Digital technology is no longer a new frontier for most industries except, sadly, for one – small-scale agriculture – a critical and very integral component of the global agri-food supply chain.
While global food supply needs are predicted to double by 2050, food and beverage manufacturers (F&Bs) need to increase their advisory work with smallholder farmers to make food production less wasteful, more efficient, sustainable, and scalable – driving efficiencies for the entire supply chain.
The problem: The smallholder farmers have yet to maximize the potential of their agricultural fields.
The solution: F&Bs can enhance collaboration with smallholder farmers by facilitating access to cutting-edge technologies while stabilizing their supply chains and increasing sustainability – a win-win for both.
F&Bs can help bridge the gap between agricultural potential and actual yield
According to a McKinsey study of a group of sub-Saharan African farmers, a significant gap exists between the potential of smallholder farms and their actual yield – and this is just in Africa.
Similar issues face most smallholder farms – now numbering around 570 million and managing 75 percent of arable land worldwide. Low productivity, food loss, and waste can be due to several problems – from unpredictability to invasive pests to lack of crop health monitoring.
To bridge that gap it’s time for F&Bs to extend the reach of advanced technology to smallholder farmers, which will not only help these farmers maximize productivity but will simultaneously allow them to gain the visibility they need to help – ultimately stabilizing the supply chain.
Bringing smallholder farms to the future with digitisation
Food companies are driving the digital revolution further down the supply chain, but until they bring these technologies to their small farm-holders, growers and suppliers, the following problems will fester:
Lack of access to correct field data limits F&Bs’ ability to help – Current techniques in aggregating agronomic data are not advanced enough – in many cases, the information is still collected on paper if at all — to ensure accuracy, as well as a credible baseline.
F&Bs cannot provide farmers with effective support if they can’t access constantly updated information – or can’t pinpoint the who, what, where, when, and how of a farming problem.
For example, an invasive pest – a significant threat to global food security – may be on the attack. It’s being fought on an individual smallholder-farm level. However, if farmers had access to a pest-control reporting app that supports multiple data reporting options, including photos and geo-referencing, the F&Bs would be able to rapidly assist in the fight while ensuring that the spread is controlled – notifying nearby smallholder farms so they can take precautionary measures while ensuring optimal use of pesticides, complying with sustainability practices, and lowering expenses. Moreover, this type of solution allows the companies who have contracted with the “invaded farms” to make better supply chain forecasting and planning decisions.
Lack of communication keeps F&Bs in the dark – Despite having the best intentions, agronomists, supply chain managers, and other farmer-focused teams within the company face the very real obstacles of geographic distance, differences in educational levels, and lack of a common language that can help them communicate more effectively and meaningfully with smallholder farmers. What’s more, because most agri-food manufacturers and other stakeholders have limited to zero contact with farmers during the pre-season planning/harvest/delivery phases, they are in the dark as to what is really occurring in the farms throughout the season – and missing crucial information that directly affects their bottom lines.
Lack of technological access – Maximizing crop output within existing farm boundaries is critical to meeting future food demands in a sustainable way. This requires that smallholder farmers access advanced technologies and learn the skills to manage them. Lack of awareness, financial considerations, and low or slow ROI are all holding them back – again, reducing F&B control of the full supply chain.
F&Bs have the resources to bring these technologies to the farmers and, at the same time, upskill them so they can overcome the steep learning curve and maximize these solutions – adding value to both the smallholder farmers and themselves.
The Food & Beverage industry – leading the way!
Some companies are already in process. For example, Heineken wanted to improve sourcing traceability and visibility and increase grower engagement. The goal was to provide everyone with timely and accurate information for better decision-making and optimized operations on both sides.
The company provided its farmers in Mexico with an easy-to-use mobile solution with a web-based user interface. This allowed Heineken’s staff to receive aggregated, actionable information in real-time, strengthening communication from the field.
By using the app’s data, with its monitoring, weather forecasting, harvest delivery, and post-season evaluation capabilities, Heineken helped them optimize processes, improve crop quality, and increase profitability.
Underperforming farms adversely impact global agri-food supply chain. By bringing technological advances directly to the smallholder farmer, Food & Beverage companies can make better forecasting and planning decisions and maximize their returns, while working toward sustainable farming and sourcing practices.
Read Part II of this article for digital solutions that grow ROI and strengthen F&B-smallholder farmer partnerships.