Creating value in digital-farming solutions

Many investments in digital farming have not fulfilled their full potential. What can companies do to improve returns?

 
Over the past 20 years, agriculture has undergone a digital revolution. It started quietly with original-equipment manufacturers that began to sell harvesters with guidance systems and auto steering, then roared to life in 2013 with Monsanto’s nearly $1 billion acquisition of the digital-agriculture company Climate Corporation. Since then, there has been an arms race within the industry, with billions of dollars invested and hundreds of millions of acres affected by digital farming.

The rapid pace of investment and broad adoption of digital technologies on the farm are a testament to the power of digital to reduce costs, boost yields, and put more money in the pockets of growers.1 However, despite the promise of digital-farming solutions, our research suggests that such investments have not lived up to expectations of the companies that made them. To explore why this might be the case and what could be done to improve outcomes, we conducted a survey of more than 100 industry executives from across the agriculture value chain.

For the purpose of this article, we define “digital farming” as any platform or application that processes input data to provide growers or crop advisers with agronomic decision-making support. These include proven digital offerings (such as variable-rate application) and ones that are more novel (such as in-season sensing). We excluded automation equipment, drones, and services that are not linked to agronomic decisions (for example, fleet-management software).

The survey found that most agriculture companies have invested in digital-farming solutions, but less than 40 percent of respondents (representing a broad swath of the industry) self-reported positive returns. To understand why, we tested a number of success factors, several of which dramatically increase perceived success. These standout factors include:

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Πηγή: mckinsey

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