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The opportunities for the agricultural sector going forward

The COVID-19 pandemic has reminded us of the importance of ensuring food security and the critical role the agricultural sector has in this.

 

Nutrition is indispensable for human beings. With the world population expected to grow over 9 billion people by 2050, food production must more than double to feed the future world population. More food must be produced, while less water, land and resources are available. The health of our planet is under enormous pressure. We need to rethink how we cultivate our acres and increase our harvests in a sustainable way going forward.


The FAO (Food & Agricultural Organization of the United Nations) earlier stressed the need for innovation to establish sustainable development. FAO Director-General Qu Dongyu states: “Innovation in agriculture is a way to enhance effectiveness, competitiveness and resilience with limited land and other finite resources." To truly make an impact, innovation should be accessible to everybody, regardless of farm size. This can be challenging, since developments go rapidly and keeping pace is mostly expensive.


This can lead to a gap – large farms with large investment budgets can buy the latest machinery, benefitting from efficiency gains, cost control and optimized total costs of operation (TCO), while smaller farms lose out. So how to ensure latest technology can be made accessible and affordable to various types of farming businesses?


Make innovation accessible

We need new business models to make sure all farmers can improve their business from a commercial and sustainable perspective. Servitization is a new and promising business model. It has already been successfully implemented in multiple industries including automotive, materials handling and entertainment, where it accomplished total cost of ownership reductions, increased efficiency and peace of mind for the users.


Servitization is a way to get access to equipment and services (installation, maintenance, warranty etc.) easily and economically by combining both into one package. Basically, it is about having access to equipment, without carrying the responsibilities of ownership. Choosing the right customized package including warranty, insurance, predictive and corrective maintenance options and many more. Servitization reduces investment barriers and shortens payback cycles through all-in-one, long-term rental, or leasing contracts. It makes state of the art equipment affordable regardless of financial resources. Take for example the rent-to-try schemes, enabling to test machines in real life conditions, without committing investments upfront.


Through servitized solutions, both small and large farmers can benefit from latest Stage V technology and fuel efficiency gains, whilst increasing output and being compliant with environmental rules and regulations. Innovation provides business opportunities which is being acknowledged. A recent study by Rabobank amongst 233 Dutch arable farmers showed that 64% expected to apply one or more precision farming techniques within 5 years.


In addition to servitized business models, agricultural innovation includes leveraging sophisticated equipment and techniques which will help the industry being more sustainable, efficient, and resilient going forward. Think about automatic steering, allowing you to precisely follow farming way lines, maximizing the cultivated area, reducing overlaps, and saving time, fuel, and money. And because you do not have to focus on steering, you will become less tired and have more energy to spend and value to bring to other areas of your business.


Leverage technology to benefit business and environment
Technology has become an indispensable part of doing business for farmers. Since farming is highly land and labor-intensive, many farmers are driven to use technology to increase efficiency and manage costs. Precision agriculture or smart farming is a development tapping into this need. According to Wageningen University & Research Precision agriculture ensures plants (or animals) get precisely the treatment they need, determined with great accuracy through the latest technology varying from e.g. GPS, sensor technology, drones, to telematics, data analytics software and robotics, without increasing labor.


Dutch arable farmer Jacob van de Borne is a well-known pioneer within this field. Starting with precision farming in 1996, today Van den Borne potatoes, farming over 600 hectares, benefits from e.g. drones, sensors, data connectivity, Pulse Width Modulation spraying and Control Traffic Farming. The use of these modern technologies has enabled the farm to determine and manage cultivation requirements per square meter, rather than by size of farming land. Greater precision and control have helped the farm to increase production, become less labor intensive, and reduce the farm’s consumption of water, fertilizers, pesticides, and diesel.


Precision farming is a farm management approach. Through real time data farmers can get direction on the amount of water, pesticides, or fertilizers to use. It also can help farmers decide when to plant or harvest crops. As a result, precision farming can improve time management, reduce water and chemical use, and produce healthier crops and higher yields. Precision farming benefits business and the environment.


Innovation is the answer for the agricultural sector going forward. It establishes sustainable development and enhances business performance. Let us therefore embrace new business models and make new technology accessible to all farmers, regardless of financial resources. So next time you think you cannot afford to replace your old agricultural machinery fleet, be sure to check finance, lease, or rental structures with your dealer as they can empower your growth.