The UK Government and the United Nations Development Program hosted the Business Call to Action event on 6 May 2008, inviting Chief Executives and Board Chairs from some of the world’s largest companies to showcase concrete initiatives that support economic growth and reduce poverty in developing countries.
In London, global information service provider Thomson Reuters presented Reuters Market Light (RML), an inclusive business initiative that provides farmers with affordable and up-to-date information on crop prices, weather forecasts, and other agriculture-related news via text messages to mobile phones. This fee-based initiative makes available weather reports over a 50-mile radius and local crop prices within a 5-hour journey in the subscriber’s local language, RML helps farmers decide which crops to plant, achieve better yields and secure better prices in local and regional markets. Reuters’ commercial initiative is fully aligned with its expertise in providing “critical information to leading decision makers in the financial, legal, scientific, healthcare and media markets.”
India’s agricultural sector employs some 120 million farmers (representing about 60% of the total workforce and 18% of the country’s GDP). The farmers’ produce is sold at 7,500 regulated markets by 5 million middle men. It is estimated that Indian farmers get a mere 25%of the value of the final price of their raw produce (in the USA and UK that figure amounts to 40-50%). Also, buyers pay a premium of up to 20% due to lack of information. For its part, while mobile phone penetration in rural areas is modest (6%), Indian mobile providers have lately been signing up users at more than 8 million a month, with total wireless users reaching about 250 million. And call rates are cheap, with costs as low as US$ 1 cent per minute.
Before the introduction of the RML service, farmers had very limited information on current and local market prices for their crops. They also lacked timely information that would help them decide the best time to harvest their crops. In turn, this hindered market efficiency, reduced yields, increased wastage and had an overall negative effect upon a farmer’s earning and livelihood.
According to Amit Mehra, RML Managing Director, “the farming community in India is one of the largest in the world, but despite its size it remains a relatively opaque market in which to operate. The rural and often remote nature of the community makes it incredibly difficult for farmers, especially those with small holdings, to get even the most basic information.” RML’s aim is therefore to “facilitate greater transparency in the Indian agricultural markets, allowing individual farmers to increase their productivity and maximize their revenue.”
RML has its origins in a project-idea conceived by a Reuters employee whilst on a year's fellowship at Stanford University’s Digital Vision Program. From this initial idea, the project was taken on by Reuters’ development team. The latter started a pilot project in April 2007 in Maharashtra State in Western India, the country’s third largest state in area and second largest in population, with some 97 million inhabitants.
RML was started on a free trial basis, rapidly signing up around 7,500 farmers by September, who enhanced their crop yields and improved their productivity over a very wide range of produce including onion, cotton, soybean, pulses, pomegranates and oranges. RML has been working with various partners in delivering this service, which include NGOs and traditional distribution channels, as well as the Maharashtra State Agricultural Marketing Board to provide commodity prices. Information on commodity prices in local markets is collected by reporters, while Reuters deploys about 45 people covering 50 markets and 11 crops across Maharashtra (watch this BBC report to visualize how RML works in practice).
In light of the successful pilot, Reuters launched RML on a full commercial basis in late 2007, introducing a customer charge of 60 rupees (US$ 1.50) per month. In this context, in late December 2007, Reuters announced a partnership with Maharashtra’s Postal Circle, aimed at distributing, selling and supporting RML across the state. This new distribution platform significantly expands the presence of the service across the region, and allows farmers to easily and conveniently learn about RML, view demonstrations, and subscribe to the services. Reuters provides RML service training to Maharashtra Postal Circle to ensure that knowledgeable local help and support for farmers is at hand.
According to Amit Mehra, RML Managing Director, “the aim is to facilitate greater transparency in the Indian agricultural markets allowing individual farmers to increase their productivity and maximize their revenue, and this new distribution channel helps to meet those goals. Reuters aims to roll the service out in post offices across all of India in 2008.” At this point, about 250,000 customers in have taken up the RML service in the state.
As Thomson Reuters’ CEO Tom Glocer explains (watch also the video below), RML is not charity, it is business. In his view, “the pilot program was an unequivocal success and now, rolling out RML across India will signal a very important milestone in its adoption as a standard for the Indian agricultural industry.”
Thomson Reuters is looking for further expansion of this initiative, extending the current RML information service to one that facilitates transactions by connecting farmers with various buyers and traders through their mobile phones. This technological support in enabling the sale of their produce will help farmers take better decisions on harvesting, selling and sowing. In light of the fact that illiteracy rates remain high among rural communities (the overall literacy rate for India is 61%), which in turn could slow down RML’s growth, there are also plans to develop a voice-based system over the next year. Finally, once the business model, technology and partnerships are firmly established, Thomson Reuters will also explore potential roll-out to other developing markets in Africa, South America and Asia.
Reuters Market Light featured in the news:
- Reuters ploughs into Indian farming (The Sunday Times, 30 March 2008)
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Text messages empower poor farmers (BBC News, 6 May 2008)
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Reuters launches SMS crop service for Indian farmers (Reuters, 1 October 2007)
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Watch the BBC story reporting from a market in India to visualize how RML works in practice
More articles highlighting the role of Information and Communication Technologies (ICT) in development:
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