South African agri-tech startup Desert Green is developing mobile solutions to improve the informal agricultural value chain across Africa.
Formed in 2016, Desert Green started out with the intention to build a crop nutrition platform to help small-scale farmers improve their yields and quality in order to supply larger retailers with guaranteed demands.
“After securing some off-take agreements from a retail and wholesale buyer, we quickly realised that many small-scale farmers were unable to satisfy these off-takes due to limited scale, and lack of infrastructure and investments to comply with retail certifications,” founder Tumelo Chiloane told Disrupt Africa.
“But nevertheless, farmers were somehow still selling produce, so we decided to follow the value chain, which led us to the informal markets.”
Like many other African countries, a majority of South Africa’s farmers are small-scale. These farmers rely heavily on informal market channels to sell their produce, and are also more directly responsible for food security at household level. Yet what Chiloane and his team observed was a significant disconnect between the demand-supply needs of informal traders and small-scale farmers.
“The demand-supply of fresh produce is invisible and unpredictable in the informal value-chain, causing a lot of instability for traders, income losses for farmers, unstable prices and produce wastage along the value chain,” he said.
Desert Green’s solution to this problem is GreenKart, a B2B marketplace platform for small-scale farmers to sell their fresh produce directly to informal traders. Traders can access more affordable stock at farm-gate prices, with shared logistics services, delivered directly to their market stall within 24 hours of placing an order.
“We believe this can be done cheaper, faster and more transparently than it currently is,” said Chiloane.“That’s why we are building mobile solutions to enable small-scale farmers and informal traders to buy directly from one another, at farm-gate prices.”
Desert Green was bootstrapped from foundation, but after taking part in a host of programmes was last year selected as part of the 2021 SAB Foundation Social Innovation Awards, which Chiloane said was currently its primary source of funding apart from sales revenues. Those have been relatively strong.
“Uptake has been overwhelmingly positive. We believe we launched at the right time, when farmers and traders have been looking for a more convenient option apart from the current traditional way of conducting their business. We are currently in the middle of a controlled pilot which we launched in March this year and still has a few more months to go before we launch full scale,” Chiloane said.
“We have a total network of over 600 street vendors and over 200 small-scale farmers that we should be fully servicing by the end of our financial year.”
Desert Green operates primarily in Johannesburg and Pretoria, which are the largest consumer markets for fresh produce in South Africa, but in the next five years plans to expand to all the major agriculture provinces of South Africa, as well as major neighbouring markets such as Zambia, Zimbabwe, Angola and the Democratic Republic of Congo (DRC).
“Our business model centres on a marketplace that will efficiently enable a direct link between small-scale farmers and informal market buyers,” said Chiloane.
“It’s a freemium subscription model for informal traders, with a big opportunity to up-sell value-added services. For farmers we charge a five per cent commission for all produce sold through our platform. This business model approach drastically improves the way the informal value chain currently operates, which is offline, with no data and is unable to predict what may happen tomorrow in terms of supply and demand.”