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Imagine you are the prime minister of a country that wants to improve the lot of its food producers, consumers, and the environment: Where should you invest time and resources? What policy levers should you pull?
Not a week goes by without news of digital disruption in traditional industries and sectors. We’ve already seen long-standing business models from taxis to hotels upended, and we’ve got to wonder where this will take the world’s oldest industry—agriculture.
We urgently need to rethink public policy interventions to help countries navigate opportunities and challenges linked to digital advances in the food economy.
The promise of digital disruption in agriculture is enormous. Producing food and fiber is a data- and capital-intensive business. On the data side, a farmer’s feel for how to combine seeds, soil, water, and weather can now be complemented by mobile-phone based extension services, remote sensing data, and artificial intelligence. On the capital side, the “sharing economy” creates amazing new opportunities for the optimal deployment of capital assets—tractors are agriculture’s Ubers and grain elevators are its Airbnbs. Advances in fintech are changing traditional land-based collateralization models and mobile banking is putting access right into farmers’ pockets.
Arguably, what is happening to product and factor markets is even more disruptive than what is happening on the farm. The race is on to streamline a hugely complex food system that relies on multiple upstream and downstream intermediaries and industries to match the world’s 570 million farmers with its soon to be 8 billion consumers. The complexity is being simplified as technologies such as blockchain improve traceability from the farm to fork and e-commerce platforms facilitate direct linkages between producers and consumers.
Digital disruption is occurring at a time when food systems are evolving under the pressure of rising incomes, changing consumption patterns, and the emergence of more business-oriented …