phy2app

For millions of smallholder farmers in East Africa, the income received for their produce isn’t enough to make a living. The size of their farms makes commercial farming uneconomic. Farmland is largely used to meet the family’s food security needs. There are two solutions: getting a better price for their produce or finding off-farm employment. 

Our approach supports both. 

Our goal is to increase smallholder farmers’ income by including them in short and sustainable value chains through local value-adding agribusinesses. These companies can access markets that farmers cannot and offer farmers’ training and inputs. In addition to providing a reliable offtake of produce, they also employ farmers to work on their land and provide off-farm employment in their value-adding manufacturing facilities year-round.

The number of farmers who are unable to earn a living is staggering. There are 1.5 billion people working in 500 million small farms around the world all facing this problem. The problem is exacerbated in Sub-Saharan Africa where 75% of 600 million smallholder farmers live in poverty as they do not receive enough for their produce.

For example in Rwanda, 92% of its population lives below the international poverty line and, in Uganda, that number is 88% of the population. Smallholder farmers and landless people in rural areas, which represent 84% of the population in Uganda, are the poorest groups of the population and rely on subsistence agriculture. 

Agriculture is the key industry for the majority of African economies and accounts for at least 15% of the region’s GDP. Smallholder farmers in Africa make up about 70% of the population and constitute the largest stakeholder group in African agriculture.

East African agribusinesses play a critical role in connecting smallholder farmers to the high-value, regional, and international markets. As they rarely have a quality website and social media that can demonstrate the information that buyers are looking for, they struggle to establish trust and are often overlooked by serious buyers.

phy2app is a digital transparency tool that promotes short and transparent value chains where agribusinesses play a key role and include thousands of farmers into the lucrative value chains. 

It guides the agribusinesses to gather and organize information about the product's origin and the farmers, their production processes, as well as their social and environmental impacts. When prepared, the digital product profiles can be shared with the buyers through digital channels (email, social media...) or through QR codes.

phy2app makes trade relationships more organized and transparent by organizing the order-related document and information sharing between the African agribusinesses and their global buyers.

phy2app helps African agribusinesses to assess the export market readiness as well as the social and environmental sustainability of their business. 

Phy2app helps agribusinesses become trustworthy trade partners for global buyers, scale sales and establish strong trade relationships. Agribusinesses also become socially and environmentally more sustainable. Consequently, this leads to higher offtake from the smallholder farmers at higher farmgate prices and scaling of all the positive social, economic, and environmental impacts. At the same time, these agribusinesses create a positive impact by creating off-farm jobs. 

Our solution currently benefits the rural farming population of Sub-Saharan African countries. Currently in this region, 450 million smallholder farmers live in poverty.

For the pilot phase, we plan to implement our solution in Rwanda and Uganda which are both classified by the United Nations as least developed countries (LDCs) and face at the same time the challenges of a land-locked country. 92% of the Rwanda population live below the international poverty line of $5.50 a day (2011 PPP) and 56% live on less than $1.90 a day. Among rural farmers, poverty is at 76.6%. In Uganda, 88% of the population live on less than $5.50 a day (2011 PPP), 41% live on less than $1.90 a day and 84% of them live in rural areas. 

Smallholder farmers and landless people in rural areas are the poorest groups of the population and thus are our target beneficiaries. However, our target users of the solution are the African agribusinesses who either buy from smallholder farmers or employ resource-poor farmers in their fields and provide employment in their manufacturing facilities to our target beneficiaries. 

Agribusinesses in Africa are struggling with the lack of market visibility:

(i) They do not have the tools to present themselves as trustworthy trade partners to international buyers. 

(ii) They are unaware of the information the market demands and thus do not know what information they need to prepare and communicate to increase their chances of getting new buyers. 

(iii) They are lagging behind when it comes to establishing new trade partnerships and would need to upgrade their company and product marketing competencies. To not waste the product, they sell to local traders at prices that barely cover their costs or sometimes even sell at a loss. 

We have acquired this key information by experiencing it firsthand through a number of projects we led and conducted over the last 15 years on the agribusiness value chains across Africa for The World Bank, IFC, GIZ, and the Bill & Milinda Gates Foundation, among others. For the past 2 years, we also have a team on the ground in Nairobi Kenya that is in daily contact with the agribusinesses and other relevant stakeholders such as agribusiness associations and value chain development organizations to constantly gain our understanding of the system we are solving. 

