In-Depth

Strengthening Competitiveness In Africa’s Agricultural Value Chain Using Smart Technologies


The COVID-19 pandemic has impacted global value chains (GVCs) by interrupting transportation and logistics frameworks, supply and production mechanisms, and demand and consumption patterns. On the pandemic onset, movement and trade restrictions were imposed by most African countries to control the spread of the COVID-19 pandemic.

The agricultural extension and advisory services also confronted substantial disruptions due to limited movement. Consequently, this created a food supply crisis that deterred and threatened Africa’s socio-economic development and growth, as well as food security. These disruptions also highlighted gaps and weaknesses in Africa’s agricultural value chain.

The negative impacts of the COVID-19 pandemic in African agricultural value chains and food supply systems have been significant because many African countries are substantially reliant on food importation. Reports have shown that African countries are substantially dependent on importing agricultural necessities outside the continent.

These imports include agricultural products such as seeds, fertilisers, veterinary inputs, fish fingerlings, and feeds. Therefore, the collapse of the international markets for agricultural inputs and outputs has exposed the weak agriculture value chains in Africa in terms of food supply and demand. This has resulted in dwindling of farming yields and food production across the African continent.

Consequently, this has led to the loss of jobs as job creation efforts have significantly declined within the agricultural sector due to the disrupted exportation and importation trade activities. These have also effectively reduced trade flows and increased trade deficits for many African countries. For example, reports have estimated that the export supply disruptions cost African countries risk losses ranging between US $1 billion and US $5 billion in 2020, which has negatively impacted approximately 10 million farmers in the form of job losses. The pre-COVID-19 pandemic food shortage expectations in West Africa were envisaged to impact approximately 22 million people negatively. However, the COVID-19 pandemic amplified the food shortages and need for food assistance to approximately 28 million people. This demonstrates the challenges of food insecurity in Africa, among other things, caused by inefficient value chains.

Notably, agriculture has remained fundamental to Africa’s sustainable socio-economic growth and strategies towards poverty alleviation as outlined in the African Union’s Agenda 2063 and the African Union Summit Decision on Accelerated Agricultural Growth and Transformation.

The United Nation’s Sustainable Development Goal Number 2 (SDG 2) aspires to eliminate hunger, poverty, and food insecurity by 2030 through smart agricultural frameworks. These aspirations from these frameworks can be accomplished through robust agricultural value chain systems across the African continent.

The systems can establish and create opportunities for small-scale subsistence and large-scale farming, as well as export commercial farming. By accomplishing and sustaining these value chain systems, African countries can further enhance their agricultural and economic development and growth. Therefore, innovative solutions to address these challenges currently facing African farmers need to be established and urgently implemented.

The African Union High-Level Panel on Emerging Technologies (APET) believes that the COVID-19 pandemic has presented unique opportunities for African countries to develop and strengthen inclusive agro-value chains across the continent using smart technologies. These smart technologies are essential in bridging and addressing the gap highlighted by the COVID-19 pandemic lockdowns. This can be accomplished by using smart technologies to enhance the African agriculture value chain systems.

APET encourages African governments and the business sector to formulate public-private sector partnerships to strengthen and develop resilient agri-business infrastructure through smart technologies. By digitising the various agro-value chain activities, African countries can ensure more effective interactions between farmers, input suppliers, transport and logistics service providers, financiers, and other value chain, partners.

The panel further encourages African countries to prioritise the adoption of smart technologies to effectively implement initiatives like the African Continental Free Trade Area (AfCFTA), potentially enhancing Africa’s agricultural trade. Such efforts can substantially improve Africa’s trade revenues, food security, and expand job creation and employment opportunities within the agricultural sector across the African continent.

African countries need to utilise smart technologies to mitigate the challenges that have caused Africa’s agricultural economy to remain fragmented, inefficient, and informal. This can help African smallholder farmers acquire market accessibility and enable sustainable operational costs.

Kenyan farmers leverage digital technologies such as Twiga Foods to augment agricultural e-commerce businesses. The Twiga Foods e-business technology is helping Kenyan farmers access food and grocery outlets within the country’s informal retail business sector. It is enabled by mobile technologies to aggregate the supply and demand fragmentation within the agricultural value chain.

Consequently, this technology enables efficient supply chain systems in Kenya, thereby reducing the food supply cost for African consumers. APET encourages African countries to pursue technology-enabled platforms such as Twiga foods to enhance market access for African farmers and food processors. This can potentially augment sustainable and reliable supply within Africa’s informal and formal retailers.

