The CP solves---inspires global investment and innovation in digital agriculture---cheap and scalable

Two-thirds of the world’s ultra-poor depend on agriculture for their livelihood. Low productivity growth in this sector is the biggest obstacle to poverty reduction and sustainable food security. The Food and Agriculture Organization’s 2022 report on The State of Food Security and Nutrition in the World estimates that around 2.3 billion people—nearly 30% of the global population—were moderately or food insecure in 2021 and as many as 828 million were affected by hunger. Improving smallholder farmer incomes and local food security is critical to achieving the United Nations Sustainable Development Goals by 2030, particularly ending poverty (SDG 1) and eliminating hunger (SDG 2). Yet smallholder farmers typically harvest only 30%–50% of what they could produce. Smallholder farmers are particularly at risk from climate-driven shocks, and fundamental changes to growing conditions make climate adaptation a key challenge to improving and securing their yields.

More than $540 billion is spent in the agricultural sector each year through public budgets, mostly subsidies on farm inputs and outputs. Of USAID’s over $1 billion annual budget for agricultural aid, much attention is given to direct nutrition and economic assistance as well as institution and market-shaping programs. By contrast, efforts in climate adaptation and food security innovation like the Feed the Future Innovation Labs and Agriculture Innovation Mission for Climate (AIM for Climate) rely on traditional, centralized models of R&D funding that limit the entry and growth of new stakeholders and innovators. Not enough investment or attention is paid to productivity-enhancing, climate-adaptation-focused innovations and to translating R&D investment into sustainable interventions and scaled products to better serve smallholder farmers.

USAID recognizes both the challenge for global food security and the opportunity to advance economic security through evidence-driven, food-system level investments that are climate-driven and COVID-conscious. As directed by the Global Food Security Act of 2016, the U.S. Government Global Food Security Strategy (GFSS) 2022–2026 and its counterpart Global Food Security Research Strategy (GFSRS) highlight the potential for digital technologies to play a pivotal role in the U.S. government’s food system investments around the world. The GFSS describes “an ecosystem approach” that prioritizes the “financial viability of digital products and services, rather than one that is driven predominantly by individualized project needs without longer-term planning.” A core part of achieving this strategy is Feed the Future (FTF), the U.S. government’s multi-agency initiative focused on global hunger and food security. Administrator Samantha Powers has committed $5 billion over five years to expand FTF, creating an opportunity to catalyze and crowd in capital to build a thriving, sustainable global agriculture economy—including innovation in digital agriculture—that creates more resilient and efficient food systems.

However, USAID stakeholders are siloed and do not coordinate to deliver results and invest in proven solutions that can have scaled sustainable impact. The lack of coordination means potential digital-powered, impactful, and sustainable solutions are not fostered or grown to better serve USAID’s beneficiaries globally. USAID’s Bureau for Resilience and Food Security (RFS) works with partners to advance inclusive agriculture-led growth, resilience, nutrition, water security, sanitation, and hygiene in priority countries to help them accelerate and protect development progress. USAID’s FY 2023 budget request also highlights RFS’s continued focus on supporting “partner countries to scale up their adaptation capacity and enhance the overall climate resilience of development programming.” The FTF Innovation Labs focus on advanced agricultural R&D at U.S. universities but do not engage directly in scaling promising innovations or investing in non-academic innovators and entrepreneurs to test and refine user-centered solutions that fall within FTF’s mandate. USAID’s emerging Digital Strategy and Digital Development Team includes specific implementation initiatives, such as a Digital Ecosystem Fund and an upcoming Digital Vision for each sector, including agriculture. USAID is also planning to hire Digital Development Advisors, whose scope aligns closely with this initiative but will require intentional integration with existing efforts. Furthermore, USAID country missions, where many of these programs are funded, often do not have enough input in designing agriculture RFPs to incorporate the latest proven solutions and digital technologies, making it harder to implement and innovate within contract obligations.

