How you’ll buy cheaper farm inputs using e-voucher

James Gitahi takes stock using a phone at his Tetu Agrovet Stores in Elburgon, Nakuru County. He sells fertilisers and seeds.

Photo credit: John Njoroge | Nation Media Group

What you need to know:

  • This app is only for agro-dealers,  who must register with the Agriculture ministry. Once appointed, the dealers are trained on how to use the app to redeem vouchers.
  • Through the app, agro-dealers will be able to verify the farmer with a genuine voucher. The farmer receives the voucher via a normal SMS even on a very basic phone.
  • The ministry will thus be able to know the number of vouchers that have been disbursed, how many have been redeemed, and how much has been paid to the agro-dealers.
  • This tool promises transformation of the smallholder farmer, who is key in attaining food security.

Over the years, the procurement of government subsidised farm inputs that include fertiliser has been riddled with corruption, with the products ending up in the hands of undeserving farmers and traders.

The process also disadvantaged farmers since they had to visit the National Cereals and Produce Board (NCPB) depots, some located far away, to access the inputs.

But starting this planting season, some 200,000 farmers in 12 counties will start using an e-voucher system to access the inputs at the nearest agrovet in a pilot programme.

The system, developed by a private firm and supported by the government, Kenya Commercial Bank (KCB), Safaricom and the Alliance for a Green Revolution in Africa (Agra), is expected to usher in a new era in inputs access.

Stephen Kinuthia, the Head of Agriculture at Mezzanine Ltd, a digital solutions firm that came up with the e-voucher app, explains what you need to know to use the system

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It has been long since the government conceived this idea and launched it the other day. How has the journey been?

Our firm was commissioned by the Ministry of Agriculture in 2015 to develop the software and by the end of that year, we had come up with a prototype.

This was later tested in Machakos, Murang’a and Embu counties to find out if a digital way of disbursing subsidies to farmers can work.

During that phase, we learnt some lessons, and among them was that farmers could easily receive electronic vouchers via short messages (SMS).

The other lesson was that we can find a way of serving farmers through use of the private sector (agro-dealers) and not using the traditional NCPB depots.

Since then, we have been improving on the system and today we can confidently say that we have a complete app that will allow agro-dealers to disburse government subsidised farm inputs particularly to smallholder farmers in villages.

Why did it take almost five years to get to the launch stage?

Three reasons. First, we had to agree on the lessons learnt and this took time to understand. Second is the procurement process.

Given that this is a government project, the procurement had to be done in a particular way to ensure transparency. Lastly is the contracting process, which had also to go through various stages.

How does the app work?

This app is only for agro-dealers,  who must register with the Agriculture ministry. Once appointed, the dealers are trained on how to use the app to redeem vouchers.

Farmers do not need an app. Once they are registered, they only receive an sms with the voucher based on their value chains.

We have four value chains. First, maize in Trans Nzoia, Uasin Gishu, Nandi and Bungoma counties. Second, Irish potato in Nyandarua and Elgeyo-Marakwet.

Third, rice in Kisumu and Kirinyaga and lastly, coffee  and tea in Nyeri, Embu, Meru and Kericho.

Through the app, agro-dealers will be able to verify the farmer with a genuine voucher. The farmer receives the voucher via a normal SMS even on a very basic phone.

Using this voucher, he can purchase the needed farm inputs from the nearest agro-dealer, and pay 60 per cent of the market price. The 40 per cent is catered for by the government.

Once the farmer redeems the voucher, a message is sent to the ministry with all details regarding the transaction.

The ministry will thus be able to know the number of vouchers that have been disbursed, how many have been redeemed, and how much has been paid to the agro-dealers.

What are the merits of using this app as compared to visiting NCPB?

It offers transparency, visibility and real-time information across the board enabling decision-makers such as the principal secretary or the Agriculture ministry’s programme staff to follow the happenings.

Another advantage is the ability for farmers to be easily register. This is done by local extension officers who they know very well.

Stephen Kinuthia, the Head of Agriculture at Mezzanine Ltd, a digital solutions firm that came up with the e-voucher app explains what one needs to know to use the system.

Photo credit: Isaiah Esipisu | Nation Media Group

Thereafter, farmers receive their vouchers based on the criteria they qualify. A criterion classifies farmers based on the main crops they intend to grow and their location.

The system is also able to control the subsidies’ central budget, making it easy for the government to deposit cash to the bank, and from that deposit, it is also easy to disburse value to farmers centrally.

This minimises the manual work where farmers had to pick a letter from one office, seek for a signature from another, then go to the bank for approval and thereafter to the depot where they were subjected to long queues.

Do you think using the app is fool-proof, that unscrupulous people would sit not find a way to manipulate the system?

Without doubt, I say yes. The system gives data, and it is very easy for anyone to use the data to track where there is fraud.

For example, if our data analytics/the algorithms show that there is something shoddy going on in a particular place, it becomes so easy to investigate.

Second, since farmers are vetted and registered by an agriculture extension officer, who is the frontline person, it is so easy to eliminate people who are not farmers.

What challenges may arise through the use of the system?

As use of the app takes off, one of the most important things is that agro-dealers must have sufficient stock.

If that doesn’t happen, then that will be an impediment. But I am confident that this can be easily mitigated.

This tool promises transformation of the smallholder farmer, who is key in attaining food security.

It also gives us an opportunity to move subsistent farmers into smallholder farmers where they are able to make a little bit more than for home consumption.

- [email protected]

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Benefits

  1. The new system is expected to facilitate farmers’ access to subsidised soil testing services, seeds, fertilisers, post-harvest handling tools and other inputs needed to increase production after the government scrapped a decade-long subsidy scheme implemented by the National Cereals and Produce Board.
  2. The new scheme will put in the hands of farmers a 40 per cent incentive, in an arrangement where they will have to contribute the remaining 60 per cent.
  3. Participating agrovets will receive the 40 per cent (government) share from Kenya Commercial Bank.