Financially viable advisory services for farmers
In a nutshell
|Sustainable Development Goal||Zero Hunger|
Over the years, India has become self-sufficient in food production and now ranks as the second-largest producer of major food grains and vegetables globally. However, its agricultural productivity falls far behind that of other large food-producing nations in terms of yield per hectare. The resource-intensive agricultural practices followed in India threaten farming sustainability by, for example, increasing land degradation and stress on water resources. Farmers also face the risk of uncertain weather conditions exacerbated by climate change. Although more than 85% of farm holdings are small or marginal in size and land fragmentation is growing, 70% of rural households and 59% of the country’s total workforce depend on agriculture for their livelihoods.
Precision Development (PxD) uses low-cost, scalable digital technologies to empower smallholder farmers to sustainably improve their agricultural productivity and incomes and respond to shocks. Through mobile telephony, it has reached 3.6 million farmers, 1 million in India, with customised information that can improve their on-farm practices, input utilisation, pest management, climate resilience and access to markets. A two-way platform allows farmers to access advisory and have their queries answered with a basic mobile phone.
Because collecting small fees from individuals is prohibitively costly, and often ends up excluding the poorest, PxD does not charge farmers for advisory. Instead, PxD is exploring whether revenues generated through partnerships with organisations that offer valuable services to its existing and future customer base, could offset the cost of advisory. Our grant will support the conceptualisation of a business model, or multiple service delivery models, to be piloted with 100 000 farmers that use PxD’s advisory services. A 2020 report on smallholder advisory services that we commissioned suggests it’s still rare for service providers in this segment to cover their costs.
Goals and Expected Impact
The main objective is to test and learn which service delivery models allow PxD to pursue revenue-generating activities at scale, while providing value-added services to farmers, with the longer-term goal of breaking even on its services. Revenues raised will go toward maintaining or expanding PxD’s services to more smallholder farmers. A key deliverable is a document that summarises the initiative’s key learnings, which will be shared widely within the advisory services sector.