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In this months Fork News we discuss how digitization and Agtech is helping smallholder farmers transform the agricultural industry. These are the items we will discuss this month:
- IBM partners with Yara to Provide digital agricultural solutions for farm optimization
- Using blockchain to help smallholder farmers get a better deal
- Smart farming market to grow to USD 15,436 million by the end of 2024 at a CAGR of 11.39%.
Yara and IBM recently announced they will be joining forces by drawing on the two companies’ complementary capabilities: Yara’s agronomic knowledge and IBM’s digital platforms, services and expertise in artificial intelligence (AI) and data analytics. “Yara and IBM will develop digital solutions that empower professional and smallholder farmers to optimize farming practices to increase yields, crop quality and incomes in a sustainable way,” said Terje Knutsen, EVP Sales and Marketing in Yara. The joint global digital farming platform will apply artificial intelligence, machine learning and in-field data to unlock new insights for farmers.
The partnership will focus on all aspects of farm optimization, however, one specific area of collaboration will be weather data. The ability to respond optimally to weather conditions is critical for farming. By merging analytical insights from IBM’s Watson Studio, IBM PAIRS technology, The Weather Company and other services, with Yara’s unrivaled crop knowledge and modelling capabilities, the joint platform will not only provide hyperlocal weather forecasts but will in addition give real-time actionable recommendations, tailored to the specific needs of individual fields/crops.
It will have worldwide coverage and aspires to reach 100 million hectares of farmland – including millions of smallholder farms. The teams will explore innovative business solutions to integrate the joint platform into the IBM Food Trust, IBM’s blockchain-enabled network of food chain players. This will allow for greater traceability and supply chain efficiency as well as ways to tackle food fraud, food waste and sustainability. It will firmly link the farm into the full food chain, creating a holistic approach to food production from farm to plate.
Insight #1 Traceability platforms are adopting value added services to add value for farmers
With market leaders like Unilever, Wallmart and Nestlé on board, IBM’s food trust is by far one of the most prominent blockchain solutions in food supply chains. Their partnership with Yara and upcoming farming module is a great example of how the synergy of two different services on one platform can increase the value of each separate service and create an incentive for different supply chain stakeholders to participate in one platform. This is becoming increasingly relevant as companies like Wallmart are already demanding more tiers of suppliers to participate in their traceability platform, planning to reach their farmers by the end of 2019.
Read more on this in last month’s News-> An incentive for stakeholders to use your platform | The Fork News #6 .
Crops are traditionally sold through middlemen who pay in cash before delivering to larger processors. That leaves growers without a formal transaction record, which means they have no official work or credit history. As a result, entire communities can’t gain access to financial services like banking, lending, or crop insurance that could help lift them out of poverty. BanQu is a blockchain-based software as a service platform that creates a decentralized digital ledger of each transactions, helping farmers build credit and hold processors accountable. It’s one of Fast Company’s 2019 World Changing Ideas Awards winners.
Instead of cash, each farmer received a digital payment through BanQu’s blockchain platform. The service delivers virtual tokens that can be redeemed for cash when needed, or applied to other networked transactions (like paying their energy bill). It also tracks and stores what volume of goods were delivered, the quality of those goods, and what price-per-pound that yield commanded. One crucial component, of course, is connectivity. But the world is reaching a technological tipping point: According to BanQu’s research, at least 60% of the global poor have access to cell phones. These don’t necessarily need to be smartphones. In Uganda, BanQu operates by spending text-based receipts over SMS service.
Banqu is not the only initiative that is working on digitizing smallholder farmers. Fairfood, a Dutch NGO known for being one of the first to implement blockchain for food in the the Netherlands, is also connecting smallholder farmers through SMS. In their latest project they work with Verstegen Spices & Sauces to make their nutmeg supply chain transparent from farmer to consumer. The batch of nutmeg has already been harvested and is expected to reach Dutch supermarket chain Coop somewhere this month. Consumer can already trace the batch of nutmeg in their online pilot together with proof from the farmers that they have received their wages as agreed on.
Insight #2 Smallholder farmers are becoming part of international supply chains
Research shows that even in the most underdeveloped countries in Afrika, mobile phone ownership is often above 80% with smartphone ownership on the rise. Although it isn’t sure when, it has become evident that some time not too far in the future the large majority of smallholder farmers will have access to mobile phones and internet. With current global trends of increasing food traceability it is very likely that we will see large parts of our global food system digitized all the way until the smallholder farmers producing our food at the start of our food chains. This means that for the first time, smallholder farmers, known for being extorted and underpaid as a result of their weak negotiation position, will get a voice in their supply chain.
Imagine how this will impact the global sustainability market and certification schemes. Instead of relying on third party certification bodies to guarantee fair wages and sustainable production methods, we can ask the farmers ourselves which pesticides they used and whether they think they have received a fair wage for their product or not.
AgriFood tech is a maturing market, as evidenced by the swell in investing activity last year. Startups in the space attracted nearly $17 billion in investment capital–a 43% increase from the previous year, according to data from AgFunder. It therefore comes at no surprise that Recent studies expect the global smart farming market to grow from USD 7,256.65 million in 2017 to USD 15,436.67 million by the end of 2024 at a Compound Annual Growth Rate of 11.39%. This article gives a good indication of what type of Ag-tech innovation is in the pipeline and what benefits this can bring for farmers and the agricultural industry as a whole.
Insight #3 Agtech for social good
The food and agricultural organization (FAO) expects the global food demand to rise with 50% until 2050 while also suggesting that by some estimates, if nothing is done to change present trends, the integration of agricultural markets could lead 1.7B farmers to be forced to leave agriculture over the next few decades. Bringing Agtech solutions to the people who need them the most, the smallholder farmers, could reverse this trend and allow them to stay competitive enough to persevere in the coming years. Lets therefore work together to use these new technologies to do good and make them available to the people who need them the most!
Incorporate these insights:
Digital adoption is on the rise among farmers and smart farming market is expected to more than double in the next 5 years. With our food demand increasing and farmer as an occupation decreasing we will have to see a massive increase in efficiency in the coming years. We are also at a social and environmental tipping point, we have to make big chances soon before our international systems run out of control. Whether it is marketing driven or not doesn’t matter, the world finally seems to start working together to solve social and environmental problems.
This seems very evident when looking at the 7 Agtech startups that received a lot of seed investment. It is interesting to note that most solutions use new technologies to solve social and environmental problem while simultaneously increasing efficiency. That is where most of the money and attention seems to be going to, solutions that increase efficiency while also solving a social or environmental problem. How does your company integrates these insights? Are you already working on technological solutions that have both social / environmental value and increase efficiency? Or do you still lack one of the two? How could you incorporate new technologies to create a holistic solution that grabs the attention of the 2020 investor?
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