Call for Fintech Solutions to Support the Agriculture Sector

Help small-scale farming in Asia and the Pacific become sustainable and profitable!

group

Teams of
1 - 3 people

The Context

The agriculture sector in Asia is composed primarily of smallholders, with agricultural holdings averaging less than 5 hectares for the region. Smallholder farmers play a significant role in achieving food security, contributing up to 80% of the food supply. Yet small scale farmers remain among the poorest, most marginalized, and most vulnerable sectors.

Increasing the productivity of smallholders will help them move out of poverty. However, they face several constraints. Among them:

High quality seeds, fertilizers, feeds, equipment, and other inputs are subject to high transaction costs, asymmetric information of prices, and market monopoly.
Limited channels to the marketplace lead to low bargaining power and post-harvest/processing losses.
Post-harvest, farmers are exposed to price risks caused by limited crop shelf life. Farmers have a short window to distribute their harvest which leads to paper thin margins.
In the livestock (dairy) industry, as the cost of collection and transportation of milk is high, because of the scattered nature of the production system, farm gate price of milk is low.
Knowledge and skills to improve productivity and value are lacking. In addition, access to information, such as prices and weather conditions, needs to be improved to aid in decision making.
Lending to the agriculture sector is perceived to be high risk. Financial institutions offer credit products that have high interest rates and repayment periods that are not compatible with agricultural cycles. Access to other financial services such as savings and insurance is also limited due to remote farm areas and lack of financial literacy among smallholders.
Many smallholder farmers are financially excluded
Women farmers tend to have less access than men to productive assets, opportunities, and technology. The female share of agriculture labor in farms is 40%–50% and is increasing due to migration of men to urban areas and overseas for employment.

The solution must take into consideration the context of most rural communities in Asia—poor internet connectivity, use of regular feature phones, and operations in remote, hard to reach areas. The solution may have an online and offline component. It should also be flexible enough to cater to the different agriculture subsectors (crops, livestock, poultry).

Below is an example of a use case we are looking to solve:

The livestock value chain in Tajikistan is unproductive, and extremely inefficient. In particular, the dairy value chain has several disperse actors (dairy processors, farmers, breeding, concentrate, and fodder enterprises, financial institutions, public support institutions) that need to be integrated.
Over 90% of the cattle are owned and over 90% of the total milk is produced by household farmers. Household cattle have low productivity due to chronic under-feeding and poor animal and husbandry practices, low reproductive efficiency, and weak market access for their products. The Tajik livestock sector also has high incidence of several animal diseases. Quality assurance and food traceability are major concerns. Furthermore, growth and competitiveness of the dairy processing industry is constrained by limited availability of fresh milk, dispersed collection, and state of infrastructure.