Technology and digitalisation possess significant potential in addressing the increasing demand for safe and nutritious food, efficient natural resource management, fostering high-quality productivity growth, and contributing to the attainment of the UN Sustainable Development Goals (SDG) Agenda. But the state of digitalisation in agriculture, water, and food systems in low-and-medium-countries (LMICs) in particular, varies widely, with ongoing efforts to leverage technology for sustainable development. Maher Salman, Team Lead, Agricultural Water Management, Food and Agriculture Organization (FAO) of the UN, in an exclusive interview discusses the importance of digital innovation in agriculture, water management, and building resilience in food systems, and emphasises its distinctive capabilities to bridge the rural-urban gap, create employment opportunities, enhance resilience in rural areas, and empower youth and women by providing access to information, technology, and markets.
ICIEC Quarterly Newsletter: Technology is critical to affecting change and driving development. In agriculture, it is said that digitalisation could be a game changer in boosting productivity, profitability, and resilience to climate change. An inclusive, digitally enabled agricultural transformation could help achieve meaningful livelihood improvements inter alia for smallholder farmers and pastoralists and could drive greater engagement in agriculture of women and youth and employment. What is the state of digitalisation in agriculture, water, and food systems in the low-and-medium-income countries (LMICs)? What is the economics of digitalisation in agriculture?
Maher Salman: Technologies and digitalisation possess significant potential in addressing the increasing demand for safe and nutritious food, efficient natural resource management, and fostering high-quality productivity growth. Furthermore, they play a crucial role in ensuring inclusivity and contributing to the attainment of Sustainable Development Goals. Digital innovation in particular has distinctive capabilities to bridge the rural-urban gap, create employment opportunities, enhance resilience in rural areas, and empower youth and women by providing access to information, technology, and markets.
The state of digitalisation in agriculture, water, and food systems in low- and medium-countries varied widely over the most recent years, with ongoing efforts to leverage technology for sustainable development. Digitalisation in these sectors holds significant potential for addressing key challenges linked to agricultural development, and hence to broader economic growth for several countries whereby agriculture is the leading sector. The status of digitalisation in these contexts is dynamic and shows both opportunities and challenges.
The adoption rate, for instance, varies across regions and countries, whereby some areas have made significant strides, while others may be lagging due to factors such as infrastructure limitations, education, and access to technology. Furthermore, technology in agriculture is becoming more and more a critical aid in decision-making. The collection and analysis of data is increasingly informing management processes, as well as investment decisions.
The economics of digitalisation in agriculture, on the other hand, involves a delicate balance of investment and returns. While initial costs are associated with adopting digital tools, the potential benefits include increased efficiency, improved market access, and elevated livelihoods for smallholder farmers and pastoralists. The inclusive nature of digitally enabled agricultural transformation also holds the promise of engaging a broader range of stakeholders, including women and youth, offering not only improved economic prospects but contributing to broader social and employment objectives.
In the face of economic slowdown and uncertainty, FAO has been playing a key role in advocating for the use of digital technologies to transform agrifood systems and agribusinesses. This involves advising on and promoting a policy agenda to address the digital divide and extend digital benefits on a mass scale, with a commitment to leaving no one behind. As part of its Digital Agriculture Program Priority Area, FAO has already initiated various programs to translate this vision into tangible support for its Member States.
To further advance this trajectory and bring digital innovation’s benefits closer to people, technology-based solutions need to be taken at scale and developed with inputs from final beneficiaries and local partners. FAO has been working in this direction, for instance, in Lebanon, with the development of the BlueHouse-Leb application that provides timely information on the irrigation needs of crops in unheated plastic greenhouses and thus contributes to improve the farm profitability and household-level food security of farmers.
What are the biggest threats, challenges and needs for sustainable agricultural development, quality land improvement and management, water and irrigation systems management, crop and land water productivity – in other words, for sustainable agri-food system transformation?
The sustainability and resilience of agri-food systems is seriously under threat unless current trends of drivers that are affecting them do change. An increase of food crises can be expected if we do not act immediately to transform the way we produce our food. Factors like the growing population and urbanization, economic uncertainties, poverty and disparities, conflicts, intensified competition for natural resources, are causing significant disruptions in socioeconomic structures and harmful effects on environmental systems.
Furthermore, the escalating threat of climate change, posing risks to crop yields, water availability, and overall land productivity poses serious challenges to the pursuit of sustainable agricultural development. Ensuring sustainable land management is hindered by factors such as soil degradation, deforestation, and inadequate land-use planning. The effective management of water and irrigation systems, critical for agricultural productivity, faces challenges related to water scarcity, inefficient irrigation practices, and the need for sustainable water resource governance.
Additionally, achieving optimal crop water productivity is impeded by the lack of access to advanced agricultural technologies, limited farmer education, and unequal distribution of resources. The overarching need lies in developing holistic approaches that integrate climate-resilient practices, advance sustainable land management, and promote efficient water resource utilization. The 2022 FAO “The Future of Food and Agriculture” report identifies four key triggers for the transformation of agri-food systems toward these objectives: improved governance; increased consumer awareness; better income and wealth distribution; widespread technological, social, and institutional innovations.