Agribusinesses and their buyers are part of our continuous agile development of the solutions. We have involved agribusinesses since the first prototyping workshop we held in Kigali, Rwanda, in November 2019, until now. We have a small network of agribusinesses we are in constant communication with and are testing all the prototypes and MVPs with. We collect constant feedback and measure the impacts we create. As they have direct and constant contact with the 

Smallholder farmers can only access markets that can make their farming a commercial activity through agribusinesses. Phy2app can support millions of smallholder farmers by solving some of the market challenges faced by agribusinesses. By enabling agribusiness higher chances of success in the market and helping them grow, they can support a larger number of farmers. they can pay higher farm gate prices and expand the network of farmers they source from, as well as invest in training and better agro-inputs that result in higher yields and higher quality, in turn leading to more money for the farmers.

Traditional approaches focus on treating the consequences of the problem. It is only by taking a value chain approach that correctly tackles the issue. In this case, African agribusinesses struggle in marketing themselves to European markets. phy2app generates a QR code that gives access to information about products to both consumers and end-buyers, far beyond the information available through agribusinesses' websites. Phy2app enables those strategic agribusinesses to get on the train of the digital economy.

Our first results show that phy2app has increased agribusinesses' visibility on the international market and its implementation leads to a positive social impact.

We have already implemented phy2app in Kenya, Uganda, and Rwanda and are now making the first implementations in Ethiopia, Ghana, and Nigeria. We are working with agribusinesses producing products ranging from macadamia nuts to specialty coffee and avocado. In total, the agribusinesses we work with are supporting over 25,000 smallholder farmers.

Until now agribusiness using phy2app achieved the following: 

(i) a Kenyan agribusiness producing dried fruits was able to open new markets across Europe and the Middle East and thus expand its network by employing more than 3,000 additional farmers.

(ii) a Shea butter producer in Uganda was able to increase sales by 20% and thus provide more stable off-take and income to the farming community that would otherwise burn forests for charcoal.

(iii) a youth-produced coffee in Uganda was successfully launched in the local market, allowing the agribusiness to be well on track to support 2,500 farmers by 2025.

Currently, available approaches focus on only one of the three following solutions: 

(i) Supporting farmers to achieve increased quality/productivity. 

Problem: The approach cannot tackle the problem of low farm-gate prices which don’t allow covering the farm input costs for each unit nor the problem of limited land resources for production given the fragmented plots which are common in many African countries.

(ii) Smallholder’s certification for better-paying markets (e.g. Fairtrade, organic).

Problem: The slight increase in farm-gate prices is not sufficient. A study from Fairtrade International showed that Fairtrade premiums paid to farmers add less than 10% to the household income and most farmers are “very far away from the living income” (Source). Brand-owners are the ones who profit the most from higher end-consumer prices of certified products, not farmers.

(iii) Providing a market platform for producers.

Problem: (International) buyers who are looking for long-term partnerships prefer other sourcing channels and are not using these platforms, so producers cannot significantly increase their sales.

Our solution is innovative and efficient because it takes a holistic value-chain approach and overcomes the before-mentioned limitations.

This approach is promoted by many governments in their poverty alleviation strategies. Studies come to the conclusion that a transition from subsistence to a market-driven rural economy has to focus on investments higher up in the value chain, namely in agro-processing, and link smallholder farmers to lucrative value chains or create off-farm employment in order to promote growth and to reduce poverty (Source).

In Sub-Saharan Africa, there are currently an estimated 60,000 agribusinesses and over 60 million smallholder farmers.

Currently, we work closely with 15 agribusinesses and over 25,000 farmers are currently part of the phy2app value chains. In the next year, we plan to impact 100 agribusinesses and an estimated 150,000 farmers.

By 2025, we are aiming to have about 2,000 agribusinesses mobilized and connected to 200 buyers via phy2app pro as well as almost 3000 natural products presented transparently via phy2app. In a conservative scenario, about 3 million farmers will participate in related value chains and significantly increase their income.

An important part of our efforts is to perform a rigorous impact assessment and to use an evidence-based approach to guide the further development and scaling of our solution.

