Imagine for a moment that you're a small-scale tomato farmer in rural KwaZulu-Natal. Every week, you have to negotiate with a trader who takes your goods to market, but pricing can fluctuate wildly because you have little idea of demand in urban markets. Tomatoes could be selling for twice the price of yours in a town a few kilometres away, while you lack information to use for better bargaining and are powerless to seek out alternative trading channels.
Believe it or not, this is the reality, in 2012, for a great number of farmers in the developing world. Many lack information about the most fundamental aspects of their business, such as weather forecasts, market demands, and distribution partners. This inability to plan results in crop or cattle losses, missed opportunities, and poor growth.
It also has repercussions for the rest of society, as the world is going to require far more from its agricultural producers in future. The global population is projected to reach nine billion by 2050, with the UN Food and Agriculture Organisation estimating farmers will need to produce 70% more than in 2006 to meet this demand.
Globally, over one billion people are employed in agriculture, the majority of which are small-scale farmers in developing countries. Smallholder farming accounts for 60% of agriculture worldwide, and roughly 500 million small-scale farmers provide food for a third of humanity. This group also accounts for half the world's under-nourished people and many live in remote communities, with minimal transport and limited access to communications and basic financial services.
For many of them, the issue is not about trying to maximise income or cash flow. It's about minimising risk.
Dr Grant Hatch, Accenture
These conditions are only set to worsen as climate change, water scarcity and competition for crops accelerate. Food security will remain a serious issue in many countries, and the global trend of rising food prices is likely to continue as energy costs climb. Water availability is another glaring threat, with irrigated agriculture accounting for approximately 70% of global water usage.
All these factors mean both agri-business and smallholder farmers face the challenge of having to produce more food with fewer resources, while operating in a highly unpredictable environment.
If that picture seems rather gloomy, hope can be found in the efforts of governments, private sector and enterprising individuals, who are leveraging this generation's strengths to tackle its weaknesses.
Technology is one of the most obvious examples, particularly as mobile has taken off in emerging markets. There are over 3.5 billion mobile connections in Africa, the Middle East, Latin America and the Asia-Pacific regions, according to Gartner market statistics.
A recent Connected Agriculture report, compiled by Vodafone and Accenture, outlines 12 opportunities in mobile which together could increase agricultural income by an estimated $138 billion across 26 countries by 2020. They could also cut carbon dioxide emissions by approximately five mega tonnes (Mt) in these markets and reduce freshwater withdrawals for agricultural irrigation by 6%.
At a seminar revealing the report's findings, hosted by Vodacom in partnership with Accenture and the Department of Agriculture, Forestry, and Fisheries, speakers touched on a broad range of issues impacting the ICT in agriculture space.
Vodafone's head of sustainability, Christ`ele Delb'e, said what makes mobile particularly powerful is that it provides access to the last mile - it stretches to where even radio or TV can't reach. And unlike these broadcast services, it allows for two-way communication, with the opportunity for feedback.
Mobile phones make it possible to call a helpline or receive SMS messages, giving farmers advice on how to improve practices and productivity, she explained. These include weather forecasts, tips on tackling pests or diseases, optimum planting times, available subsidies, local fairs and crop prices.
Another point, said Delb'e, is that mobile is real-time, so in the case of an emergency, information is readily accessible.
Accenture CEO William Mzimba illustrated how this could play out practically: “My brother, who still lives in Limpopo, wakes up every morning and drives his bakkie about 150 kilometres looking for produce he can buy to supply to the local market. At times he spends three to five nights sleeping out there at the farms, hoping one of the farmers will call him up and say they've got a harvest ready to sell. Sometimes he returns with his bakkie empty, having spent five nights out there waiting...and when he gets back, he receives a phone call from the farmer saying, 'Today I am going to be harvesting, so rush back here.' When he arrives the queue is long and the produce is finished before he can make his own load.
“Now, just imagine how technology could simplify his life. Imagine that on the day the farmer is ready to harvest, my brother received a message on his mobile device informing him that they're harvesting, that they start selling at 11 o'clock, and that if he's there at that time, he can secure his supply to sell to the local market.”
According to the Vodafone report, the provision of agricultural information could bring an additional $52 billion in incremental income for farmers. More efficient techniques and machinery could also save 1.9Mt in carbon emissions.
Mike Saunders, digital media expert at TomorrowToday, said the major element of mobile's success in the agricultural sector has not been in the delivery of something, but in the recreation or reinvention of processes.
He gave the example of MP Rajkumar, an engineer from India, who looked at the negative impacts of night-time irrigation. Saunders shared Rajkumar's view of the problem: “We water all our agriculture at night, so we turn it on, go home, and come back the next morning. No crop needs that much water - especially at night when there's very little evaporation.”
