Farm To Fork Goes Digital: How Agribusiness Digitization Can Feed the World

Anja Strothkämper

By 2050, the UN predicts the world’s population will reach nearly 10 billion people. In order to feed this population, annual meat production will need to rise by over 200 million tons to reach 470 million tons. By 2030, global water demand will increase by more than 50%, reports Farming First. At the same time, the amount of arable land available to feed the world’s population is shrinking. In 2005, 2,300 square meters of farmland were available per person. By 2030, however, there will only be 1,800 square meters, reports FAO.

Even if we could substantially increase land cultivation and crop intensity, doing so would still not produce enough food to feed the world. The vast majority of additional food must come from increases in yield and reductions in food waste. Tomorrow’s world demands that we make changes today – and digitization in agribusiness is delivering.

Three key factors driving the shift towards digitization

Traditional industry boundaries and segments are blurring thanks to a new push towards digitization. In addition to increased pressures from world population growth, three key factors are driving this change:

  1. The need for increased farming efficiency. At the start of the value chain, there is tremendous pressure to increase the efficiency of farming to produce more high-quality food in a low-margin business and to reduce consumed resources. Growing consumer demand in developing markets is fueled by developing countries’ increasing population, which has a big appetite for meat and other high-calorie food. At the same time, the scarcity of resources, such as water and fossil fuels, and the decreased availability of arable land further drive the need for increased farming efficiency.
  1. The need for transparent and sustainable food supply chains. From farm-to-table movements towards the push for local and sustainably sourced food, consumers in mature markets strongly value food safety, food traceability, and sustainability. These demands place further pressure on agribusiness to develop transparent, connected, and efficient supply chains.
  1. The need to manage supply and price volatility. Today’s agribusinesses face highly volatile commodity prices and crop supplies. Agribusinesses must be prepared to pivot rapidly in response to supply and demand shortages, as well as market price fluctuations.

Drones, connected machines, and field sensors: How digitization in agribusiness can increase yield

Digitization in the agribusiness sector can significantly increase our ability to feed the rapidly growing world population in a sustainable way. Drones, for example, can help farmers identify crop health problems in pictures. Aaron Sheller, the owner of Precision Drone in Iowa, says he takes the images from his drones and then drops pins on a Google Earth viewer. He can then precisely apply fertilizer or pesticides to the spot that requires treatment. Sheller calls this a “prescriptive approach” that improves productivity and allows farmers to “put those nutrients exactly where they need to be so the crop can uptake it and we can achieve maximum success.”

Taking the prescriptive approach one step further is GEOSYS, which was recently acquired by Land O’Lakes. GEOSYS developed satellite-based remote sensing to provide farmers with current, actionable data. GEOSYS draws on historical records throughout the growing season and then combines this data with real-time observations from remote sensing technology. Rather than the “one and done” evaluation of a field that drones provide, GEOSYS empowers farmers with continuous monitoring, helping them identify problems before more visible symptoms are even present.

Cargill has developed its own solution to “prescriptive farming” that uses proprietary software to evaluate myriad conditions, including soil and weather, and make highly specific recommendations to maximize output. For example, consider concerns around peak planting time. Cargill’s software, known as NextField DataR, will crunch a number of different data pieces such as soil content, seed type, and temperature fluctuations to help farmers determine the optimal time for crop planting.

Early adopters are winning: Digital transformation now an imperative for agricultural production

The converging needs for increased farming efficiency, transparent and sustainable food supply chains, and management of supply and price volatility are driving the conversion to digitization. Agribusiness leaders need to decide where they stand while business transformation drivers and new technologies disrupt their industry. Research shows that early adopters are seeing significant value returns on their investments. Digital agriculture production yields a nine percent increase in revenue creation, a 26% impact to profitability, and a 12% increase in market valuation, reports CapGemini Consulting. The early results are clear: if we are going to feed the world’s population and meet consumer demand for sustainability and transparency, digitization in agribusiness is a must.

Bonus: Learn more about digital transformation of agribusiness.

Anja Strothkämper

About Anja Strothkämper

Anja Strothkämper is the Vice President for Agribusiness and Commodity Management within the Industry Cloud organization at SAP. Anja’s focus is to drive SAP’s digital strategy as well as solution portfolio and roadmap for SAP Agribusiness and Commodity Management solutions. She is passionate about customer co-innovation and thought leadership in the digital era.