The 5 Barriers to Agtech Adoption
When it comes to the state of agtech, Ken Zuckerberg, likes to toss out a baseball analogy.
“It feels like it’s the second inning, and the coaches are back on the bench thinking about the game plan,” says Zuckerberg, a senior research analyst with Rabobank.
Zuckerberg says the industry is in a so-called fourth wave of agricultural innovation – digital agriculture – which he loosely defines as farm management software and predictive/prescriptive data gathering. Many products have entered this marketplace, but few have broken through. In fact, Zuckerberg estimates that fewer than 5% of farmers have deployed some type of digital agriculture on their operations. What’s the hold up?
In a report issued by Rabobank on May 16, Zuckerberg points out five key barriers to agtech adoption that growers and data scientists have validated time and again during three years of field research.
1. Many new software technologies don’t have a clearly articulated value proposition. In other words, it’s hard to pinpoint a clear ROI on a lot of new agtech. Contrast that to the seed industry, which rigorously conducts field trials year after year, and which concentrates on building farmer trust in their products.
2. Many farms don’t have the necessary agtech infrastructure. “Trying to get farmers to purchase both IT hardware and software is hard enough in a favorable commodity price environment, as farmers are typically resistant to change, given the ‘family tradition’ and experience-based nature of farmers,” the report points out. “Trying to do this during a downturn in the crop cycle is, and has been, nearly impossible.”
3. Selling software as a service to financially strapped customers is a difficult revenue-generation strategy. Zuckerberg says the top five or six of these companies have only generated around $40 million in revenue combined. He suggests a better strategy may be to offer farmers free software while selling premium add-on products to the independent agronomists and crop consultants who advise these farmers.
4. Data ownership and privacy issues have caused a chilling effect. That’s true of not just farmers, but all consumers, who have seen several big instances of hacks and other breeches of trust committed with their personal information. Zuckerberg thinks not-for-profit data cooperatives owned by an unbiased third party (a land grant university, for example) or even the farmers themselves, could be one answer. There are already several examples of this around the work already in place, including:
- Grower Information Services Cooperative (GiSC)
- The Ohio State University’s Agricultural Data Cooperative
- Farm-Oriented Open Data in Europe (FOODIE)
5. Digital agriculture still lacks a universal operating platform. Zuckerberg contends there should be a standardized operating system that can “upload, store, validate, refine, cleanse and analyze” data. His prediction: This will happen, and it will probably come from outside the industry.
“We believe a party outside of traditional agriculture is likely to create, build or manage such as system,” he says.
Indeed, some of these companies, such as IBM, SAP, Accenture and Verisk are already starting to commit resources toward this very issue, Zuckerberg says.
Zuckerberg’s advice for farmers? Listen up, speak up and stay active in the discussion.
“Farmers ought to feel empowered to be a part of the conversation,” he says.