Despite ranking as the largest recipients of agritech investments in Africa, Kenya’s agritech startups continue to struggle in penetrating the market, with official data revealing that less than 30 percent of farmers use digital farming tools.
Unlike their counterparts in other sectors, Kenya’s agritech startups face a unique set of challenges that are unrelated to funding, including a complex regulatory environment that inhibits their growth.
Sieka Gatabaki, the Programme Director at Mercy Corps AgriFin, an initiative which assists startups in getting their products to market, says navigating the regulatory landscape in agriculture has long been an issue for many startups.
Many of these startups struggle to stay upto date with evolving regulations related to data usage, land ownership, or technology deployment.
“As a result, few are able to transition into a space where they are sustainable and able to scale, with many remaining stuck at the innovation stage,” says Gatabaki.
Policy barriers related to utilisation of new technologies including Internet of Things, Artificial Intelligence (AI) and machine learning, prevent these startups from applying various smart farming techniques.
Similarly, as agritech platforms collect and analyse vast amounts of information, issues around data privacy and security have emerged as critical challenges, with regulators setting strict guidelines to guarantee the safety of sensitive farmer data.
“To ensure the success of agritech startups, policy makers need to strike a better balance between protecting the consumer and supporting innovation,” says Gatabaki.
Avenues such as stakeholder engagement forums can be leveraged upon, to stimulate conversations between policymakers and other stakeholders in the startup ecosystem- around how to foster inclusive and sustainable digital agricultural transformation.
Every year, Mercy Corps AgriFin hosts a forum dubbed AgriFin Learning Event (ALE), that serves as a platform for different stakeholders in the industry to dialogue on issues affecting the industry.
“This year, we will be hosting our 8th AgriFin Learning Event between October 15-16, under a theme that will focus on regulatory enablers and barriers to growth of these startups,” posed Gatabaki.
The event, which is expected to gather over 400 participants from various countries, will also feature discussions around how AI can be leveraged to scale positive impact, as well as how public sector data sets can support small-scale producers in accessing digital financial services and information.
“The past couple of years have had unprecedented challenges for technology startups, respective teams, and their investors in Africa. Many lessons have been learnt and a deeper discussion needs to be held to chart a more informed way forward to the technology-driven solutions in Africa,” said Gatabaki.
Collins Marita, Technical Director, Strategic Learning at Mercy Corps AgriFin, points out that compared to other markets in Africa, Kenya’s digital ecosystem is more mature, presenting a golden opportunity for players in the digital agricultural space.
He points out that other than the complex regulation, the fragmentation of service providers is also preventing farmers from adopting digital solutions for the various phases of planting like soil preparation, sowing, harvesting and marketing.
“All the different service providers in the value chain have created different access channels like USSD codes for farmers to access their products. We ask a lot from farmers to remember all these codes and processes,” says Mr Marita.
AgriFin encourages its partners to come together and form a bundle, so that it is easier for farmers to access services. A farmer can go to one platform and access input services, advisory, credit, insurance, among others.
“The success of many of the startups, especially in more recent years, involved properly partnering with one of the established actors.
There are a handful of cases of independent scale-up, but most startup success is through a partnership,” says Mr Marita.
He also holds the view that developing products without much understanding about the needs of farmers and the prevailing ecosystem that they operate in, has contributed to the struggle of many agritech products in Kenya.
“Farmers as a segment are highly varied with different crops, ages, farm size and even acceptance of technologies yet often, founders don’t have access to the tools to consider these different factors when developing products,” he says.
Startups need to gain an in-depth understanding of who their customers are and what they feel about the product, since farmers, often considered slow adopters, tend to feel overwhelmed when introduced to products they have not interacted with.
“It is not just about how good your solution is. Often, we see technology companies with good products that are trying to find a market. It is also about how you connect with the farmer and address barriers in the ecosystem,” says Mr Marita.
With access to the right tools, small scale producers can build the resilience they need against climate and emergency shocks and continue to feed their communities, while growing their earnings.
