“Science and Technology coupled with improved human capital have been powerful drivers of positive change in the performance and evolution of smallholder systems” – Food and Agriculture Organisation (FAO)
Agriculture remains one of the most important economic sectors in Africa, accounting for 15% of GDP: more than $100 billion in revenue annually (McKinsey) and 52% of the continent’s workforce (Microsoft). Not only does the sector provide food for the continent’s large and growing population, but it also serves as an economic lifeline (through exports) for many African countries that are rich in agricultural resources.
In the last decade, the African agricultural sector has evolved as traditional farming methods have been replaced by modern technology and equipment. According to a recent study by Microsoft, Africa’s agricultural sector is poised for exponential growth in the coming decade, with a projected value of US$1 trillion by 2030, driven by agritech. With a 44% year-on-year growth rate between 2016 and 2019, Africa is fast becoming a leader in the global agritech space which is currently estimated to be a $7.8 trillion industry (AgTech).
We now live in an era where technology is disrupting old ways of doing things and driving a revolution across all sectors, including agriculture. This has created opportunities for entrepreneurs and innovators to solve problems related to food production and the preservation of natural resources. The adoption of agritech has the potential to address many structural challenges, as well as improve efficiency and profitability across the agricultural value chain.
What is Agritech and why it is the new wave of the Agricultural Revolution?
In recent years, technology has proven to be capable of addressing challenges that affect smallholder farmers (SHF) and their ability to improve farm output. With the recent wave of the Agricultural Revolution, also known as Agriculture 4.0, the deployment of technological innovations requires agripreneurs to own internet-enabled mobile devices, use smart applications and develop skills to make informed decisions. This is essential for their overall productivity and efficiency from end to end. An example of agritech in action is the use of a soil sensor to measure the current soil moisture and for a holistic view of the quality of the soil. Sensors have also been integrated into various farm irrigation systems to efficiently schedule, supply and distribute water. As a result, agritech all over the world, particularly in Sub-Saharan Africa (SSA), has recognised an opportunity to adopt and design digital solutions aimed at reducing the challenges that affect smallholder farmers such as access to feeds and fertilizers, market linkages, funding, storage facilities, information on climate changes, etc.
Prospects and Challenges of Agritech in SSA
Agritech plays an essential role in creating solutions that improve farm output and the livelihood of SHF. One of the promising prospects is access to real-time information, intelligence on high-quality seedlings and fertilizers, planting periods, information sharing on weather trends, access to market, transportation and storage of farm produce, and end-to-end insurance services. All of these will reduce input costs, boost harvest yield as well as reduce post-harvest losses. Agritech can also help improve access to financial support by connecting farmers with agro-investors. Since SHF are mostly situated in rural areas with little or no access to adequate funding, agritech can also be used to reach out to farmers to enable them to access funding without having to go through arduous loan documentation processes. In terms of information delivery, agritech can be used to store data to improve SHF’s efficiency, profitability, and long-term viability of its agricultural operations.
Despite these benefits, SSA still faces several challenges with integration, including a lack of technological infrastructure, financial resources, education, and digital skills. This is because the majority of SHF live in underserved areas with limited internet access. Because of the high-risk perception associated with start-up businesses, agritech entrepreneurs may be unable to obtain financing, particularly from local financial institutions. As a result, investors or financial institutions would prefer to invest in the marketing and distribution aspects of the value chain rather than core farming to reduce the risk of potential investment losses. Lack of education and digital skills will slow the adoption of agritech, particularly in rural farming communities, as they will find it difficult to use digital solutions.
How Agritech has improved Smallholder Farming in Africa
Many African start-ups led by youths are pioneering innovative solutions that have significantly increased agricultural investment. These innovations provide real-time information and advisory services to SHF through radio, text messages, and interactive voice messages in local languages delivered by designated leaders in farming communities. This enables farmers to obtain granular details about their crops, soil, pest control, farming equipment, or livestock, allowing them to devise effective farming strategies.
One of the recent technological breakthroughs in agriculture was the use of drones to assist farmers in capturing images of crops, soil, and weeds for effective farm management. In Ghana, drones are being used to apply pest control and fertilizers, assess crop fertility, plan irrigation systems as well as address plant protection practices. This reduces labour hours and direct contact with pesticides. Farmers are also being trained on how to map their farms early in the planting season and how to help them identify problem areas and target them with the appropriate amounts of fertilizers and pesticides.
In terms of finance, crowdfunding platforms have assisted SHF in raising funds to grow their businesses, as well as providing people with the opportunity to invest in agriculture without going through the stock market. This has helped to somewhat de-risk the agricultural sector, which does not enjoy adequate access to traditional financial institutions. Besides providing finance, these crowdfunding platforms also provide farm advisory support as well as linkages with off-takers, to facilitate economies of scale along the value chain.
These agritech solutions have the potential to become a more attractive and viable employment option for youths in the coming years. It is estimated that over 330 million new entrants will join the labour force in Africa over the next 20 years, and about 70% of them will be engaged in SHF (World Bank, 2019).
Accelerating an agritech future requires increased investment in road infrastructure, network coverage, inputs, storage facilities, irrigation infrastructure and training in literacy and digital skills which Sub-Saharan African nations must actively participate in. SHF should also be involved in the development of policies and digital innovations in the sector for inclusivity.
In conclusion, a strong collaborative effort between SHF, agritech companies, investors, and the government is critical for moving this sector from its nascent stage to maturity. It is also needed to ensure that resources are efficiently deployed to support plans in the Agricultural Transformation Agenda and to contribute to the United Nation’s effort to end poverty and hunger in Africa.