In the United States, technological developments are growing at a rapid rate and, in agriculture especially, 2018 was a record-breaking year for tech developments. According to the latest AgriFood Tech Investing Report, startups have raised funds valued at over $16.9 billion. This figure has increased by 43 percent in year-over-year growth. The types of agriculture technologies invested in by agribusinesses in the US include data sources like satellite imaging, weather-based data, sensors, drones, and other IoT devices. Because of the abundance of applications offered by these digital tools, the agriculture industry is evolving to become even more efficient and cost-effective than ever before.
One example is a digital platform that has been likened to Google for farmers. Traditionally speaking, American farmers have previously relied on a distribution system that didn’t have transparent pricing for goods like seeds and fertilisers, while lacking a consolidated data system. However, the advent of the US trade war with China as well as falling crop income has necessitated action to help boost revenue. To help solve this problem, companies can provide an extensive library of data on when and where to plant crops and seeds, as well as an e-commerce marketplace for farmers to sell and market their grains. Having a social media platform promotes greater price transparency for pesticides and fertilisers, and enables farmers to exchange industry knowledge on their efficacy.
Something that businesses should keep in mind is how to level the playing field for farmers. Often, the farmer is the least profitable participant in the farm supply chain, taking on more of the burden than the companies that they buy from and sell products to. As a result, many farmers tend to get frustrated with the structure of the agricultural industry. The ramifications of this development are widespread. In terms of innovation, more and more investors are seeing the value of investing in agriculture technologies. As well as shortening supply chains and improving transparency, more and more startups are gaining the financial foundation needed to grow their operations in this area developing further. Furthermore, technology is growing affordable in terms of pricing, making it easier to develop data processing mechanisms, data storage solutions, and artificial intelligence applications.
Another trend is the rise of algorithms and machine learning to help farmers increase the yield of their crops. Through the development of microbial products, it is possible to protect new growth from disease and pest stressors. In a world where the environmental impact of synthetic chemicals and fertilisers is undeniable, these concepts have attracted a great deal of investor interest. More recently, agritech companies are expanding their portfolio to include marketplaces that can be viewed as an eBay for farmers. Online marketplaces, which help directly connect growers with buyers, enabling them to take home more earnings and receive a variety of bids. For some, this amount is quality-based, which is determined through the analysis of a third-party lab. In addition, buyers can source products that meet their specifications (e.g. organic, non-GM, or identity-preserved grain) and be aware of where they’re purchasing from. Customers can also benefit from an end-to-end transport service; using digital logistics to connect agricultural shippers and carriers, further streamlining agritech operations.
Of course, there are still many ways to bring farms to the digital era, and several companies continue to explore these. Several farms have already begun investing in QR codes, allowing customers to learn more about the source of their food by simply scanning the code with their mobile phones. QR Code Press describes how an Idaho Falls-based farm introduced QR codes into their potato bags. Scanning these codes led customers to their website, which provided new ways to enjoy potatoes, with the goal being to improve sales. This simple solution has become a popular success story, and many other companies have begun taking notice. Unfortunately, many farms still mistakenly think that good websites need to be complicated, when this couldn’t be farther from the truth. Updatable explains that even though developmental bottlenecks still exist, many online tools have been developed to address this and allow business owners to have more control over their websites. By using these tools properly, it could lead to greater consumer interaction and better sales for farms everywhere.
Because the digital aspects of agriculture technologies can be intimidating for individual farms and growers, it can be difficult to know where to start. One of the first media sites fully devoted to this niche is PrecisionAg, where they highlight key trends and explore industry developments. In a recent article on the development of agriculture technologies, they discussed the often under-prioritized role of the farmer in benefitting from new systems. Along with investors and buyers, they also need to be trained and coached by technology providers to help adapt to changing processes. When it comes to operating your own agribusinesses and websites, they also include some key questions to think about before leveraging new technology. Firstly, you should ask yourself if the need or desire for innovation is paramount in the first place. Second, consider how innovation can bring value to the farm in terms of ease, productivity, and profitability. Ensuring that farmers can reap the fruits of their labour will aid in the long-term success of the agritech industry. Ultimately, in addition to discussions like these, similar platforms can help users aggregate information from reliable sources. This can then help them derive actionable insights depending on their specific agricultural requirements, for the benefit of all stakeholders involved.
In the near future, it is likely that the agritech industry will experience many changes. Due to large numbers of agritech startups, many will be consolidated into single entities, which is generally a sign of a healthy ecosystem. Larger companies are also paying more attention to the agricultural industry, leading to new partnerships and collaborations. Lastly, a greater focus on sustainability and conservation remains a key trend, such as attempts to mitigate the impact of food production on the environment. Especially in today’s current atmosphere, the benefits of remote technology for agribusinesses are undeniably crucial, as we previously explored in our post on the applications of SmartFarm®, CropIn’s farm data management solution.
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Blog exclusively written for CropIn
by Burlie Jho