Operationally, the Twiga Foods application consolidates vendors for farmers’ produce and crops by utilising geographic information system (GIS) technology. The GIS mapping leverages artificial intelligence (AI) enabled distribution platforms to consolidate consumers that are seeking orders as well as the location of potential and active customers. This application also advises on the conditions of the roads to determine and maximise efficient deliveries.

It also enables efficient payment platforms through digital mobile money applications such as the M-PESA. Consequently, the adoption of this technology has improved the market access efficiencies for Kenyan farmers. Twiga Foods smart technology platform has decreased the typical post-harvest losses for Kenyan farmers from approximately 30% per annum down to approximately 4% per annum.

Nigerian and Kenyan farmers have created the Hello Tractor application to connect tractor owners to farmers through the Internet of Things (IoT) enabled digital technology solutions. The Hello Tractor digital application bridges the gap between manual and mechanised farming by enabling farmers to place orders for tractors quickly and efficiently.

After the installation of the Hello Tractor application into a smartphone, the digital application connects farmers to their nearest available tractor with the appropriate equipment for the job that the farmer requires. Consequently, this Hello Tractor application has improved the agricultural businesses for the tractor owners. This has been accomplished because farmers are experiencing easier accessibility to machinery to improve their farming production capacity and efficiency vastly.

The Hello Tractor platform has enabled business accessibility to approximately 3,000 tractor owners in these countries. Most importantly, the platform has enabled tractor owners to determine their tractors’ fuel usage and maintenance.

Some African farmers find it difficult to access financial services and farm input loans. Therefore, the deployment of smart technologies such as digital financial services (DFS) has potentially enabled financial services for farmers during the pandemic. For example, Safaricom financial services has developed an agricultural platform called Digifarms. Through the Digifarms application, farmers can access various agricultural and financial services via their smartphones. Additionally, the Digifarms platform offers farmers digital vouchers that can be used to purchase farming inputs at discounted prices.

The digital application is also enabling access to the extension and administrative services. Subsequently, the farmers are trained to utilise these extension and administrative services through various modules to acquire practical guidance and support. Farmers can utilise Digifarms’ loan module to apply for small loans to purchase farming inputs such as fertiliser, livestock, and feed.

Robotics technology can potentially improve farming activities throughout the food supply chain. For example, vegetable growers, fruit packers, egg producers and processors have observed enhanced efficiencies and financial benefits enabled by automation. This is accomplished while maintaining high food quality standards at reasonable prices for consumers.

For example, the Royal Association of British Dairy Farmers has estimated that 5% of dairy farming in the United Kingdom has adopted robotic milking parlours. Worth noting, these automated milking parlours constitute approximately one-third of all new milking systems being purchased by farmers. In addition, farmers around the world are also exploring robotic feed pushers and feeders to decrease labour costs so they can dedicate efforts towards cow welfare and performance.

Therefore, African countries should consider these options to improve their production capacities.

Automation generates ample production with minimal effort. In turn, this creates more time and opportunities for farmers to focus on customer satisfaction across the supply chain. This is accomplished by creating marginal improvements of their products and advice that can significantly benefit agricultural businesses.

APET advises that the adoption of robotics can substantially expand the supply chain and deploy smart technology into productive farming activities. For example, automated weeding machines can straddle rows of crops and mechanically remove any weeds within those fields. Furthermore, smart technologies enable accurate and efficient stock management systems in beef, sheep, dairy, pig, and poultry farming activities.

African farmers can also adapt automated body condition scoring infrared camera systems for their cattle. This enables heat detection collars and satellite-tracked movement tools that can enhance farming decision-making and precision farming.

APET notes that the effectiveness of smart technologies should extend beyond new machinery and the continual release of smartphone applications. However, the machinery and smart technologies should strengthen agricultural value chain solutions and be incorporated into current farming practices to create efficient and sustainable farming businesses.

Therefore, African countries should seamlessly incorporate the new technological and innovative solutions into the existing agricultural business operational frameworks. This can be accomplished through cooperation between agro-business partners and customers to formulate mutually beneficial outcomes.

APET believes that the technology revolution can change agricultural businesses, allow farmers to improve agro-business connectivity options easily, and enable efficient interfacing options with partners and customers. Therefore, the technological innovation in Africa’s agricultural supply chain can deliver lucrative benefits. These smart technological innovations can offer timely deliveries of farming produce and crops into Africa’s supply chain.

APET is encouraging African countries to embrace smart technology opportunities to enhance the agricultural value chain across the African continent. Thus, African countries are encouraged to replicate these smart technologies into their systems to enhance their agricultural value chain and mitigate the challenges posed by the COVID-19 pandemic. In this way, African countries can accomplish the African Union’s Agenda 2063 aspirations.

Source: Nepad

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