Data-heavy future ahead for farmers
Keeping apace with developments in technology goes far beyond the aims of maximising yield, optimising inputs and improving labour efficiencies, according to agricultural analyst Wesley Lefroy.
Mr Lefroy, who works within Rabobank’s RaboResearch Food and Agribusiness team, said new technologies would also allow producers to adapt to changing markets and consumer trends.
“This technology is going to create transparency, improve provenance or the proof of origin and alleviate counterparty risks, or bring more trust to transactions, and increase supply chain efficiencies,” he said. “Blockchain and data collection technologies like sensors are going to enhance the story around what we produce.”
Mr Lefroy said consumer behaviour had started to change, while developments in both emerging — mainly the Asia Pacific region — and advanced markets would put increased pressure on Australian producers.
“Our growth is primarily driven by emerging markets, and priorities in these markets can differ from ours,” Mr Lefroy said.
“At home, there is rising interest in the environment, welfare, fairness and provenance of food, encouraged by the media and accelerated by social media.
“Our market positions are being challenged by low-cost producers and there is increased focus on generating value on more than price and quantity.”
Mr Lefroy said blockchain technologies could enhance traceability and transparency of products, reduce risk within the supply chain and lead to great efficiencies in operation.
“If we have a look at traditional agricultural technologies, they are either focused on the farm, the supply chain or at the processor level, or they are focused on consumers and how consumers interact with their food,” he said.
“A blockchain is different. It focuses on interactions between each of these different entities throughout the supply chain. It is a digital platform that stores and verifies transactions between users.”
The technology also allowed for a two-way flow of information, giving farmers a greater understanding of opportunities within the market and the most optimal time to send produce to market.
But while Mr Lefroy said such a platform for trade would increase transparency, with each contributor being able to view and verify transactions, an element of human trust still existed.
“Blockchain will ensure the information is transferred but it does not ensure that the information put in is correct, and this is where the value of automation sensor technology really comes in,” he said.
Mr Lefroy said data from an interconnected group of sensors measuring the chemicals and fertilisers used within a grain enterprise, or Australian Sheep Breeding Values in a livestock operation, could be entered into a blockchain to improve trust.
“A reduction in the opportunity at the human level to make mistakes or intervene in the supply chain will enhance the production story and enhance trust in the blockchain story,” he said. “Automated data collection will strengthen the story.”
However, Mr Lefroy said what consumers valued in terms of the information shared was still unclear, and their demands would most likely evolve alongside movements within the markets for Australian produce.
“My message to farmers is that any data they can create that enhances their story is going to be valuable down the track,” he said.
“Farmers who have the ability to be flexible in terms of what they are producing and when they are producing and delivering to market will be the ones who will be best off moving forward, when this technology develops.”
Mr Lefroy said farmers not only needed to share their message, they should choose quality and prepare for a “data-heavy future”.
“It presents both disruption and opportunity for those who love to be challenged and continue to improve their businesses,” he said.
Agricultural analyst Wesley Lefroy, from Rabobank’s RaboResearch Food and Agribusiness team.