Business Spotlight: Mobile phones prove to be a lifeline for farmers in India

Gsma India

Rajender Singh, a poor farmer living in the heart of Haryana state in the north of India, one day received a message on his mobile phone. It suggested that he should delay spraying his 15-acre plot with pesticide since it was going to rain, an advice that ended up saving him 5,250 INR ($80)—quite a lot of money for Rajender and other small holder farmers, who earn on average just over $3.85 a day. 

He is just one of the 3.1 million users of Airtel’s Green SIM card, launched in 2007 by Bharti Airtel, the largest mobile network operator in India, in partnership with the Indian Farmers’ Fertiliser Cooperative (IFFCO), which distributes and produces fertilisers to farmers through a cooperative network, reaching 330 million people.

Green SIM offers voice and text agricultural information to Indian small-scale farmers, often living in remote areas of the country, to help them improve agricultural practices and increase their yields. The initiative is supported by GSMA whose Director General, Mats Granryd, is a member of the Business and Sustainable Development Commission.  

GSMA specifically provided seed funding through its mAgri initiative to improve the project’s internal infrastructure and helpline services, and also help ensure content quality.  

“We help Airtel and other GSMA members to expand in rural areas, so that their services reflect the realities of the market, helping them understand end users better and therefore enhance income,” says Natalia Pshenichnaya, Head of mNutrition, GSMA. “Most operators are already in urban areas, but the next untapped market in India and other developing countries is rural areas, that’s where the big business opportunities lie.”

(Image: Agricultural content offered through Green SIM service)

In India, almost two thirds of the population—more than 800 million people—live in rural areas, and many of them are small-scale farmers. Changes in climate have strongly affected agricultural production, with some regions experiencing unprecedented droughts in the summer of 2014, threatening the food security of millions of people particularly in poor rural areas.

Airtel’s service is trying to tackle this and other issues, turning these challenges into huge business opportunities, with extremely positive results for everyone involved. Data from GSMA mAgri-supported projects suggest that benefits of mobile agricultural information services include:

  • Repeat users are 30% more likely to grow new crops, using new seeds or new agricultural practices.
  • Consequently, 39% are more likely to report increased income in a given year than those not using this service.
  • Farmers who grow new crops are 60% more likely to report increase income than farmers who did not.
  • Crucially, this service is reaching the poorest farmers, with 88% of users earning less than $2 a day and 71% of users earning less than $1 per day.

On the business side, launching the Green SIM card has allowed Airtel to tap into the rural market, where big expansion opportunities lie.

The company reported that 5% of new rural mobile phone acquisitions came from the Green SIM card alone. Currently, 150,000 new users acquire this card each month, and 60% of customers stay on their Green SIMs for longer than 12 months, improving the loyalty levels of other customers. The service broke even in March 2011.

In December 2014, the Indian financial newspaper The Economic Times presented the project with an award for the ‘Best Use of Telecom for Social Good – For Profit Company.’

But business opportunities go beyond agriculture. In a survey carried out during 2012, subscribers indicated that they would also like to receive information related to education, health and employment alongside the usual agricultural content.

So messages sent to customers now include this additional content. Typical examples include messages on prevention of diseases, primary health and hygiene, the availability of educational courses in selected institutions and of scholarships for deserving students, and school admission schedules, helping people’s lives while increasing customer loyalty and mobile phone usage.

Beyond India

Since its launch in 2009, GSMA’s mAgri programme has reached 4.8 million small-scale farmers globally. The programme’s current mNutrition Intiative funded by the UK’s Department For International Development supports projects in Ghana, Malawi, Myanmar, Sri Lanka, Pakistan, and Bangladesh.

The most recent service launched in Myanmar is focused on smartphones, leapfrogging traditional phones, offering more visually attractive content to farmers including localised weather forecasts. There GSMA is working with a local mobile operator to develop the app, ensuring that rural users receive relevant data that will help them increase crop yields. Already some 10,000 small-scale farmers are currently using this service, but this number is expected to increase dramatically in the next coming months.

Despite the success of the mAgri programme, however, GSMA is aware of the limitations of this service. But GSMA is now looking to turn these challenges into business solutions. 

According to Natalia Pshenichnaya: “When a small-scale farmer registers into this service, it tells you about new crops and seeds that are drought resistant. But the local agri shop possibly won’t give you the option to buy these seeds, so even though the mobile phone is a great information tool, its impact would be much larger if the proper infrastructure was in place.”

The same is the case with financing, since farmers often do not have enough cash to invest in new products such as pesticides, or grow different crops despite being more profitable than traditional staple options. 

The next step for GSMA is to look at expanding financial services to rural areas, such as enabling payments to farmers via mobile wallets instead of using cash.

According to Pshenichnaya, “This will allow farmers to create a credit history, so after a few months they can apply for a loan, or save enough money. Offering these services is the next big challenge for the future.”

* Image from GSMA