Saunders explained: “The problem was that they were using so much water in the process of doing this that they were becoming part of the problem, instead of being part of the solution. So, Rajkumar created a little device that sits on your irrigation systems, and you can miss call or SMS it so it turns on or off without you having to leave your premises. It's something so small yet so significant. And the reason is quite simple - it's a human problem that can be solved through digital technology.”
Farming meets finance
One of the key ways mobile can help farmers improve agricultural productivity is by giving them access to basic financial services. Many people in rural areas don't have bank accounts or are forced to travel great distances to visit a branch, get funds or make transfers.
According to the Vodafone report, offering mobile money services can benefit farmers as they deal with erratic weather, pests and diseases, and unpredictable crop yields. They can use their mobile phones to access insurance services, build up funds to cover emergencies and access wages or subsidies without having to travel long distances.
Carmen Whateley, managing executive of financial services at Vodacom, said there's a huge demand for business-to-business mobile payments by the suppliers farming communities interact with, such as large retailers or fast-moving consumer goods companies. Settling supply chain transactions in this way replaces cash and results in faster turnaround, reduced cost and reduced risk, she explained.
What's also important to consider, said Whateley, is how to incorporate the farmer and farm workers into a sustainable macrocosm. “How do you take that farming community and have them trade using mobile money? So, for example, if wages are paid in mobile money, the farmer doesn't have to drive to town to get cash...employees are able to pay using mobile money at any kind of outlet in the vicinity. In this way you can start creating a self-sustaining ecosystem using financial services.”
Dr Grant Hatch, senior executive of Strategy at Accenture, said risk management is an equally important, and often overlooked, aspect of mobile financial applications. “I think there's this underlying assumption that all small-scale farmers are frustrated commercial farmers who seek to produce a surplus and actually generate cash income...But a lot of the work we're doing with farmers in Africa...exists on a continuum, from systems through to small scale. So, for many of them, the issue is not about trying to maximise income or cash flow. It's about minimising risk.”
He added that while the report talks about a $138 billion opportunity for increasing agricultural income, there was potentially a much better opportunity to use these applications to mitigate risk for small-scale producers. “A simple example would be providing information on the last time you could plant maize based on the current climatic information, so you have enough Sundays left to actually harvest a crop. It's critical information that many small-scale or subsistence farmers don't know, so they end up planting late because the rains are late and they don't generate a crop and therefore they suffer. It's not that they have a surplus to sell. They can't feed their family.”
Delb'e gave another example, of an insurance service for Kenyan farmers called Kilimo Salama ('safe farming'), which was initiated by agri-business Syngenta. The company found very few farmers were buying inputs to boost production, as rain or drought would often destroy crops, along with these inputs' benefits. “The challenge Syngenta gave us was that farmers were reluctant to invest in products that would make them more efficient, like fertilisers or better seeds, because they were scared that if they lost the crop, they would have lost even more money.”
Using automated weather stations, Syngenta can keep track of precipitation patterns, and at the end of the season, if local rainfall had been insufficient, farmers in the affected area receive a payout. “We wanted to offer a service that removed some of the risk-taking from the smallholding farmer. So we created a micro-insurance service that could be received via mobile, with payouts being delivered via mobile as well,” noted Delb'e.
According to a World Bank report, the introduction of Kilimo Salama has seen Kenyan farmers' production increase by an average of more than 50%, or about $150 a year.
Information vs knowledge
The report elaborates on a number of potential mobile interventions and challenges, but ultimately identifies the development of local relationships, testing solutions, and a sympathetic regulatory environment as critical success factors.
Knowledge builds economies, information doesn't.
Mike Saunders, TomorrowToday
Saunders argued that digital technology would only become useful when built into processes or used to change the way in which people communicate. “I don't believe that the solution to the future of our agricultural challenges lies in our ability to distribute information to people through the mobile phone. I believe that that would just become another fax machine.
“So, when we look at technology and the ability of the mobile device to connect people to people, instead of saying 'Let's just distribute knowledge', we could actually start to say 'How does that process work?' and ask ourselves whether we could create an environment where one farmer teaches another farmer how to farm inside their areas.”
He stressed the need to look beyond just providing information. “Data is a series of ones and zeros. It's just facts on a piece of paper. Taking all that data and putting it into one particular point where we can understand it...that's what we're doing at the moment. We've created logical flows and we're sending that to the mobile device. The next step is how do we engage people to the point where they start to build their own knowledge about the space that they're in? Because knowledge builds economies, information doesn't.”
For Saunders, it comes down to enabling societal and cultural change, whether in the agricultural or any other sector. “One of the reasons that I'm excited about technology is not because I'm constantly looking at what's coming next, it's because I'm constantly looking at how human behaviour is changing and becoming so adaptable to the idea of using digital technology.”
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