Over the last 20 plus years, developments in technology and process improvements have promised and delivered more efficient farming techniques. Right now, the industry is excited about the next generation of AgTech – the Internet of Things, satellite technology, biometric tagging and automation – to name just a few. When considering any new technology, we need to ensure we continue to make thoughtful, commercial decisions that deliver measurable results.
Generating return from AgTech
When it comes to improving business outcomes, the real value isn’t in the time saved with driverless tractors or the crop benefits of precision farming. It’s in the data that new AgTech generates and the impact that information can have on capital investment decisions and outcomes.
Livestock farmers are using biological data to adjust long-term breeding or sales strategies. History shows that incremental gains across a herd over time can result in better animal stock, and therefore better economic performance. Meanwhile, with an improved ability to aggregate data on soil conditions, moisture levels and long range weather patterns to determine the chances of success, farmers may find they have more options to redirect their investment capital, particularly if there’s little chance of a valuable yield on a crop for the season. Farmers won’t know for sure what the outcome would have been otherwise, but they’ve minimised risk and optimised for success.
Elsewhere, AgTech is combining with FinTech to create accounting systems that feed into industry data. Farmers can generate essential insight by splitting the value of resources, such as tractors or farm hands, across the parts of the business that use them to better understand production costs. When they feed that into geographical and climate data, they can see what’s actually making them money and predict how they need to operate this year in order to ensure they recover costs and, better still, profit and flourish.
Considerations for the future of AgTech
Of course, as these new data-rich technologies become more widespread, there’s going to be an awful lot of information harvested across multiple sources. There are still questions around who’s going to own the data, what’s it going to be worth, and how it will be regulated. Where is the single point of truth for all this data? Take, for example, biometric testing. If we are scanning the iris of cattle for ownership, is it the police’s responsibility to keep a register of the scans? Or does the Bureau of Meteorology take ownership of the majority of data, providing national analysis and advice around soil moisture levels and farm conditions?
In terms of business benefit, it’s important to ask what AgTech adoption is worth to us financially, and how we can quantify economic benefit. We can calculate the effect of past innovations and the result on farm productivity and profit. However, sometimes the promise of technology is ahead of its practical application and it’s hard to quantify value in the early stages of adoption.
New AgTech spans a broad range of applications and can provide smart solutions to specific business needs. However, an objective assessment of any new technology is required to understand the likely impact on agribusiness outcomes, the scope for improved decision making, and ongoing performance measurement opportunities.
At Bentleys, we pride ourselves on being trusted business advisers to farmers across Australia. We understand the industry and the challenges it presents. If you’d like to talk about adapting your agribusiness to achieve your objectives, contact your local Bentleys adviser.