John Mundy’s Post

John Mundy always provocative, and I appreciate your perspective. 10 years of working in this space and I keep coming back to the same fundamental principles: 1) Ag is risky and low margin, but essential, so it has to be subsidized (by government), as it is in all developed markets. There are many different pathways for that subsidy to stimulate, rather than undermine, financial markets. And that goes for venture/innovation, as well as production. 2) Step one is always segmentation. The idea of easily replicable scale is usually false. Every country, commodity, and market has different dynamics. This is where I've appreciated CGAP's work over the years (Jamie Anderson Emilio Hernandez-Hernandez) 3) Important to understand the value proposition and economic incentives of all the partners/actors involved in providing the various services needed. This is where I've appreciate the work by IDH on service delivery models (Iris van der Velden Kafui Adjogatse, CFA)

There’s been an uncomfortable amount of failure in this space, hasn’t there John. Put simply the promise of using digital channels to deliver products to SSA smallholders has been massively overstated, in no small part because the assumptions you outlined haven’t been robust enough. I’d add that digital engagement alone clearly isn’t sufficient for driving significant behaviour change among smallholders, like changing input practices or connecting to new markets - there are important factors like low literacy and trust preventing this, but also macro constraints like market fragmentation, volatile input/output prices, and crippling weather shocks and pest outbreaks.

John, perhaps we are overdue for an overhaul of agriculture. I recently read somewhere that at the turn of the invention of electricity, it would have been foolhardy to invest in candle manufacturers 😉, there is something missing in the transformation to commercially viable and climate sustainable agriculture to manage food security, nutrition, unemployment, balance of trade and countries competitive advantages etc, there's a lot we have put on the small scale producer and perhaps digital technology isn't going to hack it, definitely not without patient financial instruments.

Thanks for sharing these reflections John Mundy - I have a lot of reflections based on the Food Securities Fund (not an ag tech but an impact fund for working capital, now on its 3rd year & growing). Hopefully we can have a chat about them one day 😊 - I would add to your list the on-going issue of FX and also regulations (broadly including impacting import & exports, capital intermediation & marketing, capital markets, etc.).

John Mundy , thanks for your reflection. I have noticed a fair bit of reflection happening in my own LinkedIn echo-chamber, which is okay, makes me feel I am not alone. Couple of questions: you start with a reference to Tanzania, but focus mostly on Kenya in the post, have you seen it play out differently in TZ? Secondly, you speak of challenges with AgTech, but see the challenges largely as to be associated with the funding for it (sorry, I am probably simplifying your P.O.V.), but is there a bias issue with talking about agricultural production/productivity/development/innovation through the lense of it being AgTech? If of interest, here are some of my own recent reflections: https://www.linkedin.com/posts/jorisdevries_impact-investing-continues-to-struggle-to-activity-7203803957444386817-Nnmg?utm_source=share&utm_medium=member_android.

Really interesting post and comments. Sieka Gatabaki definitely calls for a deeper discussion on the topic - happy to host! A few quick thoughts: - Digital is an enabler, but SHFs still largely operate within a 2G/Feature phone environment. USSD solutions are severely limited in the promise of delivering on smart Agtech solutions - there’s the complexity of the physical infrastructure needed to support production, offtake, logistics etc, which also needs to be customized for each value chain. Major challenge in East Africa - public-private partnerships need to be strengthened to really drive impact, with clear frameworks of where all the stakeholders play - grow the right crops for our soils and climate..markets today are mostly driven by non-native crops. How do we create demand and markets for native crops that are drought resilient and work for our regional environment? Chris Mitchell and I have some strong opinions on this - then there’s demographics (aging population of farmers), smaller & smaller land sizes in Kenya, climate shocks etc Long comment to say - yes, digital agriculture, patient capital and right business models are a part of this. But food systems are so complex that’s it’s hard to point to a single issue..

Agtech is just a haux. The evidence that funders are like sheep rushing to step in, following their peers, maybe afraid to missing a big future opportunity for a fatt exit. It demonstrates uterly misunderstanding of the true issue in farming in (East) Africa. And that is the steep decline of yields from their overfarmed and malneurished shambas. A unavoidable result from the natural mineralisation cycle. And no, the answer is not fertiliser as the lobby wants to making believe the world. The only straight forward solution is immedately push soil health. Change the Paradigm from feeding the plant towards feeding the soil. Massively implement regenerative farming practices aiming at bringing back the organic matter content to what it used to be when it was still a forest. From today often 1% to at least 6% or better 8-10% Those companies early in the value chain need your interest and support. Not the Ivory Tower city people with their flashy presentations. Apologies for my candid comment. But I am getting so totally said when I read about certain pesticide and fertiliser sales agronomists who try to brainwash farmers that the land they plant on is no more then "dead medium". Disgusting

This year's Africa Prize for Engineering Innovation winner was an agtech start-up focused on pest and nutrient detection, which is of course useful, but it felt like déjà vû when the founder confidently talked about being able to sell the data so that farmers can access credit. Not sure if the farmers get paid for the data or if it reduces the cost of the loan, but more importantly, financial services for anybody, not least farmers anywhere, must start with savings.

You have put it really well John Mundy. When I wear the hat 🧢 of a farmer this being my 15th year, there are many solutions out there that could have worked but many of them have been developed without the farmer in mind or heart. Most of the solutions are built with an idea that farmer will adopt and use it very fast. Probably there is pressure from the donors or investors to build quickly & become sustainable. When I now wear my other hat and having worked with quite a number of partners at Afarmers Media I have seen some challenges in what is being sent out to farmers to digest and use. We need to recreated and repackaged for specific farmers. It’s imperative to understand the farmers & even add some to our teams & dedicate resources for physical interaction with farmers in their farms. Digital is good but the physical makes the difference. Farming is 90% physical. There is very stiff competition amongst startups for funding and probably we need to start encouraging more collaboration as Sheena Raikundalia not one organization can solve this.

As long as we are the heaviest users of synthetic fertiliser and agrochemicals it will not happen soon, the solution is working on correcting and maintaining soil health and integrity, I happened to find a farmer doing 100kg of DAP, 100kg CAN, 100kgNPK on one acre of tomatoes two seasons a year, the tomatoes were big but he was killing the soil, after 2 years that land will be useless. I think most of this startups lack a vision, they are avenues to make donors release funds and make few individuals rich and after 4 years it goes down. We cannot solve food crisis in Africa where there is no winter or summer with the approaches we use, technology needs to be incorporated and extensive farming embraced, the governments also need to be serious doing their part