Peace Tech Innovators, Come on out!

A former CEO of a financial institution challenges the visualization of the agriculture industry using smartphones

Kanno Seiichi = A Representative of the Edo Tech Global, a Professor at Tama University Graduate School and the President of the Japan Policy School.
2017/06/22 The Nikkei BP ICT Innovation Research Institute

PeaceTech is a movement that actively utilizes ICT for peaceful purposes. Mr. Kaneichi Kanno, one of the pioneers of this movement, meets with key people from PeaceTech to talk to them about their efforts and thoughts. (Takahiro Kikuchi = Nikkei BP Research Institute Innovation ICT Research Institute)

Kengo Kitaura is our 6th guest in a line of Japanese executives who embody "PeaceTech", the utilization of technology for peace. He won an award winning prize at the pitch contest of the "Nikkei Fintech Conference, 2016" run by Nikkei Fintech.
He is the man who took command of the “smartphone app used for the development of rural areas" known as AGRIBUDDY ".
In fact, he had previously been running a financial loan business in Japan for many years.

"Though it was profitable, I wanted to quit as soon as possible as we were not a major company. As a result, the clients that came to us were pretty much driven into a corner. Because of this, the number of people around me who began to think "I want Kitaura erased from existence" began to increase”. (Mr. Kitaura, the same below)

Mr. Muhammad Yunus of Bangladesh won the Nobel Peace Prize by creating the Grameen Bank, even though he was in the same money lending business that I was in. I began to think to myself: “What is the difference between him and me?”
"I noticed that the difference between us was that the feeling behind the loans we made was different. I was surprised at the difference in our target audience, that the gap between our methods went that far. That was the formative experience for me. "

In 2005, Kitaura left the money lending business and after several years he went in search of a new path that brought him to Cambodia to begin volunteer work and change and uproot the relationships of those he met.

Feeling the limits of both volunteer work and large-scale agriculture.

While volunteering at an orphanage in Cambodia, he also visited Southeast Asia.
He thought that the society would change through his volunteer work, but he discovered that this was not the reality.

"I collected donations by having people come and see the children of the orphanage.
If someone purchased new clothing with that donation which provided clothing for a child, the child didn’t look as poor, and as a result, no more donations were collected. Then, large number of notebooks were sent to us. As we didn’t need that many notebooks, I decided I would sell them, but we were mocked as having operated as a black market. I felt this whole thing was impossible. "

He decided to modernize agriculture with the person who operated the orphanage. He thought it would be better to earn money in this way, and return it to society. However, it was not so easy. First of all, Cambodian farmers were facing poverty, but not famine. Because it is a tropical country, there is plenty of food to eat. They lacked money, not food.
Since they were able to eat without working much, in a sense, it seemed to as though they were wealthy.

Modernization of agriculture was not a simple task here. Despite this, he decided to plant cassava, a crop similar to potatoes. He borrowed 1,000 hectares of farmland, invested in a wide range of recruits, and incorporated Japanese style farming methods. The result was terrible. He also incurred damage from a typhoon. But what was more problematic was that nobody knew the real numerical figures. Everything was unsystematic, including the harvest volume, investment, and cultivation cost. The data provided by the government was also incorrect. The figures he analyzed by interviewing the farmers were all random. Up until that point, nobody cared about such things.

As a result, he came to believe that neither volunteer work nor the modernization of agriculture would be able to confront the issue of poverty at its forefront. First of all, he had to do something about the sloppy data. The theme of the project was "to create many happy farmers". With the help of IT, he wanted to create solid protocols that would raise the productivity of agriculture in Southeast Asia and to improve the economic situation of the region.

Exchanging information with a "Buddy" in rural areas using a visualization application

Kitaura's business is based in Cambodia. Furthermore, he is also building a foothold in Bangladesh and India. It is said that there are 400 million farmers and 3 million hectares of land available for cultivation in these three countries alone.

"Crops produced by farmers in developing countries are handed to local markets, processors and buyers through the hands of locals, intermediate brokers, lenders and others such individuals generally referred to as middle men. There are also many exports. Not only regular exports, but illegal smuggling as well. They pass through the border as if it they were nothing. No one is able to fully conceive these figures. "

A method of quantification was conducted via a telephone interview survey. Everyone had their guard up and declined to share the exact figures etc. with them.
First of all, the accounting books were all inaccurate.

"So, even if you do business as normal, it just turns into a black market. Thus it is natural that financial institutions are less likely to lend money in these situations because they do not know much about the other party. If you cannot afford to borrow money, you have to keep doing business in a state where leverage is ineffective. In this situation the economy will not flow cyclically.
I began to think that this was the fundamental problem. "

In addition to this, let’s look at growing rice as an example. They wantonly scatter the un-hulled rice from previous year. They do not re-plant it and have no knowledge regarding fertilizer. They can only buy fertilizer with the money they have at hand. Because of this, the resulting yield is also bad. They are only able to acquire half of the yield that could be cultivated, and they have to endure with this outcome.
"If we can pay down on a farmers missing money, the economy will start turning around and farmers' lives will be better. To achieve this end, as well as teach farmers about good agriculture, we first required a visualization of the various data pertaining to the agriculture at hand."

This is why he developed an application called "AGRIBUDDY" to download and use on smartphones. It was developed by four development staff. A Japanese and Cambodian living in Singapore, as well as a mixed team of Vietnamese and Lithuanians.

