There is a huge opportunity that could be achieved from digital revolution in agriculture that would improve yields to feed an additional 1 billion people within ten years.
Farmers should no longer take the traditional route of mergers and acquisitions to increase their yields, but should instead be turning to digitisation and new technology.
A new report by A.T. Kearney suggested growers across the agriculture value chain could meet the slowing global growth rates, increase regulatory requirements and shift demand head-on – all by going digital.
By expanding digital to cover broad-acre crops, the increase in yields is so great it could potentially reach 20 to 30 per cent and provide food for as many as 1 billion additional people in the coming decade.
Partner of A.T Kearney and co-author of the report Benjamin Subei said: “Digitisation will give the grower a tool that gives him all the documentation on what type of agro-chemical and fertilizers are applied on which particular hectare of his field, resulting in a reduced output consideration.
“Compared to the development of new agro-chemical substances or new seed varieties, digitisation would offer a significant higher impact on grower yields than anything else in the pipeline so far.”
The report, entitled ‘Agriculture is fertile ground for digitisation’ suggested how increased M&A activity and consolidation in agriculture will no longer be enough to maintain record earnings.
It said larger companies have a need to embrace digital farming in order to increase yields and ‘stay ahead of the competition’, particularly following a slowdown in global growth rates in agriculture demand.
Mr Subei said it would encourage a ’learned behaviour’ within agriculture that all innovations and new technologies should follow.
"The industry will establish a learned sharing where the benefit the grower gets will be shared two thirds for the grower and one third for the industry."
Monsanto’s Climate Corporation currently covers around 30 to 40 million hectares which equates to only 2 per cent of the world’s crop land.
Data gathered throughout these crop cycles and lessons learned on one field can automatically be transferred to other growers in similar climates.
Carsten Gerhardt, partner and co-author of the report said: “We expect the industry majors to move first and fast, followed closely by start-up tech firms keen to leverage the market opportunity.
“In digital, size and speed matter. First movers will set the standards for the entire industry and shape its future.”