The future of farming: digitally disrupted and very precise

Falling grains yields meet rising populations

The results are genuinely worrying. The average annual-yield growth from corn, wheat, soy and rice in the US actually slipped to 1% between 1990 and 2010, compared with 1.5% between 1970 and 1990². US investment group GMO forecast a further fall of 0.25% in the US by 2030. It’s much the same story in Germany, the UK and France. For context note that in the Green Revolution of the 1950s and 1960s productivity was rising at around 3.5% a year - and that yields continued to rise fast in the 1970s. This is all obviously bad news – but it is particularly bad news in the context of World Bank predictions regarding the rise in the global population. There are 7.2 billion (bn) of us today. There could be 9 bn of us by 2050. Two billion more mouths to feed. That suggests that even if we manage to slash the rather revolting levels of waste inside our current system - we are soon going to need to produce more food than we do today. Hard not to be worried isn’t it?

The good news then is that behind the scenes capitalism has been doing its work. A new agricultural revolution, accompanied by a massive investment boom, is well underway. Some of this revolution will have a hint of going back to the future in it. Think a return to integrated livestock farming (manure builds soil health); the reintroduction of no till farming – if we want soil to work as a carbon sink, we can’t plough it; and an attempt improve the diversity of the crops we grow (and eat rather than feed it to animals).

That said, the most exciting part of the revolution is very high-tech indeed. Historically farmers have treated all their fields in the same way: the whole area gets the same irrigation, the same planting, the same fertiliser and the same pesticide regardless of what might be going on in different parts of it (this is the “spray and pray” method of farming). This is horribly wasteful - some 40% of fields globally are thought to be over-fertilised, for example. Until recently there wasn’t much to be done about it. That’s changed.

Patterns picked from chaos

Today the road to successful agriculture is definitely digital – and has been since farmers first got their hands on GPS³ in the 1990s. Satellites and sensors can now produce huge amounts of data. The rise of Artificial Intelligence (AI) means that we can process this information at phenomenal speed – such that patterns can now be clearly picked out of what once looked homogenous. Weather apps can tell farmers the best times to plant and harvest. Sensors placed at regular intervals around fields can allow farmers to plant in the best places at the best times, to fertilise only the bits of soil that need it (this will mark the biggest of changes) and irrigate only the plants that need water: in the new world of farming, every plant will be able to be treated as an individual.

Mobile devices can give farmers endless technical data on the go. Robots can be used to cut the waste at harvest time – vital given how much food is lost before it is transported and processed. New machines can do everything from face scanning cows to locate any that might be unwell and zapping weeds electronically from the root up to avoid using herbicides. Drones can check plant health and overall crop growth as well as pick up leaves that show signs of pest damage – and arrange to spray only those that need it (“see and spray” rather than “spray and pay”). They can also produce constant real time aerial imagery of farms to produce a replica of any area in the cloud (like a digital twin) for farmers to work from.

The farm of the future then will be one in which every stage of the agricultural process is managed digitally – one where cloud-based management systems will have fully replaced the today’s more haphazard management methods.
 

More sustainable doesn’t mean less productive

There is very little not to like here. The opportunity is huge. Precision farming should slash waste. It should end the pointless use of pesticides and fertilisers. It should save water. And it should massively raise yields: according to a recent report from Goldman Sachs, there is the potential to increase agricultural yields by 70% by 2050 using all the technology with us and on the way. Can it happen? It can. The cost of sensors is falling, the battery life of drones is increasing fast, the availability and function of robots is rising, and the finance to make it all happen is very much available. The food market is the biggest in the world (it is forecast to be worth over $12trn by 2020) so it makes sense for all investors to want to be involved in the disruption of its supply chain. At the same time, a new generation of farmers will soon emerge (the average US farmer is in his late 50s) and know that it will be hard to compete on price and productivity without full technological integration.

There is no reason for precision farming not to become the global norm. It is good for farmers, good for the companies getting involved, good for people and good for the planet. Get this right – and interest in the sector suggests we will – and it will soon be clear that a more sustainable future for agriculture does not have to be a less productive one.

Biography

Merryn Somerset Webb is the Editor in Chief of Moneyweek, the UK’s bestselling financial magazine; a columnist for the Financial Times; and a regular TV and radio commentator on financial matters. She is also a non-executive director of two UK listed investment trusts⁴.

¹https://www.earth-syst-sci-data.net/9/181/2017/essd-9-181-2017.pdf
²https://ourworldindata.org/crop-yields
³GPS  - Global Positioning System
⁴Please note that Merryn Somerset Webb’s views and opinions are her own and not necessarily a reflection of those of the Lombard Odier Group.