Agriculture – On the cusp of a rapid evolution
Agriculture – On the cusp of a rapid evolution
Guest article written by Dan Northrup of Galvanize Climate Solutions LLC
Every sector of industry is expected to make dramatic transformations to meet net zero emission goals and mitigate climate change. The agricultural sector is expected to increase productivity while reducing its emissions, which make up 10% of US emissions[1]. In addition to mitigating emissions, agriculture has a unique potential to remove large amounts of carbon from the atmosphere and generate carbon-negative energy.
Significant transitions in agriculture are difficult because modern agriculture is an interlocking, complex system of genetics, chemistry, equipment, and agronomy. The component technologies operate as a system, and improvements to one of the categories are only effective if the new capability is met by synchronous improvements to the other categories.
Significant near-term emission reductions from agriculture can be achieved by increasing efficiency[2]. Precision agriculture is a set of technologies and methods with the potential to boost productivity using fewer inputs. Given its economic alignment and climate potential, precision agriculture could have many benefits, but despite large investments and research into software systems, sensors, and data tools, adoption of precision agriculture tools remains limited[3].
In our view, slow adoption created a mistaken impression that the agricultural industry is incapable of change. In fact, valuable technologies are adopted faster in agriculture than many sectors owing to the annual cropping cycle. The rate of adoption of genetically modified crops[4] and auto-steer tractors[5] rivals the uptake of the fastest technologies in any sector[6].
The difference between new agricultural technologies that saw rapid adoption and those seeing slow adoption is their position in the ecosystem. While GMOs and autosteer enhanced the existing system independently, precision agriculture is an ecosystem shift that requires advancements in each technical category to create value. For example, gathering data for decision support requires durable sensors and field access, and generating value with this data requires a capacity for timely reactions which to date have been limited by field access, crop genetics, and legacy equipment. Without each system component, the potential efficiency and productivity gains derived from precision insights were limited.
Despite the frustration, research and investment in component technologies is beginning to bear fruit. The substantial maturation and productization of critical technologies has occurred against the backdrop of global events, market forces, and customer sentiment that significantly change the value proposition for precision ag technologies. The convergence of technical maturity and shift in business models put agriculture in a position for rapid and dramatic transformation over the coming decade with significant economic and environmental benefits.
Credit: Dan Northrup, image generated with the assistance of AI
Key Supporting Factors Include:
1. Maturation of advanced agricultural technologies
Crop Genetics: Field access is a major impediment to increased management of crops. For example, corn height has traditionally limited field access by midseason. New short-statured corn hybrids permit full-season field access for agronomic interventions without crop disruption[7].
Software and sensors: farm data collection has matured from an imprecise big data approach that resulted in data dumps from unintegrated sensor sets to fully formed products measuring key data with sophisticated user interfaces. These tools are custom-designed for farmer use and simplified decision support[8].
Equipment: The newest models of farm implements are equipped with autonomous sensors and actuators that can measure, understand, and act at the speed of modern operations. With this novel capability, sprayers can identify pests (weeds, insects, fungi) and target pesticide application directly to areas of need rather than applying pesticides broadly[9].
2. Increasing Volatility in Agrichemical Markets
Prior business models for precision technology primarily relied on reducing grower’s variable expenses. This proposition was not compelling to farmers for two reasons:
1) fertilizers and chemistries were relatively cheap, meaning the savings were minimal and
2) reducing fertilizer application can imperil yields.
Recent events - the pandemic and the war in Ukraine - disrupted supply chains for necessary agrichemicals, leading to increased prices and price volatility. Although prices have stabilized from recent spikes[10], the volatility persists, and many growers have lost confidence in the stable and low-cost supply of inputs.
Agrichemicals are a necessary part of modern agricultural operations and there is no real consideration of abandoning chemistry in the near term. We view precision agriculture’s potential to reduce the variable costs in fertilizers and pesticides as a more compelling value proposition than in previous times.
3. Climate Stewardship is a Differentiating Market Opportunity for Efficient Growers
There is growing consumer awareness that food choice represents a significant opportunity for climate stewardship, and marketing to this set represents a premium product opportunity. Similarly, food and beverage companies realized that their upstream scope 3 emissions dominate their corporate footprints, and these emissions are primarily incurred in farm production [11]. Accordingly, corporate sustainability officers are developing incentive systems for grower interventions that address these emissions to meet corporate emission reduction goals.
Meeting consumer demand, providing accurate emission inventories for supply chains, and measuring the impact of sustainable interventions requires scalable tools to gather farm data. In addition to reducing emissions, precision agriculture tools can gather data for emissions accounting without significant effort or additional cost[12]. This additional value creation opportunity provides more incentives for farmers to adopt new technologies.
4. Government Support and Regulation
The challenge of adopting precision tools is being addressed by significant public support. The USDA’s $3.1B Climate Smart Commodities Program is a producer-focused program that recognizes the need for near-term incentives and education to affect sector change while new markets are discovered[13].
In addition to new incentive structures, farmers have to comply with regulatory frameworks that aim to improve water quality and reduce emissions[14]. Precision agriculture tools and practices can reduce environmental impact while gathering data to substantiate impact and compliance.
Expanding precision agriculture is only the first key step in accelerating agricultural innovation. In addition to being impactful in the current farming system, the precision ecosystem is highly supportive of further innovation. Precision tools will foster innovation through their capacity for broad testing and outcomes measurement. By adopting these tools, agriculture can lower the barriers for the next generations of crop genetics, inputs, and equipment. Through this virtuous cycle, agriculture could increase the production of its critical goods while using fewer resources. This expanded productivity could support further climate stewardship opportunities, such as carbon drawdown, that generate significant new revenue streams to growers.
Complex systems transit long periods of gradual change that are interrupted by short periods of explosive innovation. The coincidence of technology maturation, input volatility, consumer demand, and government support is placing the agricultural industry at the cusp of a rapid transformation.
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[1] EPA, Total U.S. Greenhouse Gas Emissions by Economic Sector in 2021
[2] Rosa, et al. Achieving net-zero emissions in agriculture: a review. Environmental Research Letters 18:6 (2023)
[3] USDA ERS, Precision Agriculture in the Digital Era: Recent Adoption on U.S. Farms
[4] USDA ERS, Recent Trends in GE Adoption
[5] USDA ERS, Precision Agriculture in the Digital Era: Recent Adoption on U.S. Farms
[6] Harvard Business Review, The Pace of Technology Adoption is Speeding Up
[7] Science, High Hopes for Short Corn
[8] Emergen Research, Top 10 Leading Farm Management Software and Service Providers in the World
[9] Progressive Farmer, Smarter Sprayers
[10] Farmdoc Daily, Variability in Nitrogen Fertilizer Prices in Illinois Over the Last 15 Years
[11] WWF, How Food Companies Are Incentivizing Reduction of Supply Chain Greenhouse Gas Emissions
[12] Association of Equipment Manufacturers, The Environmental Benefits of Precision Agriculture in the United States