Since rice is a staple food for most people in Asia, the upcoming major rice shortage will put the region’s food security at risk. The global rice market is set to log its largest shortfall in two decades in 2023, according to Fitch Solutions’ Country Risk and Industry Research dated April 4. This is due to the knock-on effect of the ongoing war in Ukraine and bad weather in rice-producing countries like China and Pakistan. Consequently, the price of rice will average US$17.30 ($22.90) per cwt through this year and is likely to ease to US$14.50 per cwt only in 2024. (Cwt is a unit of measurement for commodities such as rice.)
Yields of other crops are also expected to be affected due to food distribution, energy and fertiliser shortages. This is why the World Economic Forum’s Global Risks Report 2023 identifies the food supply crunch as one of the biggest risks to the world economy in the next two years.
“Against the backdrop of climate change, biodiversity loss, and the depletion of natural resources, these factors have sparked a surge in food loss and waste, culminating in a significant decline in agricultural production. Simultaneously, the demand for widely available, year-round food has also resulted in longer transportation distances and fragmented supply chains, with consumer purchase patterns failing to provide meaningful feedback to producers and suppliers, thereby perpetuating unsustainable consumption and production practices,” Ahmed Mazhari, president of Microsoft Asia, tells DigitalEdge.
Food waste, he adds, should be a key concern too. The UN estimates that 17% of global food production is wasted in households, retailers, restaurants and other food services, which also contributes up to 10% of global greenhouse gas emissions. “When surplus food is thrown away, it’s not just a missed opportunity to feed someone at a time when food prices are generally rising, and food insecurity is expected to increase worldwide. Food put into landfills releases methane, a greenhouse gas that traps heat in the atmosphere and contributes to global warming. If food waste were a country, it would be the third largest greenhouse gas-emitting country in the world, behind China and the US, the Food and Agriculture Organization of the UN said in a report,” he explains.
He continues: “There is a strong need to improve the efficiency of food production in Asia to feed a growing population without sacrificing the resources of future generations. This needs to work in tandem with sustainable global food systems, driven by its growing demand for food production and a wide conservation effort for food wastage.”
Slow uptake of modern farming
Using technology to modernise agricultural processes and enable data-driven decisions is essential to securing our food supply. In fact, the International Food Policy Research Institute predicts that data-driven agriculture techniques can increase farm productivity by as much as 67% by 2050 while simultaneously cutting down on agricultural and food losses.
Yet, less than one-tenth of farmers in Asia are using or planning to use at least one agriculture technology (agritech or agtech) solution in the next two years.
From my childhood experience growing up in a hill station town in the northeast part of India, I understand that the farming community will always have its own way of growing and surviving. While farmers are open to innovations, it is important to be inclusive and respect all voices and feedback from the community on how technology can support them.
Ahmed Mazhari, president, Microsoft Asia
He adds: “The cost of agritech solutions can vary widely depending on the specific technology and implementation, so it can be a barrier for low-to-middle-income countries. This is especially critical for Asia, where smallholder farmers are the major group, with 450 million producing more than 80% of the food consumed in the region. Apart from the cost, there could be a knowledge gap between farmers and the tech. Farmers usually have special knowledge of their farms and how they farm. With decades of experience, many of their decisions, such as when or where to fertilise, are based on rough estimates.”
Seamus Tardif, head of growth at Jiva — a Singapore-headquartered agritech company operating across Indonesia and India — agrees that smallholder farmers tend to be hesitant to adopt technology as they may not fully understand the value of digitalising farming practices. “The challenge may not always be a lack of smartphones or connectivity, which are of course huge challenges, but it may also be a lack of education that technology can be used to help with their farming needs. For instance, we see many farmers using YouTube and Google for entertainment but not education. They will still ask their neighbours what they think the weather will be like tomorrow. Because of this, we’ve taken a more phygital [physical and digital] approach to getting our services to villages,” he says.
Smallholder farmers, he adds, need social proof before deciding to use technology to transform how they work. “Every change could result in a possible loss of income or breaking of a long-term partnership with local businesses. [So, these farmers will be motivated to transform only when they] see many others around them also changing.
“Also, smallholder farmers are keen to witness the benefits they can expect before they embrace technology. [This is why Jiva] runs demo programmes and invests in village systems by running educational roadshows. In Indonesia, we’ve directly educated over 20,000 farmers through on-the-ground roadshows and established “Jiva Villages” that showcase our 360-degree services. As we proceed, we collect testimonials, such as farmers who doubled their yield and income by following Jiva’s advisory and utilising Jiva’s input and harvest services. We can then share these powerful stories with other farmers to help alleviate their concerns,” he explains.
Empowering smallholder farmers
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According to The World Bank, most smallholder farmers live below the poverty line, subsisting on less than US$2 a day. “There are four main reasons for this: Restricted access to high-quality farming inputs, lack of capital at critical moments in the farming cycle, information asymmetry at the time of sale, and improper farming practices,” notes Tardif.
