize producing entity. Supporting 8,000 farmers to produce over 30,000 tons of grain by 2016. Enabling them to attain net incomes that are three times the national average. How do we do this? We’ll we recognize that
at the end of the day, a smallholder farmers biggest challenge is their low economies of scale. Those low economies of scale
that trap them in this cycle of poverty, where they
struggle to access the credit, to buy the quality and quantity
of inputs to be successful. The knowledge to use
those inputs effectively and despite their tremendous hard work, attaining yields often that are just 20% of other developing countries. At harvest, they’re under incredible cashflow pressures, selling
most of their products at that time at rock bottom prices. Now, we recognize that farmer cooperatives have played a critical role
to enable smallholder farmers around the world, solve this challenge. My family, my grandfather
was a smallholder farmer in South Dakota in 1913. From 1913 to 1930, he was
able to make enough money to send his children to school. So we looked at how could
we stimulate and leverage this power of farmer cooperatives
to solve this problem. We created a model we called
an agricultural franchise. Where we franchise a
network of grass-root level farmer cooperatives,
small farmer cooperatives. And support them with a
full suite of services, from training, training on
how to become great leaders of grass-root level farmer cooperatives. Training on how to migrate from a subsistence to a commercial mind-set. Training on how to become better farmers. Second, and most importantly,
we provided credit. We worked out a risk mitigation mechanism, we call our eight levels risk mitigation, that have enabled us to deploy
10’s of millions of dollars to 10’s of thousands
of smallholder farmers and attain a repayment rate of over 99.9%. The third piece is now
that credit comes 100% in kind in a holistic set of inputs, beginning with farm analysis. Understanding exactly
what that farmer needs and being able to tailor a credit package specifically to that farmers needs. The credit package includes
the highest quality seeds, great land preparation
services and other inputs. An individual that visits their
farm every two to four weeks and give them the advice and guidance they need to be successful, all
the way down, to harvesting, where we provide them the
thresher, the empty bag, the needle, and even thread
to sew up their bags. And then finally, we
offer them the opportunity to store and market their
products and get better pricing. We have a network of
transtation contractors that are similar to Uber that
will pick up their products from their field, take them
to one of our 33 collection centers, where the product
is weighed and graded. Within a week we can
collateralize that product, get them a loan against that
product, so that they have the cash in their pocket to
meet their pressing needs without having to sell that product. We then, as their agent,
market that product to them to leading buyers, like
Nestle, to enable them to get prices that are 25 to 50% higher than they would be able
to attain themselves. The reality, my friends, is that we’ve been fortunate to be able to today, this year our service closed
at 30,000 smallholder farmers to produce over 100,000 tons of grain. But in the next 20 years, in Africa alone, there are 400,000 youth coming out into the workforce. Half of them have the opportunity to make a living through agriculture. To support those youth, it would require 150 billion dollars in working capital. Sounds like a big number. But if we can tap into
the power of the capital markets and debt, it is a small number. Today, there’s 400 billion dollars given out in grant funding every year. But there’s 150 trillion dollars given out to debt every year. So all I need is 10 cents
out of every $100 of debt. We can do it because we have to do it. We cannot live in a world where there are young men
who, young men and women who are stuck in this cycle of poverty, being attracted into terrible insurgency groups like Boka Haram because they have no other options. I firmly believe we
can change this future, and we can give them a choice. Thank you. (audience clapping) – Okay the panelist can
you join me up front. I feel like after every
presentation, I’m like, sold, let’s do it, I’m
ready, sign me up! (laughs) Awesome, thanks everyone. So I’m trying to be cognoscente of time, and make sure we have some space for Q&A, so I’m gonna, kind of, go with a couple of targeted questions upfront. I’m curious about, I think this is a question to whoever wants to jump in, but the whole idea of building
trust in something new, that’s a new behavior, a new service, something that’s so integrated
into every community, what were the first
steps that you all took to be able to build trust in
the user you’re designing for? You want to go first Thomas? – Sure insurance is about trust, that’s all you sell, nothing else. And the concept of index insurance and because of the unique economics development of reaching
