There are several hurdles ahead before growers will garner sufficient value from data intensive farming, according to a new report from Rabobank, the global food and agribusiness bank.
The report entitled Bungle in the Ag Tech Jungle – Cracking the Code on Precision Farming and Digital Agriculture identifies four key waves of agricultural innovation, with the first wave starting in 1700 with the invention of machinery like horse-drawn seed drills.
The second wave launched in the 1950s with the rise of both production agriculture and the use of chemical inputs. It was during this time that farming operations became less diversified, focusing instead on a few monocultures.
Precision agriculture was born during the 1980s and 1990s, along with innovations in plant breeding and other biotechnology-focused tools such as genetic modifications, according to the report.
Now, in the fourth and latest wave of innovation, agriculture is undergoing a digital makeover. Digital ag tools are taking many forms, and “range from cloud-based software tools to hybrid hardware/software products that are ‘smart’ in that they can communicate with other connected devices wirelessly and digitally, with minimal human intervention,” states the report.
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The report also counted algorithms, AI, and machine learning among agriculture’s digital revolution, noting the ability of these innovations to provide customized prescriptions on a farm-by-farm basis.
The promise of agtech
Of course, these innovations are not without costs including both the financial investment and the time investment that growers must make to learn how these new innovations function.
The report defines the promise of digital ag for farming as the ability to access “optimal financial risk-adjusted returns on the capital used to farm.” Optimized agronomics, precise applications around timing and type of nutrient applications, and the consideration of local conditions—or even intra-field variances—will give farmers previously unrealized expertise.
Five key barriers to agtech adoption
Rabobank identifies 12 technologies in-use throughout the world today, including everything from milking robots to wireless weather stations to farm data management software. Yet, the report unequivocally states that farmers are not readily implementing these technologies, identifying five key barriers to digital agtech adoption.
- Many new software technologies lack a clearly articulated value proposition.
On the one hand, the report identifies digital agriculture’s value proposition as improved expertise and insight in agriculture. But when it comes to the currently available technologies, it notes that the value proposition is often not “proven” when it comes to calculating exactly what farmers stand to gain financially from adopting the new tool. Also, the report characterizes some startups’ and VCs’ understanding of digital technologies as an “imperfect” one, with many individuals forgetting that collecting and transmitting data is only the first step. The data must undergo additional analytics to create value
2. Many farms actually lack the necessary technological infrastructure required to interact digitally with industry farm management software.
Referencing Conservis, Farmers Business Network, Granular, and SST, the report notes how difficult it can be to convince farmers to invest in and switch over to entirely new management systems, especially considering the persistent economic downturn that agriculture has experienced since the 2012/2013 season.
3. Selling software as a service (SaaS) to financially strapped farm customers has been a very difficult revenue generation strategy, given these dynamics.
Instead, the report posits providing growers with free basic software platforms to promote agtech adoption, while selling a premium version offering additional services and agronomic insights.
4. Data ownership and privacy has been a heated, widely debated topic ever since big data entered the global farming conversation.
As with digitization of any industry, privacy and ownership concerns run rampant. The report suggests the creation of a non-profit farmer data cooperative to address privacy issues, noting that a few companies have already created such outlets. Overseas, farmer cooperatives and other groups have taken steps towards cultivating an open-data culture.
5. Digital agriculture lacks a universal operating platform in which to connect the entire operating ecosystem.
Of the five key barriers to adoption that the report identifies, it signals out the lack of a universal operating platform as the most critical. Overcoming this hurdle will involve the difficult task of organizing and aligning the industry and deciding which party or parties will take ownership of each step of the process.
Agtech adoption is rising
Despite these hurdles, the report concludes by stating that the demand for information along the food supply chain will be a substantial driver in the evolution of digital-based solutions for agriculture and increased agtech adoption. And, while adoption has become a robust dialogue in agtech, some sources indicate that deployment continues to increase despite the challenges and hesitations some farmers face.
“Creation of a universal data platform is critical. However, going from the ‘concept’ stage to the ‘blueprint’ stage is a complicated exercise. How this happens and who pays for it will depend on which party/parties take leadership in organizing and aligning the industry, and how much capital is set aside for building, testing, and maintain required systems.”