The potential of digital agriculture in Africa

The Digitalisation of African Agriculture Report 2018-19 highlights that 30 million smallholders are registered in digital applications but this represents just 10% of the market; only 25% of users are women and 75% are in the ‘youth’ age group, despite the average farmer age being much higher. What are the key findings of the report on how D4Ag can boost the potential of Africa’s agricultural sector?

In this report, we took a different approach – we decided not to look at individual solutions and provide cases for them like we have done in earlier reports. Rather, we have summarised the ‘use-cases’, which can serve as a guide for further research by those interested in the sector. In general, the most exciting solutions are those that address increased productivity, access to finance and market linkages.

Firstly, on increased productivity, I am excited by the fact that most of the solutions are shifting away from traditional SMS/text-based communication with registered farmers. New approaches are based on geolocation, identifying where a farmer is located using remote-sensing data from drones or satellites, and allowing for customised and more precise messaging. Yet, one of the biggest challenges of these solutions is the business model because most are not sustainable. Why? Their services are based on generic messages as opposed to specific, targeted ones. For example, if a farmer receives a text about a pest or disease and it is not relevant to them, they are likely to stop using the service and eventually drop off the radar. It is here that the move towards targeted messages can retain users. Real-time data from drones and satellites facilitate this process as part of the broader model of precision agriculture. Such information can help farmers cope with climate change, with advice sent on, for instance, which seeds are better suited to the season.

Second, on access to finance, consider that you are a smallholder farmer in Mali or Senegal and you receive these recommendations. If you do not have money to buy recommended seeds or fertiliser, it is not useful. However, today, there are a number of solutions actively working on access to finance and credit, based on farm data. The reality is that banks need to give credit to farmers, but the banks do not know the farmers. This is where there is a need to create digital identities of farmers to gather information on their crops and acreage, to create an alternative credit score based on a short history of 2-3 seasons. This makes the farmer bankable and increases a bank’s trust in the farmer to provide credit for input purchases.

As well as soliciting loans from the bank with their data (see the models in chapter 2 of the report), farmers can also access crowdfunding mechanisms to pool their resources. Indeed, the report shows that, “Bundling financial access, advisory services and market linkages can increase income by more than 57% and yields by more than 168%”.

But, do the farmers trust the banks? Where the answer is no, initiatives and platforms can play an intermediary role, informing farmers about financial institutions and opportunities for these institutions to support them. This creates awareness on the sort of finance available and, in turn, facilitates relationships between banks and farmers.

There are numerous advantages of D4Ag: growth in digital solutions is phenomenal, from 41 in 2012 to 390 in 2019; and 60% of solutions will incorporate advanced technologies (Big Data, blockchain, AI and IoT). Yet, as a continent, Africa’s import bill is still €30 billion – do we run the risk of both over and underdevelopment in D4Ag?

Based on our research and experience in ACP countries, it will take a number of years for smallholder farmers to deal directly with some of the systems discussed in the report. This is why we need agent networks. We do not believe that it is time for smallholder farmers in the ACP context to deal directly with the advanced technologies as they still require added support. Here, our efforts to improve digital literacy not just for the farmers but for the intermediaries, especially youth, are vital. Youth can be business agents between the technology companies and the smallholder farmers. This is not a role for traditional extension agents, rather, the digitally literate intermediaries employ themselves and receive commission through selling products and inputting data into the systems.

With the move from smallholder to semi-commercial farms, the farmer can begin to deal directly with technology companies; but here again, local languages will play a decisive role in this relationship and roll out of the initiative.

I recently attended the European Conference on Precision Agriculture, where the European farmers know how to use the technology and consult directly with the tech providers. When I took a moment to describe the situation in Africa, they responded by saying there is no difference! After all, older European farmers with larger farms are not interested in certain precision agriculture tools, but the younger generation taking over from their parents are more receptive to the technology. Yet, there is still the issue that the young generation do not necessarily want to take over the farms. This is a generational issue and a lot of factors need to be considered.

What are your key recommendations for government, private sector and donors in particular?

There are detailed recommendations in the report, but let us consider where we are now in terms of digitalisation for agriculture. We need to acknowledge what the donors have done until now in laying the foundations – hackathons, competitions, conferences, pilot studies… If we trace the funding on the ground, we can see that these activities have been funded by foundations and donors. Governments have also helped by supporting the enabling environment, namely through strategies and policies. Yet, now is the time for the private sector to take advantage of this and scale the solutions. We need to find ways of blending these kinds of roles - donor-government-private sector - so that they build on each other. After all, governments should not work in isolation. Equally, donors should not just put money into 5-year programmes for output figures. This would be a risky environment for the private sector to come in to in order to invest and scale. Therefore, the summary of the recommendations is that all stakeholder groups need to work together.

We need to consider the proof of concept and the cases tested over the years should be developed to support scaling and investment in new technologies. This is precisely where the private sector comes in; work must be done to de-risk investment and provide business opportunities. The report details specific recommendations and when they can all come together, this leads to impact. This is summed up in our last recommendation, which refers to an alliance on D4Ag with all stakeholders, including the users and farmer organisations, and in that alliance, we see a clear role for each stakeholder to avoid duplication and scattered investment.