Digitalisation in Agriculture for emerging countries

Introduction to the digitalisation of Agriculture

Agriculture challenges regarding production, sustainability, and resilience may be improved by digitalisation. National surveys and scholarly research on the adoption and effects of digital agriculture in OECD (Organization for Economic Co-operation and Development) nations show widespread usage of digital technologies in crop farms but less so in other agricultural sectors (McFadden et al., 2022).

New technological sources

Additionally, new sources of efficiency and value creation upstream and downstream of farms may be made possible by digital technologies, which might also promote research and innovation, the development of new services for the industry, and more traceable value chain transactions (McFadden et al., 2022). Aside from that, digital technology could be used by policymakers to enhance the creation, implementation, monitoring and development of new, more effective agricultural policies.

Digital solutions

Nevertheless, digital agricultural solutions have the possibility of constructing more efficient, environmentally sustainable, and inclusive agri-food systems, hence contributing to the achievement of the Sustainable Development Goals. Furthermore, the quick uptake of mobile phones and other digital tools in the majority of African nations has sped up the rollout of agricultural services for farmers and other value chain participants, improving access to information, knowledge, financial services, markets, and farm equipment (Mabaya, Porciello, 2022).

Key actors of digitalisaition in agriculture

The OECD report examines the digitalisation of primary production actors. Farmers, technology suppliers, and “intermediaries” are the three layers of actors most crucial to the digitalisation of agriculture. End-users of food products, such as food service providers, can substantially, albeit indirectly, influence technological advancements and farmer adoption (McFadden et al., 2022).

Role of the farmers

Farmers are the key players who provide food processors and other direct buyers with the desired commodities. However, farmers differ with regard to their level of capital, experience, education, and other relevant training. In addition, the OECD report identified that digitalisation adoption increases with the farmers' human capital. Therefore, the capacities of farmers and the costs of human capital are crucial to consider when evaluating digitalisation in agriculture.

Role of technology

The creators of digital agriculture technologies are technology companies. They offer a wide range of distinctive goods and services, typically in specialised industries where they have some level of market dominance. The technology providers can be classified as follows: 1) huge international agricultural input corporations; 2) large multinational software and big-data companies; 3) non-agricultural hardware companies, and 4) start-up companies.

Barriers and drivers to the adoption of digitalisation

Research on the current state of digital agricultural adoption aids in identifying where national governments may address obstacles in digital tool development and barriers to farmers' use. By removing these obstacles, the agricultural sector may be able to accomplish its productivity, sustainability, and resilience targets (McFadden et al., 2022).

Drivers

By accelerating the activity of participants throughout the value chain, such as input players, producers, and retailers, digital technologies have the potential to change agri-food systems in emerging markets, as stated by the company McKinsey (Goedde et al., 2021). Moreover, governments might help them by utilising digital tools for crucial duties like allocating subsidies to farmers or keeping track of the stockpiles of emergency food-relief supplies in government storage facilities.

If digital solutions are created to directly assist outcomes like raising farmer incomes, they can be a powerful method to speed agricultural transformation (Goedde et al., 2021). Furthermore, digital tools can help increase the agricultural output and thus enhance food security in emerging countries.

Barriers

The common barriers to adoption are related to costs, such as: upfront investment and ongoing maintenance costs; relevance and limited use cases; usability; high operator skill requirements; distrust of algorithms; and technological risk. National governments play a significant role in removing these barriers by investing in human capital, ensuring appropriate incentives for innovation, acting as knowledge brokers and facilitators of data-sharing to encourage inclusive, secure, and representative data ecosystems, and fostering competitive markets (McFadden et al., 2022).

Agricultural stakeholders have been using digital tools to enhance their operations more over the past two decades. More than 400 digital agribusiness solutions are in use alone in sub-Saharan Africa. However, despite widespread availability, many digital solutions find it difficult to scale up and fall short of helping farmers and other end users (Goedde et al., 2021).

Strengthen the digitalisation of agriculture

Figures 1 and 2 give examples of digital case studies on how to fast-track the change in agri-food systems. The impacts emphasised are related to the increase in government savings and improvement of food security management, increase in agricultural output as well as farmer income and enablers. The feasibility based on the country and the ease of implementation is illustrated.

Case study: Kenya

For instance, in Kenya, the government has digitalised the food balance sheet (FBS) to track food shortfalls more effectively and spend less on reserves, as seen in figure 1. A digital FBS assesses a nation's food consumption, production, yields, trade volume, commodities prices, and stocks by gathering information from various stakeholders. A functional FBS can contribute to national food security by offering accurate and trustworthy information as well as monitoring food production and consumption. In regard to enablers, the Rwandan government built a farm registry and linked them with the Bank of Kigali for access to financial help.

Highlights OECD report

The OECD report highlights some recommendations for strengthening the digitalisation of agriculture:

• Better data about the uptake, costs, and advantages of various technologies are required to enhance the decision-making of farmers and policymakers. 
• In order to encourage inclusive, representative, and secure data ecosystems, governments should retain the right incentives for digital breakthroughs and seize new chances to act as knowledge brokers and facilitators of data-sharing. This further emphasises how crucial it is to maintain competition in the marketplaces for technology input.
• When evaluating technology's advantages (such as bettering the quality of life or reducing family labour), policymakers should also consider its drawbacks (such as the need for human capital or scepticism of technologies).

Highlights McKinsey report

Furthermore, the McKinsey report proposed the following key lessons:

• The digital agenda should be grounded in the government's priorities
• Chose the right partnerships
• Implement agile thinking in digital product design
• Long-term projects – take time to invest in digital products

Role of the government

Governments should be aware that to accelerate agricultural transformation, digital and non-digital ecosystem components must be taken into account. This includes, digital and data infrastructure to regulation, funding, and in-person support for smallholder farmers and agribusinesses using digital tools. But it is challenging to successfully implement digital projects and transformations—most of them fall short during implementation. Governments are unable to address all of these issues at once. Hence they may solve these issues in manageable sprints to accelerate their agricultural transitions and enhance food and nutrition security for all by executing a small number of well-scoped and targeted use cases (Goedde et al., 2021).

References

• McFadden, J., et al. (2022), “The digitalisation of agriculture: A literature review and emerging policy issues”, OECD Food, Agriculture and Fisheries Papers, No. 176, OECD Publishing, Paris, https://doi.org/10.1787/285cc27d-en.
• Mabaya, E & Porciello, J. (2022) Can digital solutions transform agri-food systems in Africa?, Agrekon, 61:1, 67-79, DOI: 10.1080/03031853.2022.2032223
• Goedde, L., McCullough R, Ooko-Ombaka, A., and Pais, G., (2021), How digital tools can help transform African agri-food systems. McKinsey & Company. https://www.mckinsey.com/industries/agriculture/our-insights/how-digital-tools-can-help-transform-african-agri-food-systems