By Alice Marks
According to experts at the recent World Economic Forum in Davos, we are sitting on the edge of the Fourth Industrial Revolution. This revolution builds on the third, which was the digital revolution, and is predicted to blur the lines between the physical and digital world through innovations such as artificial intelligence, 3-D printing, nanotechnology, and the use of Big Data, which will integrate digital technologies into daily lives ever more closely. It is predicted to be exponentially fast and far reaching in its scope and impact, transforming entire production, governance and management systems in an unprecedented way. Whether this will mean “promise or peril” for humanity will likely only be clear with the benefit of hindsight, but optimists hope that it offers the opportunities to improve lives and help to eradicate poverty through improved connectivity and better access to resources.
The fourth revolution, or ‘Industry 4.0’, will build on the digital revolution, but there is still work to be done on bringing the digital revolution to developing countries, particularly to rural areas. Digital technology has the potential to accelerate change and reduce isolation for rural people, while agricultural development has the potential to support the reduction of inequality and diminish poverty gaps. Put the two together, and there could be a plethora of new opportunities for smallholder farmers. For example, electricity, internet and cell coverage can help smallholder farmers to access information on best prices, weather forecasts, and allow them to share knowledge and expertise.
Bad infrastructure is reported by African companies as the biggest barrier to doing business in Africa, but mobile technology is one way that this barrier can be brought down. For example, financial services provided through mobile phones reduces the need for a physical building and physical paper work, thereby reducing the cost per transaction such that banks can still operate profitably even if the transacted amount is tiny. For example, in 2015 Equity Bank launched Eazzy 247 mobile phone microfinance banking service in Kenya, which reduces costs to both the bank and farmers. Participating farmers pay just KSh50 (US$0.5) per transaction, compared to the average bank charge of KSh200 (US$2). This means that even those with low incomes can be potential customers.
While microfinance initiatives can help farmers to invest in their land, micro-insurance can protect their investments when things go wrong. For example, weather data can be collected remotely via satellites or meteorological stations, and can inform weather-based index insurance providers, such as One Acre Fund who offer insurance as part of a package of services for smallholder farmers. Insurance pay-outs are awarded to participating farmers if rainfall is too high or too low for a decent harvest, meaning that farmers who have lost out can still invest in their farms next season.
Better connectivity and data also offer opportunities for more resourceful farming methods. By using location-specific data, farmers can improve productivity and reduce costs, using inputs in a sparing, strategic and appropriate way. For example, Cropnuts is a Kenyan soil testing laboratory, which offers soil testing services to smallholders, using agrodealer networks to offer training and collect samples. Participating farmers deliver their samples to their local agrodealer, where it is collected and delivered to the Cropnuts laboratory. Once the soil has been tested, the farmer receives an SMS with the specific soil management and fertiliser recommendations for their soil, and can place orders via the Cropnuts web-based network, Inputs4Ag, which links farmers, agrodealers and input suppliers to ensure the farmers can access the inputs they need. With this service, farmers can access relevant data to make informed decisions about soil management as well as gaining access to the resources they need to improve their prospects.
This is just a small selection of how the ever-closer integration of the digital and physical world already affects rural farmers – the reality in the future is likely to be more innovative and far greater in scope than it is possible to imagine with ‘Industry 4.0’ in its nascent form. However, the possibilities offered by ever faster and easier links between people, institutions and information is exciting. While there will likely be challenges to overcome, particularly with regards to governance and security, there is also some space for hope and optimism.