Unlocking access to finance through bundling of “NextGen” Advisory with agriculture services: Lersha’s lessons from the field 🧑🌾
Lersha, an innovative one-stop digital platform developed by Green Agro Solution PLC, offers a wide range of services to smallholder farmers such as farm inputs and mechanization, facilitating output aggregation, agro-climate advisory, and access to finance through its mobile application and vast network of Lersha Agents operating across five regions of Ethiopia. Lersha’s primary objective is to establish a sustainable agriculture value chain by offering a range of services that make farming accessible for all. By recognizing the challenges faced by Ethiopia’s agricultural sector, including supply disruptions, rising food prices, and increased costs of agricultural production, Lersha is dedicated to collaborating with public and private sector partners to address these challenges hindering smallholder farmers from being productive and earning better income.
Lersha is dedicated to supporting Ethiopian farmers with innovative digital solutions to address their agricultural needs. Access to fertilizer and the availability of appropriate recommendations for fertilizers are key demands identified by Lersha with its interaction with small farmers. To maintain soil quality and achieve desirable crop yield, it is important to add the right amount of fertilizer while minimizing the misuse of soil resources. This can be achieved by conducting regular observations, investigations, and soil testing to determine the soil’s physical, chemical, and biological condition. Soil testing is a crucial tool for evaluating the fertilizer or manure requirement for sustainable crop production and maintaining soil fertility. The Soil and Water Resource Management team in the Ministry of Agriculture, as well as other governmental and non-governmental institutions like Alliance Bioversity and CIAT, have pioneered and provided soil testing services and subsequent fertilizer recommendations to farmers, specifically in soil management and agriculture in general.
One of the key ways Lersha assists smallholder farmers is by providing easy access to farm inputs including fertilizer. To help maximize crop yields and increase farmers’ income, they need to follow fertilizer recommendations from reliable sources. In order to better facilitate access to finance, smallholder farmers’ sufficient understanding and utilization of fertilizers plays a critical role. This is where the collaboration of both Lersha and Alliance Bioversity CIAT plays a crucial role, as they work towards the same goal of improving the agricultural productivity of smallholder farmers in Ethiopia. Smallholder farmers increase their productivity and income when they receive good fertilizer recommendations and implement them. This will enable them to make informed decisions on input purchases, and mechanization, and be more likely to obtain better access to finance.
The collaboration aimed at bundling the NextGen agro-advisory with insurance and credit services to provide funding access for smallholder farmers and enable them to apply the recommended advisory. Such endeavor is also expected to facilitate the scaling and dissemination of the recommended agro-advisory system. The Lersha and Alliance teams have collaborated to pilot the agro-advisory system in two regions of 10 Woredas, namely Oromia (Hetosa, Digelu Tijo, Munnesa Woredas, and Gadab Asasa Woreda), and Amhara (Moretena Jiru Woreda, Wonberma Woreda, and Gozamine Woreda).
Lersha extracts agro-advisory recommendations via API and then translates the advisory into four local languages and disseminates it to the Agents via its mobile app. Using the Lersha Mobile App, Lersha agents create digital farmer profiles that include farm locations to provide location-specific fertilizer recommendations via SMS, voice blasts, and follow-up calls from the call center. Accordingly, 837 (724 men and 113 women) farmers received the location-specific fertilizer recommendation of which 725 (615 men and 110 women) of them are enrolled for area yield index agriculture insurance from Oromia and Abay Insurance through the Lersha platform. 42 out of the 725 farmers accessed micro-loans for procurement of farm inputs.
Some selected Lersha Agents underwent TOT training on the LSFR as a capacity-building measure prior to the pilot phase. A test group consisting of carefully selected smallholder farmers was picked in a bid to track the impact of using the LSFR as opposed to the traditional blanket recommendation. These farmers were trained on the usage of this specialized recommendation after which the pilot was run.
On November 4, 2023, Green Agro Solution (Lersha) together with Alliance Bioversity CIAT organized a field day at Digelu Tijo District of the Oromia region. The main focus of the field day was to collect learnings on bundling NextGen agro-advisory with insurance and credit, facilitate input access to farmers, enhance adoption, and promote scaling of location-specific and contextualized agro-advisory through extension and Lersha Agents.
We gathered a small group of 37 smallholder farmers, including 14 women, 3 Lersha Agents, 4 Development Agents, 4 Lersha Team members, 1 Oromia Insurance expert, 1 Arsi University representative, 3 Media Personnel, and 2 District Agricultural Experts to engage in a round of discussions and experience sharing. A half-day event aimed to assess the observed differences and evaluate the longevity of product usage post-pilot phase. The event also helps to gather firsthand information and insights from farmers into their challenges and opportunities. This feedback from farmers, extension and Lersha Agents, and banks will contribute to improving the building approaches.
Participants shared their practical experiences and insights on how contextualized geolocation fertilizer recommendations have been helping them make better decisions. The smallholder farmers were instructed to evaluate the impact of the new fertilizer recommendations on their productivity and decision-making compared to their previous practices. They were asked to indicate their assessment using color-coded cards: green for a very high difference, yellow for a high difference, and red for a slight or no difference. All the farmers raised the green card, signifying a unanimous and substantial positive impact of the new recommendations on their productivity. The climate advisory service provided by the Lersha digital platform, which farmers receive every two weeks, has helped them prepare for the upcoming weeks. Farmers praised the effectiveness of weather-based advisory services coupled with insurance and credit, which improved their input access.
Mr. Kelil Wake, the Degilu Tijo District Agricultural office head, has praised the use of technology and innovation to help smallholder farmers make informed decisions based on scientific predictions. He also noted that the combination of location-specific fertilizer recommendations with insurance services has given micro-loan institutions a new level of confidence.
Mr. Kassaye Negassa, a model farmer from Degilu Tijo District, has witnessed firsthand the benefits of using weather-based fertilizer application advice. In the past, he would randomly apply fertilizer to his different plots of land. However, this year, he followed the advice of Lersha Agents and the Lersha call center and applied fertilizer based on the specific needs of each plot. As a result, he is extremely happy with the performance of his fields.
The field day has shown that farmers are very much satisfied with the program as all the farmers indicated the green card, which signifies a unanimous and substantial positive impact of the new recommendations on their productivity. Moreover, the climate advisory service provided by the Lersha digital platform, which farmers receive every two weeks, has helped them prepare for the upcoming weeks. Farmers praised the effectiveness of weather-based advisory services coupled with insurance and credit, which improved their input access.
Lersha suggests that relying solely on subsidies for fertilizer application is not a long-term solution to the issue of low fertilizer use. Although subsidies may provide a short-term solution, sustainable growth in fertilizer use in Ethiopia will require addressing the underlying structural problems that affect motivations to use and supply fertilizer. These problems may include the need for public investments in infrastructure to improve logistics. Therefore, it is necessary to shift resources towards activities that address these fundamental issues, rather than relying solely on subsidies.
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