e-Warehouse: A case study on the use of TaroWorks™ and the Progress out of Poverty Index® (PPI®) >

Frank Ballard

Many smallholder farmers in Eastern Kenya are at a disadvantage when selling their crops on the market. They tend to lack adequate storage for their crops, as well as access to financial services and integration into the market. Due to these factors, poorer farmers often sell their crops at harvest to earn much needed income, when markets are flooded and crop prices are low. Some farmers that could wait to sell their crops are discouraged by the costliness of storage—adequate storage is available at commercial warehouses, but rents are often high.

Farm Concern International is an organization that works to connect farmers and buyers, provide agricultural training, and organize smallholder farmers into Commercial Villages. Farm Concern International organizes and manages a network of Village Knowledge Workers (VKWs), who are responsible for delivering agronomic information and training to farmers, and collecting relevant harvest and sale information, through the use of mobile phones.

In 2013, Grameen Foundation partnered with Farm Concern International and a financial institution in Eastern Kenya to address these issues by developing the e-Warehouse program. e-Warehouse provided farmers with access to agronomic information, training on post-harvest handling of crops, and access to an advance, or loan, against their harvested crops. This allowed the farmers to wait and sell their crops when prices were higher. To manage the program and collect data on participating farmers, e-Warehouse used TaroWorks™, a mobile-based data collection tool that also stores and analyzes data.

Farm Concern International’s cadre of Village Knowledge Workers (VKW) (see side panel for more information) introduced the program to thousands of rural farmers in Eastern Kenya. Over 4,500 farmers signed up and were registered using TaroWorks. The registration survey doubled as an extensive baseline survey that was used to monitor and evaluate the program’s performance. The survey collected data on credit history, information needs, primary crops, crop storage, farm size, previous trainings, and finally poverty data, measured using the PPI. The PPI provided the percentage of farmers living below a specific poverty line; defining poverty in terms of national and internationally-recognized poverty lines allowed program managers to better communicate data to stakeholders. The PPI also empowered the e-Warehouse program staff to track how people at different poverty levels used their services and benefitted from them.

At harvest, the VKWs collected information on each farmer’s crops, including the quantity, quality and storage location. TaroWorks aggregated data from all of the farmers to track where certain crops were stored. e-Warehouse was then able to bulk farmers’ crops. Selling in bulk to retailers catches a higher price than selling small amounts to brokers. Also at harvest, the farmers were asked if they would like a loan. If farmers opted for financing, the financial institution issued them an advance of up to 50% of the value of the crop they chose to store at the current market price and deposited the funds into the farmers’ savings account. VKWs provided information to farmers about proper storage techniques and practices so that they could store their crops longer.

Farmers were sent bi-weekly text messages with market price updates, supplying them knowledge they needed to decide when to sell. When farmers did decide to sell, VKWs used e-Warehouse to collect a final sale survey that recorded the crop being sold, the price, and the quantity. The money from the sale was paid to the farmers through mobile money using M-Pesa or directly deposited into their savings accounts and the outstanding balance on the loan was paid.

Percentage of Farmers by Poverty LevelThe data collected through the e-Warehouse program offered Grameen Foundation and Farm Concern International a wealth of data to analyze. Particularly interesting were the insights provided by the PPI. Of the farmers registered in the e-Warehouse, 75% lived below the $2.50/day poverty line. This confirmed that they were indeed reaching the poor.

In addition, the e-Warehouse team had hypothesized that poorer farmers would be unable to wait to sell their crops at higher prices. Data from the PPI supported this assumption. Most of the registered farmers (53.8%) sold their crops in the first month after the harvest. Among the farmers most likely to be poor, 62.9% sold within the first month compared, while only 42.6% of the farmers least likely to be poor did.

The program was a pilot to test ways of using technology to improve the lives of the poor. Data collected virtually that could quickly be accessed and analyzed allowed e-Warehouse staff to track smallholder farmers and helped facilitate bulking the crops, resulting in higher selling prices. Mobile phones served as a channel to transfer information on crop prices that empowered the farmers to make sound decisions around when to sell.

The lessons gained during this initial pilot are now being used as Grameen Foundation refines its strategy to launch a broader e-Warehouse initiative across Kenya.