The Digital Transformation in Agriculture (DTA) track focuses on leveraging digital solutions to increase financial access for stakeholders in the agricultural sector. It builds on NpM’s previous works with the Rural Finance and the Geodata for Inclusive Finance and Food track.
As global warming keeps on evolving, the impact of climate change is incalculable. The UNEP estimates that adaptation costs for climate change in developing countries will be around USD 280-500 billion by 2050. There is still a big gap between the costs and the actual finance towards climate adapting solutions. This calls for action.
Currently, agriculture is one of the least digitalized sectors in the world, while climate change is 2-fold related to this sector. Firstly, unsustainable land-use increases GHG emissions thereby contributing to global warming. Secondly, the agricultural sector is extremely vulnerable to the consequences of climate change (e.g. floods or droughts leading to failed harvests). Thus, big steps can be made here. This workstream aims to achieve this by bringing together Fintech, Agritech and Climate Smart Solutions to catalyse investments.
Smallholder Farmers in developing countries are facing more challenges than ever before. Despite lack of information about sustainable land-use, bad quality seeds and limited market access, they are now also challenged by the impacts of climate change. Smallholder farmers are facing the biggest risks as their crops are often rain-fed and they lack the (digital) assistance on transforming to a more climate-resilient approach. These challenges can be addressed by digital innovations.
Mobile phones enable farmers to easily access information about seeds, weather forecasts and market prices. Geospatial information can be used to predict harvest yields, which can be combined with index linked insurance or loan repayment. In addition, it can provide information on droughts and floods, allowing farmers to anticipate on those and thereby diminishing the impact of climate change. This changes the risk profile of farmers which is necessary to receive more financial services. However, the investments in this sector are still limited, emphasizing the added-value of this working group.