Agricultural operations that collect, store, analyze, and communicate electronic data and information in a digital format along the agricultural value chain are referred to as digital agriculture. Many agriculturists throughout the world are becoming aware of digital agriculture, as they recognize the opportunity of utilizing advanced technology to farming and the whole food, feed, and fiber value chain.
The agriculture industry contributes significantly to the gross domestic product (GDP) of any country’s economy and tremendous attention is placed in order to raise agricultural output.
With the expansion of the world’s population, the increase in global food demand, the decrease in agricultural land, and the depletion of finite natural resources, the need to boost agricultural production has become critical.
The growth of the urban population in emerging nations, together with higher living standards owing to rising income levels and increased demand for fresh farm products and animal protein, increases the need for agricultural output.
According to BIS Research, the worldwide digital agriculture marketplace market was valued at $10.00 billion in 2020 and is expected to grow at a CAGR of 15.0 percent from 2021 to 2026, reaching $22.88 billion in 2026.
Due to mobility limitations during the total lockdown, the worldwide agriculture industry saw a modest drop in 2020 due to the COVID-19 pandemic. Lockdowns were implemented globally, causing the supply chain market to be disrupted, resulting in a lack of farming equipment and other inputs.
The global digital agricultural marketplace business is expected to grow in the future as a result of the COVID-19 pandemic’s poor food availability and labor shortage. The use of the digital marketplace among farmers is likely to expand as a result of the government’s awareness and support for digitalizing the agriculture industry. As a result of disrupted supply chains and labor constraints, COVID-19 has had a long-term beneficial influence on the digital agriculture marketplace sector.
Is Digital Agriculture Beneficial to Farmers?
Types of farmers include smallholders, cooperative, and large-scale farmers:
- Smallholders: There are a lot of smallholder farmers all throughout the world, especially in developing nations. Smallholders are the most susceptible to mediators and hence stand to profit the most from the digital platform.
As a result, the social impact of digital platforms is highest in the agriculture sector. Small-scale producers generally produce in lower volumes and from fewer locations, resulting in aggregation costs for the e-commerce industry.
- Cooperative: Cooperatives organize large groups of smallholder farmers to improve their collective negotiating power. The digital platform will enable cooperatives to directly engage with smallholders, allowing digital agricultural firms to reduce farmer acquisition costs.
To build awareness of its service among smallholders, the digital agricultural marketplace uses cooperatives, including e-commerce services and the organization of workshops and training activities.
- Large-scale farmers: Large-scale farmers produce more than smallholders because they have access to a wide variety of inputs, equipment, and machines.
These farmers utilize their transportation to fulfill orders to the digital agricultural marketplace or end client, reducing logistical obstacles.
What are the Challenges Experienced in the Digital Agriculture Market?
There are two main challenges that digital Agriculture market faces:
Lack of Digital Agricultural Knowledge
The greatest challenge for digital agriculture enterprises is to educate farmers on how to use digital agricultural services. This problem arises in third-world nations where digital literacy is generally low and farmers have little experience with e-commerce services. Digital agricultural enterprises must hire local field agents to teach farmers critical chores such as packing, uploading, grading, and the specifics of the food farmers want to sell.
Raising awareness may entail sending field agents to farmers to explain the business model and the benefits of collaborating with other groups such as cooperatives, farmer societies, or government agencies.
Because of the absence of internet connections in rural regions, digital agricultural firms find it difficult to utilize marketing to generate awareness and promote the adoption of their platform.
It is also difficult for suppliers to persuade farmers that the medium can help them minimize post-harvest waste and meet prospective customers for their commodities, particularly perishable ones.
Poor Access to Network and Internet Connectivity
The internet has enabled increased insight into the worldwide supply chain in the agriculture sector. Various consumer paths in purchasing items now begin online via search engines, online reviews or digital marketing, and social media recommendations.
Mobile data has grown more inexpensive in all areas; nonetheless, the cost of devices continues to be a significant barrier to mobile internet access, particularly in low-to-middle-income countries (LMICs).
Mobile is the most common means for individuals in LMICs to access the internet; yet, around 60% remain disconnected, with farmers in rural regions bearing the brunt of the burden. Rural residents are almost 40% less likely than urban residents to utilize mobile internet.
To summarize in a few words, a digital agriculture marketplace is a platform where people may purchase and trade agricultural products online. It is a new approach for farmers to sell their products to purchasers, including stores, restaurants, agribusinesses, and consumers. It enables farmers to avoid many mediators, resulting in better income, the ability to provide fresh products to clients, and less waste.
Agriculture is rapidly evolving, and the rapid growth of digital interfaces is not dependent on supply and demand on production. Along with markets, collaborative platforms such as banking, renting farms, trading services, and producing goods such as seeds, fruits, vegetables, and others have emerged.