Recent research from McKinsey Global Institute shows the agricultural sector as having the lowest digital penetration rate of any industry. Industries rated the highest, such as finance, have seen huge improvements in productivity and the addition of new services, while agriculture lags behind.
For many growers, the experience of digital technology does not live up to the hype. The return on investment is just not there yet. Most digital experiences and solutions in the market are still fragmented, and often just plain hard to use.
IoT in agriculture: From hype to reality with the right business model
Right now, much of the challenge lies in AgTech providers identifying the right business model. For example, Uber uses some fantastic data analytics to match drivers and fares. But it’s their business model that is currently driving the company’s success. Uber disrupted the traditional taxi business by tapping the sharing economy and redefining the relationship between drivers and customers. Fares are calculated in advance for transparency, and both driver and customer can rate each other to provide valuable feedback to future users.
So how do we move from hype to reality? This is what The Yield, an Australian AgTech business, grapples with every day.
The Yield uses IoT technology to take the guesswork out of growing food. Our unique capability is the ability to reliably and accurately measure hyper-local weather conditions at the farm, field, row, and even plant level. We don’t just measure it, we also use artificial intelligence to predict it. This intelligence is then converted into crop-specific applications that help growers make better on-farm decisions, such as the optimal time to plant, irrigate, feed, protect or harvest their crops. The Yield sells a managed knowledge service, leveraging core IoT infrastructure, to different customers.
The technology is both exciting and ground-breaking. But our success is likely to be driven as much by our business model and execution, as the technology itself.
Learning by doing: The “Internet of Oysters”
Our first IoT product was designed to help oyster farmers reduce the risk of unnecessary harvest closures caused by weather. Oysters are filter feeders making them susceptible to contamination from run-off. As such, regulators shut down oyster harvesting during heavy rainfall to avoid water contaminants having an adverse effect on human health. Such closures are extremely costly to oyster growers.
To reduce the impact, The Yield developed an ‘Internet of Oysters’ to improve the accuracy of harvest closures. It combines real-time sensors and advanced data analytics to monitor the health of the water system. We then use artificial intelligence to predict closures with an accuracy of over 95 percent, three days in advance.
The Yield has created three data-driven products using the same technology infrastructure:
1. An enterprise productivity tool for growers which helps them to plan to harvest, optimize labor scheduling, track food provenance, and food safety. And which helps to support animal husbandry and disease management.
2. A data service to help researchers create new knowledge and algorithms, which in turn feedback into our data sets.
3. Our oyster solution, which was launched in 2016, has been taken up by 95 percent of growers in the regions covered by the service, with more than half using the system every single day. The technology is set to reduce unnecessary harvest closures by 30 percent, saving Australian oyster growers an estimated AUD$7.6 million a year.
IoT in agriculture: How to save one day of shelf life
Oysters were the entrée for our business just like they are the entrée for your meal. Our oyster solution helped us show how we could deal with the execution, business, and market risks. We built IoT platform technology that is enabling us to rapidly pivot into agriculture.
With Bosch as our technology partner, we are bringing our microclimate sensing system for agriculture to market in 2017. This solution will provide the reliable, accurate data that powers our algorithms and digital solutions.
Just like our oyster solution, in agriculture, our technology reduces weather-driven uncertainty. We are currently trialing our agriculture solutions with some of Australia’s leading producers, with great results.
In the words of Anthony Houston, Director of leading Australian lettuce producer, Houston’s Farm, The Yield takes the guesswork out of farming. “It’s now an exact science, and the whole objective is to get a higher yield,” he said. Farm data from Houston’s Farm can be filtered through a variety of models to support various on-farm management decisions. For example planting, irrigation, feeding, protecting, and harvesting crops.
Another important factor that is not widely understood is the extent to which on-farm decisions ricochet throughout the food supply chain. For example, the shelf life of produce is dramatically affected by its water content when harvested. Therefore, by combining The Yield’s on-farm data with data from processing and retailers, we can optimize harvesting decisions. If we can save just one day of shelf life, this is worth billions to the food industry.
Data sharing: yes or no?
Just like oysters, the same artificial intelligence and technology infrastructure can support a wide variety of digital solutions across the food value chain, through data sharing. This fundamentally shifts the value proposition and the return on investment for AgTech solutions.
It’s worth noting that data sharing brings its own unique challenges. Naturally, growers are concerned about who has access to their data, and how it might be used. For example, if a big AgChem company has access to on-farm data, could it be used to manipulate input prices? Could governments use on-farm data to prosecute a grower for breaking spraying regulations?
On the flip side, there are enormous advantages. Many growers may be willing to share data with their bank or insurance company if it meant lower interest rates or premiums. Given the huge benefits of sharing data, including reducing the costs of bringing new products and services to market, we need to find new models for making it work. Governments are important in this, but can often be slow to respond. It is up to us, as technology providers, to find practical ways of putting growers in control. Hence at The Yield, we are focusing on giving our customers transparency and control over how their data is used. And sharing the upside of its re-use.
The digital revolution holds tremendous promise for both the food and agriculture industries and the environment. It also presents challenges. We need leadership from industry, government, and researchers so that we can all share in the benefits.
Taking the next step in farm productivity
The Internet of Things (IoT) has the potential to unleash the next step-change in farm productivity and support the sustainable intensification of food production. The promise is that we can make better and faster decisions across the food value chain while taking the guesswork out of growing. We can reduce labor costs by using robots, and big data can be harnessed to speed up research and development outcomes.
In Australia, The Yield and Bosch are founding members of the Food Agility Consortium. The consortium brings together 54 partners from the food and agriculture industry, government, technology and service companies, and researchers. We are working together to harness the power of digital technology to support and improve sustainable food production. We are doing this through industry-led research projects, the development of enabling technology, and data governance.
At the core, we share a fundamental commitment to the power of collaboration and data sharing to create economic, social, and environmental value. We hope to link with like-minded initiatives across the globe to help shape the exciting future of IoT in food and agriculture.