Beneficiary Story
Valentine Barasa is a teacher and banana farmer in Trans Nzoia County, Kenya. She is a member of the Siwahoma Producer Organization. She heard about M-shamba from a fellow farmer and approached them. M-shamba (a market access service provider) offers an app, a virtual call center, and interactive voice and/or SMS services. These services are part of a digital extension platform that uses interactive voice response services to extend and transfer agricultural technologies to smallholder farmers. Mrs. Barasa says that “Since I joined M-shamba, my banana sale volume increased from 7.2 to 18 metric tons (annual), and total sales value increased from $720 to $2,945 (annual) and the market price increased from 11 Kenyan shillings (KES) to 18 KES per kg.” Mrs. Barasa has experienced a transformation in her agriculture as a result of accessing M-Shamba’s services, which can be seen from the fact that her sales value increased by nearly 300 percent.
Challenge
The agriculture sector has historically been central to economic growth and sustainable poverty reduction in Kenya, growing at 4.8 percent in 2020 and employing nearly 8.5 million Kenyans, for 70 percent of rural employment. Between 2005-06 and 2015-16, households with agriculture as the primary source of income accounted for 31.4 percent of rural poverty reduction. Agriculture has the largest share in the country’s exports, with vegetable and food products accounting for 54 percent of exports in 2019. However, the average productivity of major crops in Kenya has not increased at a significant rate annually. Maize productivity, for example, has increased by 17 percent over the last ten years, resulting in an annual increase of about 1.7 percent, lagging behind countries like Ethiopia and Tanzania. Total factor productivity has been stagnant for multiple reasons, including low access to extension and advisory services, low access to irrigation, lack of inputs, and quality data. To reach their full potential, farmers need access to the latest technologies and data. Governments, however, faced challenges in applying these technologies at scale because the technologies were dispersed and not institutionally linked with farmers.
Approach
The World Bank worked to foster innovation to transform service delivery at the last mile and provided substantial technical assistance (TA) and technical support at multiple levels in the government. This approach involved the launch of an Innovation Challenge that was jointly hosted by the World Bank and the Ministry of Agriculture in Kenya to identify AgTech startups that had demonstrated the use of digital technologies to enhance productivity and profitability of farmers .These digital technologies and innovations included innovations like the use of mobile apps to provide extension information and credit to farmers, leveraging tech platforms to enable access to markets, and use of apps and platform to enable access to good quality inputs like seeds and fertilizers for farmers. . The World Bank then facilitated partnerships between these identified AgTech startups and the government at the sub-national level through ongoing World Bank investment projects: Kenya Climate-Smart Agriculture Project and National Agriculture & Rural Inclusive Growth Project. The World Bank successfully leveraged the analog investments being made under these projects and linked them with the digital innovations brought in by the Agtech startups. For example, these projects invest in mobilizing farmers and developing their digital registry. This brought down farmer acquisition costs for startups and enabled them to reach farmers more easily. The projects also enabled farmers and farmer groups to access essential equipment that is required for them to leverage digital technologies.
Strong TA from the World Bank and enabling investments like the Big Data Platform, the development of a digital database of 1.1 million farmers, and analog on-ground investments all contributed to the rollout of the Digital Transformation Approach. The World Bank also successfully leveraged its convening power to bring in other development partners that enabled the ministry to leverage additional support.
Results
The platforms and partnerships set up under this project worked to transform last-mile service delivery in terms of inputs, extension, financial services, and market linkages in Kenya.
World Bank TA and support enabled results in the following policy reforms:
- The government of Kenya’s annual 5 billion Kenya Shillings (approximately $50 million) manual fertilizer subsidy system was replaced with a digital e-voucher system to provide subsidies in the form of vouchers directly to eligible farmers’ mobile phones to enable them to buy inputs (seeds, fertilizer, and agricultural chemicals) at a retail shop very close to their village.
- The Ministry has also developed the Big Data Platform & the Kenya Agricultural Observatory Platform (KAOP) at the Kenya Agriculture Livestock and Research Organization (KALRO). Since 2020, these platforms have provided comprehensive data, information, and agronomic advisories that have enabled national and county-level agricultural institutions, farmers, and other stakeholders to access high-resolution geospatial agro-meteorological data and customized advice. Five million messages were sent in years 2020-2022.
- In partnership with the World Bank, the Ministry launched the One Million Farmer Platform in 2019and facilitated partnerships between 27 County governments and 24 AgTech startups and innovators. Despite the potential disruptions of the COVID-19 pandemic, the platform reached 160,000 farmers using digital tools in under a year.
- The Ministry established the COVID-19 Food Security War Room (FSWR), whose core responsibility is to ensure food and water availability, accessibility, and affordability. The FSWR uses the Digital Food Balance Sheet (FBS) as the critical tool to monitor the food availability status in the country.
Bank Group Contribution
This work was supported by $2 million from the Korea-World Bank Partnership Facility (KWPF). The World Bank also provided TA to develop a data-driven digital ecosystem in Kenya.
Partners
The primary partnerships were between the 16 pilot county governments and the Disruptive Agriculture Technology innovators. Other partnerships include:
Alliance for a Green Revolution in Africa ( AGRA), Microsoft, UN Sustainable Development Goals (SDG) partnership Platform, and Rabobank foundation who have since supported the initiative. The Platform has now been expanded to include 24 startups and partnerships have been facilitated with 11 more counties bringing the cumulative number of counties involved to 26.
Looking Ahead
This project successfully demonstrated a public-private partnership approach to deliver a range of value chain services at the last mile. Kenya’s Ministry of Agriculture is interested in mainstreaming this approach as a critical solution to tackle the lack of extension services at the farmer level. Based on the results achieved on the ground through this ASA, the Ministry of Agriculture and the World Bank will include Data and Digital Technologies as a key cross-cutting component for a new project currently under preparation, the “National Value Chain Development Project” . This will further strengthen and institutionalize the Data & Digital initiatives launched through this project.