This renewed strategic focus on food security through improved local agricultural yields and climate-resilient smallholder farmer livelihoods, along with an integration of digital best practices, presents an opportunity for USAID and Feed the Future. By using innovative approaches to digital agriculture, FTF can expand its impact and meet efficiency and resilience standards, currently proposed in the 2022 reauthorization of the Global Food Security Act. While many known agricultural practices, inputs, and technologies could improve smallholder farmers’ yields and incomes, adoption remains low due to structural barriers, farmers’ lack of information, and limitations from existing agriculture development aid practices that prioritize programs over sustainable agricultural productivity growth. Today, with the rapid pace of mobile phone penetration (ranging between 50% and 95% throughout the developing world), we are in a unique moment to deploy novel, emerging digital technologies, and innovations to improve food security, yields, and livelihoods for 100 million smallholder farmers by 2030.

There are many digital agriculture innovations – for example digital agricultural advisory services (DAAS, detailed below) – in various stages of development that require additional investment in R&D. These innovations could be implemented either together with DAAS or as stand-alone interventions. For example, smallholder farmers need access to accurate, reliable weather forecasts. Weather forecasts are available in low- and middle-income countries (LMICs), but additional work is needed to customize and localize them to farmers’ needs and to communicate probabilistic forecasts so farmers can easily understand, interpret, and incorporate them in their decision-making.

Similarly, digital innovations are in development to improve farmers’ linkages to input markets, output markets, and financial services—for example, by facilitating e-subsidies and mobile ordering and payment for agricultural inputs, helping farmers aggregate into farmer producer organizations and negotiate prices from crop offtakers, and linking farmers with providers of loans and other financial services to increase their investment in productive assets.

Digital technologies can also be leveraged to mobilize smallholder farmers to contribute to climate mitigation by using remote sensing technology to monitor climate-related outcomes such as soil organic carbon sequestration and digitally enrolling farmers in carbon credit payment schemes to help them earn compensation for the climate impact of their sustainable farming practices.

Digital agricultural advisory services (DAAS) leverage the rapid proliferation of mobile phones, behavioral science, and human-centered design to build public extension system capacity to empower smallholder farmers with cutting-edge, productivity-enhancing agricultural knowledge that improves their food security and climate resilience through behavior change. It is a proven, cost-effective, and shovel-ready innovation that can improve the resilience of food systems and increase farmer yields and incomes by modernizing the agricultural extension system, at a fraction of the cost and an order of magnitude higher reach than traditional extension approaches.

DAAS gives smallholder farmers access to on-demand, customized, and evidence-based agricultural information via mobile phones, cheaply at $1–$2 per farmer per year. It can be rapidly scaled up to reach more than a hundred million users by 2030, leading to an estimated $1 billion increase in additional farmer income per year.

USAID currently spends over $1 billion on agricultural aid annually, and only a small fraction of this is directed to agricultural extension and training. Funding is often program-specific without a consistent strategy that can be replicated or scaled beyond the original geography and timeframe. Reallocating a share of this funding to DAAS would help the agency achieve strategic climate and equity global food security goals.

Scaling up DAAS could improve productivity and transform the role of LMIC government agricultural extension agents by freeing up resources and providing rapid feedback and data collection. Agents could refocus on enrolling farmers, providing specialized advice, and improving the relevance of advice farmers receive. DAAS could also be integrated into broader agricultural development programs, such as FAO’s input e-subsidy programs in Zambia and Kenya.

DAAS: A highly scalable tool to achieve global food security and climate resilience

Plan Of Action

To spearhead USAID’s leadership in digital agriculture and create a global pipeline from tested innovation to scaled impact, USAID, Feed the Future, and its U.S. government partners should launch a Digital Agriculture for Food Security Challenge. With an international call to action, USAID can galvanize R&D and investment for the next generation of digitally enabled technologies and solutions to secure yields and livelihoods for one hundred million smallholder farmers by 2030. This digital agriculture moonshot would consist of the following short- and long-term actions:

Recommendation 1: Allocate $150 million over five years to kickstart the Digital Agriculture Innovations Fund (DAI Fund) to fund, support, and scale novel solutions that use technology to equitably secure yields, food security, and livelihoods for smallholder farmers.

