A study released by global strategy and management consulting firm A.T. Kearney, Chicago, describes the rapid changes taking place in the agriculture industry.
The report, titled “Agriculture Is Fertile Ground for Digitization,” chronicles the global demand patterns and disruption of traditional farming models and points the way to new, technologically enhanced “precision farming” that could lead to major gains in food yields—possibly enhancing current capabilities to feed an additional 1 billion people within the next 10 years.
“Digital technologies applied to agriculture are opening up a new wave of automation, from camera drones through GPS-enabled combines,” says Dave Donnan, partner and co-author of the report. “Big data applications will most likely generate dramatic improvements in crop yields that may spark the fourth agricultural revolution.”
Currently, digital farming is mostly confined to small application fields and start-ups developing high-tech drones for surveillance, satellite imaging and robotics.
After decades of strong growth, a slowdown in global growth rates of agricultural demand is projected, resulting from the confluence of slowing population growth, the consequent effect on demand, regulatory rules that impede commercialization and consumer concerns about agrochemicals and high-intensity farming.
“An industry under pressure is going to trigger a wave of cost cutting and consolidation,” says Carsten Gerhardt, partner and co-author of the report. “In agriculture, it didn’t take long for the larger companies to consider alternative strategic moves—digital farming is one move that offers vast opportunities for sector growth.”
The study also says that digitization has the power to challenge well-established business models, but staying ahead of the competition will require new ways of thinking. Opportunities exist to bundle technologies to provide end-to-end services for growers—from selecting crops to optimizing planting times, seeding rates and fertilizer applications.
“We expect the industry majors to move first and fast, followed closely by start-up tech firms keen to leverage the market opportunity,” says Donnan. “In digital, size and speed matter. First movers will set the standards for the entire industry, and shape its future.”