The world is struggling to feed itself. With the global population expected to exceed 8.5 billion people by 2030, the scale of activity required to provide food for everyone is driving the environment to breaking point. But, tech solutions deployed on robust digital infrastructure can streamline processes, minimize waste, maximize output, and let us once again walk the path to sustainability.
Alongside pressures facing land and resource use, the agriculture industry consumes nearly 70 percent of the world’s fresh water, yet 1.1 billion people lack access to water and water scarcity affects 2.7 billion people for at least one month per year. In parallel, climate change is an equal threat − at a time when agriculture needs to deliver more, increasingly erratic weather patterns can damage crops and, in some regions, slash crop production by more than 20 percent due to weather anomalies like floods and extreme heat.
Farmers, exposed to global competition and the need to supply food at prices consumers can afford, need to increase efficiency just to stay in business.
Innovation in the industry faces a number of historical hurdles. A major one is that global agriculture is fragmented, with the market mostly comprising micro farms run by families, especially in developing economies. Even developed markets are characterized by many more SMEs than large-scale farms. This structure results in a couple of significant implications for adopting technology: Farmers typically lack the capital to invest heavily, especially when fast ROI can’t be guaranteed. They tend to lack the skills to initiate big projects and in many cases are unaware of how to improve their farms. Without external help, farmers lack sufficient scale to benefit from possible savings occurring throughout the value chain or to optimize ROI even if they do implement improvement projects.
The lack of a joined-up approach means that solutions only address limited aspects of farmers’ operations.
Other restraints stopping farmers from moving their businesses forward are the general lack of targeted connectivity services and solutions coupled with a lack of standardization of how data should be collected, aggregated, and managed.
But things are changing. More farmers are using mobile devices and the Internet, both in emerging and developing markets. Doing so gives them the capability to improve trade and engage in industry initiatives. Moreover, advanced companies are adopting IoT in combination with low-cost cloud applications, low-power wide-area (LPWA) networks, sensor technologies, and data analytics platforms. These systems can impact everything from back-end processes such as purchasing or inventory control to field activities like planting, irrigation, fertilizing and harvesting.
Digital transformation is helping farmers evolve and transform. So, what will digital transformation look like in the agriculture industry when it’s more mature?
By 2025 agriculture will be in the midst of a technological transformation, perhaps as important for global food supply as the invention of the tractor or combine harvester. Just as these machines enabled farmers to achieve much more at less cost and far more quickly, so smart agriculture will enable farmers to grow and manage crops without human intervention and use the continuous feed of intelligence and insight to drive up efficiency, resource utilization, and crop yields. Research by Huawei X Labs predicts that the total addressable market for smart agriculture is expected to grow from US$13.7 billion in 2015 to US$26.8 billion by 2020 ─ a CAGR of 14.3 percent.
Precision farming will use data derived from images and sensors to track crops, soil, and the air in real time so farmers can observe and respond to changes at specific locations, also in real time.
Variable rate input technologies will add accuracy to planting and fertilizer and pesticide use, so that farmers only use what’s needed where it’s needed, saving chemical costs and labour.
Smart irrigation systems will minimize water waste and ensure delivery to the right places at the right times.
Soil monitoring systems will track the overall quality and chemical composition of the land, so farmers can improve fertility for specific crops and deal with local issues like toxicity, salination, and acidification as they occur.
Yield monitoring will provide real-time geo-referenced data about crops as they’re harvested, including quantity, quality, and moisture content.
Drones will monitor farms from the air, with data from cameras and sensors feeding into the other farming systems.
Smart greenhouses will manage growing conditions, with automated climate control and irrigation systems optimizing growing conditions and minimizing human intervention.
Precision livestock farming will manage and improve livestock health.
Farm management systems will combine all this field data with insights from wider sources like farm machinery telematics, weather observatories, and global trading markets. Data analysis, risk assessment, and financial analysis tools will help farmers minimize waste and maximize output on an E2E basis.
Smart agriculture will slash OPEX by requiring fewer seeds and workers as well as less fertilizer, pesticide, and fuel and maintenance for machinery. Farmers will produce more food with the same resources through targeted sowing and an improved understanding of local environmental conditions. With better quality produce and a better knowledge of global trading markets, they’ll also be able to command higher prices.
Farmers will benefit by improving their operations. In turn, society will benefit because there’ll be more food to go round, agriculture will be easier on the environment and resources, and food is likely to be cheaper.
Individual farms rarely have their own private networks as they’re generally too small, lack skilled personnel, and have few established relationships with IT providers. But to benefit from IoT, they need communications coverage over very wide areas.
