Digital Agriculture Platforms Understanding Innovations In Rural Finance And Logistics In Uganda S Agrifood Sector

Agriculture is the mainstay of Uganda’s economy, contributing about 25% of the GDP, a third of the ex port earnings and almost all the country’s food requirements. Yet, the sector still faces various challenges that affect production and the income derived from it. Systemic issues impact smallholder farmers' livelihoods across markets, land, skills, and capital, with cross-cutting social exclusion issues. Effective application of digital agricultural technologies has emerged as a catalyst in addressing productivity and efficiency challenges and enhancing inclusiveness in agri-food systems. Digital technologies have shown potential to address bottlenecks in access to extension services, marketing systems, suitable financial products, reliable weather information, transport services and logistics as well as supply chain management. Scaling of digital agricultural technologies in Uganda is critical for improving productivity and addressing challenges in the agricultural sector. However, for scaling to be undertaken effectively and inclusively, there is need to address the barriers that limit the use of digital innovations for some populations. However, the issues surrounding scaling and inclusivity of digital services are not well understood. This study therefore sought to contribute to bridging this knowledge gap through an assessment of the existing digitally enabled innovative cross-value chain services to gain insights into how the services are addressing inefficiencies, creating opportunities for improving efficiency and inclusiveness as well as identifying promising innovations for scaling. Specifically, the study focused on innovations in finance and logistics for value chains. For finance, the study specifically looked at digital payments, credit, and insurance, while for logistics, the focus was on supply chain management, transportation, traceability, digital platforms for e-commerce, and (cold) storage across value chains.

Finance and logistics services for agricultural value chains based on technological innovations exist in several LMICs, but they are not often extended to small holders or SMEs working in the agricultural midstream. We consider the constraints to adoption of those services faced by smallholders or SMEs. Finance and logistics improvements hold promise for increased employment, but research is needed to understand where employment gains are most likely. All value chain innovations must carefully consider possible equity-efficiency tradeoffs to ensure change does not negatively affect poor and vulnerable populations.

The digital agriculture revolution holds a promise to build an agriculture and food system that is efficient, environmentally sustainable, and equitable, one that can help deliver the Sustainable Development Goals. Unlike past technological revolutions in agriculture, which began on farms, the current revolution is being sparked at multiple points along the agrifood value chain. The change is driven by the ability to collect, use, and analyze massive amounts of machine-readable data about practically every aspect of the value chain, and by the emergence of digital platforms disrupting existing business models. All this allows for drastically reduced transaction costs and pervasive information asymmetries that plague the agrifood system. The success of the digital transformation, however, is not guaranteed as the risks it brings are numerous, including those related to data governance and inadequate competition within and between digital platforms. What’s Cooking: Digital Transformation of the Agrifood System investigates how digital technologies can accelerate the transformation of the agrifood system by increasing efficiency on the farm; improving farmers’ access to output, input, and financial markets; strengthening quality control and traceability; and improving the design and delivery of agriculture policies. It also identifies a key role for the public sector in maximizing the benefits of this process while minimizing its risks, through enabling an innovation ecosystem featuring open datasets, digital platforms, digital entrepreneurship, digital payment systems, and digital skills and encouraging equitable technology adoption.

This report aims to identify the different scenarios where the process of digital transformation is taking place in agriculture. This identifies those aspects of basic conditions, such as those of infrastructure and networks, affordability, education and institutional support. In addition, enablers are identified, which are the factors that allow adopting and integrating changes in the production and decision-making processes. Finally identify through cases, existing literature and reports how substantive changes are taking place in the adoption of digital technologies in agriculture.

Information and communication technologies (ICTs) offer unprecedented opportunities to transform agriculture in Africa. ICT innovations are opening up exciting opportunities for young entrepreneurs to engage at various stages of the agricultural value chain, from developing solutions that make the agri-food sector more productive to setting up services that facilitate market access for smallholder producers. The stories told here show that ICTs are enabling farmers to access information about everything from the weather to market prices, from agricultural best practice to controlling pests and diseases. Mobile platforms are also helping farmers to gain access to credit and therefore the means to improve their productivity and incomes. In short, ICTs are helping to make agriculture more profitable and sustainable.

This publication, produced by FAO and Zhejiang University, examines how rural e-commerce could advance the digital transformation of agri-food systems, including increasing production efficiency, expanding farmers’ market access, improving poverty alleviation, fostering agricultural entrepreneurship, and attracting young generations back to their villages for economic revival and rural revitalization. It is highlighted that an enabling ecosystem with favourable government policies and strategies, public-private partnerships and innovative business models is of great importance to accelerate the development of rural areas in China, and generate larger economic, social and environmental impacts. As the largest developing country in the world, the experience of digital agriculture transformation in China could be shared with other developing countries. The report also discusses some of the challenges encountered and lessons learned during the development of rural e-commerce, as well as the proposals for the way forward.

The recent CTA workshop on ‘catalysing actionable knowledge to enhance next-generation ACP agribusiness through digitalisation’ identified five intersecting drivers that explain what farmer-oriented agribusinesses expect to achieve by investing in digitalisation: reduced risk, raised productivity, increased efficiency, improved decisions, and enhanced market access. Participants argued that digital interventions all serve one or more of these, depending on specific local needs and situations. A critical factor underpinning what works in all these areas is the economic sustainability of the business models used to deliver value and services.

Agri-Food 4.0: Innovations, Challenges and Strategies addresses new research on digital technologies in the Agri-Food industry, including smart packaging, smart warehousing, effective inventory control, blockchain technology, artificial intelligence, and other Industry 4.0 concepts.