Best Practices of Leveraging Agtech

Farmers can strategically employ agtech to promote the widespread adoption of sustainable agricultural practices.

FREMONT, CA: The adoption of agriculture technology (ag-tech) presents a challenge. From an industry perspective, there are multiple barriers to scalability, such as fragmentation, lack of standard data architecture, and cross-platform interoperability. With recent increases in agricultural profitability and substantial investments over the past decade, there is a strong openness to innovation, but adoption could be faster. Most farmers have benefited from the macroeconomic tailwinds of global commodity cycles. Inflationary pressures are accumulating, and farmers are facing an onslaught of challenges. They must monitor weather forecasts and regulatory changes, changing consumer preferences, inflation-driven price increases, and unreliable supply chains.

The number of ag-tech startups catering to farmers has exploded. Farmers can now utilize software, hardware, and service-based solutions that promise to boost productivity, alleviate pain points, and reduce their environmental imprint. Demand drives funding availability, and ag-tech startups need help to scale. Due to changing demands, farmers are becoming increasingly open to agtech solutions to maximize yields and reduce financial risk. Farmers are producing food at high sales prices, but commodity market instability and growing input prices make future profitability questionable. Farmers' bottom lines suffer from the wait between input production, purchasing, and application.

Farmers are encouraged to optimize yields to reduce uncertainty, a chance to incorporate agtech advancements. The number of farmers employing agtech and the submarkets they adopt vary throughout areas and even within regions. Remote-sensing technology has the most significant use case. Farm-management software systems and precision-agriculture hardware solutions technologies optimize fertilizer and pesticide use and sowing rates. Farm-management software solutions can help farmers evaluate and manage vast value pools, including fertilizers, seeds, and pesticides. Precision-agriculture hardware for field input application improves these systems. Improved guidance systems and automatic shutoffs allow farmers more control over site-specific over-application.

Sustainable agricultural systems are attracting worldwide consumers and investment as climate change worsens. Agtech financing analysis also found that roughly one-third of startups have a sustainability-focused value proposition. It shows that startups and investors respond to customer preferences and societal developments. Investor and consumer attitudes toward sustainability-related agtech and those who promote sustainable farming methods have yet to match direct uptake. Even in sustainable farming areas, sustainability-related technologies are rarely used.

As farmers transition toward more sustainable practices, sustainability-related technologies that support measurement, reporting, and verification and data collection technologies such as remote sensing are beginning to address the burdensome data requirements and will likely play an important role. To participate in sustainability programs, farmers must implement sustainable practices, verify compliance, and measure their impact continuously. It includes measuring soil organic carbon to confirm carbon sequestration; three to nine years of historical data are required for many carbon programs, depending on crop rotation. These include the history of tillage, yield data, soil-sampling results, and crop inputs.