The value chain for smart agriculture is also complex. It includes device and farming equipment manufacturers; sensor makers; connectivity providers offering communications based on LPWA, satellite, and mobile networks; IoT connectivity platform providers; application providers; vendors of data analytics solutions; and system integrators.
Telcos are ideally placed to help farmers deal with this complexity by providing the scale needed for the industry to exploit the available opportunities; the expertise for individual farmers to make most of that opportunity; and the market clout to create an ecosystem of partners delivering industry-standard, end-to-end service packages and solutions that are easy for farmers to use.
Telcos are poised to generate nearly US$13 billion in annual revenues by 2020 from the smart agriculture value chain. By delivering E2E smart agriculture solutions and applications on cloud through partners, telcos can generate revenues from increased numbers of wireless and fixed network connections, sensors, systems integration, and services.
The highest revenues will come from precision farming, precision livestock, and yield monitoring solutions, but all potential applications are set to deliver decent returns.
Monitoring banana production in Colombia: Colombia Telecom, Movistar, Claro and Tigo have all introduced monitoring systems for plantain crops to help farmers deal with flooding, soil oxygen exhaustion, humidity, and low temperatures, boosting productivity by 15 percent.
Monitoring fish in Vietnam: Viettel Mobile, MobiFone and VinaFone all offer livestock monitoring services. By deploying this type of solution, a major aquaculture has cut fish mortality by 40 to 50 percent, which has increased turnover by a similar percentage.
Automated irrigation in Spain: Telefonica and ABB have supplied a GPRS-connected automated irrigation system to a dozen farms in Spain, slashing water usage, reducing electricity bills by 30 percent, and increasing profits by 25 percent.
Source: The Connected Farm - A Smart Agriculture Market Assessment by Huawei X Labs
Connected cows: Low-power and high-capacity NB-IoT modules from Huawei can be attached to cows, enabling farmers to understand cows’ natural cycles and when they’re most likely to get pregnant, and also predict sickness through monitoring temperature.
For telcos, opportunities abound in areas that require high levels of connectivity and mobility like monitoring livestock, drones for aerial photography and remote sensing, logistics and distribution, and high-bandwidth applications such as machine surveillance. Applications requiring dense networks of connected sensors and associated control systems are also rich in potential, for example, variable rate input technologies. In each of these cases, connectivity that isn’t based on 3GPP network standards won’t meet downstream and upstream bandwidth or latency requirements.
Operators can also provide support services such as mobile payments and insurance, access to trading platforms, and farmer helplines, which is especially important in many emerging markets.
The opportunity to serve farmers with smart agriculture solutions isn’t limited to telcos, with various other supplier types set to benefit:
Device and equipment vendors that provide components like sensors and farm machinery with inbuilt sensor and connectivity capabilities have a great opportunity for upselling, providing differentiated products, and creating new service propositions. Every year, millions of new connected devices will be needed, from classic machines such as tractors, harvesters, bailers and planters to new tech like drones.
By 2025, sensors for monitoring animals, crops and environmental factors will be shipping in the billions, representing a hugely lucrative market space.
Application providers will be involved in most aspects of the smart agriculture revolution. Their tools will enable farmers to use the data collected from devices and sensors to monitor and automate farm processes and interact with farm machinery. A variety of crop, process, and equipment-specific applications will be delivered as cloud native software services. To open the channel to customers, application providers will use direct sales models and third parties such as equipment vendors, systems integrators, and telcos.
They have the opportunity to target a market that has never before been software-intensive.
Data analytics companies will help farmers understand what’s happening on a local level, predict outcomes, and suggest interventions. Partnerships and visibility into multiple farms will let them collate information from across the industry. Typically cloud-based, these companies can then position analytics about individual farmers’ crops and decisions on improving efficiency and productivity into the context of the wider industry. This macro-level data will be invaluable for farm suppliers by, for example, identifying the need for more raw materials, finance, insurance, or new equipment.
Systems integrators and outsourcing providers will have a significant role to play in bringing together the various systems needed to develop smart farms, which will especially benefit the largest farms, particularly those run on an international scale. These companies will often be the primary contractor that stitches together disparate sets of smart farm applications to create fully interconnected smart agriculture ecosystems. Smaller value-added resellers will have a role to play too – providing a channel to market to smaller farming businesses.
Connected farming will disrupt the farming industry. The tech is here now, and can be deployed to instantly improve efficiency, environmental impact, yield and crop quality, and profitability. As sensors become smaller and cheaper and as farmers realize the benefits of wirelessly connected crop management systems, smart farming will very quickly become the norm.
Telcos and enterprises have significant roles to play connecting the network and technological dots, and making smart farming accessible and attractive to all farmers regardless of scale. Agriculture can then move into an age where threats like water scarcity start to diminish in tandem with the amount of hunger facing the world.