The pandemic has shone a light on vulnerabilities in the agriculture sector, and underscored the importance of ensuring food security and strengthening the agricultural chain. Some of the major problems that Nigerian farmers face include limited access to information and the market, insufficient financial support, and logistics and transport issues. However, agri-tech solutions are offering new support for farmers on these challenges.
As traditional financing meets less than 3% of smallholder credit needs globally, crowdfunding is becoming an important financing tool in Africa, with start-ups seeking to connect farmers and investors. One example is Nigerian start-up Farmcrowdy, which seeks to increase food production and promote youth participation in the sector, and focuses on connecting farmers with sponsors via a digital platform. Investors are able to fund a farming cycle of three to six months from as low as $200 to $750. The company employs a share-of-profit model, whereby the revenue is split between the sponsors and farmers, and 20% is retained by the start-up. Since its creation in 2016 the company has raised more than $15m for 25,000 farmers. Other crowdfunding platforms that have had notable success in Nigeria include Thrive Agric, Payfarmer, PorkVest, Farm Funds Africa and PorkMoney.
Market Access & Transport
The agriculture sector is exposed to logistical challenges and unnecessary delays at security checkpoints that prevent products from reaching the market on time, which causes post-harvest losses and food wastage along the value chain. According to the June 2020 report “Responding to the impact of Covid-19 on food security and agriculture in Nigeria” by PwC, around 70% of fresh agricultural product spoils during transit. As a result, not only do farmers experience losses, but consumers have access to less food at inflated prices. “Reducing post-harvest losses should be the single, most important priority for the agriculture sector to become more sustainable,” Mukul Mathur, country head of Olam Nigeria, told OBG.
To help tackle this problem, start-ups are connecting farmers directly to the market, or are buying produce from growers in remote areas and selling it in urban centres with the help of technology. Agriple, for example, connects farmers in Nigeria to consumers, who mostly buy in bulk, via an online platform, and is responsible for coordinating logistics. FarmyApp, meanwhile, is an online marketplace where farmers list their products before the harvest date, giving them control over prices and production, and creating healthy competition between farmers. Notably, FarmyApp has allowed Nigerian farmers to continue their operations during the Covid-19 pandemic, despite lockdown restrictions.
Nigerian agri-tech start-ups such as Verdant Agri-Tech are facilitating farmers’ access to information and recommendations about weather, soil and market conditions in real time. The start-up offers market information, managerial support, agricultural extension and access to financial services to rural farmers via mobile phone. Meanwhile, OCP Africa, an enterprise focused on the sustainable development of agriculture in Africa, has adopted an approach that enables agricultural cooperatives and local farmers better communication with their suppliers and consumers. Through its app, OCP Africa facilitates the distribution of information on farmers’ inputs to their suppliers, as well as provides access to financing, insurance and advisory services.
Despite the fact that more than one-third of its labour force is employed in agriculture, Nigeria has one of the least mechanised farming industries in the world, with a tractor density of 0.27 per ha, compared to the 1.5 per ha recommended by the UN Food and Agriculture Organisation. With a view to increasing mechanised farming in Nigeria, agri-tech start-ups such as Hello Tractor help farmers access tractor services in a collaborative way and at an affordable rate, enabling them to plant on time and boost yields.