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Mobile auction for agriculture

Richard Ssekibuule looks at the success of kudu, a mobile auction market that links farmers to traders, with pride. He had never imagined that something that started as his PhD research would hit the market and turn around the lives of farmers. The innovation grabbed attention so much so that Google funded the initial start-up of the service.

In 2010, Ssekibuule wanted to find out how he could use mobile technology to make agricultural markets more effective in Uganda. Farm produce was wasting away in the villages because Ugandan farmers had to wait for a trader to pass by their homes and buy their produce.

When a buyer came, the farmer was left with little bargaining power. A farmer would have to choose to either stay with the produce for months and wait for the next buyer or take up the offer at hand. Traders also faced difficulty locating produce and had to rely on word-of-mouth networks.

“We were trying to solve market inefficacy. Someone can hold their maize and sell it after four months. An efficient market is supposed to make it impossible for someone to hoard. It also helps farmers get fair prices, and limit abnormal profits. The system encourages competition in the market and limits unnecessary movement,” Ssekibuule told The Observer.

Ssekibuule studied the existing mobile price advisory services and realised they provided some help, particularly to farmers. He noticed, however, that it seemed to have problems with accuracy and timeliness. And in any case, not many farmers can access internet services.

So, Ssekibuule and his two colleagues John Quinn and Kevin Leyton-Brown, developed a mobile phone action market for users with basic phones. Quinn, a senior lecturer at the College of Computing and Information Sciences, is an expert in applications on data science and artificial intelligence to problems of agriculture and health.

Leyton-Brown is an expert in auction systems. In this type of auction, buyers and sellers separately communicate their requirements and the prices they are willing to trade at. A farmer sends a text message to 8228 indicating the produce they are selling, quantity and price per kilo. The trader sends an SMS with the crop they want, the quantity and the price they are offering per kilo. There are added features of location. With Leyton-Brown’s expertise, the system then periodically clears the market, matching compatible buyers and sellers taking into account price, location and other factors to automatically find the best matches.

“Any farmer or trader anywhere in the country can send a message in the system using any phone. This way, Kudu helps to link sellers to buyers who arrive at the market when they know what to buy,” Ssekibuule says.

Google provided support for development in the form of a research award in 2011, and the system went live in 2012 as a free service. The team began by holding meetings with groups of farmers in Bukomansimbi district and with traders in Kampala. With such meetings in other areas, and with radio broadcasts and other forms of publicity, Kudu has grown from providing auctioning for four crops to 73 crops.

“We started with four products: coffee, maize, beans and groundnuts because we thought these were easy to define and understand on the market. We needed a commodity that could be defined without any ambiguity. As we speak, we have 73 products,” Ssekibuule said.

Kudu cannot guarantee the quality specifics. After making the link between the two, the decision is with the buyer when he goes for the interaction with the farmer.

“Farmers and traders are used to negotiation and so we didn’t want to take that away. The system just gives them broader options. I met traders from Kisenyi who said they sell maize. They have ten suppliers but realised there were many opportunities in locations they have not used before. They realised they could get cheaper options in different locations,” Ssekibuule says.

The system is also a good place for price information, most of which is quoted in the media and agricultural organisations. Right now Kudu has registered 900 farmers and traders, according to Ssekibuule.

“If you have around 100 traders in three markets in Kampala, 30 traders in Owino account for about Shs 1 billion a month. We are moving into the phase of bulk buyers. So, the system will have a web sms interface where the bulk buyer can see thousands of matches which they can click on and go out to the farmer they have matched with,” he said.

The UN’s 2013 Human Development Report praised the use of mobile technology to provide farmers with information as the next breakthrough in agriculture. Today, one in every three people owns a mobile phone and one in 12 people uses internet. Besides auctioning, Ugandan farmers can now obtain weather reports and entrepreneurs can provide business services through mobile phone kiosks.

smwesigye@observer.ug

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