Toespraak van Koningin Máxima tijdens het Mercy Corps AgriFin Annual Learning Event

Toespraak | 26-04-2021

Ladies and gentlemen,

Addressing the estimated 42-billion-dollar financing gap for smallholder farmers in Sub-Saharan Africa will require game-changing solutions. Mobile-based service platforms and digital farm technology — including sensors, satellite images, and drones — help reduce information gaps, promote access to the formal system, and provide tools to better manage risk. Risk management is particularly critical for smallholder farmers. For example, the worst plague of desert locusts in the last 70 years hit East Africa in 2020. The AgriFin program supported eradication efforts by mapping locust swarms in real time using satellite and field-level data. It also worked with insurance providers, including Pula and Acre Africa, to leverage this data to deliver insurance and first-loss facilities. This further protected farmers against the climate-related risks of Desert Locust.

Technology-based solutions have grown in importance since the COVID-19 pandemic. Similarly to the 2008 global economic crisis, agriculture is serving as a buffer for low-income households according to recent World Bank data. While there has been an increase in households moving toward agriculture since the start of the pandemic, farmers face declines in revenue due to market closures, reduced demand, and value chain interruptions. This means more erratic income flows, greater vulnerability, and heightened financial stress.

While technology offers new opportunities and supports farmers with the financial tools they need, further investments are needed to turn the promise of these solutions into scale. Today there are many agricultural finance pilots with limited reach and scale across Africa. It is key to prioritize policies to scale them sustainably. This includes implementing adequate operational and financial incentives across stakeholders who manage these pilots. This also means reviewing pricing schemes to achieve sustainability once donor funding ends. Stakeholders must dedicate adequate technical, financial, and human resources to such pilots to ensure that commitments are translated to on-the-ground implementation.

COVID-19 has underscored the importance of ensuring that digital public goods enhance financial inclusion for smallholder farmers. This includes expanding digital identification, extending affordable telecommunications connectivity to the last mile, and financial sector regulation supportive of digital financial services. When these key prerequisites are in place, governments and the private sector can rapidly mobilize to provide farmers the financial tools to withstand shocks. Governments should act swiftly to invest in and build these key prerequisites, as well as address enabling environment issues.  

Now is the time to prioritize the financial and digital inclusion of female smallholder farmers. Women produce nearly 70% of Africa’s food, yet are disproportionately affected by unequal access to markets, inputs, finance, and land. The pandemic has only intensified these inequalities.

Programs must target women smallholders and address their specific constraints. When introduced safely and responsibly, technology can make a real difference. For example, a digital ID more easily proves that female farmers exist. Leveraging data from cell phone and digital platforms helps facilitate access to credit for women. And this is important because many of them lack assets such as land that are needed for collateral against loans. There is a need to invest in proven interventions that can scale quickly. For example, the AgriFin program has supported the digitization of savings group in Tanzania through the Chomoka program. This intervention has made savings groups more efficient and trustworthy, and members are reporting improvements in livelihood outcomes and overall wellbeing. 

Technology plays a key role in promoting climate smart agriculture – or CSA.  Twenty-five percent of crops in lower-income countries grown by small-scale farmers are projected to fail because of climate change. CSA requires product and service innovation, along with tremendous behavior change, across the agricultural sector. Governments can encourage emerging CSA solutions through policies such as tax relief, supporting social enterprises, introducing smart subsidies so farmers adopt new practices, and agile public-private partnerships to unlock financing barriers to support CSA interventions.

Mercy Corps’ work to serve more than 16 million farmers in eight countries over the past six years is impressive. This program is at the heart of the digital transformation necessary to achieve improved wellbeing outcomes for vulnerable farmers, particularly women. Further, Mercy Corps’ recent research helps us to know what really works. It should be disseminated widely, including amongst government counterparts.

I encourage participants to use this week to gain insights and renew commitments, backed by financial and technical resources, to accelerate progress. Collaboration is key to achieve a future for smallholder farmers that is inclusive, tech-driven, climate smart, and sustainable. 

Thank you