The Need for Digital Transformation in Agriculture
The agriculture industry has undergone a remarkable transformation over the past five decades. Advancements in machinery have expanded the scale, speed, and productivity of farm equipment, leading to more efficient cultivation of more land. Furthermore, innovations in seed, irrigation, and fertilizers have vastly improved, helping farmers increase their yields. Now, agriculture is on the cusp of yet another revolution, one driven by data and connectivity.
Emerging technologies, such as artificial intelligence, analytics, connected sensors, and other cutting-edge solutions, hold the potential to further increase yields, improve the efficiency of water and other inputs, and build sustainability and resilience across crop cultivation and animal husbandry. As the world experiences a quantum leap in the speed and scope of digital connections, industries are gaining new and enhanced tools to boost productivity and spur innovation.
Over the next decade, existing technologies like fiber, low-power wide-area networks (LPWAN), Wi-Fi 6, low- to mid-band 5G, and short-range connections like radio-frequency identification (RFID) will expand their reach as networks are built out and adoption grows. At the same time, new generations of these technologies will appear with upgraded standards. In addition, more revolutionary and capital-intensive frontier connectivity, such as high-band 5G and low-Earth-orbit (LEO) satellites, will begin to come online.
Together, these technological developments will unlock powerful new capabilities across industries. Near-global coverage will allow the expansion of use cases even to remote areas and will enable constant connectivity universally. Massive use of Internet of Things (IoT) applications and use cases will be enabled as new technologies allow for very high device densities. And mission-critical services will take advantage of ultralow-latency, high-reliability, and high-security connections.
However, without a solid connectivity infrastructure, none of this is possible. If connectivity is implemented successfully in agriculture, the industry could add $500 billion in additional value to the global gross domestic product (GDP) by 2030, according to research. This would amount to a 7% to 9% improvement from its expected total and would alleviate much of the present pressure on farmers.
Challenges Facing the Agricultural Sector
The agriculture industry is facing a perfect storm of challenges, as demand for food is growing at the same time the supply side faces constraints in land and farming inputs. The world’s population is on track to reach 9.7 billion by 2050, requiring a corresponding 70% increase in calories available for consumption, even as the cost of the inputs needed to generate those calories is rising.
By 2030, the water supply will fall 40% short of meeting global water needs, and rising energy, labor, and nutrient costs are already pressuring profit margins. About one-quarter of arable land is degraded and needs significant restoration before it can again sustain crops at scale. And then there are increasing environmental pressures such as climate change and the economic impact of catastrophic weather events, as well as social pressures including the push for more ethical and sustainable farm practices, such as higher standards for farm-animal welfare and reduced use of chemicals and water.
To address these forces poised to further roil the industry, agriculture must embrace a digital transformation enabled by connectivity. Yet, agriculture remains less digitized compared with many other industries globally. Past advances were mostly mechanical in the form of more powerful and efficient machinery and genetic in the form of more productive seed and fertilizers. Now, much more sophisticated digital tools are needed to deliver the next productivity leap.
Overcoming the Connectivity Challenge
Some regions lack the necessary connectivity infrastructure, making development of it paramount. In regions that already have a connectivity infrastructure, farms have been slow to deploy digital tools because their impact has not been sufficiently proven. The COVID-19 crisis has further intensified other challenges agriculture faces in five areas: efficiency, resilience, digitization, agility, and sustainability.
Lower sales volumes have pressured margins, exacerbating the need for farmers to contain costs further. Gridlocked global supply chains have highlighted the importance of having more local providers, which could increase the resilience of smaller farms. In this global pandemic, heavy reliance on manual labor has further affected farms whose workforces face mobility restrictions. Additionally, significant environmental benefits from decreased travel and consumption during the crisis are likely to drive a desire for more local, sustainable sourcing, requiring producers to adjust long-standing practices.
In short, the crisis has accentuated the necessity of more widespread digitization and automation, while suddenly shifting demand and sales channels have underscored the value of agile adaptation.
Unlocking the Potential of Sensor Networks in Agriculture
In recent years, many farmers have begun to consult data about essential variables like soil, crops, livestock, and weather. Yet, few if any have had access to advanced digital tools that would help to turn these data into valuable, actionable insights. In less-developed regions, almost all farmwork is manual, involving little or no advanced connectivity or equipment.
Even in the United States, a pioneer country in connectivity, only about one-quarter of farms currently use any connected equipment or devices to access data, and that technology isn’t exactly state-of-the-art, running on 2G or 3G networks that telcos plan to dismantle or on very low-band IoT networks that are complicated and expensive to set up. In either case, those networks can support only a limited number of devices and lack the performance for real-time data transfer, which is essential to unlock the value of more advanced and complex use cases.
