Precision Agriculture Analysis

Digital agriculture has been around since the 1990’s but has grown steadily in recent years with advances in several technology areas. It is a complex suite of technologies relevant to all sectors of agriculture and all stages in the value chain. Market penetration is rapidly increasing in developed and emerging economies, but most major digital agriculture platforms are poorly differentiated from one another. The benefits to large farm businesses are mainly around cost reduction and incremental productivity improvements while for the smaller farmers the gains are associated with improved productivity and market access, and can be radical. All major crop protection and seed sector players are involved: large and small companies plus venture capitalists, machinery companies and specialist equipment makers.

There is considerable debate on where the overall benefits will be greatest, an example being the use of unmanned aerial vehicles (UAVS), such as drones; the impact of UAV application of pesticides in major row crops is unlikely to be significant and may remain a relatively niche method whereas UAVs could be more relevant for application to tree crops and specialty crops like hops plus remote sensing and field scouting uses.

For the crop protection and seed sector, knock-on effect on product volumes is unlikely to be significant as many new actives are already being positioned at low use rates, and this is a more significant driver for this effect.

Our analysis recognises that while there’s a sentiment in the industry that it is important to be involved, there is also a key question to be assessed around the likely returns - will precision agriculture return on investment be sufficient or is it at best a zero sum game?