Food demand increases when the supply side is constrained by land and farming input limits.
FREMONT, CA: Agriculture has undergone a sea change in the last 50 years. Farm equipment has increased in size, speed, and productivity due to technological advancements, allowing for more efficient cultivation of more land. Additionally, seed, irrigation, and fertilizers have increased significantly, assisting farmers in rising yields. Agriculture is now in the midst of another revolution powered by data and connection. AI, analytics, linked sensors, and other developing technologies can significantly raise yields, optimize water and other input efficiencies, and promote sustainability and resilience in crop production and animal husbandry.
Food demand increases when the supply side is constrained by land and farming input limits. By 2050, the world's population is expected to reach 9.7 billion, necessitating a 70 percent increase in calories available for consumption, even as the cost of the inputs used to generate those calories continues to rise. By 2030, water supplies will fall 40 percent short of satisfying global water demands, and growing energy, labor, and nutrient costs are already putting downward pressure on profit margins. Around a fourth of arable land has been damaged and requires extensive rehabilitation before supporting crops on a large scale again. Then there are growing environmental pressures, such as climate change and the economic impact of extreme weather events, and social pressures, such as the push for more ethical and sustainable farm practices, such as stricter standards for farm animal welfare and reduced reliance on chemicals and water.
Agriculture must embrace a digital transformation enabled by connectivity to confront these challenges that threaten to destabilize the business further. Nonetheless, agriculture remains less digitalized than a large number of other industries internationally. Historically, advances were primarily mechanical, manifesting themselves in more powerful and efficient machinery, and genetic, manifesting themselves in more productive seed and fertilizers. Significantly more advanced digital tools are required to achieve the next productivity jump. Some already exist to assist farmers in using resources more efficiently and sustainably, while others are in development. These new technologies can enhance decision-making by enabling more effective risk and variability management, optimizing yields, and improving economics. When used in animal husbandry, they can improve cattle welfare, answering growing concerns about animal welfare.
However, the industry faces two fundamental roadblocks. Certain regions lack the requisite connectivity infrastructure, necessitating its construction. Farmers have been sluggish to adopt digital tools in locations with established internet infrastructure due to a lack of evidence regarding their effectiveness.
The COVID-19 dilemma has exacerbated agriculture's other five challenges: efficiency, resilience, digitization, agility, and sustainability. Margin pressures have increased due to lower sales volumes, intensifying farmers' need to reduce costs further. Global supply chains that are clogged with bottlenecks have emphasized the significance of having more local providers, which may boost the resilience of smaller farms. The global pandemic's substantial reliance on physical labor has exacerbated the problem for farms whose workforces are restricted in their mobility. Additionally, the vast environmental benefits of reduced travel and consumption during the crisis are expected to fuel a desire for more local, sustainable sourcing, compelling businesses to alter longstanding practices. In short, the crisis has emphasized the importance of increased digitization and automation, while abruptly shifting demand and sales channels have highlighted the importance of flexible adaptability.
