Digital Bangladesh story – middle income ambition supported by technology

Anir Chowdhury from a2i speaks at the World Economic Forum session on 4IR in Agriculture.

4IR has been prioritized by the cabinet ministry of Bangladesh and every ministry has been instructed to start incorporating 4IR technologies in their work with a view to establishing a developed country by 2041.

4IR potentially brings in an unprecedented set of actors together: the usual aspects in agriculture such as farmers, farmers cooperatives, input suppliers, market linkage companies, extension workers, policy makers, research labs, agri universities, banks and lenders and a new set of actors: software companies, hardware companies for IoT devices and drones, data companies such as Telco’s, satellite companies, and many others.

Agriculture accounts for around 14% of Bangladesh’s GDP and employs about 41% of the country’s total labor force. The agriculture sector of Bangladesh comprises mostly of marginal producers who work on their own initiative on small plots of land. So agriculture has not yet become an industry which means low productivity and high cultivation costs.

Due to a lack of knowledge and information, farmers cultivate based on their ideas without observing soil and weather forecast. On top of that, people involved in agriculture are less educated, and they don’t have the capacity to understand modern data-driven agriculture.

Anir shared that in agriculture, many different gaps exist: access to market intelligence, access to finance, access to weather/soil and inputs information. So, any gap filling in reality creates new services and contributes to financial sustainability of 4IR initiatives.

“The reality in this region is that 70% of the farmers are smallholders and unbanked. Access to finance is often costly for farmers. Peer-to-Peer lending platforms and crowd funding platforms can offer low cost financing opportunities for farmers”, mentioned by Anir in the forum.

iFarmer is a new startup as an example in Bangladesh that is working to facilitate funding for agricultural households. It connects farmers, funders, financial institutions, and IoT, and cloud-based solutions. iFarmer uses alternative data and a proprietary credit scoring algorithm to identify the viability of the customers.

He further mentions that cutting edge technology like blockchain can create a digital and verified identity of the farmers along with their credit and transactional history in a distributed network and accessible by relevant actors such as banks and insurance companies. There can be AI-based predictive modelling of prices, market arrivals, local consumption and export potential.

So, a lot of new services and hence a lot of untapped financial opportunities for old and new actors and farmers.

Anir sees and recommended 3 stages of financial sustainability:

The first stage has to be funded by the govt, large input suppliers and large data and tech companies through creative public private partnerships.

The second stage will bring in thousands of farmers cooperatives who will start paying for these new services.

The third stage will bring in millions of individual farmers who will start understanding the value of these services which will become micro services within the affordability of the small farmers.

“But for now, we have to prepare for a lot of experimentation and public private partnerships”, remarked by Anir at his concluding remarks.

Anir Chowdhury is a member of the Bangladesh Prime Minister’s Digital Bangladesh Task Force and Policy Advisor to a2i, the Bangladesh government’s flagship digital transformation program, jointly implemented by the Information and Communication Technology Ministry and Cabinet Office with technical support from UN Development Programme.

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