The Future of Farming 4.0: The digitalisation of agriculture

The Future of Farming 4.0: The digitalisation of agriculture

This article is part of the Forum Network series on Digitalisation, reflecting on discussions that took place at OECD Forum 2019 in Paris. But it doesn't stop there – wherever you are, become a member of the global Forum Network community to comment below and continue the conversation!

We must be prepared to increase food, fibre and energy supplies to meet the needs of our planet’s rising population which, according to Food and Agriculture Organization (FAO) estimates, is expected to reach the figure of 9.7 billion people in 2050. Recent history has shown that we are well on track with respect to the technological development in the areas of soil nutrition correction, pest and disease management and, thanks to the shortening of their innovation cycle, genetic development of food crops that allow increased yield.

Food and Agriculture Organization: The future of food and agriculture
Image: FAO

Nonetheless, regarding resource allocation and technology decisions, we remain rather "at an average level" where management, consumer sales and risk management efficiencies are still limited by a lack of precise information. Climatic variables – sometimes a blessing, and other times a curse – mean that a good farm manager, even after making the best decisions, may run into the same problems as a bad one when both face climate adversities such as drought or excessive rain. How then to reap the benefits of efficient management as we have with technological progress?

Find out more about the OECD's work on Technology and digital in agriculture and read the OECD-FAO Agricultural Outlook 2019-2028 with a special focus on Latin America [also available in Spanish]

OECD-FAO Agricultural Outlook 2019-2028

In this context, digital agriculture appears to be a promising alternative to meeting the need of gains in management efficiency, allowing the correct allocation of resources and ensuring the development of people working in the fields. As in other industries, digital transformation has made great strides in agriculture, sowing the seeds of what is now known as Agriculture 4.0, Digital Farming or Smart Agriculture.

Climate-Smart Agriculture and Inequalities: Ensuring equal access to sustainable, climate-resilient food production

Climate-Smart Agriculture and Inequalities: Ensuring equal access to sustainable, climate-resilient food production

In practical terms, this signifies an increase in data collection by way of the internet of things, i.e. sensors, machines and drones gathering real-time information that is then stored and processed in the cloud. Thanks to the detailed control of inputs, this allows efficiency gains like labour cost reductions, observing and preparing for climatic conditions that interfere with production processes, monitoring the spread of pests and diseases and so on. Additionally, predictive models supported by big data and artificial intelligence will enable forecasts of pest and disease outbreaks, recommendations for better seed placement in fields and selection of the best plant varieties as well as determining the best time to bring products to the market. 

Agribusiness start-ups, also known as “Agtechs”, lead the process of the digitalisation of agriculture. According to the Agtech Investment Review, the total capital invested in 2018 was USD 1.6 billion across 209 deals in Agtechs. It is worthwhile mentioning that many companies established in traditional agricultural markets are among Agtechs investors, conceivably anticipating the prospects of digital transformation in agriculture. According to Finistere Ventures, there are Agtechs engaged in imagery, sensors and smart farm equipment; precision agriculture; agriculture marketplace and fintech; indoor agriculture; crop protection and input management: plant sciences; and animal technologies solutions. AgFunder estimates that there are around 300 Agtechs in operation in Brazil.

The Internet of Tractors? How digital technologies are impacting the way we grow and distribute food

The Internet of Tractors? How digital technologies are impacting the way we grow and distribute food

Globally, Brazil stands out for its capacity and potential to supply agribusiness products. Both the FAO and Inter-American Development Bank acknowledge Latin America and Caribbean potential to contribute to worldwide food security, and consider that the development of agriculture in the region would result in poverty reduction.

"Digitalisation will allow customisable solutions and, in some cases, will spur innovation otherwise not possible for lack of data"

In this context, the digitalisation of agriculture might be the turning point for Latin America to develop its capabilities, even considering the existing scarcity of resources, and within areas of small-scale farming. This is an example of the “Farming as a Service” model that provides technological solutions designed for agriculture, converting fixed costs into variable costs when charging for the utilisation of services such as data collection by sensors and machinery rental.

The Next Global Breadbasket: How Latin America Can Feed the World: A Call to Action for Addressing Challenges & Developing Solutions

There are three key issues to be considered to develop digital agriculture: 

While the agribusiness production chain grows more complex, its users are becoming more specialised 

Because of this increasing specialisation, farmers do not always have an integrated solution where all the technology and innovations are compatible with each other. How to deal with technologies developed in “silos”?  There are other related issues as well. How can we enhance the co-operation between the various agriculture players and solution providers? How to reconcile the economic, technical and regulatory interests of start-ups, businesses and the government? 

New services will become available and/or feasible through a better understanding of individual farmers’ circumstances

Digitalisation will allow customisable solutions and, in some cases, will spur innovation otherwise not possible for lack of data. For instance, an agricultural insurance and/or a farmer financing business could use a digital agriculture database to find the best managers and, consequently, make offers to the most suitable candidates. Oddly enough, the risk management tools tend to look for those that achieve the best risk management; it will be no different with agriculture digitalisation. Are we ready to deal with such actions, seen as market segmentation on one hand but considered discriminatory on the other?

Get more facts and compare your country on the OECD Agriculture Data Portal

We have to deal with increasing global worry around data privacy and cybersecurity

However, the level of pressure brought about by digital agriculture is quite another story. In the worst-case scenario, it might become a state issue if the loss, misuse or theft of data could influence or jeopardise a government’s capacity to feed its population. It also involves the possible use of inside information in order to benefit from the agriculture commodities market, among others. The key issue here will be how to set control and governance levels on the use of this information. 

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OECD Forum 2019: World in EMotion

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excellent presentation and information, greetings and more successes