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Bayer, Netafim, Swiss Re, and IFC Team-Up to Bring New Tech to Smallholders

April 24, 2018

A new coalition of agriculture and finance industry players is working together to find new ways to get technology into the hands of smallholders farmers. Global crop inputs provider Bayer, irrigation technology company Netafim, global reinsurer Swiss Re and the International Finance Corporation (IFC), a member of the World Bank Group, have joined forces to form the Better Life Farming initiative in order to find holistic, market-based solutions for improving the productivity of smallholder farmers in developing countries. 

The project is based on the idea that with modern agriculture technologies, like those offered by Bayer and Netafim, smallholder farmers could increase their yields and have more impact on their surrounding economies and communities. However, many developing countries are lacking the informational infrastructure to support the institutions, like banks and insurers, that make modern agriculture businesses possible.

According to the IFC, 450 million smallholder farmers feed 80% of the developing world. But, without credit histories, often-unbanked smallholder farmers find it difficult, if not impossible to get the loans necessary to adopt new technology.

Without historic yield or weather data, farmers can’t get crop insurance to protect from extreme weather events like drought. And without insurance, banks are even less likely to lend to farmers because their income is not even partially guaranteed. The nature of this cycle is what led the coalition to focus on finding solutions for the entire smallholder ecosystem, with the beleif that this focus will yeild a more lasting approach.

The goal is to create markets and business models that can boost producitivity and financial and environmental sustainability for these farmers using the expertise each player brings to the table.

“IFC is pursuing an ecosystem approach to supporting smallholder farmers along all aspects of the value chain. This means bringing together input suppliers, financiers, and off-takers along with training for business skills and agronomic practices through a relationship that is sustainable, mutually beneficial and reinforced by a conducive business environment,” said Sérgio Pimenta, IFC Vice President for the Middle East and Africa. 

The first step taken has been a series of pilot studies running since mid-2017. Farmers in these pilot studies gain access to advanced seeds, crop protection, irrigation, training, finance, and insurance, depending on the individual situation.

On the ground technical support is provided by the IFC field teams, which provide livelihood assessments developed by the World Bank Group, business training including financial literacy and household budgeting skills, and agronomic advice.  These field officers then visit the pilot farms on a regular basis to discover their needs and challenges.

The program has begun with pilots in India, the Philippines, and Kenya. According to IFC, in the initial India pilot of 20 farmers, green chile yields have already increased 200% and the farmers’ incomes have grown by 300%. This pilot grew from 20 to 250 smallholders in a matter of months. The pilot in the Philippines grew from 40 rice farmers with 69 hectares in July 2017 to 300 farmers by November 2017. 

The government of Japan will fund the next pilot to begin in a second location in Africa. Apart from increased success for farmers, the IFC will be looking to the successful pilots to structure financing solutions and may eventually make available IFC financial products, so that the smallholder ecosystems in question can have ongoing access to the technologies tested in the pilots through healthy local markets.

Several agtech startups also work adjacent to the areas of focus for the initiative. Impact Terra delivers information about local crop prices, weather forecasts like flood and drought warnings, and can connect farmers to lenders offering capital at accessible interest rates.

Wefarm uses AI technology to connect small-scale farmers to crowdsourced information by enabling them to share techniques and advice on anything from how to battle a disease to how to increase their income, through SMS or online in their own languages.

FarmDrive generates credit scores for farmers for banks to use to loan to them by using data input by farmers into its smartphone and SMS mobile app — an app that helps farmers to track their revenues and expenses — as well as satellite, agronomic and local economic data.

And, myAgro is a mobile savings system enabling farmers to pay for crucial inputs like seed and fertilizer in pre-paid installments.

photo: Better Life Farming

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