IGC, dairy cooperatives in Uganda roll out SMS tech to track milk deliveries

UGANDA – The International Growth Centre (IGC) has partnered with 13 dairy cooperatives in Western Uganda to implement a technology that sends farmers SMS messages twice per week, summarising the volume of milk they delivered and the amount recorded in their name at the cooperative. 

To evaluate the impact of this intervention, the company conducted a randomised controlled trial (RCT) with 766 farmers and 70 transporters.

Half of these farmers (the treated group) received digital receipts twice a week, sent from a unified sender ID in the local language, while the other half (control group) received no messages.

It tracked delivery decisions and volumes using high-frequency administrative data; quality via spot lactometer tests during cooperative visits; and behaviour/trust through farmer and transporter surveys.

The company identified three key findings on how improving transparency affects delivery patterns, milk quality, and how farmers and intermediaries respond when transactions become more observable:

The first observation was that treated farmers who delivered milk themselves were 6-10 percentage points more likely to continue delivering milk during the intervention, especially during the rainy season, and to do so even after the intervention ended. 

However, average volumes per delivery did not increase – consistent with capacity constraints, walking/bicycle limits, and transporter load limits.

Second, treated farmers delivered milk with significantly lower dilution. Quality improved by nearly 13% relative to the rainy-season effect on water content, despite no price premium for better quality.

These gains were concentrated among farmers using transporters, where information frictions are greatest.

Finally, treated farmers who used transporters were: 20-26 percentage points more likely to detect discrepancies between what left the farm and what the cooperative recorded, 14-17 percentage points more likely to switch away from the baseline transporters and more likely to report lower trust in intermediaries – revealing that previously hidden misconduct had become visible.

Why this matters for behaviour across Uganda’s dairy supply chain

By reducing information asymmetries, digital receipts empowered farmers to act when they observed discrepancies that signalled potential misconduct by intermediaries. 

This not only improved product quality but also reshaped behaviour across the supply chain. Transporters had stronger incentives to act honestly, and farmers became more active participants in delivery decisions.

IGC found that digital receipts increased delivery consistency among self-delivering farmers.

This suggests that digital receipts served not only as a monitoring tool, but also as a behavioural nudge, encouraging more regular participation in Uganda’s dairy market.

Digital tools can improve other agricultural markets 

The findings of this study highlight how simple, low-cost technologies can reshape behaviour and outcomes in agricultural markets. 

Because the digital receipts system relies only on basic mobile phone infrastructure, it is highly scalable – even in rural, resource-constrained environments where more sophisticated monitoring tools may be unfeasible.

Beyond Uganda’s dairy sector, many smallholder supply chains – such as those for coffee, cocoa, oilseeds, and maize – suffer from similar post-harvest information frictions, where farmers are unable to verify what was delivered or how much product quality affected their earnings.

In these contexts, basic transparency tools can help realign incentives, improve transparency, and enable more equitable participation in markets.

Moreover, the intervention’s effects on delivery behaviour and milk quality suggest that, even in the absence of formal contracts or enforcement, farmers respond to improved information by adjusting their effort and decision-making.

This opens new possibilities for digital tools to complement existing monitoring structures, support quality upgrading, and promote sustained engagement in agricultural markets.

Turning transparency into lasting market impacts

Providing farmers with digital receipts turned opaque transactions into verifiable records. This small shift in information led to meaningful changes: better milk, more engaged farmers, and greater transparency across the supply chain. 

As mobile phone access and digital infrastructure continue to expand in rural areas, simple technologies offer a powerful and scalable solution to long-standing challenges in agricultural markets.

By reducing information asymmetries, they empower smallholder farmers and strengthen market efficiency.

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