New technologies follow a learning curve and decrease in price over time. Early cell phones were massive and expensive, but now nearly a billion Africans own one. The price of solar modules have fallen by 150 times in the past 35 years alone. SunCulture developed the Iterative Design for Eventual Affordability (IDEA) approach to product design to build high-quality products and make them available to lower-income smallholder farmers over time. This is done through a combination of farmer-led reinvention, in-house product development, and application of existing technologies to smallholder farmer problems. We are also developing a Pay-as-you-go method (PAYG) to make our solar irrigation systems extremely affordable for even the smaller-scale farmers. This blog discusses how our IDEA approach, combined with our PAYG method, is going to revolutionise the agribusiness economy in Africa.
The Opportunity
By 2030, the World Bank projects Africa’s farmers will create a trillion dollar agribusiness market if they can access the capital, knowledge and technology necessary to increase yields. Sub-Saharan Africa has the highest prevalence of undernourishment in the world. Almost one in every four people is undernourished. However, Africa possesses 50 per cent of the world’s unused arable land and can feed itself — and help feed the world too.
Smart farming technologies like SunCulture’s solar powered irrigation systems can increase yields by up to 300 per cent, using 80 per cent less water than traditional farming methods and clean and affordable solar energy . This presents an exciting opportunity to sustainably address the yield gap on millions of smallholder African farms to improve food security and enhance economic growth.
Enter Pay-as-you-go (PAYG)
There are 5.4 million hectares of Kenyan farmland. 83 per cent of these are unsuitable for rainfed agriculture and require irrigation, but only 4 per cent are currently irrigated. Switching from rainfed agriculture to irrigated agriculture leads to a 10x increase in smallholder farmer income and is one of the simplest tools available to fight poverty and hunger in Africa. One of the biggest barriers to adoption of irrigation is the up-front cost. Moreover, irrigation options like using diesel pumps to move water onto crops cost upwards of USD 250 per month to operate and are out of reach for the majority of low-income smallholders. There is strong and growing demand for irrigation solutions, but lack of access to capital limits adoption.
One of the programs we’re most excited about is leveraging PAYG technology to enable smallholder farmers to access affordable irrigation and increase their incomes. SunCulture accomplishes this by being a one-stop-shop for smallholder farmers by offering end-user financing through bank partnerships. SunCulture’s system allows farmers to access irrigation for minimal daily costs while increasing their profit margins at a much faster rate than with the traditional fuel pump. We are currently developing mobile-enabled PAYG solar irrigation services that cost as little as USD 2 per day.
Enter Iterative Design for Eventual Affordability (IDEA)
The IDEA is a product design philosophy for building high-quality products that become available to lower-income smallholder farmers over time. The driving principle is to start with an expensive product that works really well for a small subset of the total market and over a few cycles of iteration, move it further downmarket while retaining the overall high-quality experience. Many companies attempt to develop low-cost products at the onset by sacrificing quality and this has led to some fundamentally flawed products. It starts with a quality product and identifying a market for it, and then making design, manufacturing, and business model adjustments to give a lower price point to a comparable experience.
The three key elements of IDEA are:
1. Farmer-led reinvention – SunCulture designs products in collaboration with the farmers they are sold to. Using farmer focus groups and engineering field days, we solicit ideas from farmers about the most beneficial solutions to the challenges they face.
2. Application of existing technologies to smallholder farmer problems – we use existing solutions to avoid the expense and complexity of developing from the ground-up.
3. In-house product development – existing products are often incompatible with the requirements of smallholder farmers (an often-overlooked segment by most manufacturers). In this case, our engineering staff in the US, Europe and Asia work to develop new products that address the specific challenges faced by smallholder farmers.
Before SunCulture launched the AgroSolar Irrigation Kit in 2013 for USD 3,500, the market price for a solar water pump and acre of irrigation was USD 12,500. We have used the IDEA principles and PAYG to reduce the upfront cost to acquire the system by an average of 52 per cent per year.
Following the current trend in lowering costs, 2017 will be a huge year for introducing an even less expensive form of irrigation, making our technology more affordable and accessible than ever.
Source: http://www.gsma.com/mobilefordevelopment/programme/m4dutilities/suncultures-idea
