Startups Improving Agricultural Productivity in Africa

Startups Improving Agricultural Productivity in Africa

Posted on 1 year ago by Ismail

The Paradigm is Shifting. Humanity’s value system and work ethics are changing with the growing innovations in the digital-data space. The Covid-19 Pandemic came with eye-opening experiences suggesting how businesses and the global economy will be shaped by digital ingenuity for years to come. Hence, the scope and relevance of the digital-data ecosystem is fast transcending the Information Communication Technology sector to other spheres like Agriculture, Health, Trade and Commerce, Education and Government etc. According to a McKinsey report cited in the Harvard Business Review, data-driven application of artificial intelligence will generate 13 Trillion US Dollars in new global economic activity by 2030, possibly determining the next world order much like oil production had determined economic power players in the preceding centuries.

In the agriculture industry, there is already awakening to new methods that farmers could use to grow crops, rare animals and produce foods all year round without entirely depending on their labour or the natural forces. The digital-data expansion has introduced farming techniques and concepts, such as, Precision Agriculture and Climate-smart Agriculture that have contributed to an increase in the amount of data generated through farming and the entire agricultural value chain and produced a repository of knowledge that covers various data points and insights that can help farmers to make informed decisions and outsmart nature. The application of data analytics in agriculture is projected to grow to 1.5 Billion USD at a compound annual growth rate (CAGR) of 17.2 percent by 2025. This is also expected to impact the growth of the global agritech startup market from 17.5 billion USD estimated in 2019 to 41 billion USD by 2027.

Agritech Expansion in Africa’s Startup Ecosystem

Africa is home to many agritech startups that aim to provide digital solutions to the agricultural and food insecurity challenges in the continent. Ghana, Kenya and Nigeria are major contributors of digital agriculture in Africa, the three countries account for 60 percent of the active agritech startups in the continent. In 2020, the African agritech startups raised 179 million USD in venture capital equity investment against the total 1.43 billion USD that was raised by startups in all sectors of the economy. Farmcrowdy, Thrive Agric, AFEX, FarmKonnect, Babban Gona, FarmKart, Crop2Cash, Hello Tractor etc are agritech startups in Nigeria that have developed viable models that have positioned them to attract funding in grants, seed, debt, venture and private equity investments. These startups are solving food security problems in Africa by providing farmers with digital solutions that enable them to have easy access to funds and the market.

Agricultural Real Estate: A Syndicate Model of FarmKonnect

FarmKonnect is registered startup in Nigeria aiming to make agriculture profitable and solve food insecurity problem through Agricultural Real Estate of modern technology and methodology. The company specializes in growing of fruit and leafy vegetables, using both controlled farming method such as greenhouse technology and open field cultivation, and has production potential of 120000 tons of fruit and leafy vegetables per annum. It also engages in poultry and snail production as well as greenhouse construction, cooperative financing and extension services.

Driven by a philosophy; subsistence farming stings, FarmKonnect developed the Agricultural Real Estate (AgRE) model to promote commercial agriculture in Africa by maximizing precision technologies and a strong network of stakeholders in the demand and supply sides of the agricultural value chain. The AgRE model has seven elements including; Collective funding, Commercial farming, System-driven, Unified management, Scalability, High yield, and Regulation.

The four stakeholders in the AgRE web include the Sponsors or Investors, the Input service providers, the Farmers, and the Consumers. Thus, when Sponsors provide the funding for an agricultural real estate project, FarmKonnect aggregates all the skills and know-how, bringing in the best technologies and methodology towards ensuring that the level of agricultural production and food supply meet the demands.

