With 144 million farmers in Asia, there are massive efficiencies to be gained if technology can help farmers gain access to credit, produce higher value crops and connect more seamlessly to markets. But there remain significant hurdles to overcome before small farmers are ready to exploit the advantages presented by technology.
Foremost among these is the debt cycle. In rural communities, the traditional cycle of debt for farmers has been ingrained for generations. Many farmers simply don’t know about or seek out alternatives.
Typically, farmers have no other options than to borrow money from local loan sharks for seed and fertilizer. Then, they are obligated to sell their crops back to these middlemen without an awareness of market prices. It’s exceptionally hard to break through these customs.
Banks are not incentivized to reach small farmers, as returns are minimal in relation to costs, and while banks in the region have developed online tools to make consumer banking easier, these aren’t reaching farmers. For their part, farmers are highly sensitive to data costs, so in most cases, they won’t even use tools that require spending on data.
New Certification Schemes
New certification schemes are promising as a means to increase prices to smallholder farmers, but they require more extensive education and more rigorous data collection than smallholders can currently access.
One answer is in big projects aiming to work at scale. One participant implored the group to “stop trying to help 20 small farmers at a time. We need to work with the whole supply chain.” Consumers need to be engaged in seeking out ethically sourced products.
Industry has to pay more for produce, commented one participant. Mills must be willing to pay more. The mills often control the price of rice, so it’s important to educate them on the increase in quality that can come with increased rates.
New Low-cost Drones
New, cheaper drones are one example of where technology provides a vision for agricultural innovation and cost savings, but at the moment, this potential is off limits to many smallholders.
Drones are being used to capture imagery which can then be analyzed to project yields, identify crop diseases, assess chemical needs and usage, and even spray pesticides in much more targeted quantities.
But the advanced data analysis tools required to capitalize on these possibilities are far beyond the economic reach and digital literacy of most small rural farmers. Meanwhile larger agribusinesses are putting these tools to use, and gaining efficiencies while smallholders fall further behind.
At the margins, there are some more general-use technologies available now that can improve the lives of smallholders. Mobile finance apps can make credit and market information more easily available. Targeted digital agricultural credit products are now appearing as well.
The obstacle here is basic digital literacy. While in Southeast Asia a growing number of farmers have smartphones, there is a very small percentage that uses them for farming information. One participant suggested smallholder farmer MOOCs based on pictures as an e-learning solution that inspires farmers to change their practices.
A new generation of young, start-up farmers who are more open to new ideas and more adept with technology provides some hope for more widespread use of technology in agriculture, but at the moment, in Thailand young people are less than 1% of all farmers.
With the ASEAN market deregulating and internal barriers coming down, smallholder farmers are facing increasing competition. Domestic markets are no longer sufficient, but more advanced logistics are necessary to reach wider ASEAN markets.
Farmers need access to better marketing tools and the practices that will help their crops appeal across the region. So there is potential for technology to play a role, but there are still major hurdles to overcome.