The Agricultural Technology (AgTech) industry has garnered increasing attention for its transformative potential, especially in revolutionizing smallholder farming globally. However, industry leaders have now raised an urgent call for increased investment to fully realize this potential—particularly through empowering women entrepreneurs. This issue took center stage at the 8th Annual Learning Event hosted by Mercy Corps AgriFin, where stakeholders highlighted the need for robust support for women-led ventures that are playing pivotal roles in driving agricultural innovation and sustainability.
As the global population grows and climate change accelerates, smallholder farming faces mounting challenges, including reduced productivity and market access issues. AgTech offers technological solutions that could address these issues, but experts argue that the current levels of investment are insufficient to meet the growing demands of the sector. The recently released “State of AgTech Investment 2024 Report” underscores the need for a dramatic increase in funding to empower women entrepreneurs, as they often develop solutions that directly impact the livelihoods of smallholder farmers, especially women.
This article explores the pressing need for increased investment in AgTech, with a focus on women entrepreneurs, and examines how technology can reshape smallholder farming in the future.
AgTech’s Role in Transforming Smallholder Farming
Smallholder farmers form the backbone of agriculture in many developing countries, particularly in Africa, Asia, and Latin America. These farmers, who often operate on small plots of land, are responsible for producing up to 80% of the food consumed in these regions. Despite their importance, many smallholders face challenges such as low productivity, limited access to markets, and insufficient technological tools to enhance farming efficiency.
AgTech solutions, ranging from mobile apps that provide real-time weather forecasts to digital platforms that connect farmers directly with buyers, have the potential to tackle these issues. For instance, mobile technology can empower farmers to make informed decisions about planting and harvesting, helping them mitigate the impacts of unpredictable weather patterns. Similarly, digital platforms can streamline the supply chain, reducing post-harvest losses and improving market access for smallholder farmers.
However, despite these promising advancements, the sector’s progress has been slow, largely due to insufficient investment, particularly in ventures that focus on women-led farming communities. This is a missed opportunity, as women entrepreneurs are often at the forefront of developing practical, scalable solutions that could revolutionize smallholder farming.
The Critical Role of Women Entrepreneurs in AgTech
Women play a critical role in agricultural production, especially in smallholder farming, where they account for nearly half of the labor force in many regions. Despite this, women farmers often face unique challenges such as limited access to land, capital, and resources. The AgTech industry has the potential to level the playing field by offering technological solutions tailored to the needs of women farmers. However, this can only be achieved if women entrepreneurs, who are often the ones developing these solutions, receive the financial backing needed to scale their innovations.
During the Mercy Corps AgriFin event, stakeholders emphasized the need for a targeted approach to funding women entrepreneurs in the AgTech space. According to the “State of AgTech Investment 2024 Report,” while the sector has attracted approximately $1.6 billion in funding over the past decade, this amount is far from sufficient to meet the sector’s growing needs. The report argues that investment in the AgTech industry must double over the next decade to reach at least $3 billion, with a significant portion directed towards women-led ventures.
“AgTech has been better than most sectors in Africa in directing funding to where it can be most impactful, but challenges still exist. More than 40% of AgTech ventures remain unfunded, with a large portion of these being women-led ventures who have the potential to scale solutions that can improve the lives of smallholder farmers, particularly for women,” the report notes.
The Challenges Faced by Women in AgTech
Despite their potential, women entrepreneurs in the AgTech industry face several barriers. One of the primary challenges is access to capital. Many women-led startups struggle to secure the funding needed to grow their businesses, despite demonstrating a clear market need for their solutions. This funding gap is especially pronounced in Africa, where women-owned businesses are significantly underfunded compared to those led by men.
In addition to financial barriers, women entrepreneurs often face challenges in scaling their ventures. Smallholder farming communities, particularly in rural areas, may be resistant to adopting new technologies due to a lack of familiarity or trust. Furthermore, women-led ventures often lack access to the networks and mentorship opportunities that can help them refine their business models and go-to-market strategies.
Addressing these challenges requires a multifaceted approach. Firstly, investors must be encouraged to provide more funding to women-led AgTech ventures. This can be achieved through targeted investment funds, grant programs, and incentives for private sector investors who support women entrepreneurs. Secondly, capacity-building programs are needed to provide women entrepreneurs with the technical and business skills necessary to scale their operations. Finally, efforts must be made to increase the visibility of women in AgTech, showcasing their achievements and encouraging more women to enter the field.
The Importance of Tailored Business Models for Smallholder Farmers
Another key issue identified by AgTech stakeholders is the need for improved business models and go-to-market strategies tailored to the unique needs of smallholder farmers. Many AgTech solutions, while innovative, fail to achieve widespread adoption because they do not address the specific challenges faced by smallholders.
For example, mobile applications that provide real-time weather updates or market prices can be invaluable for smallholder farmers, but these solutions must be designed with local contexts in mind. In many rural areas, farmers may lack access to smartphones or reliable internet connections. Additionally, pricing models must be affordable for smallholders, who often operate on tight margins.
Women entrepreneurs are uniquely positioned to address these challenges, as they often have a deep understanding of the communities they serve. By working closely with smallholder farmers, women-led ventures can develop practical, user-friendly solutions that are tailored to the needs of local farming communities. However, to do so, they require greater financial support and mentorship.
Unlocking the Full Potential of AgTech Through Investment
To fully unlock AgTech’s potential, industry stakeholders agree that more must be done to increase investment in the sector. According to the “State of AgTech Investment 2024 Report,” the sector has attracted $1.6 billion in funding over the past decade, but experts argue that this is not enough to keep pace with innovation. To meet the growing demands of the industry, the report suggests that investment must double to over $3 billion in the next decade.
By investing in women-led ventures, the AgTech industry can not only empower women entrepreneurs but also ensure that smallholder farmers—particularly women—benefit from the technological solutions that can transform their lives. This investment will help scale innovative solutions that address the challenges faced by smallholder farmers, including low productivity, limited market access, and climate change.
Conclusion
The future of smallholder farming is closely tied to the success of the AgTech industry. By increasing investment in women entrepreneurs, the sector can unlock innovative solutions that have the potential to revolutionize farming practices across the globe. As the agricultural landscape continues to evolve, it is critical that investors, policymakers, and industry stakeholders work together to ensure that women-led ventures receive the support they need to thrive. Only by empowering women entrepreneurs can we truly harness the full potential of AgTech and build a more sustainable, inclusive future for smallholder farming communities.
