It’s been six months since we announced our first Covid-19 case on 12th March 2020 in Nairobi, Kenya. Fast forward to 2nd September 2020, Kenya has had over 34,493 confirmed cases. Our way of life has changed, our working patterns have greatly changed and the same is true for how we worship and conduct business as a society. You might have come across an advert on your Facebook, Instagram, Twitter or even Whatsapp group from a business that is now doing home deliveries to it’s clients, an art teacher offering online classes for his/her students or even an online music concert.
This reflects the new normal and those in business have to swiftly adapt if they are to have a chance in future. The Agritech industry has not been spared either. Agriculture is a key pillar of our economy, contributing 26% of the Gross Domestic Product (GDP) and another 27% of GDP indirectly through linkages with other sectors.
The sector employs more than 40% of the total population and more than 70% in the rural areas. of . This is a clear indication of how crucial the sector is, and with Covid-19, the Agritech players have had a major role in ensuring that effective movement of food and agricultural commodities is sustained, while reducing the physical interactions along the value chains to the bare minimum.
We have seen a major shift to adoption of cashless payments and home deliveries.
Now you are able to order your groceries from the comfort of your home and have them delivered within 24 hrs or less. While this is not entirely new (the truth is we have been ordering groceries online and the only difference was that it was not thought of as a sustainable business model) the overwhelming reception and adoption of the strategy by many Agritech players speaks volumes. How well a player succeeds in this space will be entirely informed by:how timely they are with the deliveries, the trust they are able to build with the customer and quality of the produce they deliver. With every household having access to Mpesa, Kenyans have always warmed up to the idea of a 100% cashless economy. The bottleneck remains to be the high transaction costs. For us to build a more inclusive, efficient & seamless business environment during and after Covid-19, the government & cashless payment service providers need to take a look into the high transaction costs of cashless payments.
The gains have come at a cost. Unfortunately, the cost of moving goods and services from point A to B still remains to be very high. Last mile delivery costs are still a huge headache to small businesses as they are forced to absorb such costs to ensure that they remain competitive. Adherence to the strict Covid-19 regulations has only helped in increasing the logistics costs incurred by Agritech players. Proper end- to- end distribution channels along the value chains are key in movement of Agricultural produce. This has not been the case for the longest time, if we have to take one lesson from Covid-19 then let that be the fact that it is not normal for transport costs to comprise 40-50% of a businesses operating expenditures.
As we normalise the new way of doing business, it is the sole responsibility of business leaders to ensure their business is more customer centric. The responsibility is even heavier on Agritech players. Providing efficiency along the value chain has been the focus; to a larger extent we can identify the successes gained. However, it is clear that more needs to be done for the farmer. The farmer is still labouring, risking it all and still earning peanuts. It is time we pursue efficiencies and innovations along the value chains with the farmer in mind, for the benefit of the farmer. We cannot talk of growth in adoption of Agritech while the farmer is still hungry, poor and underpaid.Current and future Agritech innovations need to bring dignity back to the smallholder farmer.
As a start, Vikaboni is committed to creating reliable and sustainable markets for the smallholder farmers especially those in the rural areas using Technology. Maximising on the capabilities of Big Data we will ensure that we are able to shorten the farm to consumption chain. Efforts to digitize Agriculture need to happen at every step of the Agricultural value chain. These technological advancements however promising they are, will only realise there intended success if they are all inclusive and are anchored on the smallholder farmer. What other ways can we take care of the farmer?