How technology investment can revolutionize supply chains for smallholder farmers in Africa
AgriTech is the future. Its biggest impact will be felt across value chains. AgriTech could vastly bring a change from precision farming to an efficient supply chain, impacting the livelihoods of millions of smallholder farmers in Africa.
The use of mobile digital technologies has empowered millions of smallholder farmers across the continent.
Demand for AgriTech is one of the significant factors in directing Africa’s agriculture industry to the path of development.
Agriculture is one of the essential industries in Sub-Saharan countries. It contributes to 32% of Africa’s GDP and employs about 65% of the workforce.
Out of this workforce, many farmers work on a small scale or maybe called small-scale farm holders. Small scale farmers contribute to 45 per cent of the world’s food. Out of this, 70% of the farmers belong to African and Sub-Saharan countries.
The numbers are pretty much intriguing.
However, there is an enormous gap between supply and demand across the continent. African countries are surrounded by various challenges that restraint the agricultural economy to boost.
The incorporation of digital tools into the Agriculture industry would be a game changer.
What Are the Challenges Faced By the African Agriculture Industry?
Financial, geo-political and physical instability in Africa comes as no surprise. African countries face multi-prolonged food challenges.
In the Northern parts of Nigeria, many herders are moving to the south as their land is prone to severe deforestation.
Similarly, the Shebelle River, which serves as the primary source of water for the farmers in that part, is drying up due to a war-torn situation.
With a growing population, the need for a revolution in African Agriculture is coveted.
However, various factors contribute to the low farm productivity, including climate change, shorter fallow periods, and migration that deprives communities of young people from farming.
One of the major loopholes in the African agricultural industry is in their value chains.
The value chains in Africa are deeply fragmented and structured to deprive the small scale farmers of any perks.
Surprisingly, Africa has over 33 million small scale farms, and the workers lack resources to get updated information on the supply, demand, and pricing.
One of the critical factors is the lack of adequate marketing infrastructure, which prevents farmers from getting their total value.
Farmers are unaware of the agri-related information such as pricing, global demands, weather forecasts, and any other geological instabilities to add woes.
Despite these problems, governments have partially focused on improving the face of African agriculture. They have used various policy instruments to improve crop yields.
Even more, farmers in various parts of Africa are hung on to the traditional farming processes, i.e. the use of hoes and cutlasses for different farming methods.
Hence, the demand for AgriTech is one of the significant factors in directing Africa’s agriculture industry to the path of development.
The use of mobile technologies has empowered small scale farmers in various parts of Africa.
Apart from this, much technological equipment and infrastructure - internet and mobile telephony - have contributed to the upliftment of smallholder Agriculture.
Technology & Impact on African Agriculture Industry
Lately, there have been various adoptions in technology that can be used for developing the face of African agriculture.
One of the significant developments is the use of the Internet and the smartphone.
A recent study shows that Africa has over 660 million smartphone users, and the number is expected to increase further in the next five years.
While a country like South Africa has leveraged the use of mobile phones, and hence, 84% of the population has access to the mobile phone. In contrast, a country like Ethiopia has merely 18% of mobile phone users.
Emerging technologies such as the Internet of Things (IoT), Cloud Computing, Big Data, the use of drones and Artificial Intelligence, have contributed significantly improving the supply chains for smallholder farmers in Africa.
Here are some ways digital tools are impacting supply chains in Africa:
Logistics optimization - IoT sensors are being installed on delivery vehicles and connected to an online cloud logistics management platform. These systems track movement of farm inputs from warehouses to farms as well as produce from farms to market.
Traceability of farm inputs - Blockchain systems in combination with RFID and barcode scanners can be used to trace seeds from supplier to farms as well as trace produce from farms to market.
Extension services & training - On demand digital platforms are being setup and populated with video content to facilitate on-demand training for farmers. Farmers only need access to tablets and internet to be able to access this content. Farmers who have no access to smartphones can use USSD on their feature phones to access the same content on-demand.
Smart farming - Drones are being used to get an aerial view of crops, weather forecasts data collected via APIs, and soil sensors --- make it possible to keep close eyes on crop management, harvest projection, and farm input planning.
Harvest optimization - Cloud based systems, leveraging data from drones in the sky and mobile devices on the ground provide automated insights and early warning incase of any delays in harvesting seasons.
Organized markets - Online eCommerce platform businesses are organizing markets in a way that allow small holder farmers to sell directly to consumers and vendors. This completely removes the middle-man and introduces efficiencies and economies of scale in the supply chain.
Several startups are already investing in building the next-gen digital tools for small holder farmers across the continent:
Tackling Agriculture Related Problems Such as weather forecasts, market demand, pest-related information, etc.
One of the major concerns for the farmers is the weather forecasts and the use of allocated resources. Luckily, there are several startups that focus on improving the agricultural infrastructure by use of messaging apps that provide farmers with updates in real-time.
Techno Brain is a platform for the farmers that have partnered with Microsoft to get valuable insights into farming and deliver it to the farmers irrespective of their land size. This platform works by using the captured data such as GPS to know the farm’s location, collect data on expected rainfall, soil quality, gather weather patterns and then give insights by processing the information on the cloud.
WeFarm is a free service that offers regular updates and information on farming through an SMS channel. Using this service, farmers can ask questions and receive crowd-sourced responses through the machine learning concept.
Tackling The Lack Of Access to Market and Fair Price
The involvement of middlemen has been one of the most debatable issues in the farming industry. Small scale producers are generally unaware of the ongoing market demands and the pricing for their produce.
However, with introduction of digital tools in Agriculture, the debate remains between eliminating middlemen’s role and incorporating them between the agricultural value chains.
Bringo Fresh, based in Uganda, leverages digital tools to connect 40,000 farmers with potential market vendors as well as sell their produce directly to food buyers on their e-Commerce platform.
MFarm, based in Kenya, uses the technology to connect the farmers with potential buyers. It provides the producers with updates in the market and the best time to sell your crops for maximum profitability.
Twiga Foods, based in Kenya, is another emerging startup that directly connects farmers to retailers. Their platform also allows connecting the producers, vehicles and retailers. Twiga Foods partner with M-Pesa, a money mobile service, to manage payments and orders.
Lack of Modern Machinery and Farming Inputs
One of the primary reasons for the agricultural ecosystem’s setback in Africa is the lack of inputs and modern machinery. Modern technologies like IoT and Machine Learning or AI in tandem with current African entrepreneurs and governments will contribute significantly to the agricultural industry’s growth and lower modern machinery’s price.
For example, HelloTractor is one such platform that provides an Uber-like service that lets small farmers book tractor services conveniently to their farms. Farmers can book, schedule the tractor services conveniently through text or messaging app from the nearest tractor owners.
This way, farmers can save the costs of investing in tractors and other machinery, raising productivity by up to 40 times resulting in additional income.
With the rise of technology and the incorporation of various agriculture systems, digitalization provides a promising trend.
For a sector so heavily invested in GDP, the use of digital tools and technology is highly desired.
The development of mobile apps based on farming in Africa has created a curiosity among the youth, encouraging them to be part of such a vast industry. We are starting to see more young people interested in participating in the Agriculture value chain.
Most farms in the African continent are situated at locations with limited connectivity. This makes the task of digitalization more challenging, and managing the limited resources could be the real deal.
Also, AgriTech startups and agrotechnology pioneers must include in their outreach strategy a model to educate the farmers to help them with the proper use of technology.
Digital Transformation is the future of the African agricultural supply chain.
Agrotechnology could vastly bring a change from precision farming to an efficient supply chain bringing social, political and physical changes in farmer livelihoods.
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