While the benefits of digital agriculture are compelling, it has been met by significant challenges — for example, difficulty using software, data usage concerns, disparate and propriety data formats and an unclear return on investment. Agribusiness has struggled to provide immediate, tangible results from digital agriculture equipment and software. Challenges around gathering and standardizing data make adoption difficult across all stakeholder groups. Undeveloped countries lag in adoption because of weak network infrastructure and limited capital. The gap between modern, advanced farming and subsistence farming is growing at an alarming rate. These factors raise important questions for the industry. Producers face problems and decisions every day, both on and off the field. These decisions are projected and magnified up and down the entire value chain — from field to fork. What does this mean for the various stakeholders in that value chain?
The third agricultural revolution
Digital agriculture is widely recognized as the third great revolution of modern agriculture. The introduction and implementation of mechanization (1900 to 1930) and genetic modification (1990 to 2005) are referred to as Ag 1.0 and Ag 2.0 respectively. Both revolutions drove efficiency, yield and profitability to levels previously unattainable, and are now conventional in developed countries.
While Ag 1.0 and Ag 2.0 drove significant changes in agriculture, we believe Ag 3.0 will be the most transformative and disruptive, not only on the farm but across the entire agriculture and food value chain.
Digital agriculture will fundamentally change agribusiness
While the first two revolutions in agriculture — mechanization and biotech — had a major impact for farmers and select agribusinesses, digital agriculture will fundamentally transform every part of the agribusiness value chain. Seed companies were not drastically changed from the bottom up to accommodate advanced machinery. While significant innovation occurred in equipment design, it was not altered to specifically accommodate genetically modified seeds. However, Ag 3.0 will affect producer buying behavior, and seed and equipment product design, and could enable dynamic pricing at the consumer retail level. These implications will gradually affect multiple business functions across a single company. For example, digital agriculture and big data will change the way seed and agrichemical companies market, price and sell products, select and invest in their R&D pipeline, recommend and technically support product sales, manufacture and distribute products, and manage credit and financial risk. Business strategy, product design, customer preferences and even organizational structure will change as more digital agriculture data is available.