Zambia National Farmers Union

The Problem

Over the last two decades, commodity markets have changed dramatically. To start with government and parastatal control is diminishing. This has created an opportunity for the private sector to get involved in market institutions. Furthermore, population growth, urbanization and a growing middle class has changed consumption pattern putting more demand on agricultural commodities. Moreover, the entry of national and multinational chains has created a new market dynamics. Finally, market liberalization is benefitting large scale farmers and traders and marginalizing smallholder producers and traders.

Smallholder producers and traders find themselves in a situation where market sets the price, where there is demand for products of consistent specification and in commercial quantities. Their inability to respond to these needs makes them passive players and they risk exploitation because of challenges such as:

• limited access to credit
• limited access to price information
• limited access to appropriate technology
• limited business and negotiating skills
• weak organizations
• weak bargaining power
• poor access to transport networks
• little or no knowledge of market trends

Solution and Key Benefits

 What is the initiative about? (the solution)
To respond to the evolving needs of Zambian smallholder producers and traders, the Zambian National Farmers Union, set up a demand-driven service - ZNFU4455 - to enable farmers and traders to stay connected with and informed about market demands and the changing preferences of consumers.

ZNFU4455 is a market information service open to all smallholder producers and traders. It provides accurate and up-to-date agriculture and market information covering the entire value chain. It allows smallholder producers to make informed decision about what to grow, volumes required, storage, processing, marketing and investment opportunities.

ZNFU4455’s prime objective is to make markets functional for smallholder producers and traders. The service provides a list of 180 traders - 50% of whom are active - and their offer for 14 commodities. To find the best price on offer, smallholder producers and traders send an SMS message to 4455 containing the first four letters of the commodity and the district or province. They immediately receive a text message listing the best prices and codes designating the buyers offering them. After selecting the buyer that best responds to their needs, farmers send a second SMS with the buyer’s code. A text message is returned with the contact name and phone number. Farmers are then able to phone the buyer and start trading. Each message costs around US$0.15.

Actors and Stakeholders

 Who proposed the solution, who implemented it and who were the stakeholders?
Zambia National Farmers Union expressed the need to set up a market information system allowing their members - smallholder producers and traders - to find out accurate price information.

Designed in 2006 with the assistance of the agribusiness development component of IFAD-funded Smallholder Enterprise Marketing Programme and in cooperation with the Zambia National Farmers Union (ZNFU), ZNFU4455 provides accurate and up-to-date agriculture and market information covering the entire value chain.

ZNFU together with its members implemented this service allowing smallholder producers to make informed decision about what to grow, volumes required, storage, processing, marketing and investment opportunities.

(a) Strategies

 Describe how and when the initiative was implemented by answering these questions
 a.      What were the strategies used to implement the initiative? In no more than 500 words, provide a summary of the main objectives and strategies of the initiative, how they were established and by whom.
The programme was inspired by initiatives in Africa and Asia and took advantage of the opportunities stemming from the use of mobile telephony in Zambia. Taking stock from previous experiences, ZNFU4455 adopted the following principles:
• service to be housed in an existing institution (ZNFU) with legitimacy and credibility
• government support and ensuring that the service was an integral part of the national policy
• users to receive useful information and know who is interested in their produce and where to sell it
• service open to any farmer that is willing to pay the cost of an SMS
• simple and user-friendly service
• provide users information upon request
• increase buyer’s access to products, reduce transaction costs and improve market intelligence
• allow buyers to set their own prices and provide weekly updates
• have a system administrator who ensures that market information is kept up to date
• market information should stem from large number of traders, thereby creating a critical mass and maintaining a competitive edge
• start with non-perishable commodities
• revenues to be generated through advertisement and sponsorships

(b) Implementation

 b.      What were the key development and implementation steps and the chronology? No more than 500 words
Between its launch in August 2006 and August 2009, ZUFU4455 managed to improve the bargaining power of smallholder producers, by providing them better access to markets and allowing them to deal with traders on an equal footing. Farmers have managed to reduce their transaction costs, are now producing more high value produces and targeting different markets. Thanks to the weekly updates, they are no longer overproducing, thus eliminating storage challenges.

Policy makers are using ZNFU4455 up-to-date information to identify trends in price fluctuations and to flag emergent and imminent food security challenges.

One of the success factors of ZNFU4455 is the fact that it is one of those few market information and IT applications that has little bells and whistles, it is easy to understand and use. It is a service that provides information upon request, as opposed to indiscriminately pushing content.

(c) Overcoming Obstacles

 c.      What were the main obstacles encountered? How were they overcome? No more than 500 words
In implementing ZNFU4455, while network operators were keen to support the service, the key stakeholders felt that there was not enough drive to embed this service in their existing packages. There were concerns that the network operators would not be deemed as credible enough to provide the service. Another source of concern was the patchy geographic coverage of the service which left out a sizable number of smallholder producers constituted a challenge.