To address this, Jiva provides easy access to high-quality farming inputs, offers credit facilities for farming inputs, enables harvest to be bought at fair and transparent prices, and provides agronomy advisory services for free. “By improving their livelihoods, we believe we can inspire the next generation of farmers and make farming a more profitable and sustainable occupation for generations to come, [which could help strengthen] food security,” he says.
Tardif explains that Jiva operates in a phygital ecosystem. “On the physical side, we work with rural entrepreneurs (which are farmers, collectors, and village-level retailers) and supply chain partners. On the digital side, we have three customer-facing mobile apps — one for each customer group: Farmers, retailers, and collectors. Moreover, we have an extensive automated back-end system for managing transactions, risks, and analytics, which are also made available to our field teams through internally-facing mobile applications.”
Jiva’s farmer app offers agronomy advisory services that leverage machine visioning (which is the ability of a computer to “see” images) and artificial intelligence (AI) to deliver real-time crop diagnoses and treatment recommendations by simply taking a photo. It also provides market pricing on key commodities to help farmers make informed decisions on when to sell and the price they can expect to receive based on their crop. “We will soon release a new large language model-based advisory service that draws from our extensive agronomy knowledge base to allow farmers to ask a variety of questions beyond pest and disease management. To purchase farming inputs and get access to credit, farmers can connect with one of Jiva’s collectors or retailers,” he says.
Meanwhile, collectors can use Jiva’s collector app to purchase harvest, sell inputs, and perform credit know-your-customer checks easily. The retailer app gives retailers access to Jiva’s extensive range of high-quality farming inputs such as fertilisers and agricultural equipment.
For its back-end systems, Jiva uses a variety of tech platforms and automation to assist with the management of inventory, transactions, risk, and services to farmers, collectors, and retailers. “Our credit risk assessment tool utilises AI to identify the risk level of each credit request and determine if Jiva should or should not accept a particular cash-advance request. This assessment looks at various events leading up to the request to determine the legitimacy of the request and the likelihood of default, regardless of whether a collector/farmer has been given credit in the past. The aim is to reduce default rates to ensure we can maintain a sustainable credit/cash-advance system.
“We are also evolving our pricing systems to incorporate predictive pricing through machine learning. This will look at the multiple years of the pricing data we have access to across commodities, as well as the current pricing trends and other factors, to help provide a pricing estimate for our operations management team to use to set our daily prices,” states Tardif.
Jiva’s services create a virtuous cycle of compounding benefits to farmers. Instead of focusing on a discrete component of the farming life cycle, Jiva seeks to support farmers throughout the end-to-end process.
Seamus Tardif, head of growth, Jiva
In a recent survey of more than 200 respondents in Indonesia and India, farmers and collectors who leveraged Jiva’s services saw their income increase by 25%. Farmers who used Jiva’s agronomy advisory also increased their yields by up to 49%.
“Additionally, we have heard across multiple sources that Jiva’s commodity prices are now the benchmark of prices across our operating areas. This means that even those farmers who aren’t working directly with Jiva benefit from Jiva being in the ecosystem. We have worked hard to improve efficiencies in the agricultural supply chain and reduce the possibility of bad actors inflating margins, which has resulted in more value being driven back to the farmer,” shares Tardif.
Improving the food supply chain with data
Data is crucial to enabling a more reliable and sustainable food supply chain. “Data-driven agriculture can bring predictability and precision to farming. Insights from data collected on the farm can empower decision-making, efficiency, and productivity, as well as contribute to the larger goal of global food security. Additionally, data can trace and manage food supply chains, providing food producers and suppliers with precise forecasting, which could potentially reduce food waste. With the power of technology — such as blockchain, automation and AI — companies throughout the entire food supply chain can make data-driven decisions with information about farming, food production, waste tracking, consumption patterns, and more,” says Mazhari.
He gave the example of BharatAgri, an Indian agricultural start-up that uses Azure Data Manager for Agriculture to optimise agricultural operations. This tool extends the Microsoft Intelligent Data Platform with industry-specific data connectors and capabilities to connect farm data from disparate sources. BharatAgri leverages the solution’s satellite imagery capability to monitor crop health and analyse farms as small as 1∕40 of an acre. “In 2023 alone, more than 50,000 farmers are expected to receive satellite images of their farms from BharatAgri. This satellite imagery will help significantly reduce crop losses on over 100,000 acres of farmland.”
Meanwhile, Hong Kong’s non-governmental organisation Food Angel uses Microsoft’s solutions to reduce food waste. The organisation rescues edible surplus food from different sectors of the food industry and turns them into free meals for the needy community. By leveraging Microsoft Dynamics 365 Field Service to manage logistics and inventory to support the daily operation, Food Angel can serve 20,000 hot and chilled meals daily. It is also able to deliver 11,000 other meals and food packs through a network of charities and vending machines.
“It’s clear that from production to distribution and then consumption, change will come from innovation and collaboration throughout the food ecosystem. An effective strategy to reduce waste must consider demand, supply, operations and point of sale — and it hinges on building a supply chain that is sustainable not by default, but by design,” concludes Mazhari.