Prepare for the fourth wave of ag innovation
While people outside of ag may think of farming as small potatoes, in actuality it’s a $3 trillion global industry. And it’s not old school by any means; when you combine the planet’s growing population, the increased interest by consumers in the origins of food, and compounding challenges brought on by climate change, it becomes clear the future of agriculture relies on technology.
Surfing the waves of ag technology
A 2017 Rabobank report “Bungle in the AgTech Jungle: Cracking the Code on Precision Farming and Digital Agriculture,” by Senior Analyst – Farm Inputs Kenneth Zuckerberg, laid out the concept that we have experienced four waves of ag technology. The first three waves included:
- Mechanization (first wave, 1700–1940s): the first tractors and the cotton gin.
- Ag chemistry (second wave, 1940s–1990s): everything from synthetic fertilizers to pesticides.
- Precision farming (third wave, 1990s–2014): the advent of GMO and GPS.
But the fourth wave? According to the Rabobank report, digital agriculture represents the newest wave of industry innovation. And if you follow the money, that seems like a safe assumption.
One only need look at this graphic from The Mixing Bowl to know that there is no lack of innovation in the ag technology space. Each of these companies represents a step in the field-to-plate sequence and each has embraced the digital agriculture approach. From companies like Blue River Technology, a media darling recently purchased by John Deere, to more recognizable names like Farm Market ID, everyone is attempting to get a piece of this next wave of technology.
According to AgFunder, more than $10 billion has been invested in ag technology since 2014. And 2017? The company’s Agrifood Tech Investing Report: Mid-Year Review shows it is on track to exceed 2016 numbers. The first half of the year saw funding volumes increase 56 percent year-over-year, with $1.129 billion invested.
Progress doesn’t always go forward
But does this mean that farmers are using all this technology to move their farms forward?
Unfortunately, the answer is no. Looking at something like variable rate technology (VRT), an innovation from the third wave of ag tech introduced in 1998, the USDA’s Economic Research Service estimates that adoption is between 20 and 25 percent of planted acres in corn, soybeans and rice. For cotton, that number is slightly more than 5 percent – a number that was achieved within two years of VRT introduction.
According to Farm Journal, the lack of adoption is attributed to uncertain ROI and the crowded marketplace. As we come out of the fourth consecutive year of decreased net farm income, technology needs to have a return on investment in year one. Many companies reach out to farmers to talk about “potential” but then fail to provide a concrete case that drives technology adoption.
Information is great, but it’s not everything
The problem, for once, isn’t a lack of information. Companies are providing innovation after innovation that in turn provide the farmer with ample information. What isn’t being provided is some way to process that information into data that is easily used. Even for the savviest farmers, a deluge of information has no value unless there is a standardized way to translate it into dollars. A standardized data platform has the potential to flatten the learning curve, increase the ease of analysis and improve the rate of adoption due to a shorter window between use and ROI.
The move to identify that platform is ushering in wave four. And for those companies that serve farmers and ranchers, adoption of that platform and customer training will be vital to successfully riding that wave into the future. You must be diligent in keeping up with technology, or you need to partner with a company that can provide that diligence for you. Being early to the game when the standardized platform emerges will allow you to adapt everything from product recommendations to loyalty programs. If you can help your customers see a swift improvement in ROI due to technology, you’ll already be hanging ten.