The Covid-19 pandemic disrupted the input supply chains of farmers, making it difficult for them to plan for and invest in their next growing season. They also struggled to access markets and storage facilities, and had to cope with radical market changes. Lockdowns to curb Covid-19 spread made it almost impossible for farmers to seek extension services, while the social distancing measures led to farm labour shortages.
However, there is evidence that farmers and value-chain actors already using digital tools adapted better to the challenges as they were more agile, able to withstand market inefficiencies and maintain market access. Value-chain players who had digitised their operations found it easier to scale, pivot and support farmers during the challenging times. They also showed greater resiliency to Covid-19 shocks across use cases.
Covid-19 has been identified as the main force that could drive innovation in global food supply chain and business model transformation over the next 20 years. The ubiquity of the internet, advances in robotics, and digital applications are driving increased adoption of digital agriculture. With over 100 million rural farmers worldwide using mobile phones, it is hugely appealing to service them digitally.
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The advantages
There are several benefits to adopting digital agriculture. First, digital technologies have made it possible for any farmer to gain access to information about weather patterns, crop yields, terrain and soil data through data collection equipment, satellites and IoT sensors. The technology also helps solve agricultural industry challenges such as lack of access to finance for inputs; poor access to infrastructure and modern equipment; and inadequate access to markets. Second, more farmers globally are applying innovation to agriculture and increasing yields and profit margins, which is an enormous advantage in a highly competitive and inherently risky industry.
Third, the digital agriculture sector is transforming our food production, enabling us to grow more using less resources and cost. Fourth, in the past decade, several digital agriculture solutions have reached scale to become commercially attractive to investors and have a positive socio-economic impact. The rising investment in agri-tech as a proportion of total investment in agriculture highlights the opportunities to deploy commercial solutions that address the pain points of the sector.
The roadblocks
However, there are constraints, including the cost of technology and data, that must be addressed if digital agriculture is to realise its full potential. Moreover, digital agriculture requires strong institutions and policies that facilitate innovation. These include regulation, intellectual property protection, market structures, supply chains and economic infrastructure. In addition, for digital agriculture to have a large impact it must be accessible to all farmers; but current challenges are hindering widespread adoption.
It is clear that the future of farming will rely more and more on digital technologies to address some of the major challenges facing farmers and other industry participants. The success of digital agriculture will rely on four different groups: Farmers (food producers), non-farmers (consumers, value-added processors, retailers), governments, and institutions (international development agencies, state departments of agriculture). A successful transformation will require the collaboration and active contribution of all these groups.
The writer is Sustainable Finance Specialist, CGIAR. Views are personal