To overcome the geographic coverage challenges, ZNFU4455 opted to use different means such as cellphone (SMS), internet and radio to disseminate agriculture and market-related information. By adopting this approach, the service reaches many more people through its radio programmes which are broadcast in seven local languages and in English.

To ensure good governance, ZNFU4455 as a service depends on two different institutions. ZNFU - the host institution - is responsible for uploading market data and to maintain integrity of services by screening buyers (something that the network operator was not incentivised to do). AfriConnect, is the content provider and is responsible for hosting the data, providing connection to the cellphone operators and guarantees the stability of the system by using its own infrastructure. This set up allows a 24hour, 7 days a week and a transparent service.

(d) Use of Resources

 d.      What resources were used for the initiative and what were its key benefits? In no more than 500 words, specify what were the financial, technical and human resources’ costs associated with this initiative. Describe how resources were mobilized
This service benefits from the commitment of policy makers, senior civil servants and private sector. The government provides assistance in terms of awareness raising and coordinating the lobby of the private sector. ZNFU4455 being a service-oriented undertaking adopted a business approach and is not subject to “decision by committee” or political considerations. As such it is not dependent on public financing. It is financed through membership fees and has put in place an excellent marketing campaign which allows it to make revenue through advertisement and sponsorships.

Sustainability and Transferability

  Is the initiative sustainable and transferable?
Once a luxury item, mobile telephony is now a catalyst to bring about economic development and social inclusion in developing countries, especially in Africa. For economist Jeffry Sachs “mobile telephony is the single most transformative technology for development”.

Mobile phone numbers talk for themselves. According to International Telecommunication Union (ITU) the number of mobile phone subscriptions worldwide has reached 4.6 billion. ITU estimates show that in sub-Saharan Africa there is 60% mobile coverage and one-third of the population has a mobile subscription.

Over the last decades we’ve seen the socio-economic benefits of mobile telephony on the lives of many poor rural people. We’ve seen how thanks to mobile phones those who previously were both socially and economically excluded are now actively participating in the economy and are able to connect with their families and friends. We’ve seen how mobile phone supports bottom-up economic development, provides entrepreneurship opportunities and gives voice to poor rural people and the voiceless.

Experts categorize the benefits of the mobile telephony in three categories:
• incremental: improving the speed and efficiency of what people already do
• transformational: offering something new such as comprehensive agricultural services (what to plant when, where to buy inputs, access to price information, potential buyers, transport, pest control and more)
• productive: offering employment and income opportunity

ZUFU4455’s services to smallholder producers and traders encapsulates and touches on all three categories of benefits of mobile phone listed above.

Services provided by ZNFU4455 highlight the fact that developing countries see and want mobile phones as the preferred information delivery system. There is enough evidence that poor rural people are willing to spend part of their income on such services. The challenge is to move beyond pilots and make sure that ICT4D initiatives are systematically embedded and mainstreamed in rural development projects and programmes so that there can be many more successful experiences such as ZNFU4455.

Lessons Learned

 What are the impact of your initiative and the lessons learned?
The success of ZNFU4455 is apparent from its popularity. Next time you are in Zambia ask a smallholder producer what is your lucky number and do not be surprised if the say: “ZNFU4455”. Since its launch in 2006, the website has received more than 165,000 requests for information.

To date, 90 percent of traders and 60 per cent of the Zambian farmers have benefitted from ZNFU4455. Forty percent have managed to negotiate better prices, 52 per cent have sold their products to different traders and buyers, 23 per cent managed to build new trading relationships, more than 50 per cent increased their income, 15 per cent of initial SMS messages to the system led directly to farmers selling their produce, and over 90 per cent of the calls to buyers led to transactions.

Both smallholder and commercial farmers and traders deem the service to be good value for money and a useful marketing tool. The service has made it easy for smallholder producers to find buyers, compare prices and do business. It has increased manifold their negotiating power. It has allowed them to save money and has made finding buyers much easier.

ZNFU4455 experience shows that when non-state market price information systems are carefully conceived they can provide excellent service to a broad constituency of users. The challenge is to build on pre-existing drivers of change which have strong credentials to generate and sustain interest and commitment from a broad range of actors and stakeholders. And that is exactly what the Zambia National Farmer Union did!

Contact Information

Institution Name:   Zambia National Farmers Union
Institution Type:   Professional Association  
Contact Person:   Coillard Hamusimbi
Title:   Head-outreach, member services and administration  
Telephone/ Fax:   +260211252649
Institution's / Project's Website:   http://www.znfu.org.zm/ and http://farmprices.co.z
E-mail:   hamusimbi@znfu.org.zm  
Address:   Tiyende Pamodzi Road, Showgrounds, P.O. Box 30395
Postal Code:  
City:   Lusaka
Country:   Zambia

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