Business & Policy
Data is food for thought as farmers go online
Apr. 4, 2013 - Farming and the Internet revolution would appear to be unlikely bedfellows. But increasingly the two are coming together in ways that can help farmers to become more sustainable, give consumers more confidence about where their food comes from and allow investors to keep a closer eye on the projects they have put their money into.
One of the companies at the forefront of this agricultural information revolution is Farmers Edge, a Canadian agronomic technology company. "Data is becoming a big part of agriculture now," says Wade Barnes, president and chief executive. "It is a great enabling technology that allows farming to be more sustainable and it creates value for all farming's different stakeholders."
For farmers, making use of techniques, such as composite soil sampling, geospatial yield mapping and variable rate technology, allows them to run their farms in the most efficient way, increasing productivity while reducing inputs.
"The farmer has information at the tip of his fingers which allows him to make better informed decisions on all aspects of his business," explains Barnes, whose company is one of Canada's fastest-growing businesses. "And by being better informed, the farmer can use fewer inputs such as fertiliser yet still increase productivity, sometimes by 20 to 25 per cent. As a side effect of being more efficient, he is also being a good environmental steward."
Investors are becoming increasingly interested in farmland as an asset class, but it still represents a tiny part of their portfolios. One of the reasons for this is that the information they need to decide where and how much to invest has until now not been available.
"Investors are used to investing in sectors, such as mining, that can give them real-time information. Yet often investors in large-scale agriculture have no idea if the farms are going to make money until harvest time. Our systems allow them to get an understanding in-season of what the yield will be so that they know ahead of time what their return will be," says Barnes. "The more farming looks to an investor like other parts of the economy, the more money will flow to it."
Meanwhile, food companies need to know what yields are going to be so they can take appropriate action to source alternative supplies if there are problems in particular locations. They are also under increasing pressure to prove that their products are sustainable, meaning they need to be able to verify that ingredients come from where they say they do and that they have been grown or reared without damaging the environment.
This is because consumers increasingly want to know where their food comes from and how it is grown. "They want this connection with the farmer without having to go out into the fields," says Barnes. Farmers Edge's technology creates transparency throughout the entire value chain and this feeds back to the farmer, who is able to get a premium for products that consumers can see are more sustainable.
It is only in the last few years that this "big data" approach to farming has been possible, thanks to the combination of GPS technology and the computerisation of farm technology, he explains. "The technology has been available for about ten years, but it is only in the last 18 months that it has advanced to the stage where we can transmit data from the middle of Siberia or a field in Australia to an investor in New York on a real-time basis.
"Five years from now," notes Barnes, "everyone involved in the agriculture sector will wonder how they made decisions without the information that is now available to them."
This article is reprinted from The Raconteur, with permission from Farmers Edge.
April 4, 2013 By Farmers Edge