Bad Faith, Farmer Data and Justified Fears
This post is a response. It was inspired by Matt Pryor who has written twice on farmer data and how it's "nothing that farmers should worry about". And that makes me worried.
His post "The Factory has no roof" was widely distributed and is wrong. His more recent post "Good Faith, Farm Data and Unjustified Fears" could become widely distributed too and is also wrong in fundamental ways - hence the title of this post.
Apologies in advance
Firstly, Matt this post is not meant as a personal attack. I know you a little bit - and what I know, I like. Smart, experienced and passionate.
The Venture Capitalist Saying "Don't Worry"
For those that don't know Matt, he runs an AgTech Venture Capital business and this gives him an acutely focused financial lens that is by definition seeking an accelerated return for risk taken by shareholders.
His self-interest is in finding accelerated return and reducing risks to his AgTech investments. He is not without a horse in this race - his horse(s) are the AgTech companies he is invested in.
In full disclosure. I have a horse in this race too, Regen Farmers Mutual - my horse(s) are farmers.
The Factory Has No Roof Summary
In Matt's first post - "The Factory Has No Roof" he argues that farmers shouldn't be so sensitive to data sharing because technology knows all the best stuff anyways.
He states that with machine learning and satellite data anyone with the appropriate tech can tell practically all the valuable data about a farm i.e yield.
He likens farmers to being like factory owners in the industrial age - only the factories where farmers' work, have no roof - so you can see inside them - and see how efficient they are.
He goes on to conclude that farmers have nothing (left) to lose from sharing data - except the "perception of control and self determination" - so they may as well get sharing their data.
Matt's call-to-arms for the AgTech industry in this first article is to get farmers over this "perception issue" in relation to sharing data.
I address below my issues with his first thesis, but first let me introduce you to Matts latest idea for farmers.
In Matt's second post "Good Faith, Farm Data and Unjustified Fears" he goes on to describe how good it is in the insurance industry. How insurers and insured achieve this utopian-like transparency on risks, price and fairness because of the concept of "good faith".
You know the one about good faith? Where both parties act in good faith? Like how the 'insured' are always praising 'insurers' for acting in good faith. I hadn't heard that one either until now.
The central thesis of his post is copied below in full. It says that "we need to stop telling farmers that they will get paid for their data and stop telling them to fear data sharing".
Where The Posts Go Wrong
Data at distance, Data up close
Let's say Matt is right and the factory has no roof.
Matt's argument to farmers is essentially "all the best data is known... so just hand it on over".
This is an assumption. Matt is too quick to equate that distantly-observed-data is close to the entirety of what comprises valuable data. It's not. It's just 'data at a distance'.
Seeing through the roof doesn’t tell you anything about genetics, nutrition, quality, practices, grades, certification, financing, channels, fuel sources, commercial arrangements etc.
Seeing through the roof doesn't tell you why a thing turned green. Did the farmer put on a specific synthetic fertiliser or specific biological fertiliser??
You can't even tell what anything costs? What outputs sold for?
You don’t know any of this valuable information from a distance staring through a "factory" with no roof.
Who does know all the information you can't get from space? The farmer.
The 'farmer' knows all this incredible up-close data. They know the context.
The farmer also knows that a factory-business which thrives on uniformity and efficiency and can be measured from a distance, is not the same as the dynamic environment of a farm.
Smart farmers recognise their contextual data - the 'data up close' - is the key ingredients to entire value. It is not unreasonable to expect their data to be valued.
Farmers Do Get Paid For Their Data
Matt tries to make the point that Farmers do NOT get paid for their data. But they do.
Take environmental markets. The buyers aren’t paying to come take the koala out of the tree on the farm and sit it on the balance sheet of some desk in O’Connell street.?The buyers are buying data that says there is a koala in this tree, and this tree is in this paddock on this farm.?That data goes on the balance sheet in O’Connell street.
Markets for carbon, biodiversity, conservation, species protection, sediment, pollution etc are not in fact products of carbon, biodiversity, koalas or quolls. They are data products.
Farmers are selling that data, not the koala, not the tree, not the ‘product’, but the data.
