Digital Agriculture in Kenya

Digital Agriculture in Kenya

Agricultural machinery and Mobile money are used by farmers to build transaction histories as soon as they begin collecting payments from agricultural consumers for the products they have sold. Using mobile money to pay utility bills or make loan repayments creates a transactional history over time. As mobile money usage rises, so does this problem. Performing credit risk evaluations on farmers and approving loan disbursements will be made easier in the long run thanks to financial institutions sharing data on farms and farmers. For long-term asset finance, these two procedures are essential.

It is still difficult to educate and enlighten farmers on how their information could be utilized in other contexts. While some methods include the use of field agents to negotiate data sharing permission with farmers, others use the use of SMS or USSD to distribute information. Despite all of these efforts, there is still a lack of clarity among farmers on the use of their data. Different solution providers made contradictory assertions about the ownership of the data our analysis uncovered. With the exception of Tulaa, the majority of the solutions claimed ownership of the farm and farmer data they had acquired. Tulaa only claimed title to any data that they had processed and analyzed; the company acknowledged that the raw data belonged to its farmers.

Kenya’s Agriculture Sector

In terms of both the country’s economy and the well-being of its citizens, agriculture is of critical importance in Kenya. Agriculture is responsible for 31.5% of GDP and the employment of 38% of the workforce. Small-scale farmers, crop purchasers, and agribusinesses have witnessed the rise of digital solutions that attempt to improve efficiency in the agriculture sector during the last several years. For the most part, these digital solutions make use of Kenya’s high penetration of smartphones and mobile money to formalize agricultural value chains and make them more accessible to the poor. These digital agricultural solutions are examined to see whether they may help small-scale farmers get access to credit. We will focus on three examples:

  1. Last-mile digital technologies that automate transactions (such as procurement payments, digital receipts, and so on) and expedite communication between smallholder farmers and agribusinesses, replacing manual procedures. Digital tools that digitize transactions and replace manual procedures with mobile-based solutions. Two such programs are Virtual City and DigiFarm for Enterprise.
  2. Market connection technologies help to formalize agricultural value chains by allowing crop growers and buyers to engage with one another through an online platform accessible via mobile devices. Twiga and Tulaa spring to mind as two instances.
  3. “One-stop shops” or direct-to-farmer hubs, enable farmers to accept orders from consumers while also enabling third-party agricultural service providers to deliver services directly to farmers listed on the hub. The DigiFarm for Consumer offering is the most prominent example of this kind of service.

These solutions provide a vast amount of farm and farmer data that may be utilized to construct economic identities and increase financial inclusion for farmers by solving pain points for their users (farmers, agribusinesses, crop aggregators, and crop purchasers). The first stage in creating an economic identity is to register farmers and create digital profiles on the system that include personal information as well as information about their agricultural activity.

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