While many start-ups focus on developing solutions for urban areas, a growing number are turning their attention on how to tackle problems in rural regions. Here the challenges are far steeper, but the rewards for local communities are much higher.
An estimated 65% of Sub-Saharan Africa’s labour force works in the agriculture sector, which accounts for one-third of the region’s GDP, according to the World Bank. At the same time, rural areas are home to some of Africa’s poorest communities.
Increasing agricultural productivity is therefore critical to lifting large numbers of rural households out of poverty.
Enter technology and innovation, which can play an important role in supporting Africa’s agriculture sector, empowering farming communities with information that can help drive efficiencies and ultimately increase yield and profit.
Unlocking this potential is arguably one of the largest challenges facing the region’s start-ups, as here the levels of mobile and internet penetration are at their lowest and the target customer-base has precious little disposable income. With the support of governments, academia and NGOs, a growing number of start-ups are developing innovative solutions and services that navigate these obstacles in order to help support rural communities living close or under the poverty line.
Insurance for the future
Often this means tackling one issue at a time. In the case of Pula Advisors, that means bringing insurance products to small farmers for the very first time.
Insurance penetration is extremely limited across rural areas of Africa, putting small farms at risk from low productivity that can lead to devastating consequences. Pula Advisors hopes to break that cycle of poverty by acting as a bridge between the insurance firms and small farmers.
“We are a team of actuaries and agriculture economists that get insurance products priced in a way that insurance firms understand, and get the insurance products out to farmers in a way they understand,” says Rose Goslinga, Director of Pula Advisors.
Pula Advisors achieves this by collecting data, be it from weather stations, governments, private farmers or satellites, that is uses to generate yield estimates that can help farmers get on the insurance ladder for the first time.
Yet the innovation doesn’t end there. Pula Advisors also had to think strategically about how to raise education among farmers to the benefits of insurance.
“Insurance is high volume, low margin. And we are often working in environments where the insurance penetration is 0%. How do we get these insurance products to the masses?” says Goslinga.
It explored new distribution channels, bundling its insurance products with seed and fertiliser companies that provided farmers with insurance coupons to register at local shops.
The hard work is beginning to pay off. In 2016, Pula Advisors succeeded in getting structured insurance products to 400,000 small scale farmers across five African countries. “As the data sets get richer there is more opportunity to support smaller farmers,” says Goslinga. “Satellite technology is going through a revolution here, and how we interpret that satellite data along with ground data, will be extremely valuable.”
In the longer term, emerging technologies such as drones and Internet of Things (IoT) could also play a role in generating richer data sets. “We already use remote sensor data to monitor farms, and although we haven’t used drones so far, I think that’s something we will certainly see more of in the future.
Drones enter the field
One company already looking ahead to drone technology is DroneClouds; a Cape Town based partnership between IntegriSense and Afrolabs.
DroneClouds aims to give farmers the benefits of modern remote sensing through affordable and on-demand crop insights. It does this via a cloud platform that uses aerial imagery generated through its global network of drone operators and satellites.
“As the data sets get richer, there is more opportunity to support smaller farmers.”
Founded in 2015, the company quickly went onto win a competition by the South African National Space Agency (SANSA) and Airbus Defence and Space (ADS) for its cloud-based innovation.
With the support of these organisations, Droneclouds has begun scaling its operations and finding new ways to use earth observation data to support farming operations.
“We are able to look at a region of small subsistence farmers and identify gaps in their education based on their farming activities,” says David Campey, Founder at Afrolabs and Cofounder at DroneClouds. “So for example we analyse nitrogen use and see if there is a pattern of not applying or over applying nitrogen in the fields.”
David admits that current product offering is a “bit too high-tech” for many small African farmers, and that the company is still working out how to make the product “super affordable”.
“We are generating lots of data which will create further insights for the academic world as well as provide further learning for farmers. Currently our work is focused on commercial farmers with over 50 hectares, but in the long term, we will focus more on smaller farmers with less than 10 hectares and how we can help them out of poverty,” says David.
