Agriculture and agribusiness have always been volatile industries. They are at the mercy of environmental determinants, such as rainfall and severe weather, as well as consistently facing narrow profit margins and increasing demand for products and services as the world population continues to grow. The evolution of precision agriculture, smart farming and the Internet of Things (IoT) have played positive roles in driving the industries to innovate. Relying on data and enhanced connectivity to make real-time decisions and reduce both waste and risk has buoyed agribusinesses at a time when farmers and growers face unprecedented pressure to increase yield.
In 2017, the use of digital technology in agriculture resulted in 700 million dollars invested in AgTech companies, more than doubling the investment of the previous year. As the trend toward online e-commerce activity and digitalization continues in agriculture, it is important to understand the opportunities and challenges ahead. These are six notable trends to watch while navigating the shifting bedrock of the agriculture industry, now and into the future:
- The safety of agribusiness data.
As the importance of data becomes clear across the agriculture industry, new questions and concerns are arising about the right ways to take care of that data. Some members of the value chain worry about keeping their information being safe from hackers and ransomware. Others have concerns around sharing their data across the supply chain because of questions around who will ultimately own the data. Legal decisions around data ownership and technology to keep systems safe will both create far-reaching change within the industry when they are established.
- Communication and data systems that do not integrate.
The wave of innovation sweeping across the agriculture industry is bringing large-scale operational changes and launching many new tools. As more options become available, it is becoming clear that, for systems to bring success, they must integrate with other technologies. Synchronization of data through all internal systems within one organization is required for that organization to recognize the true value of that data. Communication tools face the same challenges in their need to provide both connectivity and integration. Standardization and integration will be key moving forward and will provide a make or break point for agribusinesses as they continue to invest in technology tools.
- The drive for sustainability and traceability.
With the rapid pace of information sharing across news, education and social media platforms, international concerns regarding sustainability and traceability within agriculture spread quickly. In 2015, the United Nations launched a list of Sustainable Development Goals (SDGs), aimed at creating more sustainable practices across industries and countries by 2030. These goals are designed to increase farm profitability, while promoting environmental stewardship, enhancing the quality of life for farm families and communities and increasing the production of food. The need for traceability goes hand-in-hand with consumer’s desire for sustainability. Traceability relates to increased pressure by consumers for growers to track the produce from the field to the buyer and on forward, allowing consumers to make informed buying decisions based on information about food and ingredient quality.
- Preventing education from falling behind.
Agricultural education is a critical function in the supply chain. It provides the tools and knowledge for new members to enter the workforce and work within the value chain to help meet the needs of the global community. Through the current educational model, agricultural education teaches students about land management, natural resources and the practices of food production. The current threat within the educational system lies in its ability, or inability, to keep up with the rapidly changing technology within the industry.
- Achieving profitability.
One of the greatest barriers to success in agriculture today is achieving, maintaining and growing profitability. The need for products and services provided by this industry continues to grow, but the profit margins continue to shrink for many throughout the supply chain. To overcome this challenge, agribusinesses and farmers are working to reduce manual processes, invest in collaboration tools, make decisions based on data, standardize process and integrate their tech systems.
- Understanding the technology solutions available…and keeping up with changes.
Innovation and technology continue to advance and the possible benefits seem limitless. However, given the immense amount of options, data sets and digitalization solutions on the market, it is easy to become confused or get left behind. To prevent information overload and stay ahead of the curve, it is important to have the right network of support. Partners within the supply chain can serve as sounding boards, while also sharing advice and insights into new opportunities.