‘How Digital Tools Can Transform Africa’s Agri-food Systems’

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Global management consulting, McKinsey & Company, has stated that digital technologies have the power to transform agri-food systems in emerging markets by accelerating the work of participants across the value chain.

The management consulting firm stated this in its latest report obtained yesterday.

It noted that governments could also deploy digital tools for important tasks, such as distributing subsidies to farmers or managing the inventories of emergency food-relief stocks in government storage facilities.

According to the report, when used as part of a national agricultural-transformation program, digital tools could help raise incomes of smallholder farmers, increase crop output, and support food security. “For example, an e-wallet can help increase affordability of inputs by efficiently distributing subsidies to farmers. While governments can play a significant role in helping private-sector players and development partners to invest in digital projects by supporting policy and data infrastructure, they are also developing their own digital solutions to support their stated sector priorities,” it stated.

The COVID-19 crisis has forced many governments in emerging markets to accelerate the use of digital
agriculture technologies to support emergency responses, making the issue especially topical—
and Africa is no exception. Throughout the crisis, public-sector decision makers sought more real-time data more frequently to assess the state of food security and agriculture within their countries, particularly during lockdowns.

According to McKinsey & Company, it has also encouraged more data sharing between the private and public sectors in service of the public good.

It, however, stated that there was the potential to build on the momentum that could support a more systematic transformation of agri-food systems across the continent.

“In sub-Saharan Africa alone, more than 400 digital agriculture solutions are in use, including applications in financial services, market linkages, supply-chain management, advisory and information services, and business intelligence.

“Despite their abundance, many digital solutions struggle to scale and fail to improve the lives of farmers and other end users. For example, in sub-Saharan Africa, most applications have less than 30 per cent active users,” it added.

According to the report, 20 applications (about 5 percent) accounted for more than 80 per cent of farmer registrations and achieved scale of more than one million farmers, including the 8028 Farmer Hotline, a government-run advisory service in Ethiopia.

It noted that the availability of a digital agriculture solution does not guarantee smallholder farmer uptake and adoption.

To improve participation, it stated that three elements were necessary: Digital solutions must create value for end users so they have an incentive to adopt; farmers should receive some level of physical, in-person support, and that governments should enable technologies to flourish.

“Governments, which often play a critical role in providing the core digital and data infrastructure and regulation, may invest in farmer registries, the base data that many digital solutions rely on. Farmer registration is an expensive public good that few want to pay for yet many benefit from.

“Beyond low adoption, governments often face broader challenges to scale. These include issues like uneven digital access and digital literacy in their populations, low data accuracy and usability, and limited tailoring of content for local contexts.

“Most germane for smallholder farmers is basic access to digital technologies. Half of sub-Saharan Africa does not have access to electric power. The average cost of an entry-level second-generation (2G) or third-generation (3G) wireless device accounts for more than 70 per cent of the monthly income of a farmer in sub-Saharan Africa, compared with 17 per cent in India.

“Also, 3G network coverage in rural areas—where most farmers live—is limited: about 70 per cent in urban areas versus about 40 per cent in rural areas in sub-Saharan Africa,” it added.