‘Agtech does not offer much return on investment’

Andrew got interested in agtech while researching the possibilities of expanding the family business. “We invested quite heavily in labour saving equipment. When we made our business as efficient as possible, I looked beyond that, trying to understand where the next rise in productivity was to come from. That lead me to agricultural digital technology.”

He applied for a Nuffield Farming Scholarship. “I started a project looking at digital technology and the ways to implement it. Last year I travelled to several countries to do my research: 16 weeks in the UK, Germany, Ireland, the Netherlands, Ukraine, the USA, Kenya and South Africa. That gave me a good look into the different production systems and how they stack up.”

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According to Andrew Slade, buying a technology to solve a specific problem, is often expensive. “Ask yourself as a farmer: is this an improvement, or should I stick to my current farming practices. Is this cost effective?” – Photo: Mark Pasveer

Greater competition globally

Andrew found that his own country of Australia is very well positioned in terms of productivity. “We don’t rely on government subsidies or have very much support. But my journey, especially my visit to Ukraine, made me realise that some countries are catching up really fast in the field of technology. This will lead to greater competition globally.”

Australian farmers will have to work hard on their agricultural systems to maintain a cost advantage. There has been just 1% of growth in productivity since the year 2000. Global investments into agrifood technology have risen from US$ 2 billion in 2012 to $ 16.9 billion in 2018. “But the US spent 24 dollars per capita in 2018, Australia just 1.10 dollar.”

Focus on private investment

A lot of Australian investment still comes from government sources. “The USA has moved beyond that. There is more focus on private investment: take an idea and commercialise it. They are happy to invest, as long as 1 out of 10 ideas will have a real impact and is going to change the way things are done.”

A lot of hype

In Europe, as in Australia, there is more government investment. “Europe had some good examples of demonstration sites to trial new technology alongside other providers. That is something we could do here as well.”

Start-ups often expect that technology will change the way we do farming. But in reality, a lot of the technologies do not offer much of a return on investment

Andrew noticed that farmers in most countries he visited were in the same position, as far as adaptation of technology on the farm goes. “A lot of farmers are not able to realise the full potential of the technologies. There is a lot of hype around new technologies and that is understandable. Start-ups often expect that technology will change the way we do farming. But in reality, a lot of the technologies do not offer much of a return on investment.”

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Andrew Slade’s farm, with a field of canola. Andrew says Australian farmers, like many of their colleagues worldwide, are not able to realise the full potential of technology. – Photo: Andrew Slade

He emphasises that buying a technology to solve a specific problem, is often expensive. “Ask yourself as a farmer: is this an improvement, or should I stick to my current farming practices. Is this cost effective?”

Lack of integration and lack of data insight

Slade found there is also a more fundamental problem: the lack of integration and the lack of data insight. “We should be using the data as a collective to generate a better insight. We need to combine different providers and different sources of data.”

The present lack of integration means that farmers who want to implement more than one technology, have to spend too much time to maintain them. “It is just not feasible to do that”, says Andrew. “As individual farmers we cannot maintain multiple systems.”

Common management platforms

The West Australian farmer proposes the development of common management platforms, where providers and their solutions can be integrated. “That way farmers do not have to run and maintain multiple pieces of technology. We will have to get the pathways and ways of integration standardised, but that can be done.”

Grower owned data cooperatives

Andrew advocates grower owned data cooperatives. “We need a mechanism to get data into an embedded source. We should be able to collect data in a way that we have some level of control. Storing it in one spot will give developers access to data to create solutions. At the moment all data is held by individual farmers or the larger suppliers. There is no real access point.”

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Andrew advocates grower owned data cooperatives. “We need a mechanism to get data into an embedded source. We should be able to collect data in a way that we have some level of control. – Photo: Andrew Slade

Interest from Microsoft and Google

There is already interest from traditional software companies like Microsoft and Google in creating more integration. Ultimately, he says, a better managed agtech environment will lead to better decisions. “When we have better support tools and can make better decisions, we can maximise the productive potential on the farm.”

With access to data, farmers can also create a premium leverage, Andrew says. “We can provide valuable information to consumers. At the moment supermarkets or other parties in the supply chain use this sort of data. We can look at a sustainability model where farmers are rewarded for certain production practices, say a more water efficient production. If you can back up your claims with data, consumers might be willing to pay more.”

Engineers or software developers fundamentally don’t have much knowledge of agriculture

A lot of agtech suppliers do not understand the needs of farmers, in Andrews opinion. “Engineers or software developers fundamentally don’t have much knowledge of agriculture. It is difficult for them to understand what would be a real fit, or what is the real need. Often they have an idea, and a great piece of technology. But does it really have a benefit?”

There is a real need for more interaction. “We need farmers to try out the products. With leading producers using and testing them, developers have the best chance of success.”

Skills on the ground

For a successful digital eco system, the on-the-ground backup and support is of great importance. “There is a lack of that, it’s still a developing sector. When I buy a tractor, much of my decision making is based on the support I get from my dealer. Agtech needs the skills on the ground to make sure their technology is implemented correctly. And we need consultants who can identify what agtech might fit on a farm, and how this can be implemented alongside other pieces of technology.”