Digitalization in Agriculture will Open Vast Untapped Potential for Farmers and Investors, Creating Opportunities for Agro-Entrepreneurship A high internet penetration rate of 63% and the shift of multiple sectors such as banking, finance, retail, etc., due to the advent of digital platforms in the country are providing traction for similar initiatives in the agriculture sector. Digital agriculture will trigger a range of opportunities for IT companies and telecom providers as the demand for IT solutions and mobile applications in agriculture business increases.
Digital Finance Services (DFS) have multiple benefits for farmers since they eliminate risky cash payment problems, mitigate risk for consumers, and provide efficiency and cost savings at transaction points. DFS can provide farmers access to basic financial services and have been estimated to deliver about 75% of the total increase in agricultural income.
With 71.7% of the population employed in the agriculture sector in 2017, digital financial solutions in agriculture have viable business potential for digital finance service providers, IT companies and telecom authorities. DFS providers can partner with IT companies and telecom authorities to introduce various finance models such as mobile payment systems, micro lending, and micro insurance systems across agricultural value chains. However, financial literacy and consumer education lie at the crux of gaining return on investment from digitalizing the agricultural economy.
The Agriculture Management Information System has emphasized dissemination of agriculture-related information to farmers through digital platforms. Digital Agriculture Atlas was launched for food security analysis and planning by the government in 2015. The initiation of an information distribution system in agricultural planning provides prospects for mobile application development companies to establish applications related to agriculture. “Smart Krishi,” a mobile application for farmers to acquire information on farming technologies and parameters, has gained immense popularity within the agricultural community of Nepal with nearly 53,500 downloads and more than 15,000 active users and 1,500 daily users.
The adoption of mobile apps and IT into agriculture was initiated as part of an e-agriculture program by the government, directly benefitting 63 groups from the Terai region, 43 groups from the hills and 20 groups of farmers from the high altitude. The program is slated to be extended to 25 more districts, which will create further opportunities for the ICT sector. ICT companies have great opportunities to introduce farmer-friendly applications to a growing e-agriculture market in the country. However, the lack of ICT literacy and gender disparities in ICT adoption can be a challenge for implementing ICT tools in agriculture.
Smart farming technologies and monitoring of agriculture parameters can be enabled by digitalization. All-inclusive digital platforms with real-time data and recommendations can help improve productivity and increase the adoption of smart farming. OnFarm, a connected IoT platform developer for farms, stated that IoT-enabled farm yields rose by 1.8%, energy costs dropped by $7 to $13 per acre, and water use for irrigation reduced by 8%. Telecom operators and providers, IT companies, and innovative automation start-ups have significant opportunities to provide end-to-end IoT services to assist in smart farming.