Digitisation seeds opportunities for Eastern Africa’s farmers
This article was originally published by the IFC.
By Everlyne Situma
I have always loved farming. My passion comes from growing up in rural western Kenya, where I braved chilly Saturday mornings to till a small piece of land that my family owned. It was near a stream, and we cultivated maize, beans, sorghum, vegetables, and arrowroots, which are a tuber loved by many Kenyans. Nothing beats the experience of tending and harvesting crops and then enjoying a sumptuous meal fresh from the farm.
While I moved to Kenya’s capital, Nairobi, 16 years ago, I still haven’t lost my love of and curiosity for agriculture. With Covid-19 impacting every sector of the economy, I wondered about the pandemic’s effects on farming in western Kenya and on our northern neighbour, Uganda, where I have a number of friends and former colleagues working in the agriculture sector.
Agriculture dominates Kenya and Uganda’s economy. It contributes 35% and 24% of the gross domestic product, respectively, while employing 70% of the rural workforce and providing food to millions of citizens.
When it comes to the export market, Kenya’s agricultural products account for 60% of exports, including coffee, tea, and horticulture, while in Uganda agricultural exports such as tea, coffee, tobacco, cotton, maize, and fish account for 50% of exports.
To see firsthand the impact the pandemic has had on this critical sector, I recently visited my village in Bungoma County, 200 miles northwest of Nairobi. What I learned about the power of digital tools and local demand gave me hope for the future of this sector and the people working in it.
Understanding new realities
The first piece of news I discovered was positive: Farmers enjoyed good rainfall so far this year, compared to last year. But overall, Covid-19 has shaken up the food distribution system in eastern Africa. One big development I learned about was that Kenya temporarily banned Ugandan and Tanzanian maize imports earlier in the year amid fears of high levels of aflatoxin, a naturally occurring fungus. That could have given them a new domestic market for maize, but it was a missed opportunity – most smallholder farmers do not produce enough food to benefit.
With global supply chains disrupted due to the pandemic, companies that had relied on exporting food found that market largely closed off, while restaurants and supermarkets that relied on importing food by sea struggled to get products into the country. Imports dipped by 23% due to disruptions of sea cargo trade.
These new realities set off a scramble – and, I learned, created new markets for local companies and farmers who were able to adjust nimbly. Jane Warambo, a director at Envisage Ltd, which sells high-quality fresh fruits, vegetables, and flowers from local farmers to distributors and retailers in Kenya and abroad, told me that her export business suffered immediately after the start of the pandemic. “It hit me that certain products are mainly sold to educational institutions and hotels, and with the lockdowns, the demand was severely impacted,’’ she said.
Now, looking back at those days, “I had to adjust,” she said. “ I now supply fruits and vegetables to wholesalers and retailers in the city while making do with seasonal staff, which was not the case before the pandemic.”
Another new change ushered in by the pandemic: Grocery delivery services and online shopping increased greatly among urban residents in Kenya. Seventy-nine percent of Kenyan consumers are shopping more online since the start of the pandemic, according to a Mastercard study published this year.
One beneficiary was Zucchini, a grocery retailer in Nairobi with eight stores, which since May 2020 has seen its e-commerce business soar due to social distancing rules.
“When the pandemic hit, most of our clientele shifted online, and we started receiving many orders, which was quite overwhelming at the start,” said Stacy Adhiambo, e-commerce manager at Zucchini Grocery. “But we got the hang of it and even expanded the team. As a result, our online deliveries have increased by 2,000% in a year, compared to the pre-Covid-19 period.”
Zucchini also partnered with four large on-demand companies, including Glovo and Jumia, to expand its business. Both Glovo and Jumia have a regional presence in East Africa. “Partnership is key to any online business as it lends us additional clientele too,” Adhiambo told me. Glovo, according to news reports, has tripled its grocery orders in the last year.
Resilience is key
In Uganda, government support has helped many farmers weather this difficult period. In fact, according to a 2020 World Bank Ugandan Economic update report, the country’s agricultural sector is likely to remain resilient.
I recently talked with Apollo Tugeineyo, a 42-year-old agronomist currently working for an agricultural NGO called TechnoServe in Kayunga, Uganda. He is a former colleague, and an expert in the coffee and vanilla market.
He told me that Covid-19 has disrupted farming in Uganda, and many farmers struggled to access markets and essential materials necessary for their trade, including gunny bags and drying materials from Kenya, because of restricted movement and border closures.
“Uganda is a landlocked country and sells its agricultural surplus to its neighbours,” Apollo said. “But there was no demand or market with border closures. Prices plummeted, and harvests went to waste. Some farmers were drying maize on the ground and heaping the bags next to goats and poultry, contaminating it for lack of post-harvest materials.”
But Apollo, who trains community residents to pass on best practices to farmers, said that the pandemic has had one positive result – the growth of online markets for farming. One example is Wefarm, a social network used by 2.4 million smallholder farmers for knowledge sharing and commerce.
CTA and Dalberg Advisors estimate the market for digital services that support African smallholders at more than $2.2 billion.
David Matsiko, the founder of Uganda-based online grocery shop, Bringo Fresh, offers one example of how tech companies are opening new markets for farmers.
Through Bringo, Matsiko has supported more than 200 Ugandan farmers by buying products directly from their farms and guaranteeing storage and markets in the city. Several Ugandan hotels, among other businesses, have started purchasing fresh local vegetables on the Bringo platform. That demand, in turn, has led Bringo to hire 30 additional staff through December. The company has also found a new market for pineapples, one of Bringo’s best sellers, in Kenya.
But it’s also been a major period of adjustment for Bringo. The company faces competition from other online companies and has changed its business strategy three times since April 2020 to respond to fluctuating demand.
Close to home
With all this change in the urban centres of East Africa, I wondered whether this difficult period would also eventually help farmers from my region.
For my twin brother Justus, who farms maize in western Kenya, the pandemic helped him spot new opportunities. He told me he realised he could diversify into high-value crops like vegetables and later find buyers online.
“It never occurred to me to grow any crop apart from maize before the pandemic. However, I now want to switch to vegetables and groundnuts to cushion myself from market risks as well as earn a reasonable income,” he said. Recently, he discovered two promising online platforms – M-farm and FarmBiz Africa, which he said will offer him a market.
The ever-evolving situation for farmers in East Africa has required them to be flexible and resilient, and many have stepped up to the challenge. The pandemic has given rise to the possibility of new online, digital markets, and it’s my hope that this expands rapidly, and spreads the benefits to those rural smallholder farmers back home.
Everlyne Situma is an IFC communications officer based in Nairobi.