Joseph Michael, a Construction worker at the Farmkonnect’s 507 hectares WaVe city farm in Osun State hailed from Iwo in Osogbo, the capital of Osun. While recounting how FarmKonnect has helped him to hone his skills in greenhouse construction and have a sustainable means of livelihood, Michael expresses his desires to see more youth like him meaningfully engaged in agriculture and given opportunity to contribute to food security in the country. According to him;

‘’When things were tough, I was searching for Job. So my friend brought me here. I felt excited when I got here; I was employed immediately and we were exposed to new things. I have spent 2 months and it’s as if I have spent two years. Within the time I have worked here, I have learnt many new things such as how to construct greenhouse, how to measure and fix pipe, how to arrange irrigation kits etc.

I did not have knowledge about all of these before, but I was able to easily fit in because they taught us very well. They also pay us well.’’

Agricultural Electronic Extension Service

Launched in the first quarter of 2021, FarmKonnect Agricultural Electronic Extension Service Centre (FAgEX) aims to improve precision agriculture and climate smart farming narratives of Africa, providing farmers with digital solutions such as cloud computing, soil mapping, weather analysis, moisture content analysis, drip irrigation solutions, plant nutrient analysis and content tracking, leveraging technologies such as satellite imagery, drones, electro-optic systems, global positioning systems, geographic information systems, onsite sensors etc.

‘’FAgEX is the first of its kind on the Nigerian soil and perhaps in the sub-Saharan Africa’’ said Azeez Oluwole, the CEO of FarmKonnect. He added, ‘’through the services of FAgEX, farmers can control, monitor and receive live feeds from their farms and greenhouses stationed anywhere in Africa’’.

Co-launched with FAgEX and expected to work in tandem with the centre is the FarmKonnect Institute for Data and Agribusiness Studies (FIDAS). The institute is an intervention to enhance stakeholders’ ability and capability of using data and insights in the demand and supply sides of the agricultural value chain towards enhancing a sustainable food system in Africa. FIDAS is providing training, research and development executions and strategic advisory services to farmers and other stakeholders in the industry. Since its inception, FIDAS has recorded training more than 400 agricultural students and practitioners on the best agricultural practices of the new economy and produced industry analysis reports and insights that cut across the agricultural value chain.  FIDAS and FAgEX are strategic arms of FarmKonnect targeted at improving the input service sector of the food supply chain.

Hello Tractor, providing Uber service to Farmers

Equipment leasing is another way farmers are overcoming the problem of lack of finance to procure capital intensive technology. Hello Tractor is the app Auma is using to improve farming across 13 countries including Nigeria, Kenya and Tanzania. This innovation is often described as Uber for tractors. The app provides digital platform for tractor owners to rent their machines to smallholder farmers in their area and allow these farmers to pool together to rent a vehicle at affordable rates. Installed in these tractors are GPS devices that can enable owners to monitor their location and activity.

Jehiel Oliver, CEO of Hello tractor noted; ‘’since launching in 2014, the company has served about half a million farmers, and 55 percent of the app’s customers were using a tractor for the first time’’. According to Oliver, Mechanization is so important to be a productive farmer. But, smallholder farmers have labour and time constraints where they have a very short window to plant and if they don’t plant on time, they lose yield. ‘’So this technology is a way to get this expensive equipment to farmers’’ he noted.

Challenges and way forward

Culture lag constitutes a major setback to Africa’s agritech ecosystem. Despite the increasing pace of digital solutions in the continent, many farmers still struggle to scale and could not have significant improvements in their lives due to a lack of institutions, structures and cultural frameworks that can enhance the adaptation and localization of these solutions. Thus, most of these solutions still look foreign to many farmers in the continent. According to a study by Technical Centre for Agricultural and Rural Co-operation (CTA), more than 33 million smallholder farmers in Africa have registered for some form of digital services but less than a third use them enough to feel the full benefits.

Furthermore, lack of access to the Internet and the inability of smallholder farmers to afford procuring or even renting digital technologies have been a major source of discouragement to them.

Major investments need to be made in building ICT infrastructure and improving digital literacy in rural areas.

Government should consider giving better incentives and more robust support systems through tax relief, subsidy, bond and grants to startups aiming to contribute to the food basket and the wealth of the nation.

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