Introducing Harvesting’s FarmScore — an indicator of the economic potential of sub-hectare farms
For farmers, especially smallholder farmers, a great crop yield does not mean that their farm will earn them enough to feed their family, buy inputs for next season or save for rough times. Access to good roads, market pricing, training, and storage facilities are just a few of the many factors which can influence a farm and a farmer’s success.
Harvesting’s FarmScore is designed to identify and capture these variables and transform them into a single, easy-to-understand score for assessing the potential economic value of sub-hectare farms.
What is FarmScore?
Farm Score is a relative score, like a credit score, ranging from 0–1000. The higher the score of a farm in a portfolio of farms, the higher the probability of its economic success of that farm in comparison to other farms.
Why FarmScore?
Many smallholder farmers do not have access to the goods, services and markets that could help them improve their yields, farms, and incomes. For example, without loans, they cannot afford improved inputs like quality fertilizer and drought-resistant seeds. Without training, they do not learn farm management skills for building sustainable farms. Without access to markets and buyers, they cannot earn a fair price for their product.
Smallholder farmers lack access because they are an unknown quantity. They lack a paper trail like a credit history, bank accounts, salary slips, or utility payments and there is often little or no recorded information on their farm activity. They also live in remote locations with low-population densities, so it is costly to learn more about them first-hand.
As such, lenders, input sellers, and buyers do not consider them as potential clients for services or as sources of sustainable, quality product. And in many cases, they would not be good partners precisely because they lack the training and financing to build thriving farms.
FarmScore seeks to address this by revealing the potential economic value of individual farms. By providing insight into the potential economic value of individual farms, we want to change the dynamic of smallholder farmers in the value chain so they can be seen as long-term, viable partners.
We start by understanding the farm: we leverage our proprietary technology which converts raw satellite data into information on crop activity to get an insight on farm and farmer potential. For example, what does 10 year historical harvesting activity or soil moisture reveal about the viability of the cropland? What does it reveal about the farm management skills of the farmer?
We combine the remote sensing information on the historical, current and predicted future activity of the farm with other data like geo-spatial data which shows distance to water sources, to nearest roads, and nearest markets. Do farms closer to water sources, roads and markets benefit from better prices and lower costs than farms that are further away?
We also want to capture other data that influence farm and farmer performance such as experience with contracts, trainings, and certifications, as well as exogenous factors like market prices and trends.
Because the nature of value chains differs by crop and by region, we are continuing to identify variables and to develop the model to reflect critical influences and conditions.
Who uses FarmScore?
We believe FarmScore is relevant for any organization for which smallholder farmers are potential partners. By using FarmScore, lenders will be able to identify potential borrowers, buyers can identify reliable sources of production and service providers can better understand and segment the potential market to identify farms that may need certain inputs or training.
For example, a fertilizer supplier may target one district or region based on the higher prevailing FarmScores of farms in that area. They can also create more customized marketing strategies and identify market opportunities and priority products based on FarmScores in a given region.
FarmScore can also be relevant for agri-companies sourcing from small farms. A sugar company wanting to expand its outgrower scheme can use FarmScore to help identify which farmers might be immediately eligible, which may need some training, and which may need extensive training and support.
For lenders, FarmScore works in conjunction with/ is a component of Harvesting’s credit risk scoring model to identify the creditworthiness of potential smallholder farmer borrowers. The use of alternative data such as the remote sensing, geo-spatial and other data embedded in the FarmScore, and included in the credit risk score, is crucial for helping lenders determine the creditworthiness of borrowers who have no credit or bank account history, or other traditional data that lenders typically use to make decisions. By providing lenders with alternative data and the FarmScore on individual farms, we believe we can expand their market of clients while enabling smallholder farmers access to financing to buy improved inputs and technologies.
What’s next for FarmScore?
Harvesting’s FarmScore is a work in progress. We have built the framework based on our understanding of existing gaps and needs, but we also understand there are significant complexities and challenges in the different crop value chains around the world.
We will continue to evolve FarmScore as we learn more. In fact, our underlying technology and use of AI, is designed to learn and incorporate feedback and new data to continually improve our model and our products.
Our goal is for FarmScore to help unlock and enable the potential of smallholder agri-value chains around the globe.
