ICTworks

The past decade has witnessed an explosion in the global supply of agriculture technology innovation. State of the Digital Agriculture Sector report offers first-of-its-kind global benchmark of ICT4Ag ecosystem state and penetration across LMICs, including:

• In-depth analyses of the latest state of funding & investment, gender & social inclusion, and digital climate-smart agriculture landscapes.
• Detailed regional insights across South Asia, Southeast Asia, Sub-Saharan Africa, and Latin America & The Caribbean, with direct comparisons.
• Tangible and quantitative future outlooks and sector’s projections by 2033.

AgriTech Solutions Are Globally Distributed

Across Latin America and the Caribbean, South Asia, Southeast Asia, and sub-Saharan Africa – collectively referred to as low- and middle-income countries – LMICs – we identified nearly 1,400 currently active ICT4Ag solutions. These solutions represent six different ICT4Ag use cases: Advisory & Information, Market Linkages & Access, Financial Access, Supply Chain Management, Enterprise Management & Efficiency, and Enterprise R&D.

The largest proportion is headquartered in sub-Saharan Africa (50%), though a significant number of solutions hail from South Asia (21%) and Latin America and the Caribbean (18%) regions.

Despite showing the largest per-annum growth rate in the number of AgriTech solutions of any region over both the past five and ten years, respectively, Southeast Asia still accounts for a relatively small share of the total (7%). The remainder (~4%) are active in but headquartered outside of the LMIC regions of focus (i.e., in North America, Europe, Northeast Asia, or the Middle East).

ICT4Ag Solution Growth is Slowing

While nearly half of all AgriTech solutions active in LMICs were started in the past five years, there is a clear and consistent slowdown in the annual rate of new AgriTech solutions entering the market. The cumulative annual growth rate of the number of ICT4Ag solutions from 2012 to 2018 (33% p.a.) was more than three times larger than that for the next four years, from 2018 to 2022 (9% p.a.).

The trend of deceleration is common to every region, including relative upstart Southeast Asia. The deceleration certainly reflects a blend of increasing market maturity, consolidation, rationalization, and even COVID-19 impact—especially as sub-scale innovators start to close their doors and some venture-invested companies have shown themselves to be at the end of their ropes.

AgriTech Innovation is (slowly) Decentralizing

Only 10 markets represent the source of 67% of active ICT4Ag solutions in LMICs. While this is quite high, it is a slight decline from the 70% mark just five years ago, and the 75% mark of 2012. ICT4Ag solutions active in LMICs hail from an astounding 81 countries at present, up from 71 in 2018 and 42 in 2012.

While each LMIC region reflects fundamentally different market structures within them, the existence of (typically) one regional ICT4Ag innovation “hub” is evident:

• 61% of ICT4Ag solutions in Latin America and the Caribbean are headquartered in Brazil.
• 86% of ICT4Ag solutions in South Asia are headquartered in India.
• 45% of ICT4Ag solutions in sub-Saharan Africa come from Kenya and Nigeria.

This decentralization, in ICT4Ag’s most populous LMIC startup region, could portend a similar fanning out across other LMIC regions.

ICT4Ag Reach is Soaring

The reach of ICT4Ag is continuing to soar, though a lot of headroom remains. Across LMICs, we estimate that ICT4Ag solutions have amassed upward of ~50 million active users. This amounts to about 10% of smallholder farming households in LMICs.

Under the positive scenario, we expect this number to grow to 224 million farmers actively using ICT4Ag solutions by 2030, reaching a 16% growth rate. We are estimating the number of “active users”, as opposed to simply the number of registrants, to allow us to consider the impact of these tools on farmers’ economic and social lives.

More than half of current registrations come from South Asia—more specifically, India—where we have observed several ICT4Ag pioneers balloon to well above 15 million registrants and seen several others grow from scratch to >2.5 million registered users in the past five years. Still, with 160 million smallholder farmers in India, these are still the early days of sector growth.

AgriTech Impact is Still Mixed

We are getting a clearer picture of the impact of AgriTech, but there is still more “noise” than “signal.”

Theoretical impact pathways point to the potentially transformative role of AgriTech in economic, environmental, and social outcomes for farmers and stakeholders across agricultural value chains. To date, the “evidence” remains mostly anecdotal and housed in innovators’ marketing collateral.

Professional and academic impact studies have generally been limited to “economic” aspects of impact and have been centered on validating positive rather than potential negative impacts from ICT4Ag deployment. Still, we are gaining a better understanding over time as to how, and under what conditions, different ICT4Ag solutions are generating positive impact.

6 Ideas for Greater ICT4Ag Activity

1. Support climate-smart policies: Focus on creating robust policy frameworks that promote climate-smart digital agriculture, taking into account industry standards, regional alignment, and infrastructure development.
2. Invest in capacity building: Emphasize training for a digitally native agricultural workforce, close knowledge gaps on D4Ag’s impact across diverse sectors, and promote digital literacy and empowerment especially among marginalized groups.
3. Sustain, boost, and diversify funding: Drive more adaptive outcome-oriented funding structures, identify and address principal funding gaps, and ensure investors incorporate impact into core investment processes and structures.
4. Accelerate infrastructure development: Expand funding pathways for essential infrastructure, whether physical (i.e., rural telecommunication, warehousing, cold storage, and environmental monitoring technologies) or digital (i.e., data warehousing, farmer/ land registries, environmental and demographic data layers, etc.).
5. Foster collaboration & resource sharing: Encourage multi-stakeholder engagements, comprehensive and accessible data on D4Ag innovations in LMICs data- sharing platforms, and strategic partnerships—both within and across the regions—to collectively address common challenges and visions for D4Ag and boost funding to the sector.
6. Focus on end-user needs: Support and encourage innovators to differentiate with clear value propositions, embed inclusivity, and prioritize deep user engagement. Support and encourage primary producers to experiment, feedback, and advocate for capacity building.

A lightly edited synopsis of State of the Digital Agriculture Sector