"The literacy of the farmers is quite low despite the fact that the literacy rate is said to be 80%. This does not imply that they can read sentences, it is an implied literacy level where one can read the names of the other people and the name of places.
They are not good at math. Many of their criteria were based on assumptions.
Honestly, even if you’re fluent in the local language, it is difficult to talk about business.
Due to this I choose people who are somewhat highly literate, have them become rural evangelist “buddies”, and assign them to a group of farmers and bundle them together. "

One downloads the application to a buddy's smartphone, and it interacts with the headquarters several times a month. To measure the actual area of cultivated land, you just launch the application and have someone walk around it. Based on the acquired GPS (Global Positioning System) information, a map is plotted on the head office personal computer, and the area is automatically calculated.

Next, using pre-determined algorithms, it is possible to determine which crop yields can be expected depending on the area and region. Furthermore, we automatically calculate the total expenses required and the expected income.

In addition to this, the buddy will input the group members name, telephone number, address, family composition, type of crops being handled, time of rice planting, time of seeding, etc. according to the appropriate format. Also, if necessary, they may take pictures of the site and send them.


A "buddy" sharing the state of the agricultural land with headquarters using a smartphone

At the headquarters they analyze and process the data sent, such as who, where, how many hectares of farmland, what kind of crops are being made, when will they plant their seeds and seedlings, and when and how much will they harvest?
Meanwhile, they visualize how much money can be spent and finally how much can earned. They then display the result on a dashboard that anyone can use and share the information with financial institutions and suppliers who want to buy crops.

"For example, it is easier to determine things like how many tons of rice can be taken in this region in the next week?” or “how much is the total?” rather than how many trucks one should be prepared?"

Images are mainly used for monitoring the spread of pests. They promptly send information regarding diseased areas to the relevant buddy. If they then see an area that they suspect is suspicious, they will take pictures and send them thereby confirming the severity of infection. No one has had this type of information available to them until now.

Also disjointed and unavailable until now was the type, amount and information regarding the appropriate time to use fertilizer. Because this type of knowledge is scarce, they summarize it in event calendars for each crop. When and what must I do? They also made it possible for each person to confirm this through their own individual data.

Furthermore, the headquarters also provides updated information such as: "It is almost time to use this fertilizer soon". In this way, they control the worksite via an application.

Acquiring a credit line with data gathered by the application

"When talking about partnerships with financial institutions, financial institutions will say they cannot lend out to those whose situations they cannot visualize. So I counter them by asking, "If you could visualize the situation, would you lend us the money?" Because I was on the lender side, I understand that I can risk analysis and make loans if I am able to visualize the situation. Therefore, we ask financial institutions to make a credit facility based on the cultivation area, income, and expenses for each group. Since lending only started this year, I cannot evaluate it yet, but based on the current situation, 90 percent of these cases have been passed. "

AGRIBUDDY sells goods within the scope of this credit facility. If you lend money in the current norm, there are many cases in which said money is used for useless things. As a result they work by getting a financial institution to set up a loan balance and sell the necessary items such as fertilizers and pesticides within that that time frame. AGRIBUDDY earns via the credit sale fees of such merchandise.
Currently, the number of buddies they support is about 600. These are mainly in Cambodia, and the total number of farmers bundled to the buddies is 60,000.

"We do not want to be involved in lending operations. As long as there are institutions that allow us to borrow, we will introduce AGRIBUDDY and will continue to sell things within the scope of that credit facility. If credit sales can be made, things can be sold, so the economy will cycle. In the rural villages of Cambodia, there was no way to do all this.
Of course, we will aim stabilize income and expand further.
That way, the economy of farmers will also be driven. "


AGRIBUDDY Dashboard Screen

Covering the low literacy and narrow band using technology

To start with, we asked about the commitment involved in the development of "AGRIBUDDY".

"The part I was most concerned about was UI, UX. Japanese people can read. They make an attempt to put a good amount of information on the screen. But the situation in Cambodia is different. So I thought that maybe pictograms would be good, but this was also difficult.
Because they do not extrapolate, if you draw a picture of rice in the sense of a crop, they only visualize it as a crop of rice for them. For example they would not understand from the picture that corn or other crops could be included. We had to make these issues clear first. "

They do not understand passwords, so we had to come up with a pseudo password. But we couldn’t use a phone number because SIM cards are so cheap here and phone numbers change frequently.

Another difficulty was the narrow band connection as it makes the communication speed slow. Thus it takes a considerable amount of time to upload photos and there are many areas that are outside of the communication service area.

"Facebook messenger can upload pictures in a short time even in a narrowband environment, so that was our goal for our independent development."

Even for smartphones, everyone does not have the latest model, so the app needed to operate smoothly even on older models.

"It had to work well and smoothly on older models with OS that had not been updated. No one here would think it was their issue if the usability was not great so everyone would blame the application and it would not be used. "

In such places, what is useful and desired is not necessarily the most advanced technology.

"Since the application development engineer is in our office with a broadband connection, they will field complaints from the work sites and provide customer satisfaction within the provided broad band environment. For example, we give points to a Buddy for payment. The points can then be cashed if the points accumulate to a certain extent.
The Buddy did something right, but problems may arise if the points are not granted properly. In the case where points are not granted, the reason for this is usually a result of an issue on the side of the buddy as we operated using broad band on our end. Using this system, it will never result in them thinking that we have done something wrong, resulting in them believing that the application is broken or that they have been deceived. It is important these things do not occur”.

Anyone can master this without hesitation. This is most important. In this sense, smart phones, not personal computers, are the most suited devices. Smartphones are better than personal computers because a larger percentage of people can master them.
However, this all depends on the quality of the application.
In developing countries, a good application is one that can function even with a narrow band environment, can be used without really knowing how the application functions, and can be used without knowing how to read the language of the application properly.



Original Article (Japanese): IT Pro (Nikkei BP)

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