Will Digital Technology Work For or Against Small Farmers?
This post is the second in a two-part series focusing on data-driven agricultural development as a follow up to USAID’s Innovation for Data-Driven Agriculture Convening held on April 27-28, 2017. It was authored by Brian King, Digital Development Advisor for Digital Development for Feed the Future, USAID and Peter Richards, Economic Advisor, Bureau for Food Security, USAID.
Global agricultural development is in a period of digital transition. Advancements in earth science, computational power, geospatial analysis and data communications systems have made it possible to assess yields from space, predict and manage economic or climatic shocks, and improve the precision and profitability of agricultural production. The models for realizing the full benefits of this transformation are still emerging. This has wide-reaching implications for agriculture development. Will digital technologies follow well-worn paths of agriculture innovation? Will they prove disruptive or beneficial for small farmers in developing economies?
The Technology Treadmill
Over fifty years ago, the economist Willard Cochrane described adoption of agricultural innovations as a "treadmill," wherein technologies such as mechanization, hybrid seeds and chemical inputs helped increase productivity. However, when the resulting increases in food supply drove down market prices, farmers were forced to keep adopting new technologies to increase efficiency, only to maintain about the same farm income. Most farmers — particularly small farmers — weren’t getting ahead. When Cochrane wrote of the treadmill decades later in the 1990s, he found that his treadmill had been a force for farm consolidation. Many of the smaller, less productive or less efficient farmers ended up falling off the treadmill.
Small Farmers, Digital Tools
As use of digital tools expands in farming systems in developing economies, it is worth reflecting on what these new technologies will mean for small farmers. If the spread of these innovations follows similar patterns as those of previous waves, it could mean yet another challenge to small farmers’ livelihoods. Yet there are a few signals that digital solutions might also help small farmers even the score. Here are some key indicators:
Increasing Access to Inputs
Access to the right inputs at the right places and times has long been a challenge for small farmers in developing regions who may find themselves isolated due to poor quality infrastructure or weak linkages with input supply chains. Even where inputs are accessible, distributing them in small packages implies additional costs. Digital tools, however, can help aggregate smallholder demand and enable innovative approaches to financing to get around these constraints. Similarly, some models from the sharing economy are showing promise for improving access to on-demand transport and mechanization.
Precision in Production
New digital tools can have a big impact on small farmer efficiency. For example, access to cell phones enables even poor, rural farmers to access good guidance over interactive voice response or low-cost video, with demonstrated improvements in production. There are early successes in improving the timeliness and site-specificity of farm guidance over digital channels, such as linking SMS text messages with crop models. The near ubiquity of mobile phone services in developing economies makes it possible to deploy sensor technologies for more precise, data-driven production. These new digital channels are building true interactivity with small farmers in ways that were not possible just a few years ago, enabling farmers and farm advisors to track crop progress, plan activities and identify new solutions or opportunities.
Adam Smith said that farmers limit their production when their production capacities outstrip what they are likely to sell, as they need enough of a market to ensure that they have somewhere to offload their harvests. Smith observed that new market opportunities not only enable more sales, they also create incentives for farmers to maximize efficiency. Today, technological advancements are helping small farms access big markets, sometimes for the first time ever. Small farmers and agro-dealers can aggregate their products through digitally-enabled supply chain actors to reach new markets within their own countries. Online marketplaces such as Alibaba present new global opportunities as well, such as for mushroom sales from Kathmandu or pigeon pea aggregation in Southern Africa. Access to national or global markets — once the domain of larger farms — is being democratized through digital innovations, creating a vent for surplus and new incentives for small farms to be more efficient and productive.
Hacking the Technology Treadmill
Recent research clearly recognizes that small farmers continue to be critical to the global food supply. According to an assessment released by the Food and Agriculture Organization, subsistence farming accounts for a majority of food production in developing economies, much of it by smallholders. Globally, small and medium farms produce more than one-half of the world’s nutrients. As a result, small farmers stand to play a key role in feeding the world’s projected 9.1 billion people. Public, private, non-profit and research actors all have an important a role to play in ensuring that small farms benefit from the precision, adaptability and profitability that digital technologies can enable. This means finding and promoting technologies that streamline the cost of distributing inputs to small farms and moving harvests into market-based supply chains. It also means promoting digital tools and engagement as foundational skills for the next generation of small farmers. Smallholder engagement with digital innovations like those surveyed here is not only possible, it may prove to hold some of the keys to building a more resilient, food-secure future.
Digital Development for Feed the Future is a collaboration between USAID’s Global Development Lab and the Bureau for Food Security and is focused on integrating a suite of coordinated digital tools and technologies into Feed the Future activities to accelerate agriculture-led economic growth and improved nutrition.
For more information on Digital Development for Feed the Future's work on data-driven agricultural development, please read the Key Findings Report from the Innovation for Data-Driven Agriculture convening in April 2017.