By Anette Broløs and Erin B. Taylor, Finthropology
The past few decades have seen substantial development in the digitization of financial services, market facilitation platforms and agricultural extension services for farmers. These offer many potential benefits, but the ability of farmers to realize these benefits depends on many factors: access, usability, functionality, needs, literacy, context, and more. To date, there is no synthesis of knowledge on farmers’ digital needs, practices, and the impact of introducing new technologies.
Our recent report, Digital Change in Southeast Asian Agriculture: A Study of Laos, Cambodia, Vietnam, Philippines, East Timor, and Indonesia, explores the state of development of agricultural extension apps and research on digital farming, in light of the active promotion of digitization from governments and international organizations.
To explore these issues, we posed the following research questions:
- Where are digital services for farming most developed?
- What kinds of services are available?
- Who provides them, and who has access to them?
- How are they designed to be useful to farmers and their communities?
- What level of uptake are they achieving?
- What are their impacts?
The report includes an overview of agricultural extension apps in the six countries and a literature review focusing on the context of digital agriculture, digitisation of agricultural extension tools, and discussions and case studies of solutions (available, under development and speculative).
Agricultural extension apps
We found 87 apps, of which 20% were available in more than one country. The availability is concentrated in Indonesia, with fewer in the Philippines, Vietnam, and Cambodia, very few in Laos, and East Timor. Most of the apps were developed quite recently, and we found few figures on how many farmers are using them, or to what extent. Looking at different types of apps, there is a clear development from early solutions focusing on digital advisory services, with later developments in e-commerce, digital procurement and smart farming. Most recently we see the appearance of broader platforms aiming to connect the farming ecosystems and networks. We found fewer solutions in digital finance than expected, given the need for integrated payment solutions and access to credit and capital.
The literature is still quite scarce, with little focus on impact and practices
The findings from the literature review showed that the literature is quite scarce and is mostly focused on 1) the rollout and adoption of technology; and 2) the development of extension apps. Organizations developing apps carry out very little design research to learn about farmers’ actual experience and needs, and little research is done on how farmers use these apps and integrate them with other available tools and practices. It provides little guidance to identify unmet needs and little help on how best to design to meet farmers’ needs and preferences.
We found that there are few studies on impact, but there is an awareness of what kinds of impacts may take place, including economic impacts (sales, income, productivity and growth), environmental impacts (climate, sustainability and wildlife protection) and equity or inclusion (better inclusion for women, low income groups and farming communities).Most studies focus on economic impact.
Few financial tools designed for farmers
We found very little literature that specifically discusses the development, use or impact of financial apps for farmers. Many of the broader reports on mobile extensions in agriculture raise the issue that farmers lack financial tools and access to credit and capital. It seems that risk in agriculture holds back loans and investments by commercial banks. The reports stress that lack of access slows down the development of agricultural productivity and growth as well as (financial) inclusion for smallholder farmers (WWF 2021).
The introduction of digital finance (or fintech) is described as having the potential to create greater reach and transparency, as well as to develop new solutions that are more suited to different kinds of users, including the financially excluded. In our literature review we see two clear examples of this. Simumba et al. (2018) describe how digital development can support alternative credit scoring models better suited to serve farmers. Loukos and Arathoon (2022) discuss the development of new credit types that allow farmers to obtain credit at the time of sowing, to be repaid in later installments at harvest (Pay-As-You-Go, PAYG), and they see these as a key enabler for farmers.
Similarly, we only found 12 apps supporting finance for farmers. The apps mainly provide capital (short or longer term) to farmers, reflecting farmers’ need for capital to manage risks and uncertainty including climate change.
The loan providers fall in three major categories. Many solutions provide P2P lending platforms to help farm investors target farming projects based on relevant Information. Other apps connect credit to traditional farming practices, with suppliers and distributors providing farmers with credit for new investments in machinery or sowing with payment at harvest (“Pay-As-You-Go”, or PAYG). The third group of farming credit apps develop new financial solutions including, for instance, new types of credit scoring. We also found some examples of farming or agricultural insurance, mostly combining credit and insurance.
More anthropological research is needed
Clearly, more research is needed to better understand the potential uses, impacts and risks of digital farming apps. Dr. Todd Sanderson, Research Program Manager, Social Systems at ACIAR, commented that the report:
“…highlights a significant gap in research on user-centric design and its impact, emphasising the considerable potential for further investigation, particularly in understanding farmers’ experiences and optimising designs to meet their unique needs and preferences. An intriguing aspect of the study is its examination of financial applications in agriculture, revealing a lack of specialised apps in this domain. Given the paramount importance of financial inclusion, this presents an exciting avenue for further development and exploration.”
We recommend future research in areas such as the use of apps among different groups of farmers, the usability of apps, and the impact of use in different contexts. We particularly suggest looking into the need for financial solutions and their integration with other tools. Research questions could include:
- How widespread is the use of agricultural extension apps among smallholder farmers?
- Are there particular kinds of farmers who are more likely to use the apps than others (e.g., due to age, gender, crop, type of farming, geographic location)?
- How usable are the apps? What kinds of advantages do they provide to farmers compared with non-digital solutions?
- What is the impact of the digitalisation of farming on smallholder farming households and rural communities?
- Are there special agricultural needs for financial solutions, or are mainstream digital tools
- sufficient? If so, in what areas (savings, payments, e-commerce, insurance, credit, etc.), and how should tools be integrated with platforms?
- To what extent do e-commerce platforms provide farmers with better market conditions?
- Given the changes taking place in agriculture, what kinds of future tools and use cases might be developed? Who is best placed to develop them?
The report by Finthropology can be downloaded here. It was funded by the Australian Centre for International Agricultural Research (ACIAR). We welcome your feedback.
(Figure 1: Digital farming apps in Laos, Cambodia, Vietnam, the Philippines, East Timor and Indonesia; Figure 2: Year the digital agriculture apps were founded.)