smallholder farmers, has been there for very long. The question is always that, remember you have to over time, I tell it, you build your models, you have your models at the backend, but then with those
models, most of the times, maybe 80, 70% accurate,
but the challenge with insurance is that if you want to stick to the rules of their
contract then you have for every 10 farmers you have one or two who are not happy, and
immediately that breaks completely their trust, right? And talk to most insurance company, they say, it’s always about
what is in their contract. So we did from the what go, we agreed that, we know that our
models are not accurate, so we set up a fund to pay, we set up a way to, sort of,
verify what is on the ground. It’s called basis risk,
so if the index is saying, you’re not supposed to be paid, but someone calls us and says,
actually I had a diminution failure, we verify with
two or three farmers that are around them, then
we pay from that fund. And for us, we look at
that as a marketing cost, an element to built that trust. And, of course, you continuously improve your model as you go along because as long as you’re
just sticking to the rules, that the index is not supposed to pay, and for sure that doesn’t matter, the farmer doesn’t care about
satellites and all those things you’re talking about,
who is this satellite? Tell them to come here and see that that my seed did diminute, this guy, you’re calling satellite. So I think, you have to be flexible, you have to be very flexible
if you want to built trust. Especially at the very beginning. – [Shalu] It’s like flexibility
as well as, kind of, a guaranteed benefit, like,
we’re not gonna question you as a user, we’re gonna just provide a seamless experience from day one. – Early on with our
foot pumps, we provided a one year guarantee, and
that’s unheard of in Myanmar, that was like, what’s a guarantee? And so people couldn’t believe
that, oh if this breaks or something that they
would get a new one, and so that was highly
unusual, and we gained trust. And the other thing was,
pest and disease outbreaks, we had a hotline number
that farmers could call, they could lose, in three
days, their whole crop, and so it’s, again, unheard
of to have the kind of service where the next day, someone’s down there helping them save their
crop and it gets saved and then the whole village
gains trust as well, so it’s very tangible, things like that. – So I think, for us trust
is at the core of what we do. And I think there are about, probably three things that we’ve done to do that. First, when we’re going
into the communities at the beginning, we had
no credibility whatsoever. So we basically leveraged on
the credibility of another organization that had been
working there for awhile, and got them to help us build
credibility by association. The second piece was really around building trust the old fashion
way and showing that you do what you say you’re going to do and to the extreme effect. And so for us as an example,
I think, it was probably our second or third year in operations, and the factory that
we buy fertilizer from, they had a pipeline that was bombed, they couldn’t get gas to make fertilizer. So we had to go out and we
figure out how to source fertilizer elsewhere,
at a much higher price. But we still sold the fertilizer at the same price that we promised ’cause we had already committed. And took a trading loss that year, and make sure we buy our fertilizer and stock it much earlier now. Those pieces are very, very critical. – [Shalu] Deliver on
what you promised to do. – [Kola] It’s very simple. – [Shalu] That’s awesome. – It also has to do a lot about the agent, the work that they have. And the way you can find and work for it that’s actually working,
is also about tapping into existing communities of trust, so in our case it was the
diminution of agriculture. Is run by the government, they’ve been working
with farmers for years, so farmers still know them and trust them, so we recruit our agents
through those programs. You could work through the churches, that’s why the church is very powerful. In Ghana, in the communities,
if you find people who, if somebody’s in a church,
maybe a pastor, a young pastor, that they could be
someone that people trust, or somebody in the Mosque. So that’s one part, finding
great people that people trust. The second one is making sure
people that you’ve selected are actually available and constantly working through response to questions, and that is tied to the
conversation model that you have. First, you find people
and then they work for you for some time, but then
would they be available when a farmer has a
question, would they be motivated enough to treat
the farmer with respect, and that is connected to
how much money they make from the business model that you have. So tapping into the network of trust and also building composition
structure that actually motivates your agents to actually respond to the needs of farmers. – [Shalu] That’s awesome,
did you want to jump in? – My response would be
