DFN Blog #1: What is/Why DFN? Why DG?

Outline to go here based on Concept note draft

Putting some talking points on paper, these need to be organized into buckets and strung together in a coherent narrative. Note, I am using farmer group / FPO interchangeably and we should use a consistent term that works across IND, ETH and KEN

What do we see as a critical problem for smallholder farmers right now?

• Tremendous inefficiency bc each service provider that wants to work with a farmer group needs to go re-create the same foundational data sets: location and plot boundaries; farmer contact info (and perhaps banking details); crop grown, yield, inputs required, farming records/logs, etc

  • Bc its expensive and laborious to capture this data, the service provider views it as their proprietary asset and it becomes siloed; the farmer groups cannot use it for their own benefit or to connect w other service providers. doesn’t share the info. Also, only large well capitalized service providers can invest resources to build this data asset which throttles innovation

  • Some of the oft-cited problems are:

    • Awareness and engagement level / sense of ownership of farmer group members.

    • Access to buyers

    • Access to capital

    • Facilitating sales and increasing the % of farmer members who sell through the FPO is probably the most direct path to increasing member engagement and demonstrating value of the farmer group

What’s the solution we see to this problem?

• We want to flip this paradigm and put farmer groups in a position where they can generate and maintain this data and then leverage it to realize value

• Farmer groups, rather than individual smallholder farmers, are the right “unit” of operation given the diseconomies of scale that smallholders face. As a group, there is potential for increased bargaining power for both input purchases and output marketing and larger ticket size loans are possible which is good bc cost of servicing small borrowers is a challenge for lenders

Why is now the right time?

• There is a push to mobilize farmer producer orgs in India and cooperatives in general have been hugely successful in Agriculture. That said, reality is that these farmer groups are struggling and face lots of issues. Data alone won’t solve these problems but better data management and data literacy among farmer members can make engaging with service providers more efficient and its a role that DG is well suited to play (rather than being a trader or putting up warehouses and managing logistics)

What are the potential outcomes for this solution?

• Can unlock tremendous opportunity by data externally (with buyers, input suppliers, lenders, etc.); there is a lot of potential to leverage data internally / intrinsically within the FPO (and perhaps even across different FPOs). As an example, farmers can share key information like seed variety, date of planting, yield, date and type of fertilizer applied, etc. and that information can be shared across members. Farmers can share info about prices they are seeing from local traders and markets and compare those options vs realization from selling through the FPO. Benchmarking data among farmer members opens the door to more peer to peer information sharing and improved decision making

Why DG for this work?

• Proven ability to drive behavior change and educate smallholder farmers (evidence from video baed extension work)

  • No conflict of interest, we are a non profit whose mission is to serve smallholder farmers. Others are building digital tools as an enabler for some core business model (eg, lending or trading or warehousing) and when push comes to shove those business interests come first. This is not a risk with DG

    • We want to enshrine farmer control, agency, benefit in our governance and technology infrastructure; web3 concepts like blockchains, smart contracts and innovative governance mechanisms (eg, DAOs) support this vision

  • An open, partnership based approach; we can’t and don’t aspire to do everything ourselves; we make tools available open source and forge partnerships to realize scale

  • We take an inclusive and participatory approach and design in response to user needs; build technology products that are actually usable by smallholder farmers