Technology and African agriculture is seen by many as a dream combination and crucial if we are going to fulfil the food production opportunity across the continent. If any of us are asked about Africa’s natural resources, we all I think have an immediate image of its minerals and commodity reserves (particularly the part they have to play in current Sino investment programmes). But it is undoubtedly true agriculture and agribusinesses are each an enormous natural resource of their own in Africa, and it would be rash to forget them. When we consider impact investing in South Africa, then investment in technology to enhance the effectiveness of primary production in the region is certainly a key priority.
Especially so given the increasing demands a rapidly growing population will place on the farming sector in Africa: everything that can be done should be done to open up previously arid areas for cultivation of crops and livestock farming and maximise the use of Technology and African agriculture.
I’m delighted to see that digital technologies are playing their part in that process.
Despite the fact that we are increasingly hearing about the thriving start-up hubs in Cape Town and Lagos or the thriving Fintech ecosystem in Nairobi, Africa’s wealth is stored up instead in the red earth of its plains and farmlands, immense natural resources that are still largely untouched or undiscovered. And its not just mineral wealth either, Africa is equally as rich in agricultural resources where recent technological advances are turning the sector into a powerhouse for growth: a cornerstone for the Continent’s economic future.
Examples of Technology and African agriculture
The first example is this one at Groasis Technology (GT) which is an inexpensive new technique that allows crops to be planted in previously degraded farmlands and rangelands: structured to enable a water column to be built up under the bole of the plant by collecting dew and rainwater, which is then fed back over a period of time to prevent short term evaporation. The result is a plant capable of living for that crucial few extra weeks while it reaches out for the water reserves held deeper in the soil. These plants are much more resilient, able to survive lengthy periods of drought in previously arid areas and, more importantly, can be farmed to make the most of Africa’s land resources.
The Groasis technology also allows organic matter to build up in the ground, providing valuable nutrient sources for humans and animals so there are added possibilities for livestock farming too.
And at Lake Hawassa in drought-affected Ethiopia, Farm Africa are currently promoting “climate-smart” agricultural technologies that address rangeland degradation and promote diversification. Under the initiative, local Farmers are trained in the technologies necessary to sustain increased production levels and reinvigorate rural economies without damaging local ecosystems.
Small wonder then that delegates attending the August Digital Africa 2020 Conference in Tokyo found themselves focusing primarily on African Agriculture, where Digital Technologies are now an integral part of the Continent’s farming renaissance. Indeed, according to Michael Hailu Director of the Technical Centre for Agriculture and Rural Cooperation, “Without digitally transforming agriculture you cannot hope for sustained development”. New technologies are the key to unlocking the enormous potential of Africa’s agricultural value chains.
Digital technology and African Agriculture is now making it much easier for Africa’s Farmers to source development finance (with faster, non paper based loan applications) and historic supply bottlenecks are being freed up with devices such as the new Kobo360 app that matches real time transport resources with available farming stock. At the same time much improved digital literacy rates are enabling easier and faster payments to be made (in a region that has historically been significantly under banked).
So with characteristic simplicity, Jennifer Blanke, Vice President of Agriculture, Human and Social Development at the African Development Bank could barely contain her excitement in Tokyo: “There are juicy returns to be made…. African Agriculture is digitizing and offers great opportunities and potential. Now is the time for all of us to run in that direction…we all have to have our running shoes on”.
How Venture Capital Firms Can Support Technology and African Agriculture
Venture capital firms, with their strategic investments and commitment to fostering innovation, have the potential to play a transformative role in advancing technology in African agriculture. This essay explores the multifaceted ways in which venture capital can support and catalyze the intersection of technology and agriculture in Africa, contributing to sustainable development, increased productivity, and enhanced food security.
Investing in AgriTech Startups:
Venture capital firms can act as catalysts by identifying and investing in AgriTech startups that demonstrate innovative solutions for the agricultural sector. These startups often leverage technologies such as IoT, data analytics, and artificial intelligence to address challenges ranging from crop monitoring to supply chain optimization.
Facilitating Research and Development:
Support from venture capital enables AgriTech startups to invest in research and development, allowing them to refine existing technologies and explore new solutions. This fosters a culture of continuous innovation, driving advancements that can significantly impact agricultural practices in Africa.
Enhancing Precision Agriculture:
Precision agriculture, enabled by technology, allows farmers to optimize resource use and maximize yields. Venture capital investments can fuel the development and adoption of precision agriculture technologies, including GPS-guided tractors, sensor-based irrigation systems, and drone-assisted crop monitoring.
Improving Access to Finance:
Venture capital firms can collaborate with FinTech startups focused on agricultural finance. By leveraging digital platforms and innovative financial models, these startups facilitate access to capital for smallholder farmers who traditionally face challenges in securing loans and financial support.
Implementing Smart Farming Solutions:
The integration of Internet of Things (IoT) devices and smart sensors in agriculture, often referred to as smart farming, can revolutionize the sector. Venture capital funding supports startups developing and implementing these technologies, leading to more efficient resource management and data-driven decision-making on the farm.
Building Agri-Innovation Hubs:
Venture capital firms can play a role in establishing and supporting agri-innovation hubs. These hubs serve as collaborative spaces where startups, researchers, and farmers can work together to develop and test new technologies, fostering a supportive ecosystem for agricultural innovation.
Addressing Supply Chain Challenges:
The agricultural supply chain in Africa faces various challenges, including inefficiencies and waste. Venture capital investments can support technologies that enhance supply chain visibility, logistics optimization, and real-time monitoring, thereby reducing post-harvest losses and improving market access for farmers.
Promoting Sustainable Agriculture Practices:
Sustainable agriculture is a key focus for many venture capital firms. Investments in technologies that promote soil health, water conservation, and organic farming practices contribute to building a more sustainable and resilient agricultural sector in Africa.
Encouraging Data-Driven Decision-Making:
Venture capital-backed AgriTech startups often leverage data analytics to provide farmers with actionable insights. This enables data-driven decision-making, empowering farmers to optimize inputs, manage risks, and improve overall productivity.
Engaging in Capacity Building:
Beyond financial support, venture capital firms can engage in capacity building initiatives. This may involve providing mentorship, training programs, and networking opportunities to AgriTech entrepreneurs, empowering them to navigate the complexities of the agricultural and technological landscapes.
The symbiotic relationship between venture capital firms and technology in African agriculture holds immense potential for positive change. By strategically investing in AgriTech startups, supporting research and development, and fostering innovation hubs, venture capital can contribute significantly to the modernization and sustainability of African agriculture. The ripple effects of these investments extend beyond financial returns, influencing food security, rural livelihoods, and environmental stewardship. As venture capital continues to recognize and nurture the opportunities at the intersection of technology and African agriculture, it becomes a driving force for transformative change in one of the continent’s most vital sectors.
