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Fatma El Zahraa Aglan (WB) • 2019 IFPRI Egypt - WB “Innovations for Agricultural Development in Egypt”


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As part of the IFPRI Egypt Seminar in partnership with the World Bank, IFPRI Egyprt seminar “Innovations for Agricultural Development in Egypt”.

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Fatma El Zahraa Aglan (WB) • 2019 IFPRI Egypt - WB “Innovations for Agricultural Development in Egypt”

  2. 2. TABLE OF CONTENTS 1. Sectoral Context: Presenting the key facts 2. Vision 2030: Highlighting the evolution of the food system and the importance of digital transformation 3. Digital Technologies for Agricultural Development: Increasing competitiveness, efficiency and sustainability through digital technologies 4. DigitalAG4Egypt: A Case Study – fostering digital entrepreneurship
  3. 3. SECTORAL CONTEXT Agriculture and agribusiness combined contribute to about 35 percent of GDP, and provide jobs to a quarter (25.6%) of the population Tremendous market potential (i) untapped export potential is around US$16 billion, this is three times the current export levels. (ii) domestic food market could reach US$90 billion by 2030 The governorate level share of poverty is positively correlated with the share of employment in primary agriculture. For example, Upper Egypt has more than 30% employed in agricultural production Although only 10% of agricultural products are currently processed, they account for approximately 50% of exports. This indicates significant opportunities to increase processing and move towards higher-value processed foods. Egypt has a negative agricultural trade balance, estimated at US$ 11 billion in 2014. About 40 percent of total (ag and non-ag) export revenue is spent on ag imports The share of public investment in the sector has decreased from about six percent in 2004 to less than four percent in 2014
  4. 4. KEY CHALLENGES Inefficiencies Along Key Agricultural Value Chains • The losses along key value chains range between 10 percent and 50 percent, averaging around 30 percent. About half of the losses result from poor, or lack of, access to logistics and marketing infrastructure. • Poor skills and poor access to new technologies affect sector development. There is a need to upgrade the formal education, as well as skilling in the sector, as the current level and sophistication of skills do not meet requirements of modern agriculture and agribusiness sectors. • Lack of extension services, prevent farmers from receiving advice on good practices and suitable technologies, which would help Jobs and Incomes • Most of the jobs in agriculture are seasonal, irregular and informal • Jobs shrinking in agriculture as they shift to manufacturing and services as a result of structural changes. •A high share of jobs in the agriculture sector require little or no technical or business skills discouraging education/skill upgrading and resulting in low pay. Water Scarcity • Low water use efficiency, exacerbated by population growth and climate change effects, intensifying the water scarcity issue. • • 2. Over 86 percent of Egypts’ water is used for agriculture. Irrigation on the “old lands” is mostly inefficient flood irrigation, with water use efficiency of around 30 percent. • 3. Agriculture in the desert, drawing non-renewable water resources (e.g. the Nubian Sandstone Aquifer), carries additional market risks related to natural resource sustainability, additionally consumers in the developed countries increasingly demand more sustainable products. Sector Fragmentation • 80% of farming units in the country are under three Feddans (predominantly along the Nile River valley). Such high fragmentation of land deters competitiveness and does not allow for use of machinery in land cultivation (which would increase production efficiency), and it also limits access to markets for the smallholder farmers due the small volumes produced by the highly fragmented farming units. • Farmer cooperation is underdeveloped as the existing cooperative system does not work well. • Aggregation is difficult due to lack of infrastructure, resulting in fragmented value chains and lesser interest of Egypt’s agricultural products to the global markets.
  5. 5. VISION 2030: DOING MORE WITH LESS Wealthier urbanized population and diversified diets Structural Transformation More competitive, efficient and resilient Digital Transformation Shift towards value addition, agro processing and food services. More jobs moving up the value chain  Increasing Agricultural Market Efficiency: With current population at 97 million, growing at 2.56% annually, Egypt needs to be able to achieve food security and nutrition, and produce high quality and safe food products and decrease its food loss and waste (averaging at 30%).  Job Creation. According to CAPMAS, the agricultural sector is the highest single contributor to employment (20.5%). By enabling inclusive job growth through the diversification towards high-value crops, decreased value chain inefficiencies, and wider access to markets, the agricultural sector can further contribute to Egypt's sustainable growth.  Inclusion of Women and Youth. 75% of the unemployed in Egypt are between 15 and 29 years old. Promoting growth of agricultural and rural SMEs, the digital solutions may encourage youth to remain in commercial in high-tech, sustainable agriculture.