similar to every one else’s. We tried the technology only solution ’cause our advisors from
Silicon Valley thought that was the best way for us to scale. To our dismay and theirs,
those who put money into our company, we
had to switch to a model that leveraged those
communal relationships and leverage that equity
that already existed. And then the consistency
of service delivery, even when you lose money,
a tractor breaks down, you send out another one, you
know you’re gonna lose money on that particular transaction, but over time, you build that trust. So you start with the foundation of trust that already exists, and
then you grow from there. – That’s awesome, I think,
kind of, following on the story of shifting from Silicone Valley advice, part of the design process
is being able to be flexible and shift directions based on the feedback that you’re getting on the ground. I know that, Aloysius you
talked about shifting from SMS to voice and then shifting your model from a tractor to a platform. How have you been able to, so I’m, kind of, trying to get at, have you been enabled
by the infrastructure, so I’m thinking about from
your investors, from your leadership, from your setup on the ground to be able to pivot to be able to grow? And I think that the follow on to that is, what would you ask of
the folks in this room to enable you to be able to
do that better in the future? I’m trying to make five questions in two, so that we can have Q&A. The question is around, like, I believe that there’s a
greater expectation of startups to be able to have the
right solution from day one, but being able to iterate
and pivot is so important, and I think all of you have
done that in various ways, so have you been set up to do that? And should you be able to
do it, should the system set you up to do it better,
or in a different way? – Yeah I think the first
thing is proximity for us is really important, to be able to always be asking questions and be curious of how our customers are doing. And we’re held accountable
when we’re very close to them and we’re selling things to them, it’s an ultimate accountability. If we put crap out there
and they don’t buy it, we know right away, so
we get that feedback. So that helps us pivot. It also keeps us very flexible in changing landscape ’cause things are changing quite quickly in Myanmar. So the proximity piece
is super important for us in getting information on
time from the customers. In terms of what our investors
and donors help us with is giving us unrestricted money, grants, that allow us to pivot quickly, and make mistakes, and correct, and without having to worry about budget line items and things like that. And just being able to
treat people as customers and selling products
is very different from giving them away ’cause you
get that immediate feedback. – [Shalu] That’s awesome, Aloysius. Oh sorry, Thomas, sorry.
– You mean Thomas, okay. – There’s one complication
when it comes to farming, the fact that, for instance, in our case, everything happens once or twice a year, so you have a window where
you sell, if it’s seed, fertilizer, two months or
three months in a year, you miss that, or just have
one opportunity of iteration. But traditional, think
about the typical concept of iterate land, perfect and then scale. So if you try that,
you struggle especially because you just have always
have that two, three window of opportunity to land, and
you applied in a years time. Makes it very slow, so we’ve
had to adopt a different model where you are in three or four countries where you pick, do
something here, you land, you transfer it to the next, in one year, at least you have four, five
iterations going around. Which, think about from some investors, your run of the mill type of investors, that sounds ridiculous, why
are you doing four things, which you’re still iterating, why don’t you perfect one and then scale? But this helps your iteration as fast, meaning it’s expensive in a way, but I think it makes the landing faster because I think about
the product we had one or two years ago, it’s
probably changed 10 times, which does help. – [Shalu] That’s a really
cool example of prototyping at scale in multiple
places, that’s really cool. Jehiel you were gonna jump in. – I guess my response is, it
was pretty straight forward. You have to know who your market is, so if your market is the in
customer, the farmer, then pivoting when there are certain
challenges that you face. For Hello tractor when we pivoted away from selling tractors, we
did it in an environment where Nigeria slipped into a recession, there was credit market contraction, we couldn’t finance the machines, the farmers didn’t have the capital, the naira depreciated against the dollar, effective price of the tractor doubled, in a very short period of
time, Kola you know about this. But we had to discipline ourselves to our customers needs so
we could continue to grow. But if your customer is
a donor, then you have to discipline yourself to their needs, and they have certain impact metrics. So I don’t even think it’s a binary, kind of, good or bad thing, if you ground yourself
