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Peter Kuthan / AZFA
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« on: February 05 2007 »

Last Tuesday saw the launch of an initiative that will combine lessons learned from the success of peer-to-peer sites with agricultural market intelligence in Africa. And perhaps most interestingly of all, the goal is to leverage the mobile networks and their extensive reach into rural areas to do this.

‘There’s been lots of coverage about farmers using mobiles to get prices. Lots of it was hype. We’ve learned a lot from the early mistakes and have developed what we would consider a market intelligence platform 2.0’ says Mark Davies, the investor behind Tradenet.

‘The point is not just to deliver price information, which can be misinterpreted anyway. The point is to get to the core of what people are doing and give them tools to do it better and faster. In agriculture, that’s buying and selling. So we’ve developed a system that is focussed on exactly that… Someone, anywhere, with something to buy or sell can use the power of the mobile networks to expand and exploit new markets…’.

The development team in Accra has spent the last two years studying the market needs and building software that enables traders and producers to find each other. You can register your mobile phone to receive buy and sell alerts from other users that text them in. These can be targeted to the commodity you work in, and the region of your choice.

Davies is an Internet entrepreneur who has already launched three successful star-tups, each on a different continent: CitySearch/Metrobeat was started in 1995 in New York, FirstTuesday in 1998 in London, and BusyInternet in 2000 in Accra. Busy is the largest privately-owned technology centre in sub-saharan Africa focussed on developing individuals and SMEs.

It was after three years of this work that Davies felt frustrated that the promise of technology and internet in Africa was not really making a difference in people’s wallets. ‘It was a period of disappointment… we felt the same way in the States four years in... So much promise, so many ideas, so much hype, and particularly in Africa in the development community… I would go back to England and people would expect stories of how the Internet was transforming lives… it was much slower than that, much more subtle. So I wanted to speed things up…’

In a meeting with Technoserve discovered that farmers were desperate to get current prices so they could negotiate better deals for themselves when selling. ‘It was classic information manipulation… the traders knew the state of the markets and leveraged that to exploit the less powerful farmers in the rural areas… I thought we could shift the balance a bit in favour of the small-scale folks by giving them more knowledge…’.

Two years later, with help from different projects across Africa and South America, Davies recognizes that prices on mobile phones is just one part of the story. ‘Maybe it’s the sexiest story and the best picture to put in magazines, but it doesn’t really put money in pockets… you’ve got to go further… you’ve got to help people sell. You’ve got to help them interpret that information… turn it into market intelligence..’.

So instead of focussing on a publicly funded government service providing prices and news, TradeNet has evolved into a sophisticated lead-generation tool. Anyone in the world can submit an offer to buy something and it will be distributed via SMS to registered farmers and producers. “We’ve had people in Japan and the USA find traders in Abidjan… Someone in Yemen found an organic fertilizer seller in Lagos… Onion producers in Burkina found buyers in Accra… “

Increasing regional trade within West Africa was also the mandate of a USAID funded project called ‘Mistowa’, run by IFDC. When they started up they saw the potential in what the BusyLab team in Accra was building and licensed it for their ten countries.

“Tradenet was a great partnership for us… they brought all the technology innovation that Internet entrepreneurs are famous for. It allowed us to focus on capacity building and content aggregation. We’ve been reaching out to traders and producers and signing them up, building awareness. ‘ says Dr. Kofi Debrah, the chief of the Mistowa Project. But Mistowa, scheduled to run for 4 years with 15 million dollars was cut short by one year and four million. ‘It breaks my heart’ says Davies.. ‘just as these guys are beginning to understand the market and the potential, and are familiar with habits and needs of their target audience, the rug is pulled from under their feet. I can’t understand how reckless Development can be with projects and people’s lives. Just as they get moving, they’re stopped. It really reinforced my belief that TradeNet cannot be a public donor-funded service. Rather, we must deliver value, be accountable to the users, and get them to pay. It’s a much greater chance of long-term viability.’

Indeed TradeNet, although dependant on projects like Mistowa (and FoodNet in Uganda) in these early years, has a very clear transition plan over three years to full sustainability. Whereas basic information about prices and offers will be free, custom, private-label sites that use the technology and tools of TradeNet to deliver private content to their members will pay fees for these tools and in this way, everyone benefits.

Davies sees the route ahead through free web sites:”Just like Myspace, we’ll offer free sites to any individual, company or group that wants to showcase it’s products online… but as soon as they start crossing national borders, want to integrate with the SMS providers, distribute private supply chain management tools and information, then they pay. ‘

It’s a gamble admits Davies, but with at least 60% of the African economy still involved in agriculture, whoever provides a set of tools to help people make money will make money and survive. ‘Unfortunately in Africa, too many are risk averse to true innovation, there’s too little capital to play with, and the donor community still has a natural aversion to working with anyone who’s comfortable with the concept of profit. Until that mentality changes, all development work will undermine private sector innovation, despite claims to the contrary”.

“The donor community is on a project cycle beholden to their donors and their political whims, which change all the time. We need to see them, like Mistowa, supporting private sector initiatives like TradeNet that are beholden to their customers and can survive for as long as they provide a service and charge for it.”

Piloted for the last 12 months, TradeNet is now available across Africa. They’re actively involved in over 300 markets collecting prices and distributing offers, news, and documents. In an impact survey in Uganda Foodnet MIS found that 68% of farmers regularly access market information based on the Tradenet Market information platform. Up to 91% of farmers indicated that receiving MIS had a positive to very positive impact on their business. Farmers regularly using marketing were found to make gains of 12-20% on prevailing market prices, whereas, farmers using MIS in groups made gains of 20-34% on prevailing prices. Whilst 94% of farmers have radios, in 2006, 25% of farmers owned mobile phones but virtually all farmers could access a phone.

If you are interested in getting TradeNet up and running in your country contact info@tradenet.biz

source: balancingact-africa
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