The fund’s activities should target the following:

Digital Agriculture Pilot and Research Fund (DAPR Fund) ($35 million): Provide funding for research, user design, and pilot testing to industry, NGO, and university innovators to create and verify digital innovations like customized weather forecasts, digital extension, microinsurance, microcredit, and local input dealer directories. This could employ the Small Business Innovation Research model and use technical assistance from within the agency and in partner organizations to support the development of promising new ventures or products/services from existing players.

Digital Agriculture Scaling and Commercialization Fund ($100 million): Invest in grants or, with collaboration from U.S. International Development Finance Corporation, in equity funding for proven digital agriculture solutions as bridge capital to enhance their scaling to new markets or products. Funding should be directed not only to FTF Innovation Labs solutions but also to those outside the FTF network with a focus on LMIC-founded ventures, digital and technology-enabled startups, and existing footprints in FTF target countries to ensure broader impact. Selected solutions should have demonstrated outcomes in proof of concept and moved into the “demonstrated uptake” phase of the product life cycle. Annual investments should be up to $10 million across a small portfolio of ventures to crowd-in unlocked private capital and foster competitive, sustainable enterprises. Contract authority should be flexible and mission-oriented.

Market-Shaping and Public-Private Partnerships ($15 million): Create an Advanced Research Projects Agency-Energy (ARPA-E) style Tech-to-Market Team, a separate group of staffers working full-time to find marketing opportunities for novel technologies in the innovation pipeline. This group could coordinate new public-private partnerships, like the Nutritious Foods Financing Facility (N3F), which can support the digital agriculture ecosystem for smallholder farmers. This funding would also allow for the hiring of a cadre of dedicated digital development advisors at USAID to spearhead this work in the digital agriculture sector and collaborate with agency country missions in planning and executing RFPs and other agricultural aid programs.

The fund’s investment priorities should align with stated GFSS and GFSRS objectives, including solutions focused on climate-smart agricultural innovation, enhanced nutrition, and food systems, genetic innovation, and poverty reduction. Program activities and funding should coordinate with FTF implementation in strategic priority countries with large agricultural sectors and mature, low-cost mobile networks such as Ethiopia, India, Kenya, Nigeria, and Pakistan. It should also collaborate with the FTF Innovation Lab and the AIM for Climate Initiative networks.

Recommendation 2: Convene the Digital Agriculture Summit to create an all-hands-on-deck approach to facilitate and accelerate integrated digital agriculture products and services that increase yields and resilience.

USAID will announce the dedicated DAI Fund, convening its interagency partners—like the US Department of Agriculture (USDA), Development Finance Corporation (DFC), Millennium Challenge Corporation (MCC), US Africa Development Foundation (USADF) as well as philanthropy, private sector capital, and partner country officials and leaders to chart these pathways and create opportunities for collaboration between sectors. The Summit can foster a community of expertise and solidify commitments for funding, in-kind resources, and FTF country partnerships that will enable DAI Fund solutions to demonstrate impact and scale. The Summit could occur on the sidelines of the United Nations General Assembly to allow for greater participation and collaboration with FTF country representatives and innovators. Follow-up activities should include:

Partner Country Commitments: Secure commitments from FTF partner countries to direct annual funding toward digital infrastructure and the development of a local digital agriculture economy, whether in the form of R&D, implementation, or infrastructure funding.

Philanthropic and Private Sector Commitments: Following the Grand Challenges model, the Digital Agriculture for Food Security Challenge should seek commitments from philanthropy and private sector funders to expand the funding pool and finance pipelines for startups. Invitation to the Summit would be contingent on commitments of financial support and in-kind resources for digital agriculture innovation.

SXSAg for Digital Agriculture: Annual gatherings of innovators, investors, and stakeholders to share knowledge and results as well as attract more private capital.

Innovator Community of Practice: Create a Community of Practice of innovators and experts inside and outside the agency to advise DAI Fund staff and USAID on current challenges in the digital agriculture space for non-established entrants and opportunities for future fund investments.

Webinar Series: As a follow-up to the Summit, a webinar series could disseminate knowledge and build institutional buy-in and support for DAAS with key stakeholders within the agency. Subject matter experts from PxD and other service providers can share evidence, use cases, and lessons learned in developing and delivering these services and provide recommendations on how USAID can better incorporate digital agriculture into its operations.