  6. 6. ICT IN AGRICULTURE Continuum of Digital Technology Opportunities Source: Future of Food Harnessing Digital Technologies to Improve Food System Outcomes
  7. 7. INCREASING COMPETITIVENESS, EFFICIENCY AND SUSTAINABILITY THROUGH DIGITAL TECHNOLOGIES Digital technologies are tools that collect, store, analyze, and share information digitally, including mobile phones and the Internet • Digital technologies have tremendous potential for improving the efficiency, equity and sustainability of food systems. By leveraging the use of ICT in agriculture, we can raise productivity and incomes, reduce information asymmetries, and allow for increased competitiveness and market access. • These digital technologies in the food system range from simple off-line farmer advisory digital videos to complex systems requiring higher levels of mobile phone and Internet connectivity, such as distributed ledger technologies for value chain traceability and some forms of precision agriculture. • Increasing adoption of digital technologies in the food system will require addressing supply-side factors—such as rural network coverage and availability of digital applications—and demand-side factors, including skills and knowledge, trust, affordability, and complementary investments. • While digital technologies have significant potential they also pose several risks, such an overconcentration of service provider market power; lack of data privacy; exclusion and potential job losses. Addressing these risks calls for public policy to ensure good data governance and foster inclusion through targeted support to smallholder farmers, youth, women, and other vulnerable groups; and support skills development.
  8. 8. EXAMPLES OF VALUE CHAIN BENEFITS •Reduce costs and risks (e.g. reduce counterfeits) •Provide timely, convenientand secure ways to purchaseinputs Pre Production •Support farmers throughthe provision of extension services •Increase precision and adaptability of farming intervention(cropping choices) Production •Manage storage, and reduce post harvest losses •Track the supply chain and reduce transport costs Processing •Increase ability of smallholder farmers to sell to larger markets •Warehouse managementand product transfer tracking Distribution •Enable traceability and ensure food safety •Better planning, which can decreasefood loss and waste Retail
  9. 9. A CASE STUDY: DIGITALAG4EGYPT DigitalAG4Egypt: Crowdsourcing innovative ICT solutions aimed at raising agricultural efficiency in Egypt. The World Bank team partnered with, NilePreneurs and TIEC to implement this competition in order to:  Raise awareness regarding the challenges facing the agriculture and agribusiness sectors in Egypt;  Promote innovation, entrepreneurship and youth inclusion for sectoral development  Source integrated ICT solutions addressing issues related to access to markets, access to finance and resource management. Building on the success of this competition, the World Bank Team are in the process of scaling this initiative up and replicating it as DigitalAG4MENA Results: Received more than 100 quality submissions. 70% of the solutions were incubation-ready, and were offered by newly formed teams, and we were able to attract applicants from 21 out of 27 Governorates in Egypt Examples of Winning Solutions VerumCode: developed a unique branding and traceability system for food quality and safety. They have created unique QR codes that can identify fraudulent products, and provide real-time tracking. Freshsource: An online platform which sources quality produce directly from small scale farmers. It handles the logistics and distributes the products to local retailers and vendors Innovation Inc: created a functional prototype of a large scale fish feeding machine which operates automatically and remotely (via smartphone). This is to control feeding quantities and distribution of feed
  10. 10. PUBLIC POLICY ACTIONS THAT CAN FACILITATE BROADER ADOPTION OF DIGITAL TECHNOLOGIES IN THE FOOD SYSTEM Supply-side factors Demand-side factors Expand rural network coverage (Expand digital infrastructure) Develop relevant digital applications (Foster digital entrepreneurship) Facilitate demand for digital technologies in the food system (particularly smallholder farmers) • Adopt a spectrum policy that boosts connectivity • Lower infrastructure taxes/duties • Allow infrastructure • Sharing • Ensure consistency/ streamline local level regulations • Reduce policy/regulatory uncertainty • Improve the enabling environment for business development • Design digital regulations around functionality • Clarify data ownership • Develop governance arrangements for open data • Invest in open data that have public good Characteristics • Improve farmers’ incentives to invest • Develop data governance arrangements that build users’ confidence and trust in digital technologies Source: Future of Food Harnessing Digital Technologies to Improve Food System Outcomes There is also a significant need to crowding private investment, for example: (i) supporting skills development; (ii) improving access to finance for startups and vulnerable groups; (iii) invest in complimentary infrastructure