New Opportunities In CS: An SMS-Based Commodity Exchange In Ghana
- Posted by Jesse Polhemus
- on May 11, 2016
by Wilson Cusack
For my undergraduate thesis, I am building an SMS-based commodity and transport exchange that I am planning to work on full-time in Ghana after graduating. Below is some reflection on my journey to this and the career culture in computer science.
My interest in agriculture came when I took a year off before college and spent half of it working in India. When I was in India, agriculture was a problem everywhere I went. I heard about it while talking to the farmers outside of Kolkata, saw it while working in an arid region of northeastern Maharashtra, and experienced it personally while trying to organize the input supply chain for an agribusiness franchise I was helping a company build.
It seemed like some of the core problems were that it was really hard for farmers to connect with buyers, to get fair prices for their goods, and also to know what they should be growing in the first place (in terms of potential profitability). I had a very simple idea: why can’t a farmer text a platform saying what she wants to sell, and be matched with a buyer who also texted in saying what she wants to buy?
I told a friend who worked in agriculture about this idea and he told me that what I was talking about is called a commodity exchange and that Eleni Gabre-Madhin was working to build new commodity exchanges in frontier markets. I looked her up, guessed her email, and spent a summer working in Ethiopia. She and her team had built Ethiopia Commodity Exchange, the second commodity exchange in Africa, and were then looking to begin building exchanges in other African countries.
What they had accomplished was impressive. In the six years the exchange had been running before I was there, they had facilitated billions of dollars of trades and there had been zero defaults on payments. The price of every trade was texted out to 800,000 mobile subscribers, announced on the radio, and posted on ticker boards around the country to make sure farmers knew what price they should get for their goods. Because of this price transparency, it is argued, the farmer’s share of the final price for goods traded on the exchange went from 38% to 65% in the first three years of the commodity exchange’s existence.
There was (and is) dissent, though. Some argued that the commodities being traded outside the exchange had seen similar shifts in shares of final price and that these shifts were actually due to cell phones making prices more transparent. They said the commodity exchange had burdened the agricultural sector, making it easy for the government to tax it, and it had been unnatural to the way things were done before.
These critiques pushed me to again consider a more decentralized model, like trading using cellphones. But the work I did with Eleni and her team helped me see that the problem of agriculture in the developing world is often a problem of markets. This is worth unpacking.
More people die from malnutrition than HIV, tuberculosis, and malaria combined. Nobel Laureate Amartya Sen supposed that people do not die from a lack of food but from an inability to entitle themselves to food. This sounds like an academic version of something that has become more or less common understanding: the world as whole produces enough calories to feed everyone, those calories are just not evenly available for consumption. While this is true, it obscures the power of Sen’s point: people often starve to death not just in the context of a world that produces enough calories, but often in countries or smaller geographic areas that produce enough calories to feed everyone.
For example, in 2001 and 2002 farmers in the south of Ethiopia produced a surplus crop that could have met normal demand for two years. There was so much maize that the price dropped by 80% and farmers left their maize to rot in the field because harvesting it was not worth it. In July 2002 a food crisis was announced in the north of Ethiopia with 14 million people at risk of starvation.
The failure can be attributed to market opacity, preventing price and crop information being shared throughout the country, and a lack of trusted rules of exchange that would lend enough confidence to farmers for them to trade over vast geographic distances. This is a market problem, but solving it also helps to improve food production from a technological perspective. Making farming more lucrative helps existing farmers adopt new technologies and grow their farms, but it also attracts businesses to the sector, ideally boosting food production and improving food security.
The fall after working with Eleni, I transferred to Brown and began studying Computer Science, which opened up new opportunities. I spent the summer after my sophomore year working for FarmLogs, whose web and mobile app are now used by one in three farmers in the US, and I spent this past summer working in logistics for a large agricultural company.
This past summer I began talking with Rodrigo Fonseca, who is my thesis advisor, about potentially doing something related to commodity exchanges and logistics. I still had this idea in the back of my mind of building a less formal commodity exchange, one that would simply let people trade on cellphones, and, luckily, Rodrigo was up for working on it.
I spent the fall building the platform, getting help from many people in different departments, and then went to Ghana for nineteen days in January to pilot it. I decided to focus on maize, as it is the most important cereal crop in the country (55% of all output) and was reported in a 2012 study to have marketing margins (middlemen’s margins) of 50-70%.
I divided my testing into two phases. First, I went to villages and told farmers that I would buy from them right then, paying above market, if they used the platform to facilitate the transaction. I then went to buyers in the urban markets and told them that I would sell to them right then, below market, if they used the platform to facilitate the transaction. I traded six bags (100kg each) like this.
