Empowering African farmers with data

Many African farmers lack the capital to invest

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in yield-increasing upgrades like new irrigation systems, new machinery, new fertilizers, and technology for sensing and tracking crop growth. The most common path to capital is bank loans, with land as collateral. This is an unattractive proposition for farmers, who already bear the many risks of production, including bad weather, changing market prices, or even the shocks of geopolitical events.

Lenders, on the other hand, have an incomplete assessment of their risk, especially with potential borrowers who have no credit history. Lenders also lack data and tools to predict their return on investment.

"Building a platform for risk-sharing is key to upgrading farming practices," says Munther Dahleh, a professor of electrical engineering and computer science at MIT and director of IDSS. In order to create such a platform, Dahleh and the IDSS team aim to better predict the value of employing advanced farming practices on the production of individual farms. This prediction needs to be accurate enough to incentivize investment from economic stakeholders and the farmers themselves, who are in competition with each other and may be reluctant to share information.

The IDSS approach proposes a data-sharing platform that incentivizes all parties to participate: Technologically advanced farms are rewarded for their valuable data, bankers benefit from data that support their credit risk models, farmers get better loan terms and recommendations that increase their profits and production, and technology companies get recommendations on how to best support the needs of their farmer customers. "Such a platform has to have the correct incentives to engage everyone to participate, have sufficient protection from players with market power, and ultimately provide valuable data for farmers and creditors alike," says Dahleh.

https://phys.org/news/2019-05-empowering-african-farmers.html