Agricultural technology companies seem to be on the rise in Nigeria and we have popular ones such as farmcrowdy, Framkart, agric thrive and the likes dominating this Agrictech ecosystem. The ecosystem seems to be maturing. However, the covid-19 pandemic has taken its toll on agrotech companies in Nigeria.
Many see the agrotech companies as Ponzi scheme initiatives created to milk people of their hard-earned money because of the high-interest rate offered by some of the agrotech startups and this has aided in generating a poor image of how people perceive most agrotech companies and the covid 19 seems to have worsened this issue as investors are being owned by some of these agrotech companies.
Thrive Agric, an agrotech startup has been dragged on social media concerning the delayed payments on returns of investment owned by their customers. A customer on Twitter whose Twitter handle is frustrated Slos tweeted that: “We won’t stop until @thriveagric & its board prove they’re not an investment fraud by paying us.”
On their website, the company, however, stated that the “covid 19 pandemic and lockdown restrictions greatly hampered our business operations that generate the returns on your farm subscription.” This issue has, however, effected a change in their organisational structure as the Chief Executive Officer (CEO) has been replaced by an interim one. The delay in payments may negatively impact how people view and invest in agricultural technology startups.
On the other hand, a few others such as green partners and H O corn seem to be facing similar problems. While green partners have issues of non-payment to investors when investment returns were due before covid and during Covid, HO corn is seen as risky as 50% returns seems too good to be true and some have seen this as an indication of a Ponzi scheme in play.
The crisis faced by some of these digital agricultural platforms has, however, raised doubts on how well people could trust these agrotech companies. Their actions have signalled the opposite of the expectation required of them and they would need to deliver in order to change the current narrative.
The agricultural business comes with a risk and moving forward, agrotech brands should clearly communicate the risks involved in the investment with customers, and also they should develop action plans that reduce risks.
The government also has a role to play in the growth of the agricultural tech ecosystem and agriculture in general by developing favourable policies that would aid the growth of these startups. The government also needs to create better infrastructure and an enabling environment for the whole agricultural ecosystem to thrive as out of this abundance would these companies be taxed.