I then told everyone that I bought from or sold to that I would be back in a few days and that if they wanted to buy or sell anything before then, they could text in to the platform to do so. This was sort of the holy grail of the trip: an open trading period. It was the holy grail, first, because I wanted to see if I could actually create a new market and have it function. But, second, because I wanted to know if people would use the platform when I wasn’t standing right in front of them.
I’ve done enough surveys in the developing world to know that what someone tells you when you’re a foreigner just meeting them for the first time can mean very little. I was giving both buyers and sellers a good price.There was high incentive to just nod and tell me what they thought I wanted to hear and get to the part where I gave them the money/maize.
A person’s time is very valuable to them anywhere in the world, but especially in the developing world and especially in this context. Almost everyone we traded with was illiterate and so either had to have their children or a friend text the platform for them. And though I tried to make entering an order as simple as possible, there was certainly a learning curve. All of that to say, if they continued to use it after I left, that would be pretty high praise. Amazingly, they did!
In just a couple of days, buyers posted bids for 5400kg and sellers posted offers for 1000kg, and we delivered 500kg.
What’s Next And Thoughts On Opportunities In CS
I’ll now spend the spring semester further honing the platform, and I hope to go back to Ghana in July to work on this full time. I am incredibly grateful for the role of the university in the development of this project: for equipping me with the skills to build this and also for providing an excellent environment to explore the idea in an interdisciplinary way.
The concept seems so simple and obvious that many think there must be some key reason others haven’t already done it. It is a good question to ask when exploring any idea, but after working for companies and aid organizations that have prestigious reputations, I’ve found that there is not often a good answer to it, even from the people who you’d expect to have it. In fact, especially in the developing world, often the answer is that the reason nothing has been done is that the people who experience the problem are unfortunately not the ones who have the means to create the proposed solution. In this case, rural farmers in Ghana do not know computer science.
I feel really lucky because I have the chance to work on a problem that I really care about and that I think is really important for the future of the world. I feel lucky because I think I was lucky. I don't think I would be working on this if I hadn't spent time living in India, and I was really lucky to have parents that encouraged me in taking a year off and supported me financially. To be clear, working (volunteering) in India for five months is a lot cheaper than a semester at almost any college in the US: I spent less than $6k in total, including airfare. But such a price is obviously still out of reach for many.
My career trajectory is unique, at least among the CS undergrads that I know, but I wish that it wasn't. I wonder why someone has to be really lucky to care enough about a problem affecting a majority of the world's population to forgo the normal CS career paths. Maybe the answer to this is obvious: someone has to be really lucky because of what I said in my above paragraph. It takes going to these places and seeing these problems first hand to care enough, and most don't have that opportunity.
But I don't think this is a satisfactory answer, at least not for my community. Though it's true most can't have such an opportunity, many at Brown could. First, many CS undergrads make much more than 6k in a summer internship. And, second, a disproportionate amount of our student body come from families that could comfortably afford such an experience.
If the opportunity is available and not taken or not encouraged, if many of the most well educated and privileged people in the world have zero experiential familiarity with the problems experienced by the majority of the people in the world, then I think we should question whether there is not something wrong with the way we are educating ourselves.
But aside from the fact that many in our community could have such an experience, should we really accept that the only way someone can "care enough" about one of these problems is to experience it first hand?
I wonder if our not pursuing these majority-world problems, if I can call them that, has a lot to do with our expectations of each other, or worse, a sheer lack of thought and imagination. CS students have been equipped with a set of tools in their undergrad career. These tools are being applied to problems in every sector across the world with dramatic results, and I think there remain swaths of serious problems that are still untouched. I think we should feel a sense of obligation and more regularly ask each other, “What are you going to do to make the world a better place?” There are obviously a lot of good answers to this question, and I am not saying that a "normal" CS postgrad career is not one of them, but at this point I don't think we are even having a conversation about it. There are many people I talk to who seem moderately excited about what they are doing after graduation, but mainly see it as a stepping-stone to some unknown better thing that will come after. There is a sense that people are being forced into these careers: offered a lot of money and a quickly approaching deadline, the offer is taken, as if between classes and our social lives we really don't have time to thoroughly think through what we want to do with our lives or what we think is worth doing at all.
I think we are crazy if we think anyone else is ever going to slow down our life for us, make time for us to seriously think through the important questions. We can only do that for ourselves, and I worry that we aren't.
For more information, please click the link that follows to contact Brown CS Communication Outreach Specialist Jesse C. Polhemus.