More data, more food
Everyone in the food and agri chain, from farmer to consumer, would benefit from embracing the opportunities provided by technology, data and new algorithms. 'This move to a smarter food system is already beginning to take shape', says Rabobank strategist Justin Sherrard, 'although care will be needed to get this right. We cannot build a smarter and more sustainable food system without public support.'
Building a smarter and more sustainable food system
Many people don’t notice the 'internet of things' in their daily lives. But it’s actually around us all the time: internet technology and computers that translate information into real-time decisions that make our everyday lives easier and more comfortable. Examples include climate management in modern homes and offices, traffic management, assisted driving and .... food production:
- Global positioning systems (GPS), plant and soil sensors improve the efficiency of water and chemicals used in irrigation systems by as much as 80%.
- Drones are increasingly used to monitor and enhance livestock and crop production and to measure pasture and grass growth.
- Modern greenhouses for growing peppers and tomatoes use modern sensor technology to manage the climate and growth.
- Dairy equipment, such as milking robots, use sensor technology and data to monitor and manage the cow, its behaviour and milk yield.
- Tractors in many countries use GPS and other wireless technologies when driving on farm land for ploughing, sowing or harvesting.
Data-driven technologies are designed to improve productivity and reduce costs. Justin Sherrard, strategist at Rabobank Food & Agribusiness Research, wrote a report on 'Building a Smarter Food System', which he presented in Milan in October 2015. He says: 'Technology automates the way things happen, big data tell us what is happening and algorithms translate data into decisions, adding speed and accuracy to food production, processing and distribution.'
Meeting the global food challenge
Sherrard is convinced that the use of technology, data and algorithms can make a big difference to the global food challenge: 'The current system is successful in many ways. More people have to be nourished, while we need to improve resource efficiency, better meet consumer expectations, improve profitability and improve resilience. Use of new technology, data and algorithms will change both the way in which and the speed at which decisions are made and optimise the use of resources to produce and deliver the food consumers need.'
Connecting innovators and investors
The move to a smarter food system is already underway. This is reflected in the fact that new deal flows into smarter food systems are set to nearly double compared to last year to 4.2 billion US dollars in 2015. Rabobank is already financing farms that use data-driven technology. In the United States, Rabobank is involved in 'FoodBytes!', an event that brings together food innovators and potential investors. The 'Money Meets Ideas' events in the Netherlands give innovative entrepreneurs the chance to pitch their ideas to informal investors. Sherrard: 'Established companies in the food chain and other investors have to be willing to invest for long-term success, as these new approaches and technologies do entail new risks and opportunities.'
Farmer-owned data cooperative
Another key success factor is collaboration within the food chains, for example between supermarkets and food processors, or between supermarkets and farmers. Sherrard: 'Success will depend on greater connectivity between buyers and suppliers, sharing data and making joint decisions in real time.' For example, data collection in orchards, as is now possible using drones, can improve crop forecasting, which helps growers and retailers to optimise inventory management and pricing. Sherrad: 'This will be creating a win-win situation along the supply chain.'
A new but well-proven model could help: the cooperative. Farmers currently provide their data to databases that are often owned by a single processor or supplier. Data integration is not that easy. Sherrard: 'Why not think of a farmer-owned data cooperative, an anonymous database in which farmers bring in their data? This cooperative provides access to data for companies that develop data-intensive solutions, including peer data, market transparency and support for farmers’ marketing decisions.'
Do consumers, especially in Western countries, accept these technology-driven ways of food production, farming, plant and animal breeding? Sherrard: 'Consumers tend to favour simplicity when it comes to food production. It is important that any consumer concerns are understood and taken into account. The idea of small-scale, natural farming is inherently appealing, but is not the reality of modern farming in much of the world. In order to feed the world efficiently, change is needed, but we cannot build a smarter and more sustainable food system without public support.'