Digital agriculture could contribute an estimated $500 billion annually to the low and middle income countries (LMIC) economies by 2033, a report said. LMICs include Latin America and the Caribbean, South Asia, South-East Asia, and Sub-Saharan Africa.
The latest findings from the “State of the Digital Agriculture Sector: Harnessing the Potential of Digital for Impact Across Agricultural Value Chains in Low-and Middle-Income Countries” report highlight the transformative potential of digital agriculture (D4Ag) across LMICs.
The report was completed by Beanstalk AgTech, an innovation agency dedicated to unleashing the potential for agricultural to be a leading force for good, and sponsored by USAID in partnership with the Bill & Melinda Gates Foundation and the UK Foreign, Commonwealth and Development Office (FCDO) via Digital Frontiers.
$500 b contribution
The report suggests that under a “thriving” scenario, D4Ag could contribute an estimated $500 billion annually to LMIC economies by 2033, equivalent in value to a 28 per cent increase in agricultural output across these regions. At scale adoption of D4Ag solutions is critical, and active D4Ag users are projected to reach 38 per cent of target users across the agricultural value chain, from a base of just 10 per cent today.
The report is based on extensive consultation of digitalisation in agriculture across LMICs conducted to date, drawing on the perspectives of over 250 thought leaders and practitioners from over 50 countries and offering insights and strategic recommendations that could reshape the agricultural landscape and economies of LMICs.
Across the LMIC region, nearly 1,400 currently active D4Ag solutions were identified engaging a total of 50 million active users, globally. The ecosystem is both concentrated and dynamic — a shortlist of 10 markets represents the source of 67 per cent of active solutions in LMICs, and as much as 50 per cent of identified active D4Ag solutions were founded in the last 5 years, a release said.
Combating climate change
The report also highlights the importance of closing digital divides across gendered lines, stressing the potential to bring 64 million more women into the D4Ag user ecosystem, with significant impacts on gender equity and women’s economic empowerment.
D4Ag has the potential to reduce farm-gate greenhouse gas emissions by 9 per cent, which could have a significant impact on global efforts to combat climate change, the report said. However, careful consideration is needed to ensure that increased efficiencies do not lead to unintended consequences.
“Despite the promising outlook, the report identifies several challenges, including disconnected knowledge-sharing networks, financial viability concerns, infrastructure gaps, and user engagement issues, lack of quality impact measurement, gender inequality and social exclusion and climate-smart D4Ag deployment and credibility constraints.
To harness the full potential of D4A, the report recommends encouraging the formulation and implementation of inclusive, climate-smart policies, investment in capacity building, knowledge sharing, and digital literacy, particularly among marginalised groups, enhancing funding structures and addressing critical funding gaps for D4Ag initiatives. Accelerating the development of physical and digital infrastructure to support deployment and impact of D4Ag, fostering collaboration, data-sharing platforms and partnerships and supporting innovators to differentiate with clear value propositions, embedding inclusivity, and prioritising deep user engagement.