Virtual Farmers Market is an app-based e-commerce platform where farmers’ surplus and buyers’ demand for crops are advertised and traded. The platform provides a transparent, open and trustworthy space for smallholder farmers and buyers to negotiate fair prices and deals.
The first Virtual Farmers Market, called Maano, is currently being piloted in Zambia.
VFM builds on Purchase for Progress (P4P), WFP’s flagship programme connecting smallholder farmers to markets. Through WFP’s reputation as a reliable buyer of quality crops, virtual market infrastructure of VFM will help bring together farmers, buyers and other stakeholders.
WFP has a comparative advantage to initiate such a project due to the organization’s reputation as a reliable buyer of quality crops as well as being a neutral or impartial party. WFP also has access to infrastructure and a network of farmers, buyers and other stakeholders which has already been established during the P4P pilot. Thanks to these elements, WFP can provide a safe testing ground to transition toward a sustainable virtual market place.
In consultation with Zambian farmers and market actors, or so called 'VFM ambassadors', in three rural districts, VFM began prototyping in late 2016. Whatsapp and other existing mobile applications were used to simulate an online market place. The participating farmers decided to name the Zambian Virtual Farmers Market Maano, which means intelligence in the local language Tonga.
Based on the successful prototyping, development of the first version of the app with basic functionalities began in December 2016. The first iterations of the Maano app are currently (February to April) being user tested. The project is on track towards its goal to have a fully functional Maano app ready to market the produce of 50 carefully-selected smallholder farmers, who each represent a 50 more farmers in their rural communities (thereby serving approx. 2,550 smallholders in total). Farmers will trade with approximately 100 Zambian and international buyers before the Zambian harvest and marketing season begins (April to October). Proof of concept and attainment of a minimum viable product is expected by October 2017.
How does your innovation work?
The key functions of the Virtual Farmers Market are:
Provides information on farmers’ supply and buyers’ demand, identity and location to everyone through a smartphone application
Facilitates farmer-buyer discussions and price negotiation
Facilitates the sale of farmers’ produce through a payment system where WFP acts as a guarantor
The VFM platform supports smallholder farmers organized by lead farmers (VFM Ambassadors), to estimate their community’s production and selling price, and advertise this information on the online market. Allowing buyers to access this information and communicate directly with the farmers gives them the opportunity to increase their business by accessing larger volumes of quality produce. As smallholder farmers become more visible to new buyers, VFM increases competition between buyers for farmers’ produce, thus helping farmers get better prices and more favorable marketing options.
What Evidence do you have that your Innovation works?
Assumption and prototyping testing of Maano-VFM began in October 2016 with a group of 20 smallholder farmers and traders from three rural farming districts and four market towns from across Zambia. By the end of a four day training camp, this first group of 20 participants (average age of 56 years and with a majority of whom had never before held a smart phone) learned how to use WhatsApp, Google Maps and Airtel Money on smart phones, and to combine key functionalities of these apps to trade food.
Do you have current users or testers?
In Zambia, the pilot currently includes around 100 users.
What is your strategy for expanding use of your innovation?
Through the WFP implementation of smallholder and market access programmes, the Virtual Farmers’ Market has the potential to engage up to two million smallholder farmers across 35 countries as early adopters interested in testing this tool and could eventually expand to benefit many of the half a billion smallholder farmers currently lacking access to reliable market information.
VFM essentially follows the same ‘three-way handshake’ modality used by successful online businesses like AirBnB, Uber and Alibaba. Considering the fast growing revenues of these and other ‘three-way handshake’ companies, this model also has the potential to revolutionize WFP’s work in providing market access and fair business opportunities for smallholder farmers.
VFM would become sustainable through a 5 percent transaction fee paid by buyers on each purchase. Smallholder farmers would not pay anything to use the system, thereby increasing client acquisition and the speed with which the system will have the critical mass of data and users to spur its growth.
WFP will test and implement the Maano app during the marketing season starting in April 2017. Once the first phase of the VFM pilot has been completed, WFP will continue to refine and scale up this promising innovation within Zambia and to other countries.
The VFM business model is designed to become sustainable once it reaches the break-even point after three to five years. Until then, additional donor support is needed to enable future testing in new countries, continued app development and maintenance of the platform.
VFM is currently seeking additional public or private funding, technical assistance, strategic partnerships and access to new markets and countries in which the VFM app can be tested.
Maano-VFM has a huge potential impact to improve livelihoods and food security of vulnerable smallholder farmers through improved productivity and incomes. In Zambia in 2017, Maano aims to engage 50 lead farmers, ‘Maano Ambassadors’, who will aggregate and sell produce for at least 50 of their community members. The pilot KPIs include:
Number of transactions facilitated by the VFM: 150
Quantity of crops traded through the VFM (kg): 150,000
Value of crops traded through the VFM (US$): 60,000
Number of lead farmers (Maano Ambassadors) trading through the system: 50
Number of follower farmers registered by Maano Ambassadors: 2500
Beyond improving the livelihood of its participants, the VFM is a sustainable solution contributing to market development and strengthening of local and regional food systems more widely over time. Hence, it is not possible to measure the impact by merely counting the number of users. Investing in solutions that allow smallholder farmers market access has the potential to improve hundreds of millions of livelihoods worldwide. Investments in smallholder agriculture can also strengthen rural economies, build more effective markets and increase food security and nutrition for those who need it most. This is why empowering smallholder farmers to become competitive actors in global food systems is crucial in our efforts to achieve the Sustainable Development Goals (SDGs) and Zero Hunger.