{"id":23218,"date":"2017-11-15T00:17:39","date_gmt":"2017-11-15T05:17:39","guid":{"rendered":"https:\/\/digital.hbs.edu\/platform-rctom\/submission\/from-visibility-to-prosperity\/"},"modified":"2017-11-15T19:44:08","modified_gmt":"2017-11-16T00:44:08","slug":"from-visibility-to-prosperity","status":"publish","type":"hck-submission","link":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/from-visibility-to-prosperity\/","title":{"rendered":"From \u201cVisibility\u201d to Prosperity"},"content":{"rendered":"<p>Agricultural supply chains in Sub-Saharan Africa (SSA) are undergoing a digital transformation. As mobile networks have expanded across the continent, digital technologies have begun to enable value chain actors to trade and communicate across regions, utilize capital and labor more efficiently, and achieve greater scale in sales and procurement [1].<\/p>\n<p>Success stories of \u201cconnected\u201d farmers are touted widely by the international development community. Providing Ugandan maize farmers with accurate price information improved incomes by 15% through greater bargaining power at sale [2]. Farmers in northern Ghana have used an internet-based mobile platform to access new markets [3]. The Zambia National Farmers Union has used data visibility to offer mobile services for scheduling, monitoring and coordination of shipments to its members [4].<\/p>\n<p>While the promise of digital remains alluring, it is less clear how it will ultimately influence outcomes for the poorest. Despite the gains in agriculture productivity brought about by the \u201cGreen Revolution\u201d throughout much of the developing world, productivity improvements have contributed minimally to agricultural growth in SSA (Figure 1). The prospect of poor countries \u201cleapfrogging\u201d to greater levels of development by employing the latest technologies is often cited as a rationale for digital investment; however, 性视界 development economist Calestous Juma warns that such leapfrogging may not result in inclusive growth for all [5]. The experiences of one company looking to digitize agricultural supply chains to benefit African farmers gives a clue as to why.<\/p>\n<p><a href=\"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2017\/11\/Figure-1-5.jpg\"><img loading=\"lazy\" decoding=\"async\" class=\"wp-image-23207 aligncenter\" src=\"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2017\/11\/Figure-1-5.jpg\" alt=\"\" width=\"935\" height=\"487\" srcset=\"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2017\/11\/Figure-1-5.jpg 1161w, https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2017\/11\/Figure-1-5-300x156.jpg 300w, https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2017\/11\/Figure-1-5-768x400.jpg 768w, https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2017\/11\/Figure-1-5-1024x533.jpg 1024w, https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2017\/11\/Figure-1-5-600x312.jpg 600w\" sizes=\"auto, (max-width: 935px) 100vw, 935px\" \/><\/a><\/p>\n<p>&nbsp;<\/p>\n<p><strong>Virtual City: transforming food supply chains for global impact<\/strong><\/p>\n<p>Virtual City exemplifies many of the opportunities and challenges in improving supply chains through digital. The Kenya-based company has developed a platform which allows supply chain actors to track the flow of agricultural commodities from farmer to retail with the stated mission of improving the well-being of farmers (Figure 2). To that end, the company has adopted a two-stage model. First, the company sells individual supply chain solutions targeted to each value chain actor: buying centers, processors, distributors, retailers. Second, the company uses value chain-wide data to deliver analytics to improve business decision-making and de-risk investment. In the near-term, the company is focused on sales capability to achieve regional scale. In the years to come, the company plans to expand across the continent and provide predictive analytics to generate further efficiencies across supply chains [9].