Somalian agri-tech startup SAMS is the first platform in the country that connects farmers with buyers directly, increasing market reach for farmers and reducing transaction costs.
Launched last year, SAMS provides farmers with customised and localised crop advisory and market prices, while also connecting farmers directly with buyers to ensure they get the best prices for their products.
It also offers on-ground intervention to tackle diseases and apply modern farming techniques, which is done by its agricultural team.
“SAMS is holding the hand of farmers from the early stages up to the marketing stage, enhancing the productivity and financial security of farmers in Somaliland,” the startup’s founder and chief executive officer (CEO) Faisal Mohamed told Disrupt Africa.
Mohamed founded SAMS after discovering farmer productivity in Somalia was was low due to slow responses to weather and disease, and the lack of application of modern farming techniques. There were more problems than that, however.
“Middlemen tend to overcharge farmers, imposing high commission rates for every transaction that left farmers discouraged,” he said. “There is also information asymmetry – farmers didn’t know the real prices of their products.”
SAMS is taking on those middlemen, who Mohamed said would exploit farmers’ vulnerabilities by offering them fuel and selling produce for very high commissions.
“We take less commission, we offer free consultation services to the farmers given by our agricultural team, and even if we fail to sell their products we take 10 per cent of the loss encountered by the farmer,” he said.
SAMS currently only operates in Somaliland, but Mohamed said its ambitions are greater.
“We plan to expand into Somalia, as there are many farmers there. We also plan to launch a mobile-based service that sends weather and market prices to farmers via SMS,” he said.
It has been a case of so far, so good for the young company, however. SAMS uses two modules in order to generate revenues, the first one a subscription fee paid by farmers, and the second the commission it takes on any sales made through its platform.
“In 2017 we have generated revenues up to US$10,000 with only 110 farmers subscribed to our service, and the average transaction per farmer being $200,” said Mohamed. “In 2018 we expect that the farmers subscribed to our service will reach 1,000 and the average transaction will grow to US$300, so we expect to generate revenues up to US$30,000.”