The looming threats of climate change and food insecurity, plus the hype surrounding the COP27 climate summit, are drawing in more investors into Egypt.
Omar Fahmy’s family farm in Egypt’s Nile Delta looks like a picture of bucolic vitality: Corn and rice sway in the breeze, lemons, and pomegranates weigh down the branches of neatly planted trees, cows and pigeons— the latter a delicacy here in Egypt— rest in their enclosures. Just outside his gate runs a canal that carries water from a branch of the Nile about 25 miles away.
But if the land itself appears to be thriving, the farm’s balance sheet is not. Over the last 90 years, since Omar’s grandfather bought it, the farm has often struggled to cover its costs, leaving the family with a small profit margin relative to the labor and expenses required to operate it—especially as rising temperatures and water shortages linked to climate change require ever more spending on fertilizer, water pumps, and other hardware to keep the crops productive.
“In 80 years of work, my father didn’t get to earn much,” he says. And the Fahmys, who own about 1,500 acres, are much better off than their neighbors, many of whom own less than 10 acres and survive on about $80 a month.
Egypt’s tech entrepreneurs are turning to farming
Fahmy’s solution was to design a smartphone app that helps farmers get better rates on their crops by aggregating them with their neighbors’. He’s not the only one with that idea: As climate change descends on Egyptian farmers, a growing number of local tech startups are launching smartphone-based services to help them manage unpredictable weather and squeeze more profit from their diminishing crops.
Egypt hosts the second-biggest startup market on the African continent after Nigeria, drawing $446 million in venture capital in 2021, according to the industry journal Disrupt Africa. And although agriculture-related apps accounted for less than 2% of that funding, the looming threats of climate change and food insecurity—plus the hype surrounding the COP27 climate summit, which will be hosted in Egypt in November—are causing more investors to take a closer look, said Duaa Nassef, manager of a startup incubator at Nile University.
“Agri-tech is becoming a very promising sector to invest in,” she said. “There are so many of the problems farmers here face that you can easily tackle with tech.”
Uber for warehouses and trucks
After college, Fahmy worked for several years in Cairo for a private equity firm. He came to see the problem facing farmers in the Delta—a 7,700-square-mile swath of fertile land between Cairo and Alexandria that is home to some 40 million people, most of whom work in agriculture or related trades—as primarily one of financial planning, rather than environmental degradation. Adapting to climate change is possible, in other words, but only if farmers are able to get a better return on their harvest.
Fahmy’s solution is an app called El Shuna, which launched in June to a select group of traders in his area and has ambitions to expand across Egypt. Through the app, smallholder farmers can find space for their harvests of grains and beans in a regional bulk storage and processing warehouse called a “shuna,” from which they are sold on to distributors or exporters. Space in a shuna is typically too expensive for an individual smallholder farmer, who instead sell their crops via traders who travel door to door and offer below-market, take-it-or-leave-it prices. By aggregating small harvests via El Shuna, Fahmy can command better bulk rates and is able to pay farmers at least 6% above what they would earn otherwise.
Hussein El Sharnouby is taking a similar approach to trucking. His startup Wassaal, which is still in development, aims to connect farmers with truck drivers to collect crops and bring them to market. As with the shuna, space on large trucks is usually unaffordable for smallholder farmers. Aggregating deliveries from multiple farmers brings down costs for the farmers and the truck drivers.
Other Egyptian agritech startups, like Mozare3 and FreshSource, offer to connect farmers directly to end buyers (a factory or grocery store, for example), so farmers can avoid the guesswork and poor margins that come from dealing with middlemen. Mozare3 also provides digital financial recordkeeping services and links farmers to financial institutions for loans.
Mobile technology, El Sharnouby says, allows all of these startups to reach large enough numbers of farmers (or freelance drivers, shuna owners, crop processors, and players in Egypt’s agricultural economy) to find new efficiencies in the supply chain.
“Climate change has changed all the rules,” he said. “But at this point even the poorest farmers are connected to smartphones. If they tell me they’re not good at using technology, I just ask them if they have Facebook, and of course they all do.”
Egypt’s farmers get a space-eye view
Other startups are building tools to make farms more productive and resilient. 21Farmer and Tomatiki, for example, sell web-enabled equipment farmers can use to automate watering and monitor soil health. For Karim Amer, the biggest problem with high-tech hardware is that it’s unaffordable for smallholders. So Amer, an artificial intelligence engineer, is building an app called VAIS that draws on imagery from public and private satellites and can provide pinpoint-accuracy smartphone readouts on individual small farms.
Satellite data can detect insect infestations, diseases, and adverse reactions by plants to weather conditions before a farmer might spot them, giving time for an early intervention. That kind of information, he said, will become even more important as more Egyptian farmers leave the overcrowded inner Delta for millions of acres of desert land the government is seeking to develop with the use of groundwater irrigation. Mangoes, olives, and other high-value tree crops can thrive in this sandy soil, but are also highly susceptible to drought and heat waves if farmers aren’t careful.
“We’re about to have a huge number of acres without sufficient support,” he said. “With the scale of problems we’re facing here, there’s a huge need for technologies that can help farmers cope.”
It’s not just banks, venture capitalists, and coders who see a big opportunity in agri-tech: Farmers themselves are clamoring for solutions, said Mostafa Hassanen, CEO of Plug n’ Grow, which manufactures water-efficient hydroponic farming equipment. It’s getting easier and easier to find customers, he said.
“Two years ago, no one really understood what agri-tech required and what the potential was,” he said. “Right now we’re really seeing a change.”
Egypt’s farmers have an unfair reputation, Hassanen says, of clinging stubbornly to outdated practices. In fact, he says, many are constantly hunting for new ideas—but with the stakes of failure so high, can be averse to risk. If Egypt’s vulnerable farmlands are going to get a digital lifeline, it’s up to this first crop of startups to prove it can work.
“We need to build trust,” Fahmy says, “to change the culture.”