Moreover, the implementation of appropriate public strategies and policies, involving the active participation of all stakeholders are crucial. Addressing these challenges requires collaborative efforts, technology dissemination, policy support, and capacity building to foster a sustainable agri-food system transformation that is resilient, equitable, and environmentally sound.
The world is plagued by a cornucopia of negative metrics which tend to undermine progress towards achieving the 17 UN SDGs, of which sustainable agriculture, food security and universal digitalisation are key goals. I refer to policy inertia; lack of convergence on trade policies and tariffs; hidden protectionism through subsidies and other barriers to market entry; national interest; supply chain disruptions, land degradation and water pollution due to conflict, civil unrest, terrorism, polluting heavy industries, illegal mining, and logging; rising inequalities, and of course the impacts of the Covid-19 pandemic. What is the real economy, social, health and opportunity cost lost, and how do we future proof such challenges?
The number of challenges indeed poses formidable obstacles to the attainment of the Sustainable Development Goals, particularly in the domains of sustainable agriculture, food security, and universal digitalization. As pointed out by the UN Secretary-General and confirmed by the FAO report “Tracking Progress on Food and Agriculture-related SDG Indicators 2023”, many SDGs are off-track, including those to which agri-food systems are expected to contribute.
Issues like policy inertia, divergent trade policies, and hidden protectionism through subsidies are impeding global progress. Additionally, disruptions in supply chains, land degradation, water pollution from various sources including conflict, civil unrest, terrorism, and polluting industries intensify the complexity. The exacerbation of inequalities and the profound impacts of the Covid-19 pandemic further compound these challenges. The real costs, spanning the economy, society, and health sectors are highly significant, but so are the opportunities.
To future-proof against these challenges, a comprehensive approach is needed. This involves fostering international collaboration to address policy gaps, promoting transparent trade policies, and develop management and technical capacities of stakeholders at different levels. Moreover, investing in resilient supply chains, sustainable practices, and leveraging digital technologies for equitable access to resources are crucial steps. Building robust multipurpose infrastructures for both health and agricultural uses, and implementing social safety nets can enhance resilience, ensuring a more inclusive and sustainable future despite the multifaceted challenges we are confronted with.
The role of water is highlighted in the theme, “Water is life, Water is food. Leave no one behind,” of World Food Day 2023. There are over 2.4 billion people in water-stressed countries and 600 million reliant on aquatic food systems who face pollution, ecosystem degradation, and climate change impacts. Water scarcity, shortages and rationing are on the increase, and no country, irrespective of economic status and wealth, is spared. How did we get it so wrong, and in a world of poly-crises with competing demands for finance, how are we going to finance the remedial mechanisms required?
The thematic emphasis posed on water in this year World Food Day underscores the critical role of water in global food security. The statistics of over 2.4 billion people in water-stressed nations and 20% decline in the availability of freshwater resources are alarming. The escalating challenges of water scarcity, shortages, and accessibility are pervasive, and affect populations across nations and along economic spectrums. The question of how we reached this critical juncture prompts reflection on past resource management and policy decisions. In the contemporary context of poly-crises and competing financial demands, financing the necessary remedial mechanisms becomes a paramount concern.
Addressing water-related challenges requires innovative, collaborative solutions, a reallocation of financial resources, and a commitment to sustainable practices to ensure equitable access to water, safeguard aquatic ecosystems, and mitigate the impacts of climate change. The urgency of the situation calls for a global commitment to responsible water management, transcending economic boundaries to leave no one behind in the quest for water security and sustainable food systems. Agriculture, as the largest consumer of freshwater, has the biggest potential for impact, by changing the ways we produce our food.
In terms of governance, we need to strengthen partnerships between governments, researchers, business, and civil society to design science and evidence-based policies and improve coordination among sectors for better planning and management of water resources. As for financial solutions, more investment are required to enhance the efficiency of water resources and the development of irrigation systems based on ground-truth data, to be made available through accessible knowledge platforms.
Global water demand is likely to grow in the next three decades due to agriculture intensification, population growth, urbanization, and climate change. In water-stress regions, future demand will require the reallocation of 25 to 40 percent of water from lower to higher productivity and employment-oriented activities. These reallocations are likely to come from the agriculture sector due to its high share of current water use. Are you confident that new actions such as Smart Irrigation, Smart Wash, Land and Water Rehabilitation, Soil Enrichment will help to enhance increase water use efficiency, especially in irrigation, and enhance agricultural production and productivity?
The projection of increasing global water demand over the next three decades, driven by factors such as agricultural intensification, population growth, urbanization, and climate change, underscores the imperative for innovative solutions. The World Bank estimates that between 25 to 40 percent of water will need to be re-allocated from lower to higher productivity and employment-oriented activities in water-stressed regions.
