Solving a Business Challenge: A look at our Bundling Service
In Africa, veterinary service provision to smallholder farmers is substandard. The twin effect of awareness and utilization has consistently been identified as a major factor in low veterinary service uptake. There is low awareness of the importance and benefits of providing preventive animal health services/treatment. A significant challenge exists with the limited information on effective planning of preventive health programs amongst providers coupled with a lack of farmer knowledge on the benefits of vaccination and good farm practices. Farmers are constrained in technical know-how pertaining to disease and farm management. This tends to decrease the utilization of services, even when available.
At the same time, about 70% of Africans depend on livestock for food and income. For instance, a Cowtribe farmer, Mahamadu in Ghana said; “The crops I grow today is to feed my family but the cattle you see behind the house are my savings”. Indeed, livestock is a form of savings in this part of the world. When a farmer like Mahamadu has excess money from his crop sales, he buys a chicken, and if he can afford more, he would buy a goat and sheep or even a cow. Keeping livestock like cattle is an important tool for rural people with somewhat unpredictable lives. Livestock not only carries heavy loads, help cultivate fields, and provide transportation, they also represent an important asset for rural people. The regular livestock income generated through the sale is used to supplement seasonal farming income. A typical cattle owner in Ghana is a small farmer who owns one or two cattle, and farmers raise cattle as part of a mixed farming system comprising crop and livestock production.
However, farmers are losing approximately 25% of their livestock to disease. Many of these diseases can be prevented through vaccination, but due to the high cost of vaccination and some inefficiencies in the value chain, many farmers do not have access to vaccines in Ghana. There is a significant problem concerning access to quality products or services and treatments. It is estimated that this amounts to an annual loss of $2bn of income for smallholder farmers. Two key factors account for these losses–distance and quality. Many farmers live far away from the nearest service centre and are compelled sometimes to walk long distances and travel hours to access care. Their location makes it difficult to access animal health care or inputs. On the other hand, providers find the long distances too costly and hence add the cost to services which increases the service cost making it almost impossible for farmers to afford or be served by veterinarians.
In Ghana, veterinary service provision to smallholder farmers is very poor; there is low awareness of the importance and benefits of providing routine animal health inputs, and significant problems exist with access to quality, affordable vaccines, and treatments. Farmers, therefore, do not appreciate the importance of Preventive Animal health service delivery.
Why we thought bundling might work
In April 2020, Cowtribe introduced a new service strategy- bundling vaccination with agro-inputs and credit to help farmers access inputs whilst ensuring their livestock are vaccinated annually.
Bundling our vaccine service packages and other fast-moving inputs like fertilizers and seeds make it more attractive to farmers thereby increasing the number of subscriptions as well as payment and decreasing the cost of payment collection. It is easier to entice farmers to sign up for vaccination at the time that they purchase agro-inputs. Moreover, bundling the vaccines on top of the input costs, instead of separately, capitalizes on mental accounting—customers will bundle the vaccine for their animals and a bag of seeds as one item to purchase instead of viewing them as two items. Finally, we believe as farmers learn to trust our service, they would be more interested in subscribing to it. Which will in turn increase their utilization, raise their productivity, and increase their food security. “Bundling‟ will also allow most farmers who have never used vaccines before to first try out.
One major thing we learned is that there is always an opportunity in crisis and not allowing obstacles to hold you back. Although it has just been a few months, we are optimistic about the results this holds for Cowtribe and we look forward to tremendous success.