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E-commerce platforms, traceability systems, smart contracts, blockchains – these are just some of the digital technologies that can improve small-scale farmers’ access to markets.

The third of four Transforming Agriculture in Africa Through Digitization webinars hosted by the African Development Bank and the Investment Centre of the Food and Agriculture Organization of the United Nations (FAO) explored data-driven marketplaces in greater depth.  

It looked at some of the most promising frontier technologies, their main benefits, costs and outreach, and discussed what is needed to scale up and encourage greater uptake among small farmers.

Event co-moderator Kemi Afun-Ogidan, Digital Agriculture Flagship Coordinator for the African Development Bank, opened the webinar, saying that the goal was to learn from “the policy-makers, farmers and technology innovators who are developing digital solutions across the value chains.”

South Africa poised for transformation

South Africa has the second largest economy in Africa. The country is poised for a digital transformation thanks to good infrastructure, enabling policies, strong investment and high mobile usage and coverage, Kemi Afun-Ogidan said.

She shared these and other findings from South Africa’s Digital Agricultural Profile (DAP), carried out by the African Development Bank, FAO, the World Bank and the International Centre for Tropical Agriculture (CIAT).

South Africa’s agrifood system is sophisticated, and advanced technologies are increasingly being deployed, driven by consumer demand for quality and traceability. 

“Retailers are pushing suppliers to adhere to strict standards on health, safety, sustainability and quality. This is creating opportunities for more public investment to create an enabling environment for more advanced technologies,” she said. 

The DAP identified low energy devices, mobile apps, artificial intelligence (AI), the internet of things and smart contracts among the most promising technologies for the country.

AgTech innovators

The panel discussions kicked off with short video clips from three AgTech providers – Agrikore, Agricenta and BEXT360.

Agrikore is a blockchain-based smart contracting, digital payment and marketplace platform that connects farmers, input providers, produce aggregators, insurance companies, financial institutions, governments and development partners. The platform, which reaches more than 15 million farmers, has created 21,400 jobs. By increasing transparency and building trust, the platform has also increased farmers’ income by 32 percent. 

Agrocenta is a business-to-business e-commerce platform that links around 10,000 rural farmers with buyers. By cutting out middlemen, farmers are able to secure upwards of 25 percent more in farmgate price. The company uses a combination of low-tech and high-tech solutions to run the platform.

BEXT360 is building transparency and traceability in food value chains by using AI, blockchain and digital payments. The system is used to grade coffee cherries based on quality and to determine a fair farmgate price, paying farmers in real-time through blockchain. 

Going digital, getting more farmers on board

According to the panelists, governments could help promote greater digital adoption by incentivizing appropriate supply chain practices, increasing infrastructure investments and diversifying policies toward an agriculture-based economy, given the role agriculture can play in raising wealth across the continent.

Addressing the digital divide is vital, making sure small farmers have access to digital technologies and also know how to use those technologies efficiently.

Technologies should address the entire value chain – combining low-tech solutions like short message service (SMS), unstructured supplementary service data (USSD) and interactive voice response (IVR) with high-tech solutions like blockchain and AI for analysis. Technologies should also assist farmers in aggregating.

One of the main barriers for e-commerce agriculture is the lack of reliable internet connectivity.

Telecommunication companies, or Telcos, can provide that connectivity for farmers. Governments can step in with incentives to expand network coverage to underserved or unviable areas and to drive down the costs of using a mobile phone in rural areas. 

Panelists cited trade financing, sustainable financing and strategic partnerships, including public-private partnerships, among the key factors for scaling up their business models.

Moving forward

With the surge in digital technologies in agriculture comes the risk of saturation and farmer fatigue. That is where regulation becomes important – knowing which platforms are delivering relevant and cost-effective services to farmers.   

The Government of Kenya is keen to promote digital technology – the fourth industrial revolution – and has integrated blockchain, AI and big data into its agricultural development agenda. It has developed a roadmap on how to use these technologies, including how to address ethical issues around data.

In his closing remarks, event co-moderator Carlo Bravi, FAO senior economist, touched on questions of sustainability and the importance of bundling services, especially as “most smaller start-ups are not breaking even.” 

The webinar presented three strong business models, he said – from business-to-farmer and business-to-business to an end-to-end digital platform managed by the East African Farmer Federation, providing a range of services to 350,000 farmers in three countries. 

“The private sector is driving the digital transformation in terms of research and development, and hard investments by public actors are limited. But there is a lot of room for policy-making around the regulatory and incentive frameworks, as well as soft investments to create the building blocks for digital literacy, digital profiles, digital payments and so on,” Bravi added.

22 July 2020

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