<\/p>\n<p><a href=\"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2017\/11\/Figure-2-3.jpg\"><img loading=\"lazy\" decoding=\"async\" class=\" wp-image-23212 aligncenter\" src=\"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2017\/11\/Figure-2-3.jpg\" alt=\"\" width=\"639\" height=\"499\" srcset=\"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2017\/11\/Figure-2-3.jpg 692w, https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2017\/11\/Figure-2-3-300x234.jpg 300w, https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2017\/11\/Figure-2-3-600x468.jpg 600w\" sizes=\"auto, (max-width: 639px) 100vw, 639px\" \/><\/a><\/p>\n<p>This approach, however, is unlikely to generate the promised gains for smallholder farmers.<\/p>\n<p>Firstly, <strong>full participation is needed<\/strong> <strong>across disparate supply chain actors<\/strong> to create visibility. The complexity of managing multiple value propositions, go-to-market approaches, technical solutions has proved challenging for the company and has slowed adoption [10].<\/p>\n<p>Secondly, <strong>visibility on its own tends to benefit more powerful actors<\/strong>, particularly foreign-owned corporations from countries like the United States bestowed with preferential trade agreements by African governments [11]. Poignantly, evidence from India suggests that the primary beneficiaries (in terms of the effective price paid or received for agricultural products ) of mobile-enabled purchasing platforms are sophisticated buyers, not farmers [12].<\/p>\n<p>Thirdly, <strong>visibility on its own does little to address the underlying drivers <\/strong>of poor agricultural productivity \u2013 that farms are inefficient, undercapitalized, and too small to accommodate investment in irrigation or mechanization [13] (Figure 3).<\/p>\n<p><a href=\"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2017\/11\/Figure-3-3.jpg\"><img loading=\"lazy\" decoding=\"async\" class=\" wp-image-23216 aligncenter\" src=\"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2017\/11\/Figure-3-3.jpg\" alt=\"\" width=\"508\" height=\"437\" srcset=\"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2017\/11\/Figure-3-3.jpg 600w, https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2017\/11\/Figure-3-3-300x258.jpg 300w\" sizes=\"auto, (max-width: 508px) 100vw, 508px\" \/><\/a><\/p>\n<p><strong>Using digital to create income for farmers, not Western buyers<\/strong><\/p>\n<p>To better facilitate the digitization, Virtual City should <strong>refocus its selling efforts<\/strong> on influential stakeholders which can force immediate adoption of its platform across entire supply chains. For example, agricultural cooperatives, to which 7% of the African population reportedly belong [15], serve as regional aggregators for specific crops and thus have meaningful leverage over buyers. Such an approach will undoubtedly require a longer selling cycle but will help Virtual City remain targeted in its communications and product development activities.<\/p>\n<p>Furthermore, Virtual City should develop interventions that <strong>specifically address the productivity barriers <\/strong>faced by smallholder farmers. For example, supply chain visibility is being used to facilitate credit access for farmers to purchase basic inputs like fertilizer and high-yield seeds [16]. Taking this idea a step further, digital supply chains can enable the creation of shared infrastructure models for smallholders to access capital goods (e.g., tractors, irrigation) previously available only to land-rich farmers. Digital technology facilitates such an intervention by enabling farming communities to pool credit and coordinate equipment sharing since downstream demand is now visible to cooperatives [17].<\/p>\n<p>&nbsp;<\/p>\n<p><strong>Looking forward<\/strong><\/p>\n<p>Clearly, opportunities exist for digital supply chains to transform the livelihoods of smallholder farmers in Sub-Saharan Africa, not just corporations. What is less clear is whether the appetite exists to embrace such change. What kind of behavior change will be required of farmers and cooperatives? How might powerful corporations respond if farmers accumulate information and power? Will governments listen more to the needs of poor farmers or powerful corporations? Answers to these questions will be fundamental to whether the benefits of digitization will be shared by the poorest.