Who owns farmers’ data?

Digest #54

A farmer shows nutmeg ready for harvest. Credit: H. Siahaan on Shutterstock.

Farmers and food producers, especially in low- and middle-income countries, face immense challenges: price increases on the input end against notoriously low and unstable prices on the output end, extreme weather events, shifting consumer demand, and rapidly changing regulatory environments—to name a few. Like other industries, the agricultural sector responds to these challenges with digital technology. Think of precision agriculture technologies such as sensors and drones, which can be used to monitor crop health and optimize inputs, while AI can analyze data on weather patterns, market demand, and supply chain logistics to improve decision-making. Many of these resources, however, are restricted to large farm owners that can afford them.

If done right, greater tech adoption in agriculture and food systems can lead to more inclusive and sustainable growth for smallholder farmers. But the trend is moving in the wrong direction, in line with the wider movement toward data colonization. The fact that smallholder farmers often don’t have access to tools to use the technology that has taken hold in their sector is now amplifying power imbalances. Data from the International Telecommunication Union (ITU) illustrates this point: In 2019, 72 percent of households in urban areas had internet access worldwide, compared to just 38 percent of rural households. Digital exclusion aggravates the trend of big companies claiming ownership of data collected from individuals. Ownership, in simpler terms, means companies are using this data in any way they see fit, without sharing the benefits with farmers. 

We can and must get this right, lest we risk exacerbating and reproducing long-standing power imbalances, establishing them in the digital era for generations to come. The key to rebalancing power lies in promoting digital inclusion and farmer-centric data governance. Digital inclusion refers to the extent to which individuals and organizations can access and use digital technologies. By extension, farmer-centric data governance means considering things like a farmer’s privacy, consent, and the extent to which farmers share in the benefits from data use. It also means renewing smallholder farmers’ trust in data storage and sharing. This is why Fairfood, which develops innovations to improve smallholders’ position in food production chains, has worked with Dutch spices company Verstegen to empower nutmeg farmers in Indonesia. This post explains this approach.

Data as a source of income for farmers

“Data has a value just as nutmeg, coffee, or cocoa have a value. As farmers sell both in a way, they should be rewarded.” - Marten van Gils, Fairfood Tech Director

That data has value is a key principle underpinning tech development at Fairfood. This is a moral imperative to ensure that farmers’ are fairly paid for their data, but solving the challenges mentioned above in terms of access to tools is a necessary step. In an effort to abide by this principle and tackle both digital inclusion and farmer-centric data governance, Fairfood developed Farmer Cards to work in conjunction with a traceability Field App. These cards, powered by near-field communication (NFC), allow us to reach farmers with limited access to smartphones and/or the internet, ensuring their transactions are recorded in the system and visible to all participants in the value chain.

This is simpler than the technical terms make it sound. Picture Indonesian farmers and fragrant baskets of freshly-collected nutmegs. The goal of Farmer Cards and the Field App is to ensure farmers benefit from providing both their agriculture product and credible, verifiable data about its origin. The first step, thus, is digitizing this proof of payments. This is done with a Farmer Card scan: The next person in line, say a collector equipped with the Field App, records the transactions. This information is then verified by farmers, via a QR scan or SMS. Once in the system, data is ready to travel with the product wherever it goes.

Finally, in line with the belief that data has value, farmers receive a Data Premium through the cards for the data they provide. Their data adds up to a transparent product story, for example, about the product’s provenance, which in these times has a financial value for companies in terms of information to meet consumer or legal requirements. This value needs to end up in the right pockets. 

Findings from the field

Of course, this works in theory, but what about in the real world? Luckily, Fairfood has tested this system with agri-food companies and found proof of concept. These tech solutions are built to be integrated into production chains of multinational companies, usually to increase traceability and transparency. The Dutch spices and sauces company Verstegen partnered with Fairfood in a multi-year project aimed at emphasizing Indonesian nutmeg farmers’ voices and agency, while establishing closer and more secure trading relationships.

Indonesia, known for its spices, accounts for around 75 percent of global nutmeg production. The spice producing sector is made up largely of small landowners, and—just as with many internationally-loved products, nutmeg producers are among the poorest actors in the value chain. One reason for this is a lack of transparency, as the market is organized through intermediaries responsible for collecting products in remote areas and selling them to large exporters. That is why, even as demand for their products is on the rise, Indonesian farmers struggle to access market information such as inputs on quality, price, and potential buyers. 

Fairfood joined this project as a data steward. In this role, Fairfood serves as a mediator between nutmeg farmers/exporters and Verstegen, ensuring that the needs of all actors are heard so the data sharing process can run smoothly. Our aim is to ensure a trustworthy and trusted data-sharing environment, which enables an incentive structure in the form of payments for quality produce and data premiums to farmers and gives farmers greater control over their data. The existence of a data steward in this case helps to balance power between farmers and other actors in this value chain. 

With new European legislation on corporate responsibility, traceability has evolved from a voluntary market effort to a mandatory step for compliance. Fairfood’s traceability platform Trace, combined with the Farmer Cards, adds an extra incentive to the data sharing process by supporting Verstegen's claims about their nutmeg. It allows for all nutmeg transactions to be “farmer approved,” as farmers confirm whether they receive an agreed upon price and (“Quality and Data Premiums”) payments for the produce they sell. The Quality Premium incentivizes farmers to improve the quality of the nutmeg harvest, whereas the Data Premium is fair compensation for the data farmers provide for Verstegen to meet consumer and legislative demand for more traceability and transparency around supply chains.

One chance to get things right

By mediating the process, Fairfood ensures that farmers maintain control over their data and that the value of this data is fairly shared between Verstegen and farmers. As Fairfood looks to replicate this model beyond nutmeg in Indonesia, it has recently piloted a similar program for cocoa value chains originating in Sierra Leone. 

This message of the dire need to consider responsible data use and digital inclusion must go beyond Fairfood’s work and partnerships. I invite you to explore the recently published Fairfood Principles on Fair Data Governance, which illustrate ways to spark action at all levels of international value chains. And, who knows, maybe we'll develop a project together? It’s not too late to get it right. 

This article is based on a case study funded by USAID and the Bill & Melinda Gates Foundation among others and led by Dutch NGO Fairfood, which promotes a farmer-centric data governance approach among agri-food companies.