Creating a network of local knowledge and expertise, including local governments, will also be key to unlocking the potential of the data sets generated by the satellite and drone networks: “Experts with local knowledge is a critical component to interpreting the map imagery. The next stage will be machine learning, but at this point, we rely on humans for local knowledge,” says David.
He also has high hopes for the future of drones and imagery acquisition technology moving forward. “I see the application of drone technology being like the rollout of mobile technology. Delivery drones bypasses the need to construct complex road networks. It’s a leapfrog technology,” says David.
“Similarly, with imagery acquisition technology, the drones replace airplanes and surveyors on the ground. It bridges a technological divide and takes something that was once only accessible to high-tech corporations and makes it available to small farmers.”
Innovating across the supply chain
Across the supply chain, start-ups are exploring new ways to empower farming communities.
Be it better ways to care for livestock, such as iCow, which allows farmers to register their cows and receive SMS reminders about milking schedules and immunisation dates as well as provide other nutrition or breeding tips. Or new platforms for farmers to share information, such as Kenyan start-up WeFarm, which has developed a peer-topeer (P2P) knowledge sharing platform targeting small scale farmers, allowing them to ask questions via SMS and receive responses from other registered users. Or new ways to trade, such as the Mifugo.trade platform; an online exchange that directly connects livestock producers and buyers. It allows a network of training assessing agents to visit livestock sellers, evaluate animals and upload relevant information on an animal sale to the platform via their smartphone. Buyers then bid for the animals on the platform.
“Across the supply chain, start-ups are exploring new ways to empower farming communities.”
Even so, the low hanging fruit for start-ups remains in urban areas, where development is happening fast and the emerging middle class lives.
Efforts to assist rural communities are often subsidised by government, academia and CSR. Moving forward, the advancement of farming practices across Africa will hinge strongly on greater government support.
“Governments have a big role to play,” concludes Rose at Pula Advisors. “They need to step up and invest in the farmers that are feeding the market. We want to see them take more responsibility. There are huge rural population and smart policies can help economic growth.”
Addressing a genuine problem
Ghanaian start-up mPedigree is most widely known for its mobile pharmaceutical anti-counterfeiting solution. Launched some 10 years ago by social entrepreneur Bright Simons, mPedigree set out to tackle the growing issue of counterfeit drugs – African markets have been flooded with fake and poor-quality drugs from the global counterfeit drug trade, which has sadly become a multi-billion dollar industry.
mPedigree allows consumers to verify the authenticity of their medicinal products by text-messaging a unique code found on the product – usually in the form of barcodes and scratch-off stickers. The request is routed to mPedigree’s servers and then consumers receive an instant response to authenticate their purchase.
The service helped manufacturers and regulators to secure the drug supply chain, and was quickly rolled out to neighbouring Nigeria, where it experienced further success. Today, the service is found in over ten countries across Africa and Asia.
mPedigree is now increasingly turning its attention to the agricultural sector in order to better protect farmers from counterfeit seeds. In 2015, the startup partnered with the Uganda National Bureau of Standards (UNBS), Feed the Future Uganda Agricultural Inputs Activity and the Ugandan corporation RenPublishing to roll out its solution to the country’s agricultural sector. In Kenya, the company also partners with the Agric Ministry through the Kenya Plant Health Inspectorate Service (KEPHIS) to track all seeds planted in the country.
“Our solutions can work across a variety of sectors. We found that farmers were purchasing seeds during farming season, to only discover they were fake – which had a disastrous impact on their farming as well as the local economy,” says Eugene Boadu, Head of Corporate Affairs at mPedigree.
It is a harder challenge raising awareness in rural areas, says Eugene, where education levels and exposure to technology are much lower than in urban areas.
“We want consumers to be sure that the products they are consuming are verified and genuine. We want to change consumption patterns across the region,” he says. “At the moment, we are exploring new ways for companies to put the right information across to consumer via their phones, rather than traditional advertising channels.”