We plan to adopt state-of-the-art, proven methodologies including randomized controlled trials and causal machine learning methods in our impact assessment. In particular, for the RCT, we will identify comparable agribusinesses and randomly select half of them to onboard with phy2app as the “treatment group”, with the remaining half not on-boarding with phy2app serving as the “control” group. Tentatively, we aim at including 25 agribusinesses in each of the two groups. We then measure the impact of our solution both at the agribusiness and at the farmer level. In addition, we will also collect basic demographic and socioeconomic information on the farmers, the agribusinesses, and the buyers. Continued assessment will allow us to evaluate the long-term social impact of our solution

To this end, we will partner with Professor Y. Karen Zheng and her research team from MIT (see Profile). Karen is a leading scholar in agricultural value chain innovation, with active research and field collaboration to help improve smallholder farmers’ welfare through value chain optimization and transparency. In our partnership, we will rely on Karen’s expertise to carefully evaluate the impacts of our solution on the financial outcomes of the agribusinesses and on the income of the farmers they work with.

Part of the funds will be used to support Karen and her team’s work.

Anteja ECG is a for-profit, consulting company with HQ in Ljubljana Slovenia, and offices in Nairobi, Kenya, Stuttgart, and Boston. The company has been working on sustainable development and sustainable biobased value chains for the past 15 years, with a focus on Africa and Europe. Anteja has extensive experience on agribusiness value chains leading projects for the likes of the World Bank, IFC, and GIZ. Anteja Africa is a sister company of Anteja ECG based in Nairobi Kenya and is in charge of the deployment of phy2app across East Africa. 

Co-Founders (3) - Mateja Dermastia, Mary N., Gerd M.

Full-time team (8) - Jon G.D., David N., Martina V., Carol M., Beth A., Catherin K., Jackline K

Part-time (2) - Alexis Z., Susan M.

Interns (3) - Gloria S., Aljaž U., Alexis M.

IT dev subcontractors - HiGroup d.o.o.

The management team of Anteja Africa is well equipped for scaling phy2app to reach every agribusiness in Africa and make them visible to international markets. We have the ground familiarity and presence in East Africa & Europe and have worked in the field of developing transparent and sustainable supply chains for over 20 years. We combine the years of experience with young innovative minds, this is what makes our management team diverse and innovative. 

Mateja Dermastia is the CEO and is a specialist in transparency, sustainability, value chains, and clusters. She has been an entrepreneur for more than 15 years.

Social Entrepreneur Mary N. is an environmental ambassador who has built many jobs for women in manufacturing and is passionate about skills development and decent jobs. 

Gerd M. is a global cluster development expert and regional development strategies with over 20 years of experience working across Africa. 

The leadership is supported by:

Jon Goriup, an Esade Business School graduate, in charge of product design and business strategy.

David Ngechu, Leeds University master's graduate, in charge of customer engagement and success management.

What makes our management team so diverse and innovative is the combination of our years of experience in the industry with young innovative minds from all around the world. By fostering a multinational environment, we not only expand the horizons of our staff but also our partners. What further sets us apart when it comes to inclusion and diversity is that our company is woman-owned and woman-led. The current make-up of our company's team is 55% female and 45% male which shows our commitment to creating a balanced working environment. Furthermore, alongside our Slovenian staff, we employ people from 6 countries, including France, Germany, the USA and Kenya.

Our company values include sustainability, trust and social impact with transparency in mind. Our solution builds upon these values and attempts to transfer them to as many people as possible. By enabling agribusinesses in East Africa, we intend to create a positive social impact in the local communities. Another value which we are building towards is a truly global approach and to create a team that is as diverse as possible, regarding not only gender but also age and nation. By giving opportunities to young talents coming from the world's top universities, our team will work on ideas and improvements from various generations which will, in turn, help our work and the communities using our solutions.

We are applying to Solve to:

• Gain exposure to key networks, media, and conferences, especially in the area of development policy and agribusiness.
• Make our impact assessment possible and support professor Karen's and her team’s work.
• Learn from other teams and establish potential tech collaborations.

We will need support for:

(i) Development and refinement of our business model and pricing strategies 

(ii) Reaching relevant national bodies in East Africa.

(iii) Conducting an impact assessment.

(iv) Finding additional strategic partnerships and distribution networks.

We want to partner with Professor Y. Karen Zheng and her research team from MIT to perform a rigorous impact assessment and to use an evidence-based approach to guide further development and scaling of our solution.

We plan to adopt state-of-the-art, proven methodologies including randomized controlled trials and causal machine learning methods.

We focus on Digital Inclusion by empowering African agribusinesses to get them on board the train of the digital economy, which we believe must be (i) transparent, and (ii) socially and ecologically sustainable.