Digital Transformation in Agriculture Digital transformation in agriculture is more than a business opportunity. It is a world-changing event, and here’s why. Jay Matre Senior Business Architect Human civilization depends on people working the earth to grow the food we eat, the clothes we wear, and even the raw materials we use for shelter. Agriculture is an ancient industry with a thousand-year-old history of consistent innovation, but there is a remarkable amount of potential left to take advantage of modern digital tools. In fact, a report by McKinsey asserts that it is one of the least digitized sectors in the economy. The bottom line is that even though it might appear incredibly high-tech, the agriculture industry is bound for digital transformation. How do we achieve the dream of digital transformation in one of the most critical industries for humanity? Here are some ideas from an experienced Business Architect who grew up around farmers. My history with agriculture goes back long before I began helping organizations change, back when my version of a technology strategy was figuring out how to play CDs in my car. I grew up in small Iowa farm towns, and while I don’t come from a family of farmers, I spent a few of my teenage summers doing very analog farm work. I sprayed weeds in soybean fields, baled hay, and detasseled corn using equipment and techniques my grandparents would have recognized. Even though my experience may not have reflected it, farmers worldwide consistently find innovative ways to grow more. The numbers speak for themselves. In the Midwestern United States, the amount of corn grown per acre of land has more than quintupled in the last 100 years, despite the fact we’re still (mostly) dependent on the earth and the weather to power the factory. A huge jump in productivity in the 20th century was driven by a cluster of practices called the “green revolution.” It involved chemical pesticides, high-yield seeds, and increased mechanization. However, that increased momentum has slowed, and with a changing climate and uncertain geopolitical factors, we need agriculture to continue to innovate to feed the world. Agriculture’s unique non-controllable factors and lagging digitization open the door for Digital Transformation in new and exciting ways. No matter where farmers, agribusinesses, co-ops, commodity traders, food suppliers, or logistics providers are in their Digital Transformation journey, now is the perfect time to begin that journey. Digital Transformation Maturity Continuum Digitize – Automate the Business of Farming Growing up around family farms, I learned that they are the original cross-functional organizations – farmers need to be mechanics, doctors, meteorologists, accountants, commodity traders, supply chain managers, and don’t forget the actual crop growing. Sometimes the first entry point into the digital realm is to use software to manage that business. Doing things the old-fashioned pen-and-paper way just won’t cut it anymore. Farm Management Suites such as Tend, Farmlogics, Agrivi, or Conservis can streamline accounting, finance, supply chain, and operations management. The best of those suites combine the internal business metrics with external factors like commodity market data and lending rates to allow farmers to manage the cross-functional organization more easily and efficiently. Many farmers were early adopters, but there’s never been a better time to digitize. Optimize – Farm Automation As we move up in digital maturity, there are more opportunities at each step. The Global Positioning System (GPS) was originally built to give the U.S. a strategic military advantage. However, in 2000, the U.S. Government de-restricted it for a higher accuracy level, leading to many of the innovations we take for granted today. On the farm, that location data stream allows farmers to streamline activities where a tractor can follow a preset route. Our team has helped to democratize that capability into tractors that weren’t self-driving from the factory with our development of the AgJunction Whirl app to set up their Wheelman solution. Imagine how many other pain points we can address by extending our existing tools. Transform – Precision Agriculture The next logical step in maturity is a holistic approach, tying tractor-based location and sensor data with weather and agronomy data to enable precision agriculture. When we bring these information streams together, farmers can model their fields and understand the minimum effective dose of fertilizer and pest control, saving resources and the environment. The dream of true transformation is that, over time, these massive amounts of data will build a Digital Twin that will continue to help farmers grow more with less. Many of these technologies and information are available today, and the market is ripe for new products. The only way we’ll help growers around the world adopt them is through excellent user experience, which begins with a solid partnership between a client with an innovative mindset and a capable software services vendor. Through our partnership with our client DTN, we built tools to consolidate data streams and make them readily available for farmers, crop consultants, and other agribusinesses. Keep Adapting – Explore New Markets We’ve found that Digital Transformation doesn’t have an end-point. Truly mature organizations make it a practice to be agile and able to respond to market shifts or shifts in the weather. Some forward-looking growers are finding alternative ways to take advantage of their assets and land by finding different opportunities than their once-a-year cash crop. One example of that is farmers and Co-ops taking advantage of carbon capture marketplaces. Many eco-conscious companies are looking to offset their carbon dioxide emissions by trading for others who capture or sequester carbon. Farmers can adopt practices that capture carbon in the soil and sell credits to those companies. Conveniently, many of the techniques are better for the soil’s long-term health, but they cost time and money to implement. The carbon marketplaces allow growers to offset those costs and more. We’re seeing the emergence of technologies like remote sensing and drone surveying to quantify carbon capture, along with blockchain and smart contracts to manage the markets and provide traceability for the credits. Next steps We’re in the middle of an agricultural revolution thousands of years in the making. The examples I’ve discussed might soon help the industrial-sized Iowa farm in the middle of the United States grow 300 bushels of corn from a single acre. Still, we need true innovation worldwide. We’re in a race against anthropogenic climate change and overpopulation to grow enough healthy food for everyone. Technologies in the Digital Transformation toolkit help grow more with less. Edge computing and industrial automation systems enable vertical farms in Dubai to use less water and less space. In the same way that cell phones allowed many African nations to skip over landlines to stay connected, smallholder farms in developing countries may have the most to gain with emerging technologies and business models. The ability to tap into real-time markets and immediate access to credit allows them to leverage their crops in ways that weren’t possible before, lowering food prices for consumers while increasing returns. There was a running joke in those small Iowa towns that the farmers were the few millionaires, surrounded by food, who may not have enough money to eat because it was all tied up in equipment and seed and fertilizer until the harvest came through. Digital sharing platforms are giving the smallholders access to mechanization that would otherwise be out of reach, so they don’t have to roll the same proverbial dice to use expensive labor-saving machines like tractors. As one of the most significant sectors in the global economy, the Agriculture sector is a giant market with a lot of potential for innovation. The USDA estimates that American farms contribute over a trillion dollars to the GDP in the U.S. alone when we account for dependent industries like food, tobacco, and apparel. The USDA has stated goals in its Agriculture Innovation Agenda of increasing agricultural production by 40% while reducing its environmental footprint by 50% by 2050. Many other governments and NGOs are investing to increase efficiency. We will need to combine business acumen with a push to apply new technologies in ways that delight the humans who use them. It’s an exciting time to think about how we can change the world of agriculture with digital technology. I haven’t even touched on how computing power and large datasets affect genetics. I can’t wait to see where it all takes us! Tags StrategyDigital Transformation Share Facebook LinkedIn Twitter Share Facebook LinkedIn Twitter Sign up for our monthly newsletter. Sign up for our monthly newsletter.