“The Internet for the Next Million” – Mobile Innovations in Rural India

by Dina on August 31, 2009 · 17 comments

in Bridging The Divide Rural India,innovation,Mobile

It’s how Natesh, Head of  Nokia Life Tools India describes the program – I like the realism when he uses ‘million’ and not ‘millions’ or ‘billion’! Alan Reiter, who was with us during our rural immersions has a great article on Life Tools – here’s an excerpt:

Farmers view Dhanaji Dongre’s crops in Khandali, India, and ask why they are looking so much better. Dongre says it’s because he is using agricultural information transmitted to his cellular phone, and he shares that information with others. This is how mobile data empowers people in rural India.

Dongre farms some eight acres with such crops as corn, tomatoes, eggplant, and wheat. He lives in a modest home with simple furnishings, and he typically uses animals for farming rather than tractors or other motorized equipment.

Dhanaji Dongre is a farmer from the Mohar Taluka in Sholapur District, Maharashtra; one of the crops he grows is ber or bor. By no means poor, despite his simple living and manual field operations, Dhanaji tells us how he was helpless at the hands of middlemen, transporters and wholesale markets prior to using the Agriculture Life Tools.

http://farm3.static.flickr.com/2599/3873130535_6a017ffe50.jpg

How it Works:

While there are many programs, including those run by the government, that hold a lot of useful information on market price, dissemination of this information is usually poor. Here’s where the Life Tools program delivers – it allows access to this information, and disseminates it in the simplest manner – through SMS. Internet kiosks are doing some of this, however they are plagued by infrastructural problems (erratic electricity, high outages etc.).

What’s interesting is that Nokia as an Agri Desk at the backend which works with State Agricultural boards and NGO’s; and collects/mines/analyzes/validates/disseminates this information – most of this backend work is done via the Internet. However, for the end-user, the farmer, it is his mobile phone that is the touch-point, the delivery mechanism, and he is totally unaware that the Internet is actually being used. It’s often been said that India will leapfrog the PC stage, and it is the mobile that will be the device that delivers the internet to people – this is a real example!

For Rs. 60 (US$ 1.3) a month, he gets three types of information daily:

  • market prices within a 100 km radius for three crops registered by the farmer – price alerts are sent late evening every day, and are factored upon minimum-maximum price traded that day, and supply levels.
  • daily weather updates at 7 am – based on location of the subscriber (the more rudimentary method of using pincodes rather than GPS for now) and advisories based on the three crops registered by the farmer (eg. if you’re growing this crop, take this precaution)
  • advisories – alerts, precautions, tips on best practices, pesticides and fertilizer information; and neighbourhood news within the 100 km radius and dependent upon the crop. (eg. there’s a growing incidence of red colour stains on sugarcane crop – take XXX precaution). These are sent early evening.

Benefits and Motivators:

We interviewed Dhanaji for a while, between shooting breaks, to try and understand how all this has impacted his life, changed it and made it better.

[Picture credit]

Dhanaji told us that he had wanted to purchase the Nokia 3110 seven months ago, but when he went to the dealer, he was shown the Nokia 2330 with the Agriculture Tools service. He was primarily attracted by the fact that he would get daily market prices for the crops he grew. As a farmer, he was otherwise almost held to ransom by the middle-men and transporters who would take his produce to the marketplace. These middle-men worked on a commission basis with the wholesalers and retailers at the markets, and did not really look after the farmer’s best interests, holding him hostage to their greed. So more often than not, he never did get the best price for his crop. Moreover, approximately 25% of his revenue was “eaten up” by these intermediaries he felt.

With the power that comes with access to information, Dhanaji now insists upon a fixed price with the middle-men, and also asks them to take the produce to the market of his choice. Also, he feels better equipped to buy and more in control of the pesticides and fertilizers he needs.

How does he make is assessment whether the Agriculture Tools service on his mobile phone is working?