Nonetheless, current IoT technologies running on 3G and 4G cellular networks are in many cases sufficient to enable simpler use cases such as advanced monitoring of crops and livestock. In the past, however, the cost of hardware was high, so the business case for implementing IoT in farming did not hold up. Today, device and hardware costs are dropping rapidly, and several providers now offer solutions at a price that is believed to deliver a return in the first year of investment.
These simpler tools, however, are not enough to unlock all the potential value that connectivity holds for agriculture. To attain that, the industry must make full use of digital applications and analytics, which will require low latency, high bandwidth, high resiliency, and support for a density of devices offered by advanced and frontier connectivity technologies like LPWAN, 5G, and LEO satellites.
Key Use Cases for Sensor Networks in Agriculture
The good news is that connectivity coverage is increasing almost everywhere. By 2030, we expect advanced connectivity infrastructure of some type to cover roughly 80% of the world’s rural areas, the notable exception being Africa, where only a quarter of its area will be covered. The key, then, is to develop more—and more effective—digital tools for the industry and to foster widespread adoption of them.
As connectivity increasingly takes hold, these tools will enable new capabilities in agriculture. By the end of the decade, enhanced connectivity in agriculture could add more than $500 billion to global gross domestic product, a critical productivity improvement of 7% to 9% for the industry.
It’s important to note that these use cases do not apply equally across regions. For example, in North America, where yields are already fairly optimized, monitoring solutions do not have the same potential for value creation as in Asia or Africa, where there is much more room to improve productivity. Drones and autonomous machinery will deliver more impact to advanced markets as the technology will likely be more readily available there.
Crop Monitoring
Connectivity offers a variety of ways to improve the observation and care of crops. Integrating weather data, irrigation, nutrient, and other systems could improve resource use and boost yields by more accurately identifying and predicting deficiencies. For instance, sensors deployed to monitor soil conditions could communicate via LPWAN, directing sprinklers to adjust water and nutrient application.
Sensors could also deliver imagery from remote corners of fields to assist farmers in making more informed and timely decisions and getting early warnings of problems like disease or pests. Smart monitoring could also help farmers optimize the harvesting window. Monitoring crops for quality characteristics—such as sugar content and fruit color—could help farmers maximize the revenue from their crops.
Most IoT networks today cannot support imagery transfer between devices, let alone autonomous imagery analysis, nor can they support high enough device numbers and density to monitor large fields accurately. Narrowband Internet of Things (NB-IoT) and 5G promise to solve these bandwidth and connection-density issues. The use of more and smoother connections between soil, farm equipment, and farm managers could unlock $130 billion to $175 billion in value by 2030.
Livestock Monitoring
Preventing disease outbreaks and spotting animals in distress are critical in large-scale livestock management, where most animals are raised in close quarters on a regimen that ensures they move easily through a highly automated processing system. Chips and body sensors that measure temperature, pulse, and blood pressure, among other indicators, could detect illnesses early, preventing herd infection and improving food quality.
Farmers are already using ear-tag technology from providers such as Smartbow (part of Zoetis) to monitor cows’ heat, health, and location or technology from companies such as Allflex to implement comprehensive electronic tracing in case of disease outbreaks. Similarly, environmental sensors could trigger automatic adjustments in ventilation or heating in barns, lessening distress and improving living conditions that increasingly concern consumers.
Better monitoring of animal health and growth conditions could produce $70 billion to $90 billion in value by 2030.
Building and Equipment Management
Chips and sensors to monitor and measure levels of silos and warehouses could trigger automated reordering, reducing inventory costs for farmers, many of whom are already using such systems from companies like Blue Level Technologies. Similar tools could also improve the shelf life of inputs and reduce post-harvest losses by monitoring and automatically optimizing storage conditions.
Monitoring conditions and usage of buildings and equipment also has the potential to reduce energy consumption. Computer vision and sensors attached to equipment and connected to predictive-maintenance systems could decrease repair costs and extend machinery and equipment life. Such solutions could achieve $40 billion to $60 billion in cost savings by 2030.
Drone Farming
Agriculture has been using drones for some two decades, with farmers around the world relying on pioneers like Yamaha’s RMAX remote-controlled helicopter to help with crop spraying. Now, the next generation of drones is starting to impact the sector, with the ability to survey crops and herds over vast areas quickly and efficiently or as a relay system for ferrying real-time data to other connected equipment and installations.
Drones also could use computer vision to analyze field conditions and deliver precise interventions like fertilizers, nutrients, and pesticides where crops most need them. Or they could plant seed in remote locations, lowering equipment and workforce costs. By reducing costs and improving yields, the use of drones could generate between $85 billion and $115 billion in value.
Autonomous Farming Machinery
Precise GPS controls paired with computer vision and sensors could advance the deployment of smart and autonomous farm machinery. Farmers could operate a variety of equipment on their field simultaneously and without human intervention, freeing up time and other resources. Autonomous machines are also more efficient and precise at working a field than human-operated ones, which could generate fuel savings and higher yields.
