REPORTS: Ag-platforms business models and policy gaps reports

ODI is releasing a series of reports funded by the Enhanced Integrated Framework that aim to explore AgriTech in East African value chains

Report 1. Disruptive technologies in agricultural value chains: insights from East Africa. 

ODI © SUPPORTING ECONOMIC TRANSFORMATION. Working and discussion papers. March 2020. Aarti Krishnan, Karishma Banga and Maximiliano Mendez-Parra. 60 pages

Agricultural technology (AgriTech) is a form of technological innovation, encompassing dataconnected devices using information and communications technology, internet and artificial intelligence, agricultural biochemistry and biotechnology, innovative food and farming, farm robotics and automation, and smart warehousing and logistics. 

Disruption in AgriTech has the potential to occur through: (1) increased agricultural productivity in capital and labour; (2) value addition; (3) regional trade and cohesion; (4) skills acquisition and formalisation of jobs; (5) opportunities for youth and women; and (6) redistribution of value. If governed properly, AgriTech can deliver increased equity, expand digital capacities and increase the quality and quantity of jobs.

This working paper explores the implications of the digitalisation of agriculture, with a focus on East Africa. It addresses the following key questions:

• What is AgriTech?
• What prevents adoption of AgriTech?
• What does disruption mean within AgriTech?
• What are the pathways through which AgriTech may disrupt livelihoods and support transformation?

Report 2. ‘PLATFORMS IN AGRICULTURAL VALUE CHAINS: Emergence of new business models in East Africa’

ODI © SUPPORTING ECONOMIC TRANSFORMATION. July 2020. 57 pages.

This report aims to develop typologies of business models of the Ag-platforms that exist, identifying the challenges and opportunities of using these business models and the extent to which they can create value capture opportunities for farmers, youth and women in agriculture. 

Drawing on case study evidence from Uganda and Rwanda, the report deep-dives into the business models of Ag-platforms, unpacking the 3Cs of Costs, Complexity and Capabilities, to indicate the potential ways in which platformisation may exacerbate existing inequalities rather than supporting value creation for the poorest. 

The report presents five models of Ag-platform delivery across a value chain, which consists of a combination of various scopes (breadth of functions and processes) and scales (destination of final product). Ultimately, we develop a roadmap for policy-makers to facilitate the development and proliferation of sustainable Ag-platforms. 

1. The production and exchange model consists of three scopes: backward exchange, horizontal offers and information services, whereby farmers gain production-related information, sometimes along with Artificial Intelligence (AI) and big data analytics support, generally at the pre-production and production stage of the value chain. 
2. Output exchange occurs midstream in the value chain, consisting of three scopes: forward exchange, post-harvest and information services. This is an auction-based model, wherein farmers are provided information on crop prices and on logistic prices to transport products, as well as post-harvest services such as grading and packaging. 
3. Trading and sharing consists of five scopes: marketplace matching, horizontal offers, information services, complex information services, production and harvest services, and sharing and knowledge exchange. This model covers the full value chain, as it includes services from the pre-production stage to the output sale. 
4. Guarantee purchase and logistics consists of two scopes; guaranteed purchase and prices, and information services. In this case, Ag-platform firms act as intermediaries and buyers, by taking the onus of loss onto themselves. They provide farmers with contracts, along with a guarantee of purchase at specific market defined prices. 
5. The single buyer-led (integrated) model works within a completely vertically integrated value chain, wherein the main off-taker, be it a processor or a retailer, directly controls the entire value chain and there is already a predetermined market.

Report 2. AG-PLATFORMS IN EAST AFRICA: National and regional policy

gaps. 

Aarti Krishnan, Karishma Banga and Joseph Feyertag July 2020, 63 pages. 

This report aims to discuss how various business models of Ag-platforms can be used to bridge national and regional policy gaps in East Africa, drawing on case study evidence from Uganda and Rwanda.

This report aims to discuss how various business models of Ag-platforms can be used to bridge national and regional policy gaps in East Africa, drawing on case study evidence from Uganda and Rwanda. 

1. Section 1 highlights the multiple value creation and capture opportunities as compared with traditional value chains.
2. Section 2 zooms in on East Africa and compares East African countries in terms of digital and regulatory readiness. 
3. Section 3 lays out a typology of Ag-platform models. It presents five models of Ag-platform delivery across a value chain, which consists of a combination of various scopes (breadth of functions and processes) and scales (destination of final product). 
4. Sections 4 and 5 explore the potential of Ag-platforms to act as a bridge for national policy gaps in the short term.
5. The final section provides a roadmap for policy-makers to develop sustainable Ag-platforms that engender value capture maximisation and act as an effective bridge of policy gaps. Thus, the various business models of Ag-platforms developed, and the related policy deficits, can be matched to policy goals, in order to create win/win opportunities for the poor.