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5 Stages of Digital Adoption by Smallholder Farmers in Southeast Asia

By Guest Writer on June 6, 2024

ictforag smallholder farmer southeast asia

There are over 70 million small family farms in Southeast Asia. These farming businesses typically face a range of challenges in accessing credit, advice, and markets. In theory, new digital technologies could cut transaction costs and improve information flow within the sector.

Agriculture technology could drive greater efficiency in finance and trading, delivering higher incomes for farmers and stronger sectoral growth as it has in so many other industries.

Over the last ten years, a host of ICTforAg technologies have emerged with the potential to fill this gap. Farmers have been slow to adopt these digital tools. For example, the largest smallholder e-commerce platform in Southeast Asia is used by just 25,000 farmers.

Five Stages of AgriTech Adoption

Grow Asia talked to smallholder farmers directly, interviewing 100 farmers in Vietnam, Indonesia, and Myanmar to find out why adoption has been so slow. What they found was surprising – farmers actively using their phones to grow their farming operation but in very different ways than expected.

Driving AgriTech Adoption: Insights from Southeast Asia’s Farmers showcases how farmers typically move through five stages of digital adoption:

  1. Face-to-Face: farmers begin by using no digital technology at all — each interaction with their suppliers, customers and lenders is undertaken face-to-face.
  2. Phone Call: most farmers today substitute some face-to-face interaction with phone calls.
  3. Peer Group Dialogue: once farmers own a smart phone, they tend to begin joining small group chats with their peers. WhatsApp, Line, and Facebook Messenger are common. These groups allow farmers to seek advice and discover information on price and products from their peers. As these groups build on existing social networks, farmers use the groups to communicate with people they know.
  4. Active Discovery: The next step is farmers using their phones to open up new connections they haven’t or couldn’t have made in person. These farmers are using technology to not only negotiate but also discover new transaction partners. Web search, video streaming and messaging allow these farmers to expand their network and knowledge.
  5. Digital Service Engagement: a range of starts and agribusiness are building more formal tools, typically provided as an Android app to farmers. Apps have been created for trading, finance and disease recognition.

At each step along the farmers were observed weighing up three key factors before they advance to the next step. They consider a) how the technology will perform, b) how easy it is to use and c) what other farmers say about the service.

Implications for Industry

Digital adoption by smallholder farmers is a strategic imperative for startup founders, agribusinesses, NGOs and governments in ASEAN. This study highlighted the following learnings for industry:

  • The digital transformation of smallholder value chains is much deeper than farmers downloading and using apps. Building an app might not be the best place to start – consider engaging with farmers on a chat platform they already use to connect with their peers.
  • A standout feature of the adoption curve is farmers’ strong preference for conversational technologies. Train, encourage and reward your staff to use chat-based technologies.
  • The bulk of digital communication that farmers engage in is with someone they know already. Digitalization is a decentralized activity. Drive digitization at the edges of your organizational structure – in villages.
  • Age is a key factor in willingness to adopt new technologies. Digitalization strategies should focus on younger farmers.
  • A few lead farmers typically provide most of the input into peer group dialogues. Engage these group leaders and provide them with messaging that is easily shared in online chat forums.
  • Chat-based technologies, while a clear preference for farmers have limitations. Take steps to capture data from your staff’s digital chat conversations and use this data to build up client datasets and target messaging.

A lightly edited synopsis of Driving AgriTech Adoption: Insights from Southeast Asia’s Farmers.

Filed Under: Agriculture, Featured, Reports
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