How connectivity is transforming Kenyan agriculture
By Patrick Ndegwa, SEACOM East Africa Business Sales Lead
The agricultural sector makes up roughly 31.5% of Kenya’s GDP and employs 38% of Kenya’s total population. For 70% of rural Kenyans, agriculture provides their main source of income, which makes it a sector of the economy that shouldn’t be overlooked.
Agricultural businesses face many challenges, including short shelf lives, inconsistent product quality, lack of access to knowledge or financial resources, changing pests and disease patterns as well as increasingly volatile weather due to climate change. Although traditional farming practices may not be able to address these challenges, digital technologies are emerging which could provide solutions. New digital tools just might be the answer to improved productivity, profitability, and resilience to climate change.
These tools may also be able to help when it comes to Kenya’s food security. As the population increases, so does demand for food. Food security is one of our national goals, as outlined in our government’s Vision 2030 plans and the Big 4 Agenda. Digital transformation may not only be beneficial but imperative to meet rising demand. So, what role does connectivity have to play in realising this?
A digital revolution
In 2016, McKinsey reported agriculture was the least digitalised sector in the world. But due to continued innovations in digital technologies, the sector is rapidly evolving. In the past, advances were predominantly mechanical, with more sophisticated machinery expanding the scale and speed of cultivation.
Today, artificial intelligence, automation, analytics, geo-data, and real-time sensors are leading the way forward to further improving yields. Connectivity lies at the heart of this transformation, and McKinsey also reports that the successful implementation of connectivity in agriculture could contribute between 7% and 9% in additional value to the global industry.
These technologies improve decision making, operational efficiencies, and risk management. For example, geo-data obtained from satellites can provide valuable mapping and forecasts for essential variables regarding crops, soil, water, weather, or livestock. In less developed regions, however, almost all farm work must be done manually without the aid of connected technologies. As Internet penetration across Kenya increases, this is sure to change.
Financial inclusion and mobile marketplaces
The widespread use of mobile money platforms in Kenya has significantly improved financial inclusion for the low-income population by digitising payments between agribusinesses and smallholder farmers and facilitating microloans. According to the UN’s Food and Agriculture Organisation, smallholder farmers produce up to 80% of the food supply in Asia and sub-Saharan Africa, and yet only 1% of bank lending in Africa goes to the agricultural sector.
Mobile money microfinancing is bridging economic divides by allowing more farmers access to essential resources such as seeds and fertilisers to get their businesses going. Many institutions, like Safaricom’s DigiFarm, are also offering these farmers advice and guidance on how to manage their crops more effectively.
New market linkage tools are formalising agricultural value chains by connecting crop producers and buyers through mobile-based online platforms. Direct-to-farmer hubs allow third-party agricultural service providers to offer their services directly to farmers registered on online platforms.
Twiga Foods, a business-to-business food distribution platform, has not only helped farmers with networking, but also builds more efficient supply chains that ultimately lead to reduced food prices. The company recently partnered with IBM to use the blockchain to further improve their supply chains and provide blockchain-based microfinancing.
Considering that Kenyans spend on average 46.7% of their household income on food, the socioeconomic impact of these digital platforms is substantial. By lowering food costs and enabling more opportunities for rural farmers, sustainable developments in agriculture can go a long way to alleviating poverty across Africa.
The seeds of connectivity
What is clear is that connected technologies can empower millions of smallholder farmers through financial inclusion and access to guidance from leaders in the agricultural industry. Last-mile digitisation tools have also given more established farm owners real-time visibility over their crops, deliveries, and payments. Other digital tools allow for simpler inventory management and reduce the risk of excess inventory. But for systems like these to work, fast and reliable connectivity is crucial.
Connectivity is the backbone of digital transformation and as it continues to improve across Africa, so will farmers’ access to innovation. If we want to build a sustainable future where food is secure and every smallholder farmer has a chance to thrive, we need to get more people connected to the digital world.