ICT Enabled Service Delivery for Rice Farming


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Participants on the 30th Global Young Leaders Programme (YLP) responded to International Rice Research Institute (IRRI)’s invitation to make business and strategic recommendations on ways to commercialise its research technology and used IRRI’s Nutrient Manager for Rice as a basis for a business model. Through a combination of classroom-based discussions and onsite visits to local communities, this YLP proposed the establishment of a new company to drive an integrated ICT platform to improve rice crop management and provide farmers with access to credit, farming-related information and services. This platform would give IRRI the opportunity to reach out and significantly impact the socio-economic livelihoods of smallholder farmers, whilst contributing to more environmentally sustainable farming methods.

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ICT Enabled Service Delivery for Rice Farming

  1. 1. Click to edit Master title styleClick to edit Master title styleICT Enabled Service Deliveryfor Rice FarmingA proposal by participants on GIFT’s 30th YLP
  2. 2. Global Food Security & The Role of Rice• A small increase in globalfood prices drives millionsinto extreme poverty.• Rice is a staple food formore than 3 Billion people(almost half the population)• More than 90% of rice isproduced and consumed inAsia.• Continued pressure onusage of Fertilizers, ClimateChange and Urbanization.
  3. 3. Rice Farming in the PhilippinesAgriculture: Agriculture plays avital role in the Philippines economy.• 13.2% of the GDP, 33% of laborforce: 12.27 million people• Rice production is currently notsufficient for nationalconsumption which leads to animbalance in the Balance ofPayment. The import content ofrice in 2012 was USD 300 M.Currently the average rice yield is3.7t/ha, lower than the worldaverage due to the ineffective cropmanagement practices*8 Philippine Daily Inquirer, ADB urges Philippines to addressincome inequality, 16 April 2012*9 Bureau of Agricultural Statistics, Overview of PhilippineAgriculture*10 FAO, USDA
  4. 4. International Rice Research Institute (IRRI)• The International Rice Research Institute(IRRI) is a non-profit independentresearch and training organization• IRRI is dedicated to developing newvarieties and crop managementtechniques• In line with its vision of providingeducation to the Farmers IRRI launcheda platform called the Nutrient Managerfor Rice (NMR) to assist farmers inoptimising nutrient application
  5. 5. Global Institute for Tomorrow (GIFT)• IRRI invited GIFT to evaluate commercial viability of theNutrient Manager for Rice.• GIFT is a pan-Asian think and do tank dedicated to advancingan understanding of:– Shift of economic power from west to east– Reshaping of global capitalism– Evolving social contract between business, government and civilsectors• GIFT asks… what does this mean for Asia and the world?
  6. 6. Profiles of YLP ParticipantsYLP participants come from corporate sector, with IT andagricultural backgrounds as well
  7. 7. Key Findings on NMRBenefits:• Reduce fertilizer cost, increased paddy yield• Tailor made advice for farmer• Print out serviceChallenges• NMR is beneficial but not comprehensive.Farmers need assistance on Weather,Prices, Post Harvest Techniques to helpmaximize their value chain• Low penetration into farming community• Unfamiliarity with ICT interface• Lack of hardware capital• Lack of ICT literacy• Lack of Post-harvest support
  8. 8. Identifying opportunities & gapsProposal to create a New Company that provides acomprehensive platform to farmersUNMET NEEDS• Reducing PreHarvest Costs• Increase yield• Improved Postharvest services• Appropriatefinancial servicesMARKET TRENDS• Strong GDPgrowth• Smartphoneusage increase• Increasedinterested intargeted ruralmarketingIRRI’s MARKETPOSITION• World Leader inRice Science• Opportunitiesto influencepolicy(ProposedPolicyInfluencers)
  9. 9. Introducing the new companyCivilPublic Private•Integrating the objectives ofpublic, private and civilsectors•New approach to deliveringIRRI’s world class research•Driver of rural prosperity ,Philippino rice self-sufficiencyand nation-building
  10. 10. Overview of Farm Saya business model• Comprehensive information services forfarmers– Nutrient Manager, Rice Crop Manager, Rice Doctor,Knowledge Bank– Daily weather information– Market & Pricing info– Micro-financing• Business model based on building a largerural subscriber network– Free of charge for farmers– In the future, premium service will be provided• Revenue sources– Commissions from commodity sellersthrough the network– Future premium subscription model– Sales of market dataICT Platform will extend to more of the rice value chainHow to access and use Nutrient ManagerWeb GSM mobile phoneSmartphoneInteractive VoiceResponseimplementation boxFarmer callsdedicated numberSmartphoneoutputWeb outputSmartphoneand mobile:Text outputAvailable in Philippines andIndonesia
  11. 11. Revenue & Operation ModelFarm Saya provides subscriber network in farming communityInvestors- Non-private- Private- FarmersAssociation- ImpactInvestorKnowledge- IRRI- PhileRice- ICTFarm SayaIntegratedPlatformSmartphone,PC, Tablet, SMS,Printing materialExtensionworkersDirectChannelLocal NGOCo-opFarmersInformation- Fertilizer- Seeds- Daily needs
