Mobile Layaway for Farm Inputs: A Silver Bullet for the Silver Bullet

I guess it makes people feel grizzled and wise to say “there are no silver bullets for development,” because just about everyone does. It’s one of those universal clichés. 

As with most clichés, this one mixes a good deal of common sense with some worrying blind spots. The contrarian in me wants to pick at it: doesn’t this reverence for complexity amount to a cop-out?

Take agricultural inputs. A large majority of the “Bottom Billion” are small-holder farmers. Nearly all of them have abysmal incomes as a direct result of working with sub-standard inputs: low yield “saved seed”, old-fashioned farming methods and, too often, no fertilizer at all.

So I’m going to commit the ultimate development heresy and suggest that, for very poor smallholders, better agricultural inputs are a silver bullet. Improved seed, fertilizer and extension services would be enough, on their own, to help millions overcome the most extreme forms of poverty.  That’s why any intervention that targets innovative solutions to the agricultural inputs problem automatically gets a Boring Development gold star.

Of course, when you look closely at the Ag Input problem, you realize it’s really a series of nested problems, some logistic, many regulatory, more political, but perhaps the biggest of them financial: inputs is a big, “lumpy” expense. It’s just hard for very poor farmers to come up with $100 all at once to buy hybrid seed and fertilizer.

Smallholder financing for inputs turns out to be a hard question. Which is why the little boomlet of initiatives to address it seems to me to be one of the most hopeful developments in the development world.

Take MyAgro. Founded by One Acre Fund alum Anushka Ratnayake, MyAgro a Layaway system to allow farmers to save up for that crucial Seed/Fertilizer that piggybacks on Africa’s mobile-telephony boom to help farmers save for seed and fertilizer.

The idea is disarmingly simple: even where there’s no M-Pesa, farmers are already familiar with the scratch-card system for topping up air time on their phones. And if you can use scratchcards to buy up air time, you can use them to save up to buy ag inputs.

If cobbling together $100 all at once to buy seed and fertilizer is a daunting prospect for very poor households, why not allow farmers to do it little by little, saving 10 bucks here, 5 bucks there until they reach their goal?

Now in its 3rd year, MyAgro may or may not prove to be a success. But already they’re getting a lot right:

  1. Recognizing that the heart of the input problem is really a financing problem. Even though he can expect a 300-500% return on his investment, putting together $100 is a daunting task for an African smallholder. Zeroing in on this aspect of the problem is key.
  2. A Marketing outlook: Notice the nice “M” logo? The scratchcard distribution model? These guys realize that it’s not enough just to have a good idea. You have to sell it. And to sell it, you need a marketing strategy. If you don’t market it, it goes nowhere.

Yesterday, I argued that Hybrid Seed is the most boring of all development interventions. But maybe that was premature. Maybe financing for hybrid seed trumps it. It’s just too boring to fail.

3 thoughts on “Mobile Layaway for Farm Inputs: A Silver Bullet for the Silver Bullet”

  1. Ag input support may be *as close to* a silver bullet as you’ll find… but what about the markets problem? I’ve met plenty of farmers who’ve been thrilled to receive support for inputs and doubled yields… only to watch half their crop rot. So you end up supporting traders and building links to agro-processors and advising on governance issues and before you know it you have a situation I suspect you might characterise as ‘development bloat’.

  2. I agree with all of that – strongly – except for the very last bit. Supporting traders and building links to agro-processors and advising on governance issues sounds like an *excellent* one-sentence summary of a smart Boring Development agenda to me.

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