Developing Business models for the IDSS Project

The following case study has been developed based on LightCastle’s work with SNV-ACI on the IDSS project. 

The Opportunity

In 2016, ACI Agribusiness, a business division of the Advanced Chemical Industries (ACI), envisioned a 36-month program titled ‘Intelligent Decision Support System (IDSS) for farmers’. The program is co-financed by ACI and Netherlands Space Office (NSO) and is implemented in partnership with SNV Netherlands Development Organization (Bangladesh office), Nelen and Schuurmanns (Netherlands), SarVision (Netherlands). ACI will also collaborate with the Department of Agricultural Extension (DAE) during the field-level implementation of the program.

The project is aimed to leverage geo-data to gather, target, and disseminate relevant information to farmers when they need it, in a sustainable way. The ultimate vision is to positively affect the lives of 967,675 rice, potato, and vegetable farmers. For this project, ACI needed LightCastle’s expertise in developing a commercially viable business model for IDSS services.

Our Approach

We looked into the current status quo of availability of agro information in the agricultural sector, the models being followed globally as well as locally by conducting secondary studies, primary surveys, key informant interviews, and FGDs. As a reference point, international as well as local models of information dissemination in agriculture were segregated into three segments; modular models, integrated models, and platforms.

Modular models deal with specific information needs such as the need for market information, weather information, or pest information. Examples included Market Light (international) and E-Krishok (local). Integrated models, on the other hand, deal with the whole value chain, with the actors supporting farmers from seed to sales; the best example being ITC, with E- Choupal in India. They sell seeds to farmers, provide them with information and buy the product from them with bonuses for quality – minimizing risk and maximizing quality. Platform models such as Esoko were also investigated. Ultimately, the modular model would be the most appropriate to start with, with the possible rollout of the integrated model sometime in the future.

Overall, farmer’s information needs to be revolved around pest information/advisory, soil/fertilizer advisory, and market and weather information. Information regarding pests consistently came out to be the most sought-after information type. Moreover, farmers trusted the advice given by input retailers the most. So, retailers were evaluated to be a strong channel for information dissemination to farmers in the IDSS model.

The Future

• A modular model was proposed with retailers as the focal point of distribution.
• In another, a new breed of ‘last mile’ independent salesmen has been earmarked for selling ACI’s products along with offering agro and weather information for free to farmers.
• In the final model, agro-information dissemination with different stakeholders was explored, wherein the IDSS project could collaborate with different development organizations on a partnership basis, for designing and executing interventions pertaining to agro information.
• ACI is in the process of implementing the project based on LightCastle’s strategic recommendations in the second quarter of 2017.