Where does precision agriculture investment fit in todays farming context? In 2014 the Canadian agriculture system generated $108B dollars. This represents roughly 6.5% of Canada’s GDP. In a more recent study “An Overview of the Canadian Agriculture and Agri-Food System 2016” found that producers saw their direct production costs increase by over 47% between 2004 and 2014.
Many farmers suffer from increasing operational costs and dwindling farm-gate prices for their products. According to the US Farm Income Outlook for 2016 “The forecast for lower net farm income and net cash income is the result of the outlook for lower crop and livestock receipts—down a combined 2.5% ($9.6 billion). The fall in cash receipts reflects continued declines in prices for most commodities compared with the period of 2011-2013, when prices for many major commodities experienced record or near-record highs.”
Which raises the question, where does precision agriculture investment fit in todays farming context? A recent marketing brochure for precision agriculture services by Accenture cites, the precision farming market is estimated to reach USD 4.80 Billion by 2020, at a CAGR of 11.7% between 2015 and 2020. The factors driving the precision farming market, include expanding global food demand and increase profitability and production by precision farming techniques. Let us look at that underlined statement a little closer!
The report mentioned, “Increase profitability & production”. Yet the costs mentioned in the Canadian AG study shows that the primary cost centres that contributed the most to the increase in overall expenses over the study period were commercial seed (107%), fertilizer and lime (103%), livestock and poultry purchases (91%), and machinery fuel (71%). The US report states that farmers are getting less money for the products they sell!
There is no doubt that precision agriculture represents the invention of the tractor in terms or revolutionizing the production techniques in agriculture. Many farmers are already adopting these technologies to improve their farm performance.
However, we must be very careful in over estimating its benefits because as farmers’ cost inputs rise, our food costs will rise. This will only make feeding the 7 Billion people on this planet that much harder.
If the precision agriculture movement is primed to truly transform the way we grow food and optimize the resource inputs to increase farmer profitability, then the aggregated data should be used to create a platform that can benefit the farmer and not to be used just as an excuse to extract rent from the very people who feed this planet.