Akintunde: Why We Must Address Low Technology Adoption in Agric Sector 

TECH HUB

While unsophisticated irrigation systems, climate change among others are classified as some of the challenges stunting development in the agriculture sector, experts have also highlighted low technology adoption by farmers as a major obstacle. In this exclusive interview, the President of one of the foremost commodities exchange platforms, AFEX Nigeria, Mr. Akinyinka Akintunde, harped on the need for increased access to technology and capacity building for farmers on how to use modern agricultural technologies. Ayodeji Ake brings the excerpts:

How has AFEX been able to maximise technology to foster the growth of the commodity market? 

For us, technology is an important aspect of building a thriving commodity market for Africa, particularly because of its role in increasing market participation and improving efficiency. The creation of a technology-enabled trading platform, a step ahead of the traditional physical trading floor, creates an efficient marketplace for buyers and sellers of commodities, allowing users to place orders, view market data, and execute trades electronically. Beyond wealth creation for more investors as a direct consequence of digital trading, leveraging technology for the commodity market has also increased market access for farmers in rural areas, and at the end of the exchange, increased liquidity for the market. 

Can you share with us the technological tools developed to assist small-scale farmers in Nigeria?

We believe in the importance of merging technology and physical infrastructure, and we created a technology stack that meets the needs of the value chain across farmers, processors, retail and institutional investors. The stack features two products: WorkBench and Africa Exchange. WorkBench is primarily a digital Business-to-Business (B2B) platform that connects farmers, traders, and agri-businesses to input financing, aggregation, inventory, payment, warehouse management, storage, and logistics services. WorkBench enables seamless interaction across the agriculture value chain, eliminating supply chain inefficiencies, while delivering maximum benefits to farmers and other parts of the value chain. Africa Exchange is a digital platform facilitating the trade of securitized commodities backed by a vast physical market, creating access to formal markets for farmers and eliminating the inconsistencies of the informal market. A salient feature of the digital trading platform is access to fair and transparent prices that enable farmers to negotiate equitable contracts even in the informal market. In prioritising the application of digital technology, we are building the infrastructure for the seamless integration of the physical markets with the financial market. 

What are some of the effort by AFEX to empower African farmers with AI and provide market access to them through the CODE CASH CROP (CCC) initiative?

Code Cash Crop (CCC), as a platform was created in response to gaps in the market across consolidation of technology and finance to grow the agriculture industry. At the foundation of Code Cash Crop is really the sensitisation of these relevant industries to increase interest and investment in the agricultural sector, whether this be financial investments, technology or physical infrastructure, which directly contributes to improving the livelihood of farmers and other stakeholders involved in food production. This year, for instance, we focused on scaling market-led innovations and at the ag-hackathon level, we invited solutions that directly addressed market challenges across data, extension, and logistics, three core areas where we see immense untapped potential to transform our agriculture economy and the commodities market. One of the solutions that was pitched at the ag-hackathon stage, tried to deploy some aspects of AI to build an extension platform for farmers with various simplified education modules. The bulk of solutions directly or indirectly addressed issues of market access by proposing solutions to logistics challenges or larger infrastructure challenges that limit access to the market on the continent. 

In this new dispensation of digital transformation, how has technology accessibility to farmers aided in combating food insecurity? 

The way we think about food insecurity, which then snowballs into how we tackle it, is predominantly from a food production perspective. The Food and Agricultural Organisation (FAO), highlights reduction in food availability as one of the major contributors to food insecurity. At AFEX, we are tackling this by working to increase farmers’ productivity, and we have integrated technology into this process first by creating WorkBench that allows us to disburse and manage input financing. Through the platform, farmers can get access to quality seedlings and fertilizers, as well as access to storage, reducing post-harvest losses and increasing agricultural productivity. In addition, we are tackling major problems across farmer identification, data aggregation, and financial inclusion through the E-Warehouse receipts system, which helps build creditworthiness for farmers. AFEX’s ComX has served over 80,000 investors in Nigeria and facilitated trades worth over USD 200 million since it was launched in 2020. The platform delivers impact to farmers and investors alike by enabling finance to be unlocked for the agricultural sector while allowing investors to build wealth. We have launched a new trading platform – Africaexchange, that replaces the ComX platform, filling the same gap in the market and providing more real-time data and information for commodity market players. 

Early this year, the United Nations forecasted that 25 million Nigerians could face food insecurity. What role can technology play in addressing this situation?

While there are technology frameworks that could be potentially leveraged to solve food insecurity, this problem is primarily and predominantly a structural challenge. Nigeria faces chronic food insecurity and by very definition, the FAO points out that chronic food insecurity is borne out of structural gaps that prevent people from accessing food. For 2024, we are focused on expanding some of our structural operations such as building smart warehouses and investing in machinery to drive up production, processing, and export capacity, essentially creating a solid infrastructure foundation for technology to thrive. Speaking of technology, we are doubling down on building platforms that allow multiple market participants to play in the commodities market with all the data and information that they need at their fingertips. Data continues to be a significant gap and one big way that technology can have an outsized impact. The availability of data would allow us to plan interventions better as a country and manage risks better in our day-to-day operations. 

  But low technology adoption is one of the challenges the sector is facing. How do we deal? 

We need to look at the agriculture sector from the smallest unit and then upwards. Farmers make up 80 per cent of food production in the country, and a majority of these farmers have little formal education and are disconnected or excluded from digital services such as the Internet, network service, personal digital identification etc. The ripple effect of poor infrastructure has kept technology adoption in the agriculture sector at 25 percent as of 2022. Dealing with this requires joint efforts across public and private partners to increase access to technology for the value chain by investing in adequate extension services, capacity building for farmers on how to use modern agricultural technologies, building infrastructure, such as roads and electricity, in rural areas, and promoting market specific Research and Development (R&D) of adoptable agricultural technologies. 

Aside from Low technology adoption, what other challenges do you see in the sector and how do you think they can be solved? 

Other challenges within the sector cut across high post-harvest losses, limited financing, poor access to markets, unsophisticated irrigation systems, climate change, and global events. On agriculture financing alone, the World Bank estimates that the value of the financing gap is worth $65 billion. Low financing in agriculture means that farmers do not have the necessary inputs, seeds, and fertilizers to produce enough to match demand. The ripple effect is that people are not able to access the necessary nourishment to stay healthy, and in the case that they can access food, they do so at incredibly high, unsustainable rates. Regardless of these challenges, we have witnessed growth in the sector and more interestingly, a growing interest in Agriculture from individuals and the government. However, we also believe that there’s much to be done to fully transform agriculture into a thriving sector and this requires first and foremost, long-term patient and innovative capital pumped into the sector, policy coordination at the level of the government alongside heavy infrastructure development to support technology advancements. 

Do you feel some policies should be developed and implemented by the government to support technology development? 

Technology of course cannot exist in a vacuum; it needs a suitable political environment that eases implementation processes. In the past couple of months, we have seen the current administration prioritize growing the agriculture sector through a number of initiatives. More recently, the Federal Ministry of Agriculture through the National Agricultural Growth Scheme Agro Pocket (NAGS-AP), provided subsidized inputs for farmers and AFEX built the technology to enable seamless execution of the input redemption process.