<\/p>\n<p>[799 words]<\/p>\n<p>&nbsp;<\/p>\n<p>Sources:<\/p>\n<p>[1] World Bank Group. 2016. \u201c2016 World Development Report: Digital Dividends\u201d. World Bank Group.<\/p>\n<p>[2] Svensson, J., and D. Yanagizawa. 2009. \u201cGetting Prices Right: The Impact of the Market Information Service in Uganda.\u201d Journal of the European Economic Association 7 (2\u20133): 435\u201345.<\/p>\n<p>[3] Egyir, I. S., R. al-Hassan, and J. K. Abakah. 2010. \u201cThe Effect of ICT-Based Market Information Services on the Performance of Agricultural Markets: Experiences from Ghana.\u201d Unpublished draft report, University of Ghana, Legon.<\/p>\n<p>[4] Zambia National Farmers\u2019 Union (ZNFU). \u201cThe ZNFU Submissions on the Role of ICTs in National Development\u201d, submitted to the Parliamentary Committee on Communications, Transport, Works and Supply. Published 4 Jan 2017.<\/p>\n<p>[5] Juma, Calestous. \u201cLeapfrogging Progress: The Misplaced Promise of Africa\u2019s Mobile Revolution\u201d, The Breakthrough Journal, No. 7. Published summer 2017.<\/p>\n<p>[6] International Fund for Agricultural Development. 2016. \u201cRural Development Report 2016: Fostering Inclusive Rural Transformation\u201d. Rome, Italy: International Fund for Agricultural Development.<\/p>\n<p>[7] World Bank Development Indicators, accessed 14 November 2017.<\/p>\n<p>[8] Virtual City website, accessed 14 November 2017 &lt;http:\/\/www.virtualcity.co.ke\/approach\/&gt; .<\/p>\n<p>[9] Personal interviews with Virtual City management team (John Waibochi, Eric Mwiti, Catherine Irungo, Herbert Thuo, Dennis Gathage, Brian Ndunda) in Nairobi, Kenya, summer 2017.<\/p>\n<p>[10] Ibid.<\/p>\n<p>[11] Meltzer, Joshua P. \u201cDeeping the United States-Africa trade and investment relationship\u201d, Brookings. Published 28 January, 2016 &lt; https:\/\/www.brookings.edu\/testimonies\/deepening-the-united-states-africa-trade-and-investment-relationship\/&gt;.<\/p>\n<p>[12] Banker, Mitra, Sambamurthy and Mitra. 2011. \u201cThe Effects of Digital Trading Platforms on Commodity Prices in Agricultural Supply Chains\u201d. Management Information Systems Quarterly, 35(3): 599-611.<\/p>\n<p>[13] Jayne, Thomas S., David Ameyaw. 2016. \u201cAfrica\u2019s Emerging Agricultural Transformation: Evidence, Opportunities and Challenges\u201d, Africa Agriculture Status Report 2016: Progress Towards Agriculture Transformation in Sub-Saharan Africa, Alliance for a Green Revolution in Africa (AGRA).<\/p>\n<p>[14] \u201cInvestment in agricultural mechanization in Africa: Executive summary\u201d, Food and Agriculture Organization of the United Nations (NAO) and United Nations Industrial Development Organization (UNIDO). FAO 2010.<\/p>\n<p>[15] Develtere, Patrick, Ignace Pollet, Fredrick Wanyama. 2008. \u201cCooperating out of poverty: The renaissance of the African cooperative movement\u201d, International Labour Office, World Bank Institute.<\/p>\n<p>[16] Ibid.<\/p>\n<p>[17] Personal interview with Baba Adongo, Deputy Country Director of TechnoServe in Accra, Ghana, 6 January 2017.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Fixing the broken promise of the digitally-connected farmer in Sub-Saharan Africa.<\/p>\n","protected":false},"author":9965,"featured_media":23219,"comment_status":"open","ping_status":"closed","template":"","categories":[89,28,1911,704,3235,511],"class_list":["post-23218","hck-submission","type-hck-submission","status-publish","has-post-thumbnail","hentry","category-africa","category-agriculture","category-agriculture-technology","category-developing-economies","category-digital-supply-chain","category-international-development","hck-taxonomy-organization-virtual-city","hck-taxonomy-industry-agriculture-and-agribusiness","hck-taxonomy-country-kenya"],"connected_submission_link":"https:\/\/d3.harvard.edu\/platform-rctom\/assignment\/rc-tom-challenge-2017\/","yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.3 - 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