How is Big Data revolutionising agriculture?

15 August 2022

Human beings are hardwired to instinctively react to danger and it’s because of our fight-or-flight reaction that societies have survived and thrived. But what happens in the 21st century when our lives revolve around more complex, unpredictable and uncontrollable situations? From an economic viewpoint, individuals have developed two main ways to cope with this, one conscious and the other less so: risk assessment and economic rationality.?

Agriculture is one of the world's most unpredictable markets because its core variables are climate, temperature and natural resources which not only vary seasonally but also across geographies. Now let’s also consider intricate trade, logistics, international supply chain operations as well as other factors beyond human control that also change over long periods of time, such as geological processes.?

The past two years have particularly reminded us of market vulnerability. And what have farmers and agricultural stakeholders been doing to reduce uncertainty and stay viable? Enhancing their economic rationality with innovative solutions and developing faster and better ways to understand risk.?

How have they done this??

With technology, especially greater, broader and faster information, that is: Big Data.?

Satellite images and data are becoming a foundation for modern agriculture because they outline, in great detail, the historical productivity of the land. By collecting real-time information, they predict weather patterns, identify soil types and fertility levels, measure moisture and temperatures and contrast the past with the current agricultural performance.?

The value of this data goes beyond its already ground breaking use for operational and managerial decision-making. In fact, this multidimensional and detailed picture becomes a tool to monitor natural capital, assess risk, support investment strategies, manage and optimise supply chains, prevent crop failure, disease and other disruptions. Overall, big data has the potential to boost food production and farming practices, ensure food security and improve sustainability without forsaking profitability.?

In Australia, Agtech has expanded significantly over the past decade, and it appears to be maturing further. In 2017, this sector received $123.8 million in angel and seed funding and is expected to be worth $100 billion by 2030. In particular, the climate tech industry has raised $1.4 billion in the last 12 months to develop solutions that mitigate or remove the negative effects of the current climate crisis and enable businesses to adapt to the changing environment. The largest sectors of climate tech in Australia and New Zealand are Data and Finance, Agrifood and Circular Economy.??

Australian agriculture has the potential to become one of the world's most competitive, advanced, and efficient sectors. In 2019, the National Farmers’ Federation (NFF), endorsed by the federal government, set an ambitious target to make Australian agriculture a $100 billion industry by 2030. However, achieving that goal would require a growth rate of 4.5% annually, almost three times as much as the 1.7% on average that the industry has recorded over the last decade.?

According to an Agribusiness Australia-commissioned analysis, agriculture has fallen behind by at least 6.3% in terms of productivity gains required to reach the 2030 target, due to extreme weather conditions, geopolitical challenges and the Covid-19 pandemic. In fact, the investment inflow required to boost farm gate production and to reach the goal set by the NFF would have to be $250 billion.

This is how agricultural investment can help, especially in Agtech.?

The long-term nature of agricultural investments amplifies the concern regarding uncertainty and unpredictability. Nonetheless, it’s actually because of this, that risk can be managed with a broader chance for adjustment throughout time. Furthermore, agricultural investment is not only an asset for investors, acting as a safe haven against inflation with a growing value over time, it is an opportunity to employ and feed the community.?

According to StartupAUS report “Powering Growth”, tech startups in Australia may contribute up to $109 billion to GDP while creating 540,000 jobs by 2033 but they need a large amount of investment to boost their innovative potential. In this sense, Agtech and Big Data agribusiness are high-value industries that could have a large impact on the economy through their ability to present solutions to the complex challenge which arises when agriculture, finance, investment and risk converge. By 2030, the Australian Agtech industry is expected to be worth $100 billion, but to get there it must nearly double its growth rate.

The good news is that there is a growing appetite for investment in these sectors, as shown in the Commonwealth Bank Agri Insights survey. According to this document, 22% of farmers in Australia, expect to increase their investment in tech and innovation while a larger pool of investment funds is also gaining interest in Agtech. The Federal and State governments are also adopting innovation as one of the core issues in their agendas, providing support for agricultural research and development that amounted to $250 million in 2015-2016.

12,000 years after the invention of agriculture, we find ourselves at a turning point. The adoption of robotics innovations, such as drones, autonomous tractors, harvesters, and watering and seeding systems in traditional agricultural companies is transforming how we relate and adapt to the environment. The use of Agtech’s sensory and analytical tools helps monitor farming conditions and provides farmers with information to optimise their practices and anticipate and prepare for threats such as pests.?

All of these developments have started with an intangible tool that has the most powerful impact: information. A lack of information is not only detrimental to a business but to the industry as a whole. Big Data is filling information gaps and developing ways to better understand and manage risk. This is the foundation of better, more accurate and efficient decision-making which can take agricultural sustainability and productivity to the next level.?

Sometimes great things start with a simple tweak to the way we think. Big Data gives us the chance to do things differently with the same amount of resources, enhancing well-being, tackling climate-related issues and ensuring food security. This is why Big Data is core to the next agricultural revolution.?