Originally written on Tuesday, 7 January 2020
Solutions that bundle multiple digital agricultural services have the capacity to unlock the potential of smallholder farmers. However, emerging ‘super platforms’ are complex and their impacts need to be carefully assessed before widely promoted in Africa.
A super platform is a type of digital agricultural solution which bundles together, in one platform, multiple different services for farmers or other smallholder value chain intermediaries and, typically, integrates digital advisory services, market linkage services, and financial services, among others. It’s not about a bucket list of services on one platform by a given service provider; super platforms bring services that complement each other together, enabling them to strengthen one another and create added value.
Super platforms take a comprehensive approach to service provision by linking farmers to market (input and output) and to the broader ecosystem of finance, advice, and other services, thereby reducing layers of intermediaries and creating immediate economic value. Minimising the number of service providers a farmer deals with is a key benefit of super platforms. Rather than having separate service providers that offer digital market linkage services, financial services, index-based insurance and climate-smart advisory services to a farmer, super platforms that can build all of these services to complement each other will have the advantage in the future to reach more farmers, create operational efficiencies, improve farmer trust and loyalty, establish quality control over value chain inputs and outputs, and provide valuable data and insights.
Business models for sustainability
The Market-led user-owned ICT4Ag-enabled information service (MUIIS) in Uganda – a digital agricultural service funded by the Dutch government and implemented by CTA – started as a bundled service with precision advisory and agri-insurance services. The service is now moving to integrate payments, credit, and market linkage elements as it explores a move to a super platform model.
The biggest challenge while building this model with MUIIS has been securing relevant stakeholders, particularly with a lack of private sector/business partners. In hindsight, I’d have gone for a model of super platform in which governments take the lead. Government builds the basic data infrastructure – the middleware. Private sector partners – including banks and input dealers, which need to provide services to smallholder farmers – would then be able to join and build the super platforms in partnership with the government and use this strong foundation to continue the process. Providers of financial services, advisory services, market linkages, and supply chains, etc. could all be part of the system.
In order for banks to give loans to farmers, for example, they need to know the farmers, and it is governments that are most likely to be the reliable source for such data, the data infrastructure, and the middleware, including farmer’s digital IDs; so banks need to partner with the governments to be able to provide financial services to farmers in a more trusted way. A mobile network operator (MNO) that wants to deliver mobile services to farmers needs to work with the government to access farmer data. With data infrastructure, aggregators can easily locate farmers, know what crop they are growing for the season and the yield forecast among others. This data can also be used to secure loans from banks to purchase the produce from farmers.
While governments can provide basic infrastructure for super platforms, they cannot do everything; the private sector has an important role. Governments are not business-oriented so may not be able to build strong business models for sustainability, for example, so if business models are not built into the platform they will not work. A key factor that must be built into a super platform is ‘who will pay for the services’ to be delivered to the end users. Super platforms will only have a future if they can define how that payment is made; whether it is farmers, or businesses.
Super platforms vs young start-ups
Super platforms are interesting models which have advantages and challenges, but I’m not a fan. I am not sure if we have yet reached a stage in Africa where the advantages of super platforms outweigh the challenges. The young digital entrepreneurs that we work with and support do not have the capacity to build such platforms in Africa. So, if I promote super platforms as the way to go, then I’m killing their businesses. For example, if the ‘powerful’ such as a government or MNO invest in such a model without considering young start-ups/entrepreneurs, these young people will be out of business the next day. Unless we define the role of each actor in the partnership, identify ways and put in place measures and strategies for the start-ups to work with the ‘powerful’, the ‘powerful’ are likely to take over, and this may not be in the interest of smallholder farmers. The ‘powerful’ can invest in the development of super platforms, but sustaining this within the development context is another issue as the interest of the ‘powerful’ is – most of the time – for profit, not development.
Developing, operating and sustaining a super platform is extremely complex and difficult. Hence simple and focused platforms could potentially be more successful than those that promise to do everything. At the same time, we have seen the very low survival rate of these single service platforms. Therefore, it will be good to see how the complex super platforms that aim to combine a number of services actually operate and are sustained. Hence, if I look into the future, I see few of the super platforms surviving across the continent.
So, we have to wait and see how they survive, and then assess their impact before we promote them more widely. The concept needs to be proven under the various geographic contexts and then we need to see how to scale and sustain them.