  12. 12. Farm Saya Organisational structure - highlights• Unique partnerships are invitedfor shareholding– IRRI– PhilRice– Farmers associations– Private sector– Civil sector• Equity opportunities will beoffered for farmers and farmingconsultantsProposal for IRRI to invest in new shareholding partnershipPotential ShareholdersIRRIPhiliRicePrivatesectorCivilsectorPercentage will to be determined.Farmers
  13. 13. Sales & Marketing Strategy OverviewDirect Channel (Sales & Service Agents)ShareholdersPublic Sector/Gov OrgsNGOs &Youth GroupsAgri OrgsEducationInstitutionsRetail ChainsReligiousCommunitiesMediaSocialNetworksFarmSayaFarmersIndirect ChannelsFarm Saya sales effort will reach and attract a criticalmass of farmers
  14. 14. Introducing Farm Saya Sales & Service Agent (SSA)SSA’s are clearly differentiated from public sector extension workers:• Promote Farm Saya ICT platform and support delivering info services• Work in best interest of farmers to improve crop management• Highly motivated through private company incentives and potentialemployee shareholding options• Well equipped with hardware and well supported with world-classknowledge resources from IRRI etc+Sales & Service Agents present a new model for serving theneeds of farmers
  15. 15. Focusing on the young farmersFarm Saya’s Goals• Turning farming a moredesirable profession choice foryounger Filipino generation• Equipping young farmers withlatest Agri-info and best farmingpracticesSupporting Strategy• Building up online network foryoung farmers (e.g. Facebook /Twitter)• Designate agri-major students asStudent Ambassadors; FundStudent Volunteer Groups toconduct village education andregistration service• Publicity effort via local mediaspecifically targeting younggenerationFuture of rice production dependson next generation of farmers
  16. 16. Additional channels to build networkDirect ChannelShareholderEducation InstituteAgri OrgsPublic Sector/ Gov OrgsReligious CommunitiesPrivate/CorporatepartnersMediaNGORetail ChainsSocial Networks-202468100 1 2 3 4 5Est. Initial Resource Required(Index on the scale of 10)Year to StartNote: The bubble sizes represent Est. # of farmersreached/attracted (index on the scale of 10)Direct sales agent outreach is supplemented by a variety ofmarketing channels
  17. 17. Farmer subscriber targets30,00075,000150,000240,000300,000360,000432,000518,400622,080746,4960100,000200,000300,000400,000500,000600,000700,000800,000YR1 YR2 YR3 YR4 YR5 YR6 YR7 YR8 YR9 YR10Subscription Target by YearSubscription Target to reach 750K users by Year 10
  18. 18. Future Business Partnership TargetTelecom Food & BeverageCompaniesFinancial services• Smart• Globe• Jollibee• San Miguel• BanKO• Crop InsuranceIn additional to subscribing farmer users, Farm Saya will pursuebusiness partnership, and some examples areRetail Chain Inputs/Equip Companies FMCG• Seven Eleven• Supermarket• Seed Companies• Fertilizer Companies• Farming EquipmentManufacturers• Nestle• Unilever• Procter & Gamble
  19. 19. Financial AssumptionsKey Revenue Streams1. Commission from BusinessPartnership Sales through ICTPlatform2. Sales of Customized Data fortargeted marketing campaigns3. Future Premium ModelSubscriptionKey Costs1. Labor Cost associated with Salesand Service Agent is primary cost2. Marketing Cost to reachsubscribers3. IT Development to expandplatform
  20. 20. Financial Projection (Base Case)Revenue increases alongside subscriber increases(200,000)0200,000400,000600,000800,0001,000,000(1,000,000)01,000,0002,000,0003,000,0004,000,0005,000,0001 2 3 4 5 6 7 8 9 10(Persons)(1,000 PHP)Revenue Accumulated Profit No. of Perticipants (RHS)
  21. 21. Scenario AnalysisScenario Usage GrowthCustomizedData (Revenueat Year 2)Break EvenRequiredCapitalBestAggressivegrowthUSD750k Year 3 USD 4.2MBaseModerategrowthUSD500k Year 5 USD 6MWorst Weak growth USD250k Year 6 USD 9.5MBase case shows break even in Year 5 with capitalrequirement of USD 6M
  22. 22. Sensitivity Analysis-500,0000500,0001,000,0001,500,0002,000,0001 2 3 4 5 6 7(1,000 PHP)Accumulated Profit Accumulated Profit(Best) Accumulated Profit(Worst)
  23. 23. Roll out timelineMonth 1-6Identify and Engage Key StakeholdersSetup Business EntityDevelop Integrated ICT PlatformMonth 7-12Negotiation with Business PartnersTest Run PlatformPrepare Hiring of Sales and Service AgentSet up Back Office SupportMonth 13-24Hire & train Sales and Service AgentBuild up Platform BaseMonitor Progress and Obtain FeedbackOngoing Research and Development
  24. 24. Recommendations• Farm Saya proposal allows IRRI todeliver research to farming communitythrough an equity-based sustainablemodel.– Investors– Strong government support– Farmers as shareholders• Comprehensive platform with suite offeatures in addition to Nutrient Manager– Weather information– Post harvest information• A movement bigger than the farmeralone!– Campaign driven, nation buildingapproach• Model can be expanded beyondPhilippines
  25. 25. Institutional Recommendations for IRRI Consideration• IRRI needs to seek private sector partnersinterested in implementation(commercialization rather than onlyfundraising for research)• Use Science & Research to influencepublic policy & engage key private sectorpartners• creating a public policy department andset priorities aligned with IRRI missionand value– Address Post harvest challenges– Leverage research & expertise toinfluence change
  26. 26. It takes a nation to grow rice!• Greater movement• Multiplestakeholders• Communities offarmers linkedthrough a platform– national pride!• Young generation• Focus on theimportance of thefarmer to all of us!
  27. 27. Thank you!