Increasing the autonomy of machinery through better connectivity could create $50 billion to $60 billion of additional value by 2030.
The Value of Connectivity in Agriculture
Connected technologies offer an additional indirect benefit, the value of which is not included in the estimates given in these use cases. The global farming industry is highly fragmented, with most labor done by individual farm owners. Particularly in Asia and Africa, few farms employ outside workers. On such farms, the adoption of connectivity solutions should free significant time for farmers, which they can use to farm additional land for pay or to pursue work outside the industry.
We find the value of deploying advanced connectivity on these farms to achieve such labor efficiencies represents almost $120 billion, bringing the total value of enhanced connectivity from direct and indirect outcomes to more than $620 billion by 2030. The extent to which this value will be captured, however, relies largely on advanced connectivity coverage, which is expected to be fairly low around 25% in Africa and poorer parts of Asia and Latin America.
Achieving the critical mass of adopters needed to make a business case for deploying advanced connectivity also will be more difficult in those regions where farming is more fragmented than in North America and Europe.
The Evolving Ecosystem of Connected Agriculture
As the agriculture industry digitizes, new pockets of value will likely be unlocked. To date, input providers selling seed, nutrients, pesticides, and equipment have played a critical role in the data ecosystem because of their close ties with farmers, their own knowledge of agronomy, and their track record of innovation.
For example, one of the world’s largest fertilizer distributors now offers both fertilizing agents and software that analyzes field data to help farmers determine where to apply their fertilizers and in what quantity. Similarly, a large-equipment manufacturer is developing precision controls that make use of satellite imagery and vehicle-to-vehicle connections to improve the efficiency of field equipment.
Advanced connectivity, however, gives new players an opportunity to enter the space. Telcos and LPWAN providers have an essential role to play in installing the connectivity infrastructure needed to enable digital applications on farms. They could partner with public authorities and other agriculture players to develop public or private rural networks, capturing some of the new value in the process.
Agritech companies are another example of the new players coming into the agriculture sphere. They specialize in offering farmers innovative products that make use of technology and data to improve decision-making and thereby increase yields and profits. Such agritech enterprises could proffer solutions and pricing models that reduce perceived risk for farmers—with, for example, subscription models that remove the initial investment burden and allow farmers to opt out at any time—likely leading to faster adoption of their products.
An Italian agritech is doing this by offering to monitor irrigation and crop protection for wineries at a seasonal per-acre fee inclusive of hardware installation, data collection and analysis, and decision support. Agritech also could partner with agribusinesses to develop solutions.
Enabling the Connected Agriculture Future
Much of this, however, cannot happen until many rural areas get access to a high-speed broadband network. We envision three principal ways the necessary investment could take place to make this a reality:
- Telcos and LPWAN providers: These connectivity infrastructure builders have a vested interest in expanding their networks to unlock new revenue streams in agriculture and other industries.
- Input providers and agritech companies: These players have a strong incentive to invest in connectivity to enable their digital solutions and services for farmers.
- Public sector: Governments could improve the economics of developing broadband networks, particularly in rural areas, through subsidies, tax breaks, or other supportive measures.
Regardless of which group drives the necessary investment for connectivity in agriculture, no single entity will be able to go it alone. All of these advances will require the industry’s main actors to embrace collaboration as an essential aspect of doing business.
Going forward, winners in delivering connectivity to agriculture will need deep capabilities across various domains, ranging from knowledge of farm operations to advanced data analytics and the ability to offer solutions that integrate easily and smoothly with other platforms and adjacent industries.
The public sector also could play a role by improving the economics of developing broadband networks, particularly in rural areas. For example, the German and Korean governments have played a major role in making network development more attractive by heavily subsidizing spectrum or providing tax breaks to telcos. Other regions could replicate this model, accelerating the development of connective products by cost-effectively giving input providers and agritech companies assurance of a backbone over which they could deliver services.
Conclusion: Embracing the Connectivity-Driven Future of Agriculture
Agriculture, one of the world’s oldest industries, finds itself at a technological crossroads. To handle increasing demand and several disruptive trends successfully, the industry will need to overcome the challenges to deploying advanced connectivity. This will require significant investment in infrastructure and a realignment of traditional roles. It is a huge but critical undertaking, with more than $500 billion in value at stake.
The success and sustainability of one of the planet’s oldest industries may well depend on this technology transformation, and those that embrace it at the outset may be best positioned to thrive in agriculture’s connectivity-driven future.
By leveraging the power of sensor networks, IoT, and advanced connectivity, the agriculture industry can unlock new levels of precision, efficiency, and sustainability, ultimately boosting yields, reducing costs, and ensuring the long-term viability of food production worldwide.
Explore the possibilities of sensor networks and connected agriculture at sensor-networks.org</