An equation for agricultural development in Africa

In 2016, the American magazine Foreign Affairs published an excellent collection of articles entitled “ African farmers in the digital age: how digital solutions can enable rural development ”. In this report, 20 African and global experts discuss ways to transform African agriculture, with a focus on food systems and small rural farmers.

The report is 141 pages long, so we share only an excerpt written by Bill Gates (founder of Microsoft) that first appeared in this special issue (February 2016):

“Right now, hundreds of millions of Africans depend on agriculture for a living, but they don’t grow as much and they don’t sell as much of their surplus as they could. As a result, Africa had to import $ 40 billion in food last year. Of course, something is not working properly when half the continent produces food and the continent still buys a substantial portion of its food from elsewhere!

So, what’s wrong after all? Why don’t small African farmers participate in this $ 40 billion market? The main problem arises from the fact that agricultural markets, such as banks, exist on a formal level, while small producers exist on an informal level. Therefore, farmers and markets cannot communicate effectively. Small producers do not know what the market can afford, they cannot grow their crops to market specifications because they do not know these specifications. They have no way of learning the crop management practices that would double or even triple their yields. Instead, they mainly grow what they can eat or trade locally, as they always have.

As long as this disconnection of information exists, there will be a related physical disconnection. The tracks and roads that would take crops from the mining gate or farm to the market do not exist, because the market does not want farmers’ plantations to grow in the forms and volumes being cultivated. Thus, farmers are isolated, without money and without a voice so that the market can hear them.

But digital technology can act almost as a bridge connecting the two sectors (formal and informal). Small producers already use cell phones to communicate within their network of contacts, for example, to chat with family and friends. The institutions that make up the formal market communicate in the same way, using the same technology. So it is now possible to generate a two-way conversation between African producers and their consumers and this is an entirely new conversation. Each party will be able to express their needs to the other for the first time.

Imagine a small farmer who can easily discover that cassava must have a high price this year. He can also contact a local cooperative to arrange to group his yuccas with the neighbors’ yuccas, meeting the volume requirements of buyers. Because this way he has the guarantee of selling at harvest, the peasant will even be able to pay a loan through his mobile device, to buy fertilizers or improve storage or anything else he needs to maximize his income. In the meantime, instead of waiting for the visit of an extension worker who may or may not know the secrets of cassava and the soil in this particular region, the peasant can obtain advice adapted by culture and type of soil via video or digital text.

When information flows easily, when data is democratized, the cost of doing business in agriculture decreases, just as transaction costs fall when financial transactions are digital. The excess of time and money that farmers, agribusinesses and cooperatives spend managing the risk of doing business with unknown partners is an obstacle to efficiency. When these partners can get to know each other easily, they can function as nodes in a single market (marketplace) and agriculture will prosper.

It is not as easy as the paragraphs above can make it seem. Building a digital agriculture system that really achieves these goals will lead to innovation and investment. But the point is that it was not possible before and now it is. The additional variable of digital technology changed the agricultural development equation… Bill Gates

In 2016, the founder of Microsoft already had a clear perception of the positive impact of a marketplace solution on the rural market. David Lipton, the first deputy general director of the International Monetary Fund, once said “technology has the ability to overcome isolation, a problem serious in Africa ”.

It is based on these principles and ideas that LAMININ developed the Kepya platform , Angola’s digital agro-market, an integration tool between rural producers and traders, supported by communication infrastructure with the power to connect purposes, revolutionize and impact our economy . Get closer to know more

Laminin SGPG & Consultoria is a company that accelerates the logistics chain, providing and developing multi-sector solutions with innovative operational models supported by technological platforms. In the agribusiness value chain, the company is responsible for ensuring the solid integration between the phases of the chain, meeting the need with availability, building trust, promoting the profitability of the chain, stimulating its development through the production and availability of information of added value.

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