Agriculture suffers from a spectrum of problems revolving around one main idea – vulnerability resulting from lack of information.
Cultovo builds risk analysis software to help farmers and financial services get the information they need, when they need it.
Vulnerability in crop production from factors such as drought, floods, hail, diseases, and weeds results in problems across the industry supply chain.
Farmers suffer tighter profit margins, insurance brokers are limited by uncertain risk profiles, and commodity traders buy and sell on volatile prices. A lack of information on these issues at the plant and regional levels prevents effective solutions from being created and deployed. By gathering information and providing context to production issues in agriculture, resilience can be improved.
Crop insurance can protect farmers in the agricultural sector by covering losses from adverse events such as weather, diseases, or other perils. This can help farmers to maintain their income level and to continue farming even if a harvest is lost.
Agricultural insurance can also assist farmers to access credit markets, which can provide financing for food production and act as a catalyst for economic growth for example by enabling farmers to buy new equipment, fertiliser and seed, thus increasing their output. Insurance also has the potential to change behaviour by reducing uncertainty and putting a price on risk.
Insurance penetration in emerging markets has been remarkably low, with nearly 50% of global premiums coming from the United States and Canada.
Increasing agricultural insurance uptake in emerging markets would be game changing for food security and income security for farmers as well as a major new market opportunity.
Better information can also export better agricultural practices. Better agricultural practices can increase resilience by adopting the right strategies for a locality. This has been difficult to date with the lack of reliable information in emerging markets. Having better information systems in emerging markets should allow internationally accepted “Good Farming Practices” to be adopted – increasing productivity and yield and subsequently resilience while lowering the environmental impact of agriculture.
If a farmer farming 400ha of crops switches from continuous conventional till to continuous no-till, he or she saves 15,700l of diesel fuel – more than $8,500 worth – each year.
The FAO’s Good Farming Practices are considered the gold standard globally of appropriate measures to ensure good yields while keeping environmental pressures down. Examples of good farming practices that integrate biodiversity and ecosystem management for sustainable crop production intensification include:
- No Tillage Agriculture. By not tilling the soil it saves farmers money, time and the environment by reducing soil erosion.
- Ensuring pesticides being used appropriately. Pesticide wastage is a serious problem as farmers lack the information required to make targeted or appropriate applications of pesticides.
- Crops being planted in fertile areas. Crops not planted in fertile areas or without sufficient fertility, grow a slower rates and produce lower yield
- Planting the correct crops for the correct soil and biome. The wrong crop in the wrong location may be more susceptible to disease and adverse conditions – decreasing yield and prevents farmers from growing more efficient crops.