in who your customer is, then you have to deliver for them. And for Hello Tractor,
we’ve always prioritized our customers, farmers,
and tractor owners, and so when we pivoted away from trying to sell tractors
to selling technology, which is a lot easier to
sell in these environments. We captured 75% of all the
new tractors that were sold in Nigeria, so that was the success for us, but USA wasn’t happy
because they wanted us to sell our little mini tractors (laughs). I hope nobody from USA is in the building, we love USA ID,
– it’s okay let them hear it. – USA is our, America
first, no I’m joking. (audience laughing) USA has changed a lot over
the last 12 months, hasn’t it? (audience laughing) It’s just about market discipline,
this is on camera, wow. (audience laughing) – [Shalu] Button up that suit my friend. (jehiel and shalu laughing) Awesome, thank you for that honest answer. Let’s take some question
from the audience. When do you want to, we
have mics coming over. So front row, and then we’ll
go on to the lady in back. Oh sorry, I was gonna have Wendy that’s up here in the front. – I’ve wanted to take the conversation in a bit of a different direction. Top of mind for me are
women’s smallholders. And we know that increasing productivity, especially for women’s smallholders has huge benefits at the household level. And it gets to these holistic benefits that have been talked
about to some degree. How have you been taking
women’s smallholders into consideration with
the different types of interventions, have
you had to differentiate that may or may not be a loaded question. Has your approach changed over time, and what are you thinking
about in particular, with regards to reaching
women’s smallholders? – So women’s smallholders
actually have a lot of similar challenges
to young smallholders. In the sense that typically, they have much smaller plots of land. So their need for productivity and enhancement is much higher. If you have a .2 hectare piece of land, you need to really optimize that. The other piece that they have is they’ve tended to not have investment capital. So they’ve been mining their soil more, so they tend those small plots of land, and have lower soil quality, soil health. So their need for comprehensive soil health solution tends to be greater. So we’ve actually designed
our model specifically for that demographic, that
has that particular challenge. We can finance farmers
lowest .1 of a hectare, and insure that they have,
are able to get yields that are typically about two to three times the national average. The challenge we face though,
which is a very vexing issue, is as you move into communities
that are more conservative, it’s harder and harder to reach women. And we’ve been really trying
to solve that challenge and through a series of
iterations of surveys and talking with different folks, we found out that really the
root cause is the fact that, their husbands often don’t let them, are not comfortable with letting them out and work with organizations like us. So we designed a product that
is specifically designed to make the husbands comfortable, and now what we do is
we finance their wives, their daughters, their mothers to have retail shops at the home. And then meet with them on a monthly basis to provide training
and so on and so forth. And the idea is still is not proven yet, our hope is that will
now become a pipeline for us to get close to 10,000 women into our program within
the next 12 months or so. – [Shalu] That’s awesome,
I think there was a hand, okay how about this woman right here. – Thank you, my name is Mica Riench and I’m here with the Grameen foundation, and I have a question
particularly regarding the use of the data
that is being collected through digital Ag initiatives. And Grameen foundation is
as many of you maybe know, is it has been an early mover
in the area of digital Ag, and so we’ve developed
a number of products and services that link
digital agriculture with extension workers in Latin
America, Asia, and Africa. And we’re finding that we
have this growing database of really granular data,
and in the age of big data, we’re starting to look at
what we’re doing with that and try to view as an asset that we have and collectively in the industry we have. And so Grameen just had
a webinar on Monday, in collaboration with USA
id’s, global development lab. We’re really trying to
launch a conversation about what we can do with
this data so that it can better serve smallholder
farmers and our industry. So I’m curious if any of
you are thinking about that and what you’re doing with the
data that you’re collecting? – Data privacy, you saw what happened yesterday, Zuckerberg was on the hill. So data privacy is something
that, at least in the US, our default setting is
we have to self-govern because the regulatory
environment has not evolved with the generation and exploitation of data. So we were fortunate to
work with Sidley Austin on revising our data privacy policies to be, not in alignment
