New drivers to boost millenial agriculture
Many digital tools are fast being developed to aid farmers, and there is also an explosion of knowledge on how to best use such tools for specific situations.New media is now becoming available to convey such knowledge to farmers. Agricultural technology (agtech) through its portfolio of new technologies and new financing modalities (fintech) has great potential to boost food production by smallholder farmers, and become a disruptive innovation.
PAUL TENG says it all.
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Modern farming depends on physical inputs like seed, fertiliser, pesticides, water, and machinery.
These have formed the basis of the production systems which assured sufficient supply of the world’s major food crops.
However, it became increasingly obvious to scientists, policy makers and development agencies that physical inputs alone did not guarantee high yields.
Knowledge is required to make the inputs work, make farms productive, farming practices efficient, and farm productivity more targeted.
This century has also seen the pervasive influence of information-communication technology (ICT) on the farming community, providing the means to capture and share knowledge widely and in the process, ensure that the potential of the physical inputs is fully expressed.
The Asian Development Bank in Manila, Philippines, convened a recent workshop to exchange experience and ideas on how to design and implement appropriate measures for delivering knowledge and technology to the >300 Million small Asian farmers in order to build a knowledge intensive agriculture (KIA).
Why Knowledge Intensive now? Impact of technology
The large number of smallholders in Asia is geographically spread, diverse and with varied needs.
Each farmer is an individual using techniques based on his/her knowledge either newly learnt or inherited.
These small farmers were responsible for using the first set of disruptive innovations during the 1st Green Revolution of the 1960s, such as high yielding crop seeds, fertiliser and pesticides to sustain the demand for food.
However, the lessons learnt from the 20th Century are that farmers individually use the physical inputs in different ways, and often inefficiently.
So a key development challenge is still how to level up all farmers with the same knowledge to use these inputs, effectively.
The growth of knowledge in digital form, and the increasing capacity of small farmers to access digital information provide opportunities to do just this, leading to KIA.
The new twist in KIA is the exponential introduction of ICT in various forms.
Through its use of knowledge in combination with physical inputs and technology, KIA can augment traditional agricultural extension systems and democratise the sharing of knowledge.
It also has the added attraction of luring millennials and other new entrants into agriculture at a time when almost all countries are faced with the twin problems of an ageing and declining farming population.
Creating new economic sectors: AGTECH and FINTECHA
Major player in these areas, AgFunder, has defined agtech as individual technologies or a combination of technologies related to farm equipment, weather, seed optimisation, fertiliser and crop inputs, irrigation, remote sensing (including drones), farm management, and agricultural big data. Agtech has gained widespread attention and considerable investment totaling an estimated $7B in 2014 and 2015 alone.
The related FinTech is an industry composed of both startups and established financial and technology companies that use new technology to compete in the marketplace of traditional financial institutions to deliver financial services.
Fintech has skyrocketed to billions of dollars by the beginning of 2015, and is helping bring new technologies to farmers must faster than the traditional route.
The growth in KIA offers new opportunities for new technologies, new physical inputs and new financial mechanisms to ensure these become socialised into the farming sector.
Increasingly two new words, “agtech” and “fintech” have crept into the discourse.
But are these “old wine in new bottles” or are they truly “new wine in new bottles”?
More than any other sub-sector, urban farming has seen some “new wine” in the form of indoor farms using fully integrated technology with the growing of vegetables under controlled artificial environments of LED lighting, temperature, carbon dioxide, water and fertiliser.
Electronics industry giants like PANASONIC have developed fully commercialised indoor high tech farms to produce vegetables in Singapore.
Korea and Japan have over a hundred of these indoor high tech farms. South Korea has even established a government department to provide oversight and promote high tech farming.
Digital information becomes knowledge.
One company, AgFunder, that combines FINTECH with AGTECH has shown that the agri-food sector is the least digitised of all modern sectors, when compared to the airline and hotel sectors.
The key considerations that need to be taken into account in KIA are the growth of knowledge in digital form, the increase in smallholder capacity to access digital information, and the large, disparate population geographically spread that we call smallholders — all these point to new ways to get knowledge out to the smallholders who need them.
KIA as a disruptive innovation in farmingA “disruptive innovation” is one that creates a new market and value network and eventually disrupts and displaces established markets.
Historically, farming has evidenced many disruptive innovations, from the first domesticated crops and animals, to hybrid corn in the 1920s, the short-stemmed high yielding rice varieties of the 1960s, biotech crops in 1996, and now digital agricultural technologies and genome edited crops and animals in the 2010s.
But as the ADB Workshop noted, KIA has potential to become the latest and most impactful game-changer because it “connects the dots” to link technology, knowledge, the farmer and the financier.
The FAO February 2017 report on “The Future of Food and Agriculture” stressed that to meet the 50% increase in demand for food by 2050 requires significant increase in investment and technology generation —US$ 265 Billion per year in investments are needed.
KIA has potential to attract significant new investments so that agriculture can be more efficient and productive.
Going forward, fintech and agtech will see new players in the private sector bypass or complement traditional financial and technology players in getting to small farmers, but they will still need governments to set the enabling environment.
So it is important that public-private sector dialogues be held to ensure this disruptive innovation benefits those countries which need it to ensure growth in bio-based economies and improved food security.
NOTE: Paul Teng is Adjunct Senior Fellow at the Centre for Non-Traditional Security (NTS) Studies, S. Rajaratnam School of International Studies (RSIS), Nanyang Technological University.
He formerly held leadership positions at The WorldFish Centre, The International Rice Research Institute and Monsanto Company.
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