By Tolu Oyekan, Partner, BCG Lagos
Recent studies on Africa’s agriculture market projects an estimated growth to $1 trillion by 2030. This shows that the continent’s agriculture industry has huge potentials. Informed suggestions have been made on how the full gains of this fast-emerging market will be achieved; one of which is through digital agriculture.
There is no doubt that modern farms and agricultural operations are carried out differently from how farming was done in the last 20 years. This is mainly a result of advancements in technology.
Like almost all spheres of life, technological advancements have made an in-road into agriculture to address such challenges as climate change – leading to increased temperatures, changes in rainfall patterns, frequent extreme weather events and reduction in water availability.
Digital agriculture or agricultural technology benefits both farmers and end consumers by reducing the use of traditional/archaic farming methods and generating higher crop productivity.
Digitizing agriculture also saves resources such as water, fertilizers and pesticides; reduces the impact on natural ecosystems; reduces chemicals getting into rivers and streams and increases the safety of farmworkers.
It is for this reason that the digitalization of agriculture should be part of the larger agricultural transformation agenda in Africa.
Over the years, there have been numerous digital agricultural initiatives and startups which by leveraging technologies, have led to improving farmer productivity, incomes, strengthening food security and enhancing the resilience of food systems in the continent.
Sadly, the impact on smallholder farmer incomes is still poor. This is not unconnected to the fact that access to technology in developing countries is an enabler of accelerated agricultural innovation.
In Nigeria today, some digital firms are focusing on ensuring that smallholder farmers benefit from the new technology revolution in agriculture. Platforms like Babban Gona, Thrive Agric and Agro Rite were created to give smallholder farmers access to resources critical to their work and the growth of the agricultural sector.
But these solutions are still available to a meagre percentage of the hundreds of thousands of smallholder farmers scattered across Nigeria; and these smallholder farmers still battle with the three-fold challenge of poor access to market, poor access to finance and inadequate knowledge of improved farming practices.
According to a recent report by BCG titled ‘The Digital Agriculture Revolution’, agricultural productivity will need more than innovation. Already, greater crop yields are required to feed Nigeria’s exploding population. The population of Nigeria has been forecasted to reach over 400 million people by 2050.
Estimations published in 2019 show that by that time, the consumption of farm produce such as eggs, milk, beef, cassava, maize, wheat and others will increase by almost 300 percent! If not properly addressed, this scenario might lead to a full-blown food insecurity situation.
The truth is that lack of information and knowledge is most limiting to the growth of the sector. This presents a challenge to food security because access to the right information, education, and training enable farmers to make use of new farming knowledge and technologies.
This being the case, farmers’ knowledge and information must be constantly upgraded. Farmers must have access to information about sustainable farming practices to enable them to maintain natural resources to ensure that farmlands are productive for future generations.
For Nigeria to have environmentally good food systems, farmers and other stakeholders need to have effective communication technologies coupled with relevant information.
Furthermore, the Nigerian agriculture sector must adopt climate-smart practices and technologies to increase productivity as food production demands increase. Presently, Nigeria like other countries in Africa still relies on rainfall to water farms.
With climate change and reduced rainfall as mentioned earlier, there is the need for intensified water management and alternative sources of rainwater to irrigate the farmlands.
In cities like Florida and California, USA and Beijing, China; farmers have used reclaimed water to irrigate their farms. Reclaimed water is wastewater that has been treated and transformed into a product that is clean, clear and odourless.
There is a need for stakeholders to keep investing in modern ways of farming. The emergence of integrated data sets combining satellite imagery, weather and soil data is a modern approach that can be leveraged by development partners.
This will empower farmers with more affordable credit and insurance, better early warning of crop failures and improved farm management. Such practices will cushion the sector from the negative effects of climate change while adapting to sustainable food systems.
In addition to innovation, bridging capital, coupled with the right capabilities is pivotal in transforming the agricultural sector in the continent. For farmers to benefit from a fully-functional market ecosystem, there is a need for players in the agricultural supply chain to prioritize efficient, transparent and innovative ways of connecting farmers to markets.
This is where ICT enabled technologies comes into play. Mobile-phone-based services can ease farmers’ access to knowledge on extension services, market information, weather forecasts and agronomic advice.
Furthermore, they can offer price information services for inputs and outputs, enable demand, and supply aggregation, and facilitate e-marketplaces.
In fact, the Technical Centre of Agricultural and Rural Cooperation (CTA) estimates that market linkage solutions deliver, on average, a 73% improvement in farmer productivity (including through access to lower-cost seeds and fertilizer) versus just 23% for digital advisories.
Our review of dozens of current market solutions revealed several successful alternatives, but no one-size-fits-all approach. This is a clear indication that agriculture is modernizing.
Unfortunately, domestic agriculture markets in many developing countries remain fragmented and inefficient, making it imperative for digital agricultural innovations to address such situations.
The beauty about digital agriculture is that it could help rural-urban migration and get young people to drive rural development because of the use of technology.
The increased use of digital technology in farming and agricultural activities might actually attract and retain younger generations to live in rural communities.
For Nigerian farmers, the adoption of digital agriculture will wholly enable access to various information including information on inputs, weather and soil condition; processing and storage resources: markets and finance; and food monitoring and consumption requirements.
Hopefully, if Nigerian farmers and others in the food supply chain embrace this technology, digital agriculture could help to maximize production and reduce waste; reduce costs of production and increase yields; minimize environmental impact and maximize the quality of agriculture produce.
The cross-cutting nature of the digital solutions will continue to improve interconnectedness among stakeholders in the agricultural value and supply chains.
This will improve efficiencies, productivity earnings in the sector while feeding the growing population sustainably and improving the livelihoods of Nigerian farmers.
It is important to note that to achieve the UN Sustainable Development Goals (SDGs) of a ‘world with zero hunger’ by 2030, more productive, efficient, sustainable, inclusive, transparent and resilient food systems are required – and this can largely be achieved with digital technologies and innovations in agriculture.