Agriculture, once more can play a pivotal role and the FAO Strategic Framework hence indicates the need to increase global agricultural production by at least 40 percent by 2050, given the limited availability of water resources. Initiatives like the ones mentioned holds promise in enhancing water use efficiency and boosting agricultural production and productivity. In particular, the Smart Irrigation-Smart WASH approach, which was promoted under my lead by the Land and Water Division of FAO, addresses the concept of multiple water use and proposes solutions to enhance irrigation and provide WASH facilities to vulnerable communities, thus, responding to the critical needs in times of pandemic crisis.
With the Covid-19 emergency behind us, our focus is redirected to irrigation and its development to support the most efficient management of water resources. The “Irrigation Mapping of need and potential” initiative aims at supporting countries to mobilize sufficient resources for irrigation development and to sustain sound irrigation strategies with well-justified, prepared, and targeted action plans.
The objective is to ensure that irrigation meets actual needs, leverages untapped potential, and accommodates potential future scenarios, planning and decision-making processes. The initiative is developed by FAO through a broad partnership, including global and national stakeholders who share similar concerns about the need to enhance irrigation efficiency and are ready to promote effective solutions in countries worldwide.
In one of your recent papers, ‘Enabling pathways for intensifying drought finance flows’, you seem to suggest an important correlation between digitalisation and financial actors and recipients, and information management as the enabler of this process. Technology needs assessment, you stressed, can lead to the identification of bankable projects and support investors in establishing portfolios. You also mention customer clustering and value chain management. Making projects bankable, especially in drought prevention and mitigation is dependent on a whole range of metrics which are not readily evident in LMICs – credit enhancement, de-risking solutions, integrated policies and so on. Given that droughts are an increasing phenomenon in FAO member states, what is the outlook for increased drought finance and underwriting of the associated risks?
The report is formulated under the framework of the “Enabling Activities for Implementing UNCCD COP Drought Decisions.” project, executed in partnership with the United Nations Convention to Combat Desertification (UNCCD) and financially supported by the Global Environment Facility (GEF).
The primary focus of the publication is to delve into the complexities, alternatives, and mechanisms associated with drought finance. It is meant as a contribution to the creation of a conducive framework for the comprehensive management of drought, aligning with the overarching goal of integrated drought management. In the publication a number of short-term and readily implemented strategies are presented as pathways to drive drought finance forward, which include information management, digitalization, drought awareness, technology needs assessment, customer clustering and value chain management.
Recognizing the complexities inherent in drought prevention and mitigation projects, such alternative enablers of drought finance should be considered, especially in low- and middle-income countries (LMICs), where metrics like credit enhancement, de-risking solutions, and integrated policies are not always available. The growing recognition of the urgency and severity of drought occurrences confirms the need for increased drought finance and underwriting of associated risks, but the outlook is still far from the requirement.
Digitalization, coupled with innovative financial instruments, has the potential to unlock new avenues for financing. Moreover, the focus on customer clustering and value chain management contributes to creating a conducive environment for making drought-related projects more bankable. The imperative lies in sustained collaboration, international partnerships, and continued efforts to bridge financial gaps, ultimately fortifying the resilience of member states in the face of escalating drought challenges.
Digitalisation is a source of new growth and new efficiencies but also of new risks. The talk is about smart agriculture, precision agriculture and building agri-resilience through greater digitalisation. Risks include policy, market, water, investment, technology, cyber and insurance risks. At the same time, increased dependency on digital infrastructure especially in large-scale food systems, makes such assets more vulnerable to business interruption and cyberattacks. How do you mitigate these risks, especially for LMICs? Is targeted involvement and innovation of credit and investment insurance a potential answer?
FAO promotes inclusive and adapted innovative technologies, including digitalisation for sustainable production and improved market access, as key accelerators for the sustainable transformation of agri-food systems. There is considerable optimism that the integration of digitalization into agri-food systems, encompassing aspects like input management, disease control, supply chain management, and automation, holds the potential to enhance operational efficiency and concurrently reduce environmental impacts.
The infusion of information as a valuable resource has paved the way for big data platforms to enter the agri-food landscape, however, potentially assuming dominant positions. The issue has progressively come under the UN radar, especially for LMICs, as highlighted in the 2020 Report by the Secretary-General. This transition has given rise to novel and disruptive business models, particularly evident in the shifts observed since the onset of the COVID-19 pandemic.
However, concerns have emerged regarding the concentration of both big data and analytical capabilities in the hands of a select few entities. Without appropriate regulation, this concentration threatens to accelerate power imbalances, foster greater inequality, and marginalize impoverished and unskilled workers. Rural families and farmers, in LMICs and worldwide, are particularly at risk, as they lack the digital competences to stay updated in increasingly digitalized food markets and their employment opportunities are limited. In the light of these considerations the importance of carefully managing the integration of digital technologies to ensure equitable outcomes in agri-food systems emerges clearly, and so does the need to keep looking for suitable answers.
