A disruptive new technology?

I’ve changed jobs. Still with Engineers Without Borders, but as of last week I’ve started a new placement with Mobile Transactions a start-up company based out of Lusaka, Zambia. One of their current projects is to build system of redeemable scratch-card vouchers for use by NGOs to buy farm equipment and inputs.

It works like this. An NGO distributes vouchers to farmers they’ve registered into their program which the farmers can redeem at selected agriculture retail shops to purchase farming equipment or inputs such as seeds or fertilizer. On the back of the voucher are two scratch panels, similar to lottery scratch cards, which reveal authentication codes. The retailer of the shop uses her mobile phone to log on to an internet site where they use the voucher scratch codes, as well as a serial number on the voucher, to verify that the voucher is legitimate. If everything checks out, money equivalent to the voucher value is deposited into the shopkeeper’s account and the farmer receives his goods.

It’s a beautiful system in that it makes subsidies better targeted, much more traceable, and also partially hidden inside of regular private sector business. No more big trucks driving around with tonnes of free seed, instead people getting extra purchasing power at local shops using established supply chains.

Even better, I think, is that seeing as NGOs are always attracted by the latest, newest, shiniest thing, there will be huge pressure to quickly move away from the current practices of overt and cumbersome subsidies to simple, direct, voucher-based alternatives.

This could have the effect of a general upheaval in the practice of agriculture projects in southern Africa, a sector that is (in my opinion) is seriously in need of a shake-up. Might scratch-card based vouchers be the disruptive technology to do it?

(And please note, for the sake of brevity, I cut a couple corners in my description of the voucher system—feel free to ask for more detail.)

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4 Responses to “A disruptive new technology?”


  1. 1 Deg September 22, 2009 at 2:48 am

    Awesomesauce. I’m excited to hear updates on this, especially after seeing those Mobile Transaction flags start popping up in Kafue town. Although I guess it could be at least a season or two before useful numbers are collected, eh?

    What’s your role in it all?

    And remember, “keep zambia clean”!

    –Deg

  2. 2 Elizabeth September 24, 2009 at 10:51 pm

    Wow, this sounds fabulous! How will the NGO’s decide who gets the vouchers? (Same system as for subsidies?) Also, how will the vouchers be set up, as coupons (one voucher=one bag of fertilizer for example) or more like gift cards (spend on whatever you wish)?

    Thanks!

    Elizabeth (EWB McMaster chapter)

  3. 3 Graham Lettner September 27, 2009 at 11:40 am

    Deg-balls,

    “Awesomesauce”? I’m going to start using that as of today.

    Looks like I’ll be in Kafue sometime soon. The World Food Programme is using our voucher system there as well, though not so much for agriculture as it is for food aid. Still good to be in your neck of the woods, though.

    I’m managing the roll-out of these vouchers in Eastern and Southern province: meeting with the shops, setting up training, working with the training staff, and meeting with the program heads to make sure everything is on track. Not a big deal really, but a lot of fun.

    As for Keeping Zambia Clean, did you know that past OVS Trevor Freeman once blindly threw a banana peel out of a Zambian bus and accidentally hit a small boy right in the face? It was a low point, for all of us.

    Hope university is good schtuff.

    Graham

  4. 4 Graham Lettner September 27, 2009 at 11:45 am

    Elizabeth,

    The NGOs that use the vouchers get to pick their target group so it could be to reward farmers for good conservation farming techniques, or to target vulnerable households in a food shortage. Their choice.

    In one program the vouchers work like coupons and a person gets a pre-set basket of goods. In another it’s just like a gift card with which a farmer can put it towards the item of his choice (though there is a set list of about 10 items).

    Thanks for being interested. Any more questions?

    Graham


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Working to include smallholder farmers in agricultural markets, we know there are no easy answers. This blog is a place to ask "What does it take to make it work?" and to share what we're seeing and learning.
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