Farmers also get paid for their data as expressed through certifications. Via certification they give/get market access (ie ISCC) or premiums (ie organic) to farmers based on data. Incidentally this is certification data is 9 times out of 10 data that can’t be known to others just by just operating in a roofless factory.
That is why Net Zero certification is a big deal and can't be done from a distance by supply chains. Only the farmer knows.
Farmers data is valuable.
领英推è
Why Good Faith Isn't Justified
Matt is right, farmers don’t want to share their data (and lose autonomy) as he previously correctly pointed out.
Although I think Matt thinks this is just a perception issue. Whereas, it's not a perception issue. It's lived experience.
Good faith is not justified.? Farmers have a long history of data being used against them.?Like all the time.
Farmers often suffer from information asymmetry.?Water traders, anyone?
Banks have collected information in their loans area and then the same banks traders use this to hedge markets against their own client, the farmer.?Cotton industry late 80’s - 90’s, anyone?
Governments and resource authorities have collected information on the basis of "best practices" or "bench-marking" only to introduce legislation and regulation. Agforce anyone?
Supply chain have collected data on yields to maximise their profits - not the farmers profits - forever. It's not in the supply chains best interest to maximise anyone else's profit except their own. This is why they are so happy the factory has no roof.
It is not a good idea for farmers to start thinking they have no valuable data. It is not a good idea for farmers to share data just because a VC said they've got nothing to worry about.
Why Farmers Worry About AgTech
And now here’s Matt, an AgTech Venture Capitalists, advising farmers to act in good faith and share their data because it has no value anyway.? He's saying you'll get paid back over time (or forced to through regulation) and so farmers should get over their perception issue.
But this isn’t a case of immaturity of farmers.
Farmers know that their information is valuable.
Farmers know that when they give it away it’s often to the detriment of their value.
Farmers get from previous experience to hold a value on their data - less that data be used against them.
AgTech, we know your Big business model
Farmers get venture capital and get that AgTech want their data.
AgTech ventures are a high risk / high reward game. VC even more so.
We all know that you need "winners to win big". You need an accelerated return for your investors.
An 'accelerated return for investors' must compromise a 'fair return' for some other party like the employee, customer or the supplier.
When the Customer is BigAg, BigFood, BigFinance or BigData - it's not these Big companies that are going to be squeezed. It is the many and much smaller supply side of the market i.e farmers who get squeezed.
So, if there’s a stakeholder in the value chain that AgTech is going to sacrifice a fair margin to in order to give an accelerated return to investors. It’s farmers. Farmers get it. You're not in the AgTech business for them.
There’s also the inherent business model of most AgTech, which is a data aggregation or data connection between farmers and BigAg, Big Retail etc
It's no accident that the BigAg and other customers sometimes turn up as buyers of whole AgTech companies. In short, Big Customers become big acquirers at a certain point for AgTech startups. BigAg provides the "exit", which is the reason for all these high risk / high return startups in the first place.
The "exit" (and accelerated return) is always, always, always BigAg or BigRetail. Seriously, when was the last time you saw an AgTech 'exit' to a consortium of farmers or anything like the supply side of the equation??
The Implied Authority Of VC Should Be Ignored
It is perfectly reasonable for Matt to promote ideas that benefit his commercial interests (why else be on LinkedIn?).
It's just the term VC carries with it an authority similar to researcher or journalist because of the breadth and depth of their experience in a specific field. However, a VC is motivated differently to a researcher or journalist because they have a horse in the race.
Farmers should not take the advice of "your data has no value", "share your data" and "don't worry" from a VC. This isn't independent advice from a journalist or researcher.
Conclusion:
Farmers Worry When They Are Told "Not To Worry"
Good faith is not justified around farmer data.
AgTech like every other stakeholder before - Governments, Banks, Supply Chains and more - wants to use information asymmetry against farmers. It's the oldest game on the planet for non-farmers.
They just want it to be easier.
Unfortunately for them, it is not easy, because it is not a perception, it is a reality.
Farmers fear having their data used against them - because it often is.
Farmers data does have value ie Environmental Markets and Certifications. In fact, their data up close is more valuable than data at a distance.
