One of CTA’s most innovative digitalisation projects, the Market-Led User-Owned ICT4Ag-Enabled Information Service (MUIIS), made good progress in 2018, helping smallholder farmers in Uganda significantly improve their crop yields and profits. Launched in late 2015 with support from the Dutch Ministry of Foreign Affairs, MUIIS set itself the goal of increasing the yields of 200,000 Ugandans farmers by at least 25% and their profits by 20%.
In March 2017, MUIIS launched a unique service bundle, delivered by text to mobile phones, which provides farmers with agronomic tips, weather alerts and index-based insurance. It was originally hoped that 100,000 farmers would sign up for the service, which cost US$2 per cropping season, by the end of the second year. However, progress was disappointing, with just 379 farmers subscribing during the second season. Most farmers in Uganda were used to receiving advisory services for free and were unwilling to pay for the product. Nevertheless, those who did receive the service bundle reported significant increases in yields and profits.
“From our research, we could see that lack of access to finance was a serious barrier to adopting a whole range of innovations which could improve productivity,” says Benjamin Kwasi Addom, CTA Team Leader for ICT4Ag. In late 2017, he and his colleagues began discussions with the Rabobank Foundation about the possibility of introducing a loans scheme to smallholder farmers. “We pointed out that by digitally profiling farmers, we had already gathered the sort of information banks and financial institutions need when assessing creditworthiness,” says Addom. By the end of 2017, MUIIS had digitally profiled 130,000 farmers, a figure that would double during the course of 2018. The profiles provide detailed information on everything from geographical location to crops grown, size of family to assets owned – just the sort of information banks need when assessing loan applications.
Rabobank Foundation approved a loan of USh1 billion (€230,000). The MUIIS project agreed to manage the loan, with the money being channelled through the financial arm of the Ugandan Cooperative Alliance. Farmers who applied for the loans, which they could use to buy inputs like seeds and fertilisers, received USh80,000 (€17) per ha, up to a maximum of 2 ha each. As a condition of the loans, the farmers took out a subscription to the MUIIS service bundle.
The first tranche of loans was distributed to 1,890 farmers, covering 2,000 acres of cropland. Lydia Kiwuka was a typical beneficiary: “Last season I used cow dung and urine to fertilise my maize because I couldn’t afford to buy fertiliser,” she said. “With this loan I have paid for fertiliser needed for the whole season. I’ve even bought some preventative pesticide in case the armyworm [a major pest of maize] comes back to my farm.”
To provide empirical evidence about the impact of both the service bundle and the loans, CTA commissioned a study which was carried out by the Alliance for a Green Revolution in Africa and the National Agricultural Research Organisation of Uganda. The study, which focused on soybean, maize, beans and sesame, provided compelling evidence that the service bundle and loans led to a significant increase in crop yields.
“We had been hoping that farmers would increase their soybean yields by 25%,” says Addom. “But they did much better than that.” Soybean yields increased by 60% and bean yields by 90%. At the time of going to press, there had been a good rate of loan repayment. Addom believes that hard evidence of increasing yields will encourage organisations like the Rabobank Foundation to make further loans in future.