How digital marketplaces drive agricultural productivity in Nigeria

Onome Amuge

In a country where smallholder and subsistence farming have traditionally dominated the agricultural landscape, marred by inefficiencies that have hampered the sector’s growth, digitisation has been considered a transformative force.  With the potential to address the fragmented and often impoverished state of the agricultural economy in Nigeria, digital solutions,according to analysts, offer a glimmer of hope, promising to usher in a new era of innovation and progress in the agricultural sector.

As the drive to modernise and optimise the Nigerian agricultural sector intensifies, experienced and fresh players alike are turning to digital solutions as the pathway to success. With efficiency and transparency top priorities, the search for cutting-edge, digital-based approaches is gaining momentum, signaling a promising shift in the industry.

In the quest to improve food security, digital marketplaces also known as e-commerce platforms  have been recognised to hold great promise in fostering greater accessibility to nutritious food, particularly from smallholder farmers. By utilising the power of technology, these marketplaces have the potential to revolutionise the sector, increasing efficiency, connectivity, and sustainability. Ultimately, digital marketplaces may prove to be a key piece in the puzzle of solving the pressing challenges of food insecurity in Nigeria and ushering in a new era of prosperity for farmers and citizens alike.

According to Straits Research, the global digital agriculture marketplace market size stood at $11.4 billion in 2021, with a compound annual growth rate (CAGR) of 15.05 percent, propelling the market to $34.99 billion by 2030. This remarkable growth trajectory underscores the profound impact that digitisation will have on agriculture in the coming years, promising a transformative shift towards a more sustainable, efficient, and profitable agricultural sector.

Analysts believe that digital marketplaces hold the key to tackling food security challenges in Nigeria, enabling smallholder farmers to overcome their perennial struggles with market access and information asymmetry. By connecting farmers to buyers in a seamless, efficient manner, these tech solutions mitigate post-harvest losses, maximise income, and enhance sustainability. Empowering farmers with access to critical information on market prices, weather conditions, and best practices, digital marketplaces promote informed decision-making, unlocking new opportunities for success in an industry historically plagued by inefficiencies and fragmentation.

Digital market platforms also offer a powerful boon to small-scale Nigerian producers, unlocking the potential for global market access. With the power of the internet, farmers can showcase their products to customers worldwide, reaching a far wider audience than they could have previously. This expanded reach not only increases sales opportunities, but also enhances farmers’ visibility, helping them to build trust and develop a loyal customer base. The ease of sharing information such as product images, videos, and descriptions through ecommerce platforms further boosts consumer confidence and encourages repeat purchases, contributing to the overall growth and prosperity of the small-scale farming sector in Nigeria.

Diana Tenebe, the chief operating officer of FoodStuff Store, an agritech company bridging the gap between farmers and consumers, affirmed the immense potential of digital marketplaces to reinvent Nigeria’s food system and tackle its food security challenges.

According to Tenebe, by eliminating intermediaries and directly connecting farmers to consumers and businesses, these platforms improve profit margins for farmers, strengthening their economic position and incentivising them to produce more. She added that these platforms promote greater transparency and efficiency in the food supply chain, ensuring that farmers can get the best prices for their produce, thereby reducing food waste and increasing the availability of nutritious food for all Nigerians.

Tenebe added, “Logistics can be streamlined by connecting farmers with transportation and storage providers, minimising waste and ensuring timely delivery. Additionally, there is an opportunity for enhanced transparency between farmers and consumers especially concerning pricing, reducing exploitation and promoting fairer pricing. Market trends are also easily available through digital marketplace platforms to make farmers make informed decisions.

Nigerian agritech companies and start-ups are dedicated to helping farmers achieve maximum crop yield through their work. Foodstuff Store exemplifies this commitment, utilising technology to connect customers and businesses with raw and processed food products directly from smallholder farmers and whole food suppliers at affordable prices, adding value to the food supply chain”

While acknowledging the transformative potential of digital marketplaces, Tenebe highlighted the importance of tackling the challenges that may impede their adoption. Among these, limited internet access, digital illiteracy, inadequate infrastructure for deliveries, security concerns, and trust issues on the part of both farmers and consumers pose serious obstacles. The chief operating officer of FoodStuff Store, noted that ensuring widespread access to reliable internet, providing digital training for farmers, building trust through transparent communication, and developing robust security measures will be vital to the successful implementation of digital marketplaces in addressing Nigeria’s food security challenges.

Tenebe noted further that Investment in rural infrastructure, digital literacy programs, public-private partnerships to promote digital agriculture, and access to financial services like mobile money can create a more efficient, inclusive, and resilient food system.

“A tech-driven agricultural sector has the potential to not only eradicate hunger but also empower farmers, create jobs, and propel Nigeria towards a food-secure future,” she added.

A GSMA report, titled “E-commerce in agriculture: new business models for smallholders’ inclusion into the formal economy,” highlighted the transformative potential of digital agriculture marketplaces. According to the report, these marketplaces offer a promising avenue for streamlining the agricultural value chain, eliminating inefficiencies, and improving the distribution of farm produce. It added that by fostering a direct connection between farmers and buyers, these platforms can minimise transaction costs, increase profitability for smallholder farmers, and enhance overall efficiency in the agriculture sector.

The GSMA report provides further insights into the potential of digital agriculture marketplaces, highlighting their ability to open up a wide range of sales channels for farmers. These platforms,it stated, provide a unique opportunity for smallholder farmers to connect with a diverse range of buyers, from local agri businesses to national retailers, restaurants, and even direct-to-consumer channels.  It explained further that this increased connectivity not only widens the reach of farmers’ produce but also enhances the transparency of the value chain, giving farmers greater visibility into market conditions, pricing, and consumer demands.

“It enables farmers to bypass several intermediaries, resulting in higher income for the farmers, reduced wastage, and the potential to deliver fresher produce to customers. Such benefits are especially significant in developing regions, where more than 97% of people employed in agriculture live and where the sector’s contribution to GDP is in double digits,” the report added.

Within the vibrant landscape of the digital agricultural marketplace, several platforms have carved out a niche for themselves, dedicated to empowering farmers and agricultural producers. These online marketplaces for farmers specialise in catering to the distinct needs of the agricultural community, providing a direct link between farmers and consumers. These include: Farmcrowdy Group, AgroDomain,FarmGate Africa,Farmsquare,Agriple,Alosfarm,Farm365,FoodStuff Store, amongst others.

Beyond mere marketplaces, these platforms offer a sense of community for farmers, serving as hubs for sharing knowledge, accessing resources for growth and improvement, and engaging directly with a consumer base that values quality, freshness, and the personal connection to the farmers who grow their food. Each platform boasts its own distinct features and advantages, allowing agricultural producers to navigate the landscape and choose the platform that best supports their unique products and business strategy. With this abundance of digital agriculture marketplaces, small-scale farmers can tap into the power of technology to expand their reach, maximise their potential, and strengthen their foothold in the agricultural sector.