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The Many Ways Digital Technologies Can Improve The Lives of Smallholder Farmers

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There are nearly 500 million smallholder farmers in the world today.  A significant proportion of these farmers are poor are insecure and have limited access to markets and services.  Because of this, their choices are also constrained.  They still plod on and support their families, estimated to be around 2 billion people.  The smallholder farmer suffers from multiple challenges such as erratic and extreme weather events leading to crop loss, low productivity, lack of finance and lack of bargaining power in the market. However, aggregation of farmers through cooperatives, producer organisations or through other aggregating agencies helps in leveraging digital technologies that improve their livelihood.

Firstly, using a basic digital technology such as farm management helps improve operational efficiency of the farm, which in turn leads to increase in income of the farmer.  The second most important concern is environmental degradation that has become rampant.  Here, precision agriculture advice that is available through digital, data-driven technologies advises on the precise amount of water, fertilizer and pesticide to be used on different areas in the farm.  This helps conserve resources and limit environmental degradation of the farm. Farmer advisory is another digital solution that alerts farmers on weather events, helps manage pest and diseases and also provides market price alerts.  This helps the farmer take concrete corrective action to prevent crop loss.  Awareness of market prices helps the farmers bargain for the best prices in the market for their crops. 

Again, the trend today is all about going back to organic food and fiber.  In many cases, organic certification enabled by digital technologies has helped hundreds of thousands of organic farmers earn premium pricing for their organic produce.  SourceTrace has worked with several organisations that have engaged with farmer groups ranging from the Soliga tribal coffee growers of Karnataka to organic oil palm growers in Sierra Leone.  Organic certification has helped these farmer groups earn 10 per cent more for certified organic produce compared to conventionally grown produce.  This has led to both social and economic improvement in their lives.

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Traceability is a fast-upcoming digital technology that enables tracking of the entire supply chain.  In several cases, ethical brands demand certain standards to be met, such as FairTrade, UTZ-Rainforest Alliance and the like.  Traceability helps the buyer trace the source of produce.  Brands that buy such produce in turn provide the farmer with a guaranteed and sustainable market. Another major obstacle that farmers face is that of not being financially included, and thereby losing out on access to loans and crop insurance.  Digital technology helps combat this lacuna by providing a platform on which all farmer data is stored.  This platform can be integrated with financial institutions such as banks and insurance companies to enable them to assess the credit worthiness of the farmer.  This greatly eases the farmer’s route to securing loans and insurance. 

Digital solutions are also used to manage farm transactions.  For example, companies that provide input to farmers and in turn procure their produce need to maintain a precise financial ledger.  Doing so on a digital platform speeds up the process while keeping all data intact. SourceTrace’s customers have reported that using the digital platform has helped cut down the payment cycle to farmers from 8 weeks to 2 weeks.  Another positive fall out of this technology is the overall transparency of transactions and thus a more trusting relationship between farmer and the procuring company. Digital technology also enables the creation of a market linkage platform that connects producer and buyer.  This overcomes the challenges that farmers have faced in the past such as middlemen taking off a disproportionate amount of the profit.  A digital platform, on the other hand, enables the farmer to sell at best price and directly in the market.

These are some of the ways in which digital technologies can reduce the many inequalities that farmer communities face and improve their lives.  These technologies just need to be harnessed in the right way to enable a more sustainable way of life for those who feed the world.

Dr. VenkatMaroju

CEO, SourceTrace


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