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Info Service on Sustainable Agriculture The Digitalisation and Financialisation of Africa’s Food and Farming Systems A two-part series from the African Centre for Biodiversity explores 1) the current status of digital agriculture in Africa and the potential implications its deployment has for smallholder farmers on the continent; and 2) how private-sector interests and motives are driving the financialisation of Africa’s food and farming systems. The digitalisation of African food and farming systems, including the extraction and use of data, is taking place under circumstances where smallholder farmers are mere ‘data producers.’ This is enabling profiteering by private companies from the knowledge of farmers, their farms, territories, and the relationships they enjoy with the land and resources. Concerns for smallholder farmers include inequitable benefits and influence accrued from its deployment; ownership of data and how it is used; and its exclusion and marginalisation of people-environment relationships and knowledge systems. Digitalisation is an enabler of financialisation. The financialisation of Africa’s agriculture systems, characterised by investments or financial activity that focus on generating revenue from a perceived value of a real-world asset – through interest on loans, shareholder returns, and commodity and derivative trading – has resulted in the growing corporate dominance of all elements of the food chain, reduced funding into the real economy, and an increased focus on delivering short-term returns. The consequences of financialisation include the marginalisation of human rights, particularly as relating to land access and ownership. With best
wishes, ————————————————————————————————————— THE RISE OF DIGITAL AGRICULTURE AND DISPOSSESSION IN AFRICA: IMPLICATIONS FOR SMALLHOLDER FARMERS African
Centre for Biodiversity In part one in a series of two, consisting of a briefing paper and linked fact sheet, we explore the current status of digital agriculture in Africa and the potential implications its deployment has for smallholder farmers on the continent. We outline three primary areas of concern related to potential inequitable benefits and influence accrued from its deployment; ownership of data and how it is used; and the potential exclusion and further marginalisation of people-environment relationships and related knowledge systems. Africa is characterised by a significant digital divide (particularly marked in rural areas and by gender, with women having less access to and knowledge of digital products and services). This divide is entrenched by disparate investment in digital infrastructure, unaffordable costs of internet-enabled devices and data, and limited education and training on information communication technology at school level. Only Benin, Rwanda and Nigeria have considered the digital transformation in their agricultural strategies. Digital agriculture is big business. Investment into Africa’s ag-tech market was US$482.3 million in 2021, and it is growing. Digital services and products offered in the African agricultural sector range from advisory services to the use of drone technology to spray crops, collect data or deliver inputs. The World Economic Forum notes that about 22 million small-scale farmers in Africa have registered for a digital service, but that less than a third We outline three primary areas of concern related to potential inequitable benefits and influence accrued from its deployment; ownership of data and how it is used; and the potential exclusion and further marginalisation of people-environment relationships and related knowledge systems. Africa is characterised by a significant digital divide (particularly marked in rural areas and by gender, with women having less access to and knowledge of digital products and services). This divide is entrenched by disparate investment in digital infrastructure, unaffordable costs of internet-enabled devices and data, and limited education and training on information communication technology at school level. Only Benin, Rwanda and Nigeria have considered the digital transformation in their agricultural strategies. Digital agriculture is big business. Investment into Africa’s ag-tech market was US$482.3 million in 2021, and it is growing. Digital services and products offered in the African agricultural sector range from advisory services to the use of drone technology to spray crops, collect data or deliver inputs. The World Economic Forum notes that about 22 million small-scale farmers in Africa have registered for a digital service, but that less than a third of them are using them in a way that provides a benefit. It is not just services and products that are of value in the digital agriculture sector. The collection of farm-related data is very valuable, particularly when it is aggregated across a geographic location or a type of farmer. Ownership of this data enables corporates to predict farming-related trends and tailor their products to a particular market. Aggregated data is also being used to inform policymaking. The Civil Society and Indigenous Peoples’ Mechanism raises concerns about how data is being used, noting that data is neither neutral nor objective. It is impacted by who collects it, how they do it, and what they choose to include or exclude in how it is presented. This is because “digital technologies and processes … reshape our very perception of the food systems through the inclusion or exclusion of ‘data that counts’ and therefore what food futures are imaginable” (CSIPM, 2023:1)1. The paper explores digital sovereignty, democratisation of data, and digital commons as a response to concerns about the digitalisation of agriculture in Africa. There is a fact sheet linked to this briefing paper, which can viewed here (https://acbio.org.za/wp-content/uploads/2023/08/Rise-of-digital-agriculture_dispossession_Africa_and_smallholder-farmers_factsheet.pdf) and you can read or download the briefing here (https://acbio.org.za/wp-content/uploads/2023/08/Rise-of-digital-agriculture_dispossession_Africa_and_smallholder-farmers_briefing.pdf). ———————————————————————————————————————- Part 2 FINANCIALISATION, DEMATERIALISATION, DIGITALISATION & DISTANCING OF AFRICA’S AGRICULTURE African
Centre for Biodiversity What future for small-scale farmers and their food and seed systems? Following on from part one, The rise of digital agriculture and dispossession in Africa: implications for smallholder farmers, part two looks at how private-sector interests and motives are driving the financialisation of Africa’s food and farming systems. Financialisation is the focus on generation of revenue and of profit from an abstracted and increasingly digitalised version of real-world production. This encompasses interest on loans, shareholders returns and commodity and derivative trading. It is a de facto dematerialisation of the reality of the work undertaken by Africa’s smallholder farmers to produce food for the continent, generate livelihoods and act as custodians to the relationship between people and the land that sustains them. The consequences of financialisation are growing corporate dominance in all elements of the food chain, reduced funding into the real economy and an increased focus on delivering short-term returns. Real-world systems are ruptured. This paper describes key financial instruments like futures and derivatives trading markets, and index funds. It also explores the financialisation of climate change and the role of public private partnerships. Significant financialisation actors are identified, such as banks, asset management funds, large institutional investors and philanthropic organisations. Agricultural commodity trading companies are engaged with financialisation instruments like derivatives, as are global energy traders. Digitalisation is an enabler of financialisation. See more on digitalisation of Africa’s agricultural systems in part one. There is money to be made in the abstraction of agriculture by those who do not participate in the actual production or risk of producing food. This paper explores the consequences of financialisation, which include the marginalisation of human rights, particularly as relating to land access and ownership. It looks into financialisation related to seed breeding and seed-related research and development finding that seeds are increasingly viewed as digital commodities. There is a ‘distancing’ that happens in the process of financialisation – distancing of revenue generation far from the place of production, distancing of accountability as the entry of many stakeholders unrelated to food and farming obscures responsibility, and distancing (almost erasing) of the physical form of food production, including of those who produce it and their related knowledge. The briefing paper is here: https://acbio.org.za/wp-content/uploads/2023/09/Financialisation-digitalisation-of-Africa-agriculture_what-future-smallholders_fin.pdf The associated fact sheet is here: https://acbio.org.za/wp-content/uploads/2023/09/Fact-Sheet-2-Rise-of-the-digital-economy-in-Africa_fin.pdf
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