At 6:00 in the morning, before the sun is blazing, Kasamba Salim is already at work among the shrubs and stalks that stripe his fields. On three acres in Bugiri, Uganda, 40 miles north of the equator, he grows corn, rice and coffee.
“I’m proud to be a farmer,” he says. “We’re the backbone of the country.”
Yet smallholder farmers like Salim often struggle to meet their families’ basic needs. The agricultural value chain is long and opaque, and by the time everyone is paid, farmers are often left with little to show for their hard work. Supplies are hard to come by, and drought can negate months of backbreaking work. As a result, 27% of small family farmers in Uganda live below the national poverty line, and the annual GDP per capita is $1,014, according to the World Bank.
What’s more, as the rest of the world is quickly digitalizing, many agricultural communities in sub-Saharan Africa still face inconsistent connectivity and electricity, making it difficult to access digital services. Farmers’ transactions with their buyers go unrecorded, rendering farmers largely invisible in the digital world.
Now, in Uganda, a digital platform is using financial technology to improve farmers’ lives. The Farm Pass app, locally referred to as Yo! Pay Agric, brings together the supply and demand sides in a one-stop agricultural marketplace where farmers can negotiate fair prices and take advantage of secure digital payments.
It is powered by Mastercard’s Community Pass, a digital infrastructure that gives people in underserved, rural and often offline areas access to critical services, such as enabling governments to deliver health care. Through Farm Pass, the smallholder farmer can be connected to providers that offer quality seed, fertilizer, equipment and other agricultural products, as well as buyers, creating a transparent digital commercial network that can benefit everyone in it.
The challenges that hold farmers back
Farming plays a critical social and economic role in Uganda, where 68% of the population is employed in agriculture, including 7 million smallholder farmers. Agriculture makes up a quarter of the country’s GDP.
“It’s the only sustainable way of earning predictable money here,” Salim says. “Land and abundance are our competitive advantage.”
The International Trade Administration rates Uganda’s agricultural capacity as among the highest in Africa, with consistent temperatures, two rainy seasons and enough arable land to feed 200 million people. But that potential is hampered by an opaque value chain and gaps in infrastructure.
For example, many farmers sell primarily to middlemen, who then resell the produce at a much higher price. Hours from the markets and without internet service, farmers can’t track the going rate for their crops, so they often get a raw deal.
“They give you half the market value,” Salim says. “You always need money, and there’s nowhere else you can borrow.”
Farmers like Salim are paid almost entirely in cash, leaving little to no recorded financial history. That means they can’t secure loans for the capital expenses that could help them build financial stability: modern irrigation systems, for example, or warehouses to store extra harvest. Getting essential supplies is difficult, since the same middlemen are their source for fertilizer and seeds — usually of poor quality and sold at a steep markup.
That’s why in 2011 Salim organized the farmers in his village into a cooperative called Nabigingo, which negotiates higher payments for produce and raises funds for shared equipment. However, the organization kept records on paper, making it difficult to track data like total yield to date and outstanding payments. Salim would walk to individual farmers’ fields to deliver messages, since most members didn’t have phones.
When COVID lockdowns prevented farmers from traveling, he began looking for technological solutions. “We’d heard rumors about a new system that allows farmers to have cashless transactions and access everything they need across the value chain,” he says.
The technology that ‘changed everything’
The rumors were true. As a pre-built, all-in-one digital infrastructure, Community Pass reduces the costs of extending digital services to underserved populations — currently nearly 6 million people in Uganda, Kenya, Tanzania, Ethiopia and India.
“Lowering the cost of serving these farmers and helping them become more profitable creates a more commercially sustainable agricultural value chain, which benefits everyone,” says Tara Nathan, the founder of Community Pass.
In 2021, Yo! Uganda Limited, a fintech based in Kampala, integrated Farm Pass with the company’s nationwide payments infrastructure to create Yo! Pay Agric. By setting up a digital account linked to their bank or mobilew wallet, farmers can order supplies, sell crops directly to buyers, track production, check weather forecasts and even find pest control advice. There are now more than 1 million registered users on the Community Pass platform via Yo! Pay Agric.
Salim’s co-op was one of them. “This is the fastest thing we’ve ever used in our lives,” he says. “It changed everything.”
Digital data made it easy to keep track of expected harvest yields. And rather than set out on foot to ask a farmer a question, Salim can send a free instant message through the platform. As a result, Nabigingo has expanded from 60 farmers to 500.
With a better understanding of how much fertilizer and seed to order each season, the cooperative’s profits have improved. And by matching Salim and his colleagues directly with buyers, the platform eliminates the go-betweens.
Market value transparency enables farmers to negotiate prices as much as 50% higher than in the past. And Yo! Pay Agric preserves a record of this income, allowing farmers to build a credit profile. This is the digital credit history that will enable banks and lenders to assess loan applications from farmers so they can grow their enterprises.
In Kenya, for example, a pilot program with the U.K. charityShell Foundationand theCo-operative Bank of Kenya harnesses Community Pass to enable affordable credit so farmers can buy income-generating energy assets like solar-powered irrigation pumps, cold storage and biodigesters, maximizing their yields.
In two years, Uganda’s Nabigingo has amassed enough capital to build a warehouse where farmers can store extra harvest. Now they’re raising funds to install a modern irrigation system at each member’s farm.
As he works to help his fellow farmers get ahead, Salim is also looking out for the next generation. He hopes his four children follow in his footsteps, and he’s making sure better infrastructure is in place when that day comes. As he says: “The digital systems make our work easy.”
