readily to the use of mobile telephony and e-banking (e.g. M-Pesa in Kenya). ICT also provides an avenue for extending crop insurance to farmers thereby mitigating risks. For example, the Syngenta Foundation’s Kilimo Salama weather index “mobile technology–based insurance on purchased inputs (certified seed, fertilizer, and crop protection products) protects farmers against bad weather shocks. Mobile phones are used to scan the barcode of products purchased by farmers and M-PESA is used for payout at the end of the growing season in case of bad weather” (WEF 2015). The insurance is available to thousands of farmers in Rwanda and Kenya.

Third is the scope for a fruitful intersection – cemented by the exchange of data - between a growing, modern services sector that supports GVCs and a dynamic agricultural economy (WEF 2015). Whether agriculture can serve as a leading sector depends upon the quality of services including R&D, other intermediary services and extension promoting the assimilation of technologies<sup>42</sup> that will nudge agriculture closer to the production frontier. Research on the manipulation of plant genes and on the exactly tailored application of water and nutrients for example, will be key to higher yields, nutrient content of foods and resource conservation. Other skill intensive services such as consulting, storage, finance, insurance, marketing, logistics, branding, and (sensor based) tracking of food products as they move through the supply chain<sup>43</sup> will determine agricultural diversification, and post-harvest losses (PHL)<sup>44</sup> and help maximize value capture, food safety, and exports.

# **4. Scope for Trade Assisted by Integration into Global Value Chains**

What explains the importance of global value chains (GVCs)? And how promising is the scope for trade assisted by integration into GVCs? GVCs serve as vehicles for 70 percent of global trade in intermediate goods, services and capital goods, hence integration in chains is almost a necessity for developing countries that have set their sights on export-led growth. GVCs also are an important conduit for technology transfer and can stimulate FDI, which countries in SSA urgently need.

> 42 For example, the National Agro Foundation in India provides a variety of services to villagers in Tamil Nadu to improve farm productivity including through the education of farmers. See Govindrajan (2014) https://hbr.org/2014/02/transforming-rural-india-through-agricultural- <u>innovation</u>

> 43 Tracking can now be done with the help of tablet or laptop based apps. Blockchain will improve tracking capacity. Hjort and Poulsen (2017) find that the access to fast Internet is increasing the demand for and employment of more skilled workers in Africa.

44 The FAO estimates that PHL in SSA is in the region of 37 percent. FAO (2011) <u>http://www.fao.org/docrep/014/mb060e/mb060e.pdf. This might be too high. Other estimates</u> arrive at a lower rate of about 20 percent for grains such as maize with most of the losses occurring in post-harvest handling and storage. Those of fresh produce, meat and fish occur during handling, packaging and distribution. Loss prevention measures can reduce losses of grain to less than 5 percent. Sheahan and Barrett (2016);

- <u>http://barrett.dyson.cornell.edu/files/papers/Sheahan%20Barrett_post harvest%20losses_FULL%20TEXT.pdf; Affognon et al 2015</u>

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