DIGITAL TECH & INCLUSIVE AGRICULTURE IN AFRICA

Transcription

1 CONNECTIVITY AT THE BOP POLICY BRIEF NO. 2 DIGITAL TECH & INCLUSIVE AGRICULTURE IN AFRICA by Laura Mann and Kate Meagher, Dept. of International Development, LSE Given the rapid penetration of digital technologies into African agriculture, how should policy-makers and tech designers understand their impacts on smallholder farmers and informal workers? How can opportunities for greater inclusion be fully realised and vulnerabilities minimized, and what areas of contestation may remain despite digital innovations? BACKGROUND Agriculture remains hugely important for most African economies. On average, it accounts for 32% of GDP and employs 65% of workers. Much of this production takes place on small-scale familyowned farms characterised by low technology and informal labour relations. A range of digital innovations have been developed to foster more productive livelihoods including: Advice, marketing and compliance platforms for individual farmers (e-soko, m-farm, I-cow). Advice, marketing and compliance platforms aimed at cooperatives and outgrowing schemes to better coordinate their members (Farmforce). Climatic information and insurance systems (Climate Corporation/Monsanto). Digital payment and banking solutions designed for farmers and traders. Marketing and compliance platforms aimed at improving traceability and incorporating traders into formal value chains (In-house agribusiness platforms). Aggregation platforms for domestic retailers of fruits and vegetables (TwigaFoods, Sendi) Digital technologies are likely to bring broad economic benefits from cheaper food, increased crops and reduced cross-border losses for national economies. Yet digital technologies involve concentrating capital (and data) to reduce inefficiency and to raise overall productivity. In the process, new vulnerabilities and forms of exclusion are likely to emerge. This policy brief examines the opportunities and risks of digital technologies for informal livelihoods within African agriculture. The material presented here emerged from a Bellagio Centre Conference funded by the Rockefeller Foundation in September 2016, which brought together ICT activists, social entrepreneurs, government officials, academics and informal economy activists from across Africa, Europe and North America, including regulators and high level telecommunications officials from Kenya, Nigeria and Somaliland. This policy brief maps out digital impacts on the agricultural value chain and identifies key questions for those wishing to foster stronger economic inclusion. While digital innovations create new forms of access and opportunity, they also generate tensions, contestation, and new processes of marginalization. We conclude this policy brief with key recommendations to manage these risks. 1 The Conference, entitled Connectivity at the Bottom of the Pyramid: ICT4D and Informal Economic Inclusion in Africa, was held at the Bellagio Centre, Italy from September It was funded by the Rockefeller Foundation with additional support from the Department of International Development at the London School of Economics and Political Science, UK. 1

2 MAPPING OF DIGITALLY- MEDIATE VALUE CHAINS Box 1 presents a simplified agricultural value chain depicting the current range of informal actors involved. The red boxes are used to identify informal actors who have been deemed as barriers to enhanced productivity, efficiency and traceability. The arrows indicate two streams of economic value: a red, lower-value, undifferentiated/untraced value chain, which primarily flows through informal traders to the domestic market and a higher-value green differentiated/traceable value chain, which Figure 1: Agriculture Value Chain (Current) flows onto domestic supermarkets, domestic agro-processors as well as international buyers (requiring traceability). To depict the difficulty that farmers face in upgrading into this stream of value, the green value chain flows through cooperatives and out-grower schemes. Box 2 represents potential digital transformations to the value chain. The green boxes represent new digital tools. At the top left hand side of box 2, we can see mobile platforms developed by Agribusinesses both to incorporate traders into their distribution chains as well as advice and compliance platforms designed for individual use by farmers. Some Agribusiness Counterfeit input suppliers Informal traders Informal Finance (Rotating credit) Smallholder Farmers Informal traders Informal and formal domestic markets Seed sharing groups Cooperatives or out-grower scheme Domestic agro-processing International buyers Figure 2: Digitally Intermediated Agriculture Value Chain (Envisioned) Agribusiness Digital payment and banking solutions Mobile Marketing Platforms and mobile advice/ compliance platforms Informal and formal domestic markets Digital payment and banking solutions Smallholder farmers and cooperatives/outgrowers Domestic agro-pocessing Mobile advice platforms (independent) International buyers 2