The AgTech industry telling farmers their data doesn't matter or that it doesn't have value, but then making the industry on the basis that it does matter and does have value is inconsistent and should be ignored (or challenged as I'm doing here).
Farmers see that inconsistency in AgTech and it reminds them of everyone before that told them "you can share your data with us, there's nothing to worry about".
ABOUT THE AUTHOR:
Andrew Ward is Director of Regen Farmers Mutual - helping farmers create and retain maximum value from their environmental assets and management. Regen Farmers Mutual controls Regen Digital, a platform for Farm Digital Twins. Regen Digital and Regen Farmers Mutual provide farmers with their unique, secure, data store and attach this data to environmental markets and Green Commodities contracts. Good for the farm, good for the farmer.
Co-founder | Chief Data & Technology Officer @ Oceanfarmr | Business Advisor Data & AI Governance
2 å¹´Spot on Wardy. Thanks for taking the time to respond to many of us that found Matt's piece troubling. Most farm data is still "analog" - that is, it is generated by and resides in practices that are unique to their production and place - and much is implicit (ie it's in the farmer's head, their learned experience). It's their data and IP, even if it isn't explicit. Digitalising it makes it no less their data - their exclusive rights to control and benefit. However, digitalisation without the means to express their data rights exposes them to exploitation by good faith actors as bad ones. I agree, that farmers do understand the value of data and should justifiably be fearful, or at least concerned.
Co-Founder and Director of Open Food Network
2 å¹´Nicely put
Imagining how rewilding humans and landscapes will heal our beloved country || flora, fauna and fungi
2 å¹´Bravo Andrew Ward (Wardy) for articulating so well that 'agtech' always seems to be owned by someone else far. far away. I immediately feel cynicism when someone without similar lived experiences imposing upon me 'what i should do'..... The value of lived experiences ESPECIALLY living in rural and remote locations, generating an income with the landscapes, at the behest of climate volatility, stupid commodity markets and being treated as imbeciles provides we country people with a very strong bullshit detector. There are the external variables we cannot control however will have serious implications for all enterprises.....PEWST Politico-legal Economic Weather Social behaviour Technology How does AgTech factor in all the above to enable a more reliable outcome for farmers, landholders and families? My mistrust is not (always) of the technology; it is of those who are selling the technology and the results derived from it / them. My critical analysis lens stays firmly wedged in!
Principal - Agriculture, Agribusiness, and Pastoral, at TRE PONTE capital
2 年It’s all about RESPECT … Then there’s the ‘value-proposition’ … I’ve observed first-hand, where people talk to a Farmer and a discussion ensues … maybe they’re a Consultant … when basically they ask the Farmer the time (because they need to know now) by looking at the Farmer’s watch, and then charge/bill the Farmer for the exercise … when the right thing to do, is either ‘pay the man appropriately’; or give him either an annuity or equity. … for without the deep knowledge to underwrite the VC’s ‘idea’ and the capital necessary to underwrite the business-model, it was just another idea … So, what’s a fair number ? How long is a piece of string? Negotiate: always in good-faith; and be ‘cards-on-the-table’ honest during the process.
Principal - Agriculture, Agribusiness, and Pastoral, at TRE PONTE capital
2 年There’s an arrogance in VC (smartest guys in the room … some of whom, may not know sh*t from cl^y) … IMO All close-up, ground-level data is valuable … and the information hidden in the data has much more powerful value again … think power-law … Hearing is something. Reading is better. Seeing is believing; Touching, that’s the Truth. The ‘roof is off the factory’: maybe so, but an algorithm in AI, facilitated via a satellite located 4-miles high, doesn’t tell you much at all in deep-analysis, no matter how much zoom-in is involved. It’s the how, the why, and the when, and the ‘why then, at that time’, and the ‘how much to use’ … for that place, in that location, and for what purpose … else, it’s all a big guess! Think on Rudyard Kipling’s poem on ‘The Six Soldiers’ … A Farmers knowledge gained across time and space, may be priceless: which is why it’s called ‘Confidential Information’ … Else, it’s mere generic ‘stuff’ that everyone ‘knows’ … or thinks they do … Ask a Farmer ! Pay the Farmer ! All else is arrogance and allegory at a distance … IMO