Can technology change the agriculture industry?
The first thing that comes to our mind when we think about food is taste, flavour, memories, festivities, and restaurants but how many of us think about the farmers who grow the food, much less know how it feels like to walk in their shoes?
A unique chance to be a part of farming, sharing the excerpts of the life of a farmer in Bangladesh -- iFarmer -- connects individuals and institutions with farmers through a sponsorship package to fund higher yields for a share of the returns.
It also trains farmers on smart agriculture practices and provides access to markets. Since this is a profit-sharing model, farmers are more motivated to invest in better inputs and farming practices to ensure better returns.
iFarmer provides monitoring support so that the farm sponsors are updated about the farms and get the intended return at the end of the farm cycle. But why is a business like iFarmer so relevant in today’s world?
According to FAO, by 2050, the world population will reach 9 billion. Bangladesh will have an estimated population of 250 million. How are we going to feed this huge number of people?
Food production will have to increase by 70%. Only in Asia, there are 450 million smallholders who grow more than half of what the world consumes. Like most smallholder farmers around the world, farmers in Bangladesh deal with three major problems.
Almost 80% of the farmers in Bangladesh are smallholders and 70% of them do not have any access to formal banking. They have to rely on personal savings and interest rates of as high as 110% from loansharks and microfinance.
Lack of access to appropriate finance discourages farmers to invest in better quality inputs and often encourages them to undertake malpractices to increase their outcome.
Most farmers also lack updated knowledge and information about good agriculture practices and new technologies to improve farm productivity and yield.
Lastly, the exploitative nature of the middlemen also causes farmers to incur a loss and at times have to sell produce well below their production cost.
In 2018, the retailers sold the potatoes that were sold at the local markets in Bogra at Tk2.5/kg in Dhaka at Tk15-20/kg. This is mostly due to the inefficient and unorganized supply chain.
So iFarmer is working to improve the conditions on all these three frontiers. What makes iFarmer different is that it turns a complex problem into a digital marketplace. iFarmer is taking care of funding for farmers, training them, and providing them with the market to sell.
iFarmer takes care of the logistics to move farm harvests to the market, makes sure farmers earn a decent return at the end of their cycle, and share the profit with the farm sponsors. At the core of everything is data.
Using a data-driven approach, iFarmer screens small-scale farmers. It reduces risk for the farm sponsors and increases the return from the farms, by connecting the farmers to the markets.
Currently, iFarmer is only working with cattle farms, but soon it will launch fish, duck, crab, and other cash crops. iFarmer’s revenue model operates on a split system for sponsorships -- the sponsors earn principal plus 30% for sponsors, 50% for farmers, and 20% for iFarmer.
Since officially starting in July 2018, iFarmer has been working with 1,000 farmers by training them and facilitating finance to selected and verified farmers attracted sponsorships from more than 150 people for 500 cattle.
iFarmer won the “Startup with the most Social Impact” award from the Swiss Embassy in Bangladesh in 2018.
iFarmer also was one of the top five businesses at UNDP Youth COLab, A finalist Echoing Green Social Impact Business 2019, and a winner of UNCDFs Fintech Innovation Fund for Women MSMEs 2019.
iFarmer has been incubated by Toru and has partnerships with Startup Bangladesh and CARE International.
The iFarmer team sees the revenue potential for agriculture in Bangladesh as huge, as the size of the agriculture market is almost $40bn.
Bangladesh has 165 million people and is projected to become one of the top growing counties in the next 30 years. All of these people are going to need food to eat.
Fahad Ifaz is the co-Founder and CEO of iFarmer.