**Updated to include comments from Gerdien Velink of Impact Terra **
Impact Terra, an agtech and fintech for-profit social enterprise, has raised nearly $3 million in grant funding to digitize smallholder farming in Myanmar.
The mobile and web-based app Golden Paddy is the crux of Impact Terra’s work in mobile connectivity for smallholder farmers. The platform 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.
The bulk of Impact Terra’s new funding will support Smart Agriculture Myanmar (SAM), a project that uses remote sensing to provide advice to farmers about crop timing, pest management, and irrigation. Impact Terra secured a $2.3 million grant from Netherlands Space Office Geodata for Agriculture and Water (G4AW) Facility, which supports projects that convert geodata (basic information about geographic locations) into usable insights for farmers about local climate conditions, weather patterns, and other hazards.
Working with the satellite analytics company Satelligence, SAM will evaluate satellite images for insights about agricultural crop performance, with the long-term goal of collecting data about the particular challenges that farmers in Myanmar face. From the data, Impact Terra will build a framework for credit assessments so that financial institutions can better understand what farmers need, the struggles they face, and increase the accessibility of loans.
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Financial Access, a financial services firm focused exclusively on emerging markets, will support its efforts to model credit risk and develop loan products. The Centre for Economic and Social Development, the Myanmar Ministry of Agriculture, Livestock and Irrigation, and Wageningen University & Research will provide additional agricultural modeling, extension, and training support.
Alongside, Leap201, a venture philanthropy organization that also contributed to the company’s funding, partially funded a pilot of Impact Terra’s On-Demand Advice project (ODA), which integrates image recognition into the Golden Paddy app to help farmers identify pests and diseases early on. Plant pathologists will at first analyze photos uploaded by farmers, but eventually, the process will be algorithmic and automated.
The App in Context
Impact Terra thinks that Golden Paddy can help to address many of the challenges that smallholder farmers face by bringing the nationwide embrace of mobile digital technologies into rural areas. In Myanmar, agriculture makes up 25% of the GDP, but nevertheless, productivity and profit levels are lower than in neighboring countries. By comparison, in France, Portugal, and Italy, agriculture accounts for 2% of the GDP.
Moreover, smallholder farmers make up 95% of farmers in Myanmar, where agriculture is seen as a primary tool for economic development and a key tool for poverty alleviation. Nevertheless, most farmers experience rates of crop loss between 40 and 60%, which the FAO attributes to a lack of access to tools like dryers, harvesters, and warehouses.
Loans from microfinance institutions and banks could help farmers acquire such equipment, but in Myanmar, both have struggled to cater to the agricultural industry, faced with uncertainty about how to best assess credit risk. Impact Terra plans to address this problem by collecting data about the farmers’ financial situations through the Golden Paddy platform and analyzing it to create models for credit risk assessments.
Investment in the infrastructure to support mobile technologies in Myanmar boomed over the past four years. Mobile penetration was 9.5% in 2013, 77.7% at the end of 2015, and now hovers around 80%. The spike in mobile phone usage, though, has not been without challenges. By and large, infrastructure is poor, the demand for electricity outpaces supply, and government-imposed restrictions limit use.
Nevertheless, mobile phones provide valuable access to information for many farmers. Rather than relying on the prices a broker or middleman demands, farmers can do independent research and find the best price.
“Previously there was no way to reach this target group,” Gerdien Velink of Impact Terra told AgFunderNews. Farmers have long relied on lacking offline channels to access to relevant data about agronomic insights, market prices and microfinance. With Golden Paddy, Impact Terra claims it reaches even the most remote smallholder farmers, providing them with much-needed information and insight.
Impact Terra isn’t alone in developing digital tools for smallholder farmers rooted in local needs. Wefarm, a UK-based company with offices in Kampala, Uganda and Nairobi recently raised $5 million in a second seed round last week. The company helps farmers in East Africa access information about weather and crop yields via SMS.