Albert Boogaard, Head of Innovation at Rabobank Foundation, explains the importance of bringing the latest data-driven technology to smallholder farmers in developing countries across the world.
Listen to this story as a podcast (in Dutch), or read on for the English interview.
Smallholder farmers face the formidable challenge of feeding a booming population. To do that in Africa without imports would mean lifting the efficiency of farming there from its current 20-30 percent to 80-85 percent, as it is in the Netherlands. But how? With data-driven innovation, says Albert Boogaard of Rabobank Foundation.
Rabobank Foundation, the bank’s social fund, has for 44 years used its financial resources, network and expertise to help smallholder farmers in developing countries become self-reliant in the longer term. A year ago, in recognition of the increasingly important role of technology in this process, the Foundation appointed a Head of Innovation, Albert Boogaard. From his extensive experience as a banker with smallholder farmers in developing countries, he knows their challenges and sees the enormous potential that can be unlocked by harnessing data.
Albert Boogaard: “With data-driven technology, we’re getting a better idea of what smallholder farmers need. That allows us to develop better products and service models for them.”
“In countries with stable governments and decent infrastructure, what farmers lack most is access to finance and knowledge,” Boogaard explains. “With data-driven technology, we’re getting a better idea of what they need. And that allows us to develop better products and service models for them.”
The mobile phone has been a great enabler in rolling out digital innovation in the developing world. In East Africa, cellphones are relatively cheap and very popular. “For example, these phones allowed people to open and manage savings accounts or obtain a loan from home instead of travelling many kilometers to a bank branch.” Later, the arrival of smartphones meant a spectacular increase in the services at people’s fingertips: internet access, cloud applications.
But what is driving innovation now is data. Rabobank Foundation finances fintech start-ups that combine satellite technology, machine learning and cloud storage to design hybrid services. “In Kenya, for instance, our partner offers farmers a combination of insurance, finance and advice,” says Boogaard. “On their smartphone, farmers get information from satellites on land and weather conditions, perform financial transactions, agree on contracts, and converse with a chatbot in Swahili.”
Meanwhile, the data collected serves as input for the credit model the company is developing. The satellite data provides objective information about farming conditions in the area, and the farmer’s online transactions create a kind of track record. All this makes it easier to determine the risk involved. Boogaard: “The fintech company can identify which individual farmers represent a relatively low credit risk, and can offer them a loan they might not have been eligible for otherwise.”
“Young people are finding tech jobs supporting farmers”- Albert Boogaard, Rabobank Foundation
For farmers, the advantages of data collection are considerable: higher productivity and a higher income. “Besides,” Boogaard points out, “because farmers spend their increased income locally, the local economy grows. Young people who don’t aspire to become farmers find tech jobs supporting farmers: collecting and passing on data with their smartphones, for instance. They don’t migrate to the cities.”
Rabobank benefits, too, though not immediately in terms of return on investment. Rabobank Foundation tests promising concepts that are still too risky for the bank to take on their books. “And the Foundation boosts employee cohesion and morale,” Boogaard adds. “For example, we used to invite older colleagues to our projects in developing countries. They could help keep records without a computer, on paper; now we need IT-colleagues to help them.”
A critical factor in the success of this tech-driven approach is convincing farmers to work differently. The easiest way for Rabobank Foundation to achieve this, Boogaard says, is through cooperatives (setting them up and strengthening them if needed) and through the companies that buy the crops. But ultimately it is a matter of convincing individual farmers.
“Especially when it comes to paid services, seeing is believing,” Boogaard explains. “Sometimes things look too good to be true, like a soil scan developed by one of our partners, which provides an analysis within one minute that used to take six weeks. Farmers just laughed. So next time, we went away and came back a day later with the result. Then they were prepared to believe. We overcome farmers’ skepticism by showing them that the innovation works. And every new season, more farmers sign up.”
“We overcome skepticism by showing farmers the innovation works”- Albert Boogard, Rabobank Foundation
But there are areas without cooperatives, or even mobile phone coverage. “An Indian partner we support travels out to remote areas of India with difficult internet access to reach illiterate farmers. They hand out tablets with video instructions in the farmers’ own language. The tablets also carry simple tests that farmers can do, which tell us whether they are ready for farm input or a loan.”
Selecting partners and projects
Another critical success factor is selecting the right external partners, and the right innovations to test. “The innovations we choose are likely to solve a problem that is highly relevant to farmers, and offer added value compared to existing alternatives. Such innovations have the potential to become services that users are willing to pay for.”
Rabobank Foundation benefits from its small scale and agility. “We work closely with the bank in deciding whether projects within the bank are worth launching in developing countries, and which Foundation projects are ready to become mainstream.”
“We want to give farmers access to their own digital profiles”- Albert Boogaard, Rabobank Foundation
Going forward, Boogaard already sees the next step in the data-driven revolution. “Eventually, we want to give participating farmers access to their own digital profiles, their track records. So they can share them with relevant parties. Show others who they are and what they are capable of.”
“And we at Rabobank Foundation can then do the same thing,” he adds. “Show the world what we do. What impact our efforts have. Why we love our jobs so much.”