3 platforms launched by Agribusinesses may be linked to proprietary inputs (seeds and chemicals), encouraging farmers to use their own products. However, at the bottom of the box, we also see independent advice/compliance platforms as well as payment/banking solutions specially designed for farmers. One of the potential benefits of digital platforms is that they record the use of inputs and financial flows, thus allowing farmers to build credit histories and comply with traceability requirements. For this reason, we have grouped individual farmers and cooperatives as these technologies could potentially allow individual farmers to access the same benefits as cooperative members. Further to the right of the value chain, we can also see market aggregator platforms aiming to connect farm producers directly with urban markets. These technologies aim to disintermediate the value chain by removing informal middlemen, thereby lowering overall costs, increasing prices for farmers, reducing waste and potentially allowing farmers more confidence to take risks and invest. Finally, we see digital payment and banking solutions aimed at food retailers. These may also include Enterprise Resource Programmes (ERPs) that allow shopkeepers to manage accounts and stocks. KEY QUESTIONS FOR DESIGNERS AND POLICY- MAKERS Reflecting on these value chains and drawing on insights from our workshop, we identify a number of key economic inclusion questions for policymakers and designers interested in inclusion: 1. ARE ALL AGRICULTURAL STAKEHOLDERS LIKELY TO BENEFIT EQUALLY FROM DIGITAL SOLUTIONS? As the prime targets of many digital platforms, farm owners and smallholders are most likely to benefit from digital technologies through higher prices, enhanced productivity, and greater access to formal financial services and traceability schemes. Farm cooperatives are likely to gain disproportionately as they may be able aggregate data from across members and thus increase the potential for learning and innovation. They may be better placed to collectively bargain with digital solution providers about the terms of inclusion. More literate and wealthier farmers may also benefit disproportionately as they are likely to be early adopters while poorer or more remote farmers may be disadvantaged and less able to access services (particularly if solutions are purely market-led). As such, digital solutions may intensify the exclusion of the most marginalized farmers. We must therefore be attentive to inequalities in impacts among farmers (something developers are trying to address through easier interfaces, outreach efforts and cross subsidisation). Food retailers in urban areas (both formal and informal) are also likely to benefit as they may receive more competitively priced and higher quality goods, and potential opportunities to upgrade and diversify into differentiated markets. They may also benefit from improved formal financial access. 2. WHAT ARE THE POTENTIAL TRADE-OFFS FOR FARM OWNERS AND SMALLHOLDERS? Farm owners and smallholders may lose some autonomy over decision-making concerning seed and pesticide use if they get locked into proprietary systems. They may also experience some deskilling if they come to rely on digitally mediated processes, advice platforms and commercial expertise. Depending on how new digital financial services are regulated, there may also be issues with debt and predatory marketing as well as use of personal data for other unknown purposes. 3. WHAT NEW ECONOMIC VULNERABILITIES MIGHT BE INTRODUCED BY DIGITALLY ENABLED VISIBILITY? Some digital solutions characterise independent input distributors and traders as barriers to enhanced productivity, efficiency and safety. These actors are characterised as risky for allowing dangerous chemicals to enter the chain, as inefficient for contributing to waste and as exploitative for offering low prices to farmers and high prices to retailers. They are also seen to intermediate information flows, making it difficult for farmers to learn about quality improvements and traceability requirements. Similarly, some 3

