There is a lot of attention for digitalization for rural development (see for example the IT4D publication), however the sustainable increase of production and productivity in agriculture and water with the help of digitalization has not reached scale yet. The current wisdom is that this is most likely because most farmers in developing countries are smallholders, notoriously difficult to reach. Is this true? We’ll have a look.
But first, a few starting remarks, going back to the title of this blog. Universal and inclusive access to geospatial information does not necessarily mean that this information is free. Inclusive is added because people should be empowered to act on the information they get. Paradoxically, this strengthens the case for free, or at least affordable, information provision.
Returning to the subject: what makes the concept of digitalization so attractive? There is a history of creating an enabling environment for digitalization:
- Increased availability of (semi-)smart phones (and other connecting devices);
- Introduction of smart agriculture in developed countries & digitalisation;
- Availability of free and open satellite data (US Landsat, EC Copernicus);
- Efforts to transfer these gains to developing countries, with special attention for smallholders (examples are GSMA, G4AWand the UK Space IPP);
- Development of new, affordable sensors, such as those used in the TAHMO weather stations and the increased use of drones;
- Increased connectivity in rural areas via space and air.
The first initiatives on digitalization for agriculture were those by MNOs. A lot of these were evaluated in 2015 or 2016, but what happened after? The recently published GSMA AgriTech toolkit gives a good overview of best practices and examples. However, there is little information about value-added services related to precision agriculture, only a statement that the business case is not clear (farm information is mostly used as a support measure for other services). This seems to confirm that indeed increasing production and productivity for smallholders is the most difficult part to address of the whole agricultural value chain.
But there are success stories. An example is the Garbal app for pastoralists, developed in the STAMP (Mali) and MODHEM (Burkina Faso) projects, supported by the G4AW Facility that promotes the use of satellite applications. Other G4AW success examples deal with the weather (start of the rainy season, forecasts, extremes, and/or agronomic advice for high-value crops (vegetables) or crops that cover relatively large areas (rice) and/or index insurance.
Indeed, as the GSMA AgriTech toolkit and a recent GrowAsia study indicate, establishing a sustainable business case for these apps takes quite some time. In addition to that, the technology has to work, the transmission channels need to be appropriate for the target group and data protection and platform ownership need to be arranged (to ensure long-term success, platform costs should be kept as low as possible). In addition, several initiatives indicated that the service provided should consist of information instead of advice, to respect the position and expertise of the farmer/pastoralist as decision-maker and often a bundling of services is requested by the target group (to be more effective and to avoid duplication and fragmentation). This makes sense, as increasing production is not very useful if access to markets is the main limiting factor.
Water management-related apps are maybe easier to market than agricultural apps for smallholders if one aims at the government as the main client and partner. An example is the use of the HydroNET platform of the company Hydrologic deployed for the Ministry of Agriculture, Land Reform and Rural Development and water boards in South Africa. Usually, it helps when these platforms are already developed for and functional in the home market.
This also applies to services that are offered to commercial farmers in developing countries. The € 10 – 13 / ha price (for a minimum of 25 ha) that the company IrriWatch charges for insight and advice on water consumption gives an indication of what to expect.
Other potential market opportunities are services for (local) government to facilitate decision-making on food security, such as those developed by the AfriCultuReS project, and services based on the application (new) in situ sensors, such as those developed by the TWIGA project.
When looking at future perspectives, trends, opportunities, and challenges, there are four types of providers (overlap is possible and the order does not give any indication of the importance of priority) that can be distinguished as potential players in the market of services for agriculture and water:
- “Big data” players, like ClimateCorp, 6th Grain, etc. that aim at a potential continental coverage, with lots of AI and ML, etc. Their strength is processing capacity and access to the latest technology. This proposition is appealing to investors, but a potential weakness is lack of knowledge of the local situation.
- For African companies knowledge of the local situation is a strong point and they often have a cost advantage and are closer to the target groups. A lack of processing power, IT infrastructure and access to information to keep up with new developments could be bottlenecks.
- Companies (mostly from the Global North) that go for one specific technology where they have an advantage, like VanderSat with passive microwave satellite data or Satelligence with combined optical and radar satellite data or with specific sets of algorithms (e.g. eLeaf using evapotranspiration). They are highly specialised, but scaling up, making the business case work and their relatively high costs are weaknesses. When finding sufficient capital and partners, companies could go for the no. 1 category, like VanderSat is doing with insurance partners like SwissRe and AXA Climate.
- Companies from India (such as CropIn) or China that have developed solutions for their large home market. They have a cost advantage, but lack of knowledge of the local situation outside their home country could be a disadvantage.
Regardless of whoever will dominate the market, continuing support is needed to develop solutions that (also) cater to smallholders. Inclusiveness from start to end is a requirement for success, in the form of co-design and decision power for individual farmers and/or farmers’ organizations. Only if this condition is met, the promise of geospatial information of creating opportunities that change the context of doing business for and with smallholders will be fulfilled.
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Written by: Mark Noort