Indian Startups: RML Helps Rural Farmers Via SMS

Kathryn Cave catches up with Amit Mehra to find out what it has achieved so far and where it is heading next.

Reuters Market Light (RML), an SMS information service for farmers, has been running for six years. In March 2013 it finally went independent from Reuters through Venture Capital fund, Ivy Cap. Kathryn Cave catches up with Amit Mehra to find out what it has achieved so far and where it is heading next.

“It was a little embarrassing in the old days when people used to write about us and celebrate our success,” says Amit Mehra Founder and CEO of RML the pioneering, multi-award winning mobile-led information-services for rural Indian farmers. “I used to feel the best was ahead of us. It was encouraging [though], the BBC did a study where they said they had gone to the market and seen an impact.”

The figures for what RML has achieved since its launch in late 2007 are impressive. Its local language SMS service which provides actionable advice to farmers is currently in place across 17 states, serving around 1.3 million farmers directly. Yet as Mehra explains this is only the tip of the iceberg: “[our] penetration as a percentage within India is very, very miniscule”

“To give you a sense,” he says “there are roughly 130 million cultivators [in India]. These are people who own the land. There are many more labourers who work on somebody else’s land, about 250 million of those put together. [Then] extend it to their family [and you have a total of] about 600 million [who work in agriculture].” RML may serve 1.3 million farmers directly but this is only 1% of the cultivators, let alone the rest.

This is a big challenge, because as Mehra explains: “What we’re trying to do with RML as a company is two things at the same time. Firstly, we’re trying to address a social problem: how do we impact the lives of an underserved community? The second thing we’re trying to do is make money. We want this to be sustainable. We’re not a charity; we want to make the value so strong for whoever pays for it, that it continues.”

This dichotomy has underpinned the company since it began. On the one hand, there is a clear need for better information and collaboration amongst a farming community. On the other hand, the average Indian farmer is 51 years old, not technologically comfortable beyond receiving SMS and making phone calls, and has most likely been working in a set way for several decades. This means change is especially difficult and as Mehra puts it: “intangible, ICT-led service on mobile phone” is not a product category in the way insurance is.

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Image credit: runran via Flickr

The Development of the Company

 “The original idea was a one-pager that really wasn’t my idea,” says Mehra.  This was a proposal which was submitted into a Reuters’ innovation program and was chosen out of 100+ potential business ventures. Mehra was selected to head up the business and as he explains:

 “We were the pioneers when we started this. There were not many benchmarks we could look at where people were providing a similar service.  It was all very new, but we realised that to scale this business took a lot of education and awareness.”

The mainstay of what RML has been doing for the last five years is providing “a very personalised service for the farming community that is delivered on the mobile phone that helps then take decisions around productivity, higher price collaboration or reducing their losses; all delivered as personal preferences. We either sell this directly to the farmers, or we sell it to organisations, including the government, who then provide it free to the farmers.”

The next phase for the company is for RML to help small farmers connect with relevant people to improve their business opportunities. Mehra adds some context:  “Indian agriculture is largely run by smallholder farmers [who have] less than 5 acres, [which is] not large enough to buy from bigger sellers or sell to bigger farmers. They also have to go to intermediaries. That adds to the margins and doesn’t always give the farmer the best price or the best share of the price as there are too many linkages.”

The government of India is currently promoting Farmer Producer Organisations (FPO) and the Ministry of Agriculture has declared 2014 the year of the FPO

“We are onboarding existing Farmer Producer Organisations,” says Mehra. RML has built a platform with the Indian government under the aegis of a small farmer agribusiness consortium: “we’ve already [taken] 6,000/7,000 agribusinesses; 10,000 farmer interest groups, 300 farmer producers [and we’re] already one of the largest farming communities.”

The problem for RML is that as the farmers are neither very tech savvy, nor yet very connected and they will not go onto the platform themselves. “We’re [phoning them up] saying: tell us who you are, what you grow, how much is under cultivation. We collect that data and put it onto the platform ourselves because at this stage we don’t expect them to do it.  Once we have the data, we do matching and through our engines it triggers an SMS with the names and phone numbers of people to contact.”

“That is not a very scalable process,” he continues, “but we’ve done this so [the farmers] can see the benefit. We’re [already] seeing from our own research that the farmers are getting higher prices. Once we’ve demonstrated there is a need, and as the penetration of smartphones increases, we expect more people to do this on their own and it not to require so much handholding from our side.”

Where Next for RML?

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“When we started we did have a plan to move into a few other select countries especially parts of Africa,” says Mehra. “But without a proven large scale commercial model and in view of the significant untapped opportunity in India we are not looking at other countries.”

“If you look at some of the European countries they are smaller in population than some Indian states. When people ask what would be the challenge to take it to other parts of the world, I say it will be a language difference, a cultural difference, agro-climatic difference, but guess what, this is exactly what we had to do when we moved from one state to two states in India.”

There is still a lot to do in India and the journey so far has thrown up a lot of surprises for Mehra. “It is powerful, it is impactful and they [the farmers] have never had anything like this in the past. We have a decent segment, about 30% or so, who repeatedly take the service,” says Mehra, “yet a large number do not come back on their own. They still need hand holding, they still need reminders and they still need an easy way for this service to be accessible to them. They will not go the extra mile to buy the service.”

This information could prove quite heartening for marketers and business people around the world. Maybe no matter how genuinely good a service is people will always react in the same way?

Mehra explains RML also came into the market place with a lot of false assumptions. He assumed because what they were offering was useful they would be able to ride on the existing telecommunications network, they would not need to create new content, they would not need to sell themselves and could just broadcast information straight out via SMS.

 “All these assumptions were wrong,” he says. “We had to sell directly. We obviously did not have the content so we had to create a whole network of about 400 people.  We couldn’t just broadcast [information] it had to be personalised…. if you grow tomatoes and onions you only want information on tomatoes and onions.”

This service can provide a real social service, there is a clear need, but there is still a lot of work to be done. The commercial model is not in place yet and although RML is striving to do public good it seems to face exactly the same challenges as any other publishing service. As Mehra concludes:

“It would be very wise for the government, certainly in India, and maybe in other parts of the world too, to encourage private enterprise and let them compete [to deliver a commercial model]. Don’t reinvent the wheel. Private enterprises should be working in partnership with public organisations to deliver initiatives that do public good.”

 

Kathryn Cave is Editor at IDG Connect