  • his revenue has increased – he says “if earlier I earned Rupees 100, now I earn Rs. 150″
  • he feels he’s better equipped for timely interventions and precautions that ensure his crop is doing well
  • he feels more knowledgeable when he goes to the shop to buy pesticides and fertilizers. Often product info on the packs are in English or Hindi and he doesn’t understand either very well. So he would rely on the shopkeeper’s recommendations on type, brand, method, timing – which he feels could be biased by the margins they get on each product. Now he knows better and has been asking for specifics

He says people ask him why his crop looks “visibly better” – which for him is proof! Another consequence is that he is now perceived by other villagers to be the thought-leader – and this gives him immense satisfaction and a sense of power, status and achievement. I asked him why others in the village weren’t buying the service, especially since it had all these benefits, and he said they don’t need to – all they need to do is ask him for his advice on how they can grow a healthier crop, and get better market value!

Equipped with knowledge around farming, access to better prices and the ability to make choices, I do hope these sorts of initiatives will help alleviate some of the strife our farmers face, often leading to suicides, especially among poorer farmer.

It’s also a smart marketing move on Nokia’s part and can be a really profitable venture – 70% of India is still rural, a large proportion of that is in agriculture. Mobile phone penetration urban and rural in India is at 34% and the rural segment is growing quite fast. This means many many many millions who are yet to be connected. Natesh’s estimate of connecting the next million using the cell phone as the device seems reasonable.

It’s also smart in terms of pricing and payment model – for the most basic information, the farmer pays Rs. 30 (less than 1 US$ a month) while for the full suite of services, he pays Rs. 60 a month (US$ 1.3). The interesting bit is that since almost 90% of all subscribers in India use pre-paid services, Nokia is able to deduct Rs. 20 (if it’s the premium service) every 10 days, rather than deducting or adding on Rs. 60 at the beginning or end of the month. As a result, the farmer doesn’t feel the pinch as much. This taps into the  concept of bite-size pieces or small and therefore affordable pack sizes, propagated by C.K. Prahalad in the  Market at the Bottom of the Pyramid.

Given that the service was launched only in July 09, although pilots were on much earlier,  time will tell what attrition rates will be like. I doubt it though, as the potential benefits don’t seem to be driven by economics alone – using a service like this also delivers emotional benefits of not being at the mercy of middle-men, and of a higher stature derived from using a hi-tech approach to agriculture!

Additional Links:

[Disclosure: I was invited by Nokia to share in these experiences, and was paid travel expenses only, and not a fee.]

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{ 4 comments… read them below or add one }

1 Yusuf Kirmani August 31, 2009 at 1:45 pm

Real story of rural India but Dina I think true picture only can come from eastern UP. If you visit Haryana or Punjab you will find farmers better than eastern UP. Although eastern UP farmers also using mobile phones, but their plight is different and that can not be solved through mobile phone.

2 Dina August 31, 2009 at 1:56 pm

Hi Yusuf .. I couldn’t agree with you more that the mobile phone will not solve all their problems! Esp. in the poorer areas where they are battling with sheer subsistence. I do believe though, that knowledge and access to information can potentially be a means to changing their lives for the better, by reducing their reliance on the corrupt middle-men and traders, and ensuring they get a fair price for their efforts. Of course, this is unlikely to be beneficial to the landless labourers who really have nothing to trade except their manual labour. I don’t think it’s intended for them.

3 Jeanneleez August 31, 2009 at 3:07 pm

Great post, but there’s another company doing even cooler things than Nokia here in India. Have you heard of VNL? First it’s an Indian company and they’ve just released the world’s first completely solar GSM system for rural networks which allows mobile operators to get their networks out to these rural areas affordably. You should check them out: http://www.vnl.in

4 Dina August 31, 2009 at 3:29 pm

Hi Jeanneleez, thanks so much for the heads up on VNL. Looks really interesting – will follow their blog :)

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