4 solutions promise efficiency and reduced corruption through better management and surveillance of rural workers. Yet smallholders earn income, mediate economic shocks and accumulate capital through both trade and wage labour and so we must consider impacts on these groups as well. Informal traders will be particularly vulnerable to digitization processes, both at the input and distribution ends of the value chain. Such groups will either be displaced or incorporated by digital solutions. If incorporated, the question then becomes: on what terms? Will they be incorporated as business owners, workers with bargaining power over incomes and terms of inclusion or as workers with increasingly less say over their terms of inclusion? Informal workers on smallholder or commercial plots may also face new vulnerabilities. Productivity is currently being understood through labour discipline. Yet such digitally mediated discipline may also eliminate time for sideline activities or kinship and cultural obligations that make marginal informal livelihoods viable. In order to make such efficiencies both viable and inclusive, it is necessary to frame productivity in terms of worker security and to better map out inter-connections between trade, wage labour and land plots. If policy-makers and designers are serious about building a digital economy that is inclusive for all workers at the Bottom of the Pyramid, they need to grapple with these tensions head-on and shape digital infrastructures in ways that take account of the long-term security and dignity of groups whose livelihoods may be threatened. 4. HOW SHOULD WE UNDERSTAND THE CONTRIBUTION MADE BY INFORMAL ACTORS TO DIGITAL INNOVATIONS? Tech designers are not starting with a tabula rasa. Indeed informal economic infrastructures and workers are often viewed as a means of reducing costs, rather than as infrastructural assets worthy of further investment and compensation for their contribution to system innovation. Many agricultural innovations depend on public extensions networks, NGOs and informal traders to extend the reach of solutions and platforms. Their use is often valorised as inclusion yet it is not clear that the distribution of profits recognizes their role in the profitability of the activity. The result is a tendency to prioritize distribution of the gains toward digital technology providers as compensation for their innovation and investment, while keeping services competitive by according equally essential informal or public collaborators a low share of the gains. Genuine inclusion requires greater recognition of the informal and public institutional innovation that makes inclusive ICT business models economically viable. Discussions explored other cooperative models of data sharing that return some of the benefits to technology users. For example, in the United States, farm cooperatives are experimenting with data ownership models in which farmers may be compensated if their data is used for commercial purposes. 5. BEYOND PRODUCTIVITY AND EFFICIENCY, WHAT OTHER BENEFITS MIGHT DIGITAL TECHNOLOGIES BRING? While many innovations are being developed in the context of partnerships between smallholder farmers and MNC input suppliers or within the context of outgrowing schemes, it is conceivable that alternative digital infrastructures could be built to facilitate stronger public policy interventions and better information gathering and monitoring by African governments and research institutes. Given that ICTs can help enable information flows about products and processes, discussions noted that these technologies could enable African domestic firms to claim greater value through traceability, certification and branding efforts and allow for stronger coordination between firms, research institutions, extension services and cooperatives. Such alternatives would depend on data governance laws and agreements to enable public access (or access by public research institutions) to datasets currently held in private databases. REGULATION AND SOCIAL DESIGN In order to promote and support genuine economic inclusion, policy-makers and designers need to take a macro-perspective and consider the long-term and short-term impacts on all economic actors including those that have been demonised as intermediaries 4

5 or problems in the value chain. While digital technologies are lauded for connecting people, they can also serve to disconnect people from sources of income and from existing career paths while locking economies into narrowly defined upgrading strategies. Luckily, sensitive social design strategies exist to manage these risks. Designers can use social design to better sensitize themselves to relations between agricultural producers and traders in rural livelihood systems. Inclusive social design can find ways to engage (rather than bypass) rural input and crop traders given their central role in off-season livelihoods and their capacity for resistance. In addition, social design can be used to engage (rather than bypass) informal urban wholesalers. While many digital marketing platforms seek to eliminate these actors and create seamless links between farmers, input sellers and formal retailers, in the long-run, such an approach may short-circuit the career path of informal traders and retailers and undermine rural and urban livelihood strategies. Crucially, the predominant focus on commercial innovations and immediate short-term profit may cause us to neglect possible public uses of this technology that may better serve the needs of bottom of the pyramid users and better position African economies within global markets in the long-term. Accordingly, officials and designers must consider the potential for these technologies to build connections, not just to private corporations and global trading systems, but to domestic and local public agricultural institutions as well. Economic planners and researchers might consider how they could build up digital platforms that strengthen public sector data gathering, monitoring and policy interventions and foster closer links between farmers and local agricultural research and development structures. Doing so would both strengthen the knowledge base of officials dealing with the vulnerabilities discussed above and help African economies break away from the narrow donor focus on productivity and efficiency to embrace alternative strategies for capitalizing on opportunities within domestic agro-processing, agribusiness and Agtech. For full details about the workshop and its findings, including details about our sensitive social design strategies, please see the White Paper: Connectivity at the Bottom of the Pyramid: ICT4D and Informal Economic Inclusion in Africa.