with just the United States, but also what’s coming down the pipeline, in the European union, which
is much more conservative, in terms with how you can use data. And until we’re comfortable with how we can use this
information particularly these connected tractors
are mapping farmers fields, they’re mapping transportation routes, planting times, there’s
a lot of implications to this information, and so
how we self-govern is we don’t share that or do anything with that data externally until we’re comfortable with what the deeper implications might be. And it’s a very complicated
topic that I don’t think anybody has wrapped their minds around. So erring the side of caution will probably benefit, not
only the smallholder farmers, but the company’s that serve them because you can find yourself in a lot of trouble if you move too quickly. – From our side with
quality time to waste, we give tools to company’s, food company’s that are working with farmers
quality line and store it. When we do that, that
detects enough for us, and tell it for them is
their private information so we can’t do anything about it, we can’t look at it, or we can’t touch it. And then we collect data from
the families that we work with like Dartley and Ghana as well. So we use that information to help us to try the amount of
resources that they require, how much they can pay and all that. And often we get a lot
of people coming to us especially large manufacturers
that are trying to, have, like, direct assets to farmers. And the outcome they
asking the wrong questions, they’re like can you give
me database of 100,000 farmers that you have
with their phones numbers so they can call all of them
and try sell inputs to them. And we said no, we can’t give that to you because by the laws in
Ghana, we are a Ghana data protection act that
doesn’t allow us to do that. And two, giving you the
information would be useless ’cause what you want to do is, build a right package of
input information required, prices were and give it to them. If I give you the phone
numbers then you send out phone calls to them or you send SMS, you’re not going to get
a return that you want, so let’s us provide you
insight and advice you on how you can distribute your product. How you can build a product
and tailor it to the need to the farmers in the community. And how you can distribute
it at a price point that farmers can afford,
so we encourage them to ask for the insight, actionable insight, business insight. That would help them to
distribute more to farmers versus asking for the raw detail because everybody’s asking for raw detail, and most cases, they might
not need the raw detail, they might the insight that they can get to help their business. – Yeah, so just to talk a little bit about something different about data. We think in some of these
markets, the biggest issue is that you have
fragmented pieces of data, where everyone is trying
to collect their data, no one has the efficiencies, and no one has the view,
a full view of the data. To give you two examples,
one, say you have, the input companies don’t have a view of their customer completely, right? And at the same time, they have their own initiative, for instance seed companies to collect their data,
fertilizer companies, airgrow sort of, chemical companies, which don’t yield much food. So how we approach it is that for much of the activities
especially what we do with input companies when you bundle a product, so our agreement is that, sort of, that data is owned centrally, and then no one can benefit from it. So basically what we view
at PULA from a data point is that, sort of, build an ecosystem where you have all these
players can plug in. And build a data where
everyone can benefit from it. As long as it’s not about, at the end of the day
as long as they use this to benefit the smallholder farmer, then you build the skill, in terms of, to be able to collect that
data because think about it, we are collecting this data for insurance, but again, you can use the
same data for farm advisory. Then you have companies that
are spending enormous amounts of money to do digital farm advisory. Their cost of acquisition of that data is significantly high, so
then how do you go about building the skill efficiencies around it? Secondly, for another one
of our products, area yields insurance, we collect a
lot of the yield data. Probably have a depository
of a lot of yield data in Nigeria, nine countries across Africa. Now the question is, of course, the cost of acquiring that data, the yield data is high,
but then the question is, who else would be interested in that data? Then you reduce the cost
to each of the users. I think if we start looking
at it from a point of reducing the cost of data acquisition, and secondly, as long as it’s properly policed to the benefit of
the owners of the data, the farmers because it’s farmer
data at the end of the day. – [Shalu] Cool, I think we
are at time, unfortunately. But this has been
amazing panel, thank you, all of you, all the panelist for coming. Thank you all for coming.

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