The fringe benefits of agtech
The application of agtech is often positioned to improve operational efficiency, profitability and sustainability. But could this narrow definition be limiting the adoption of agtech on farm and in the supply chain?
A panel of experts at evokeAG. 2023 discussed the peripheral value drivers that producers should consider in their pursuit of digitising their business and explained that return on investment is not always measured in dollars and its impact is not always seen in the paddock.
Here we outline some of our key takeaways from discussion highlighting the opportunities for agtech developers and entrepreneurs to ensure their solutions deliver return on investment, and what producers should consider when introducing technology into their farming businesses.
Farming – it’s not always about the economic bottom line
Drawing on 20 years of experience innovating and creating impact in agriculture, and natural resource management agtech consultant Dr Ben Baghurst now works closely with clients to accelerate the development, commercialisation and adoption of agtech on farm.
According to Ben return on investment is absolutely critical for producers, but it doesn’t always have to be measured by financial return.
“Don’t be blinkered to think that return on investment has to be a dollar value. Every single farmer doesn’t go out and do what they do day in, day out purely to make money. It’s necessary, but arguably insufficient to be happy in life,” said Ben.
“Farmers are also looking for technology that helps them retain their passion for farming and makes it feasible for them to stay in operation, without detracting from one’s enjoyment and quality of life,” said Ben.
As way of example he pointed early stage startup Sky-Hand who is using off the shelf drone technology and software – similiar to that being used in the mining industry – to monitor stock location, numbers and condition all from the front porch. But a dollar return was not the sole driver.
“The founder [of Sky-Hand] is an entrepreneur who was seeking a solution for his dad who is in his 80s. A farming accident limits his mobility and this technology lets him keep doing what he loves.”
The concept was eye opening for some in the audience, including one developer who talked about investing heavily in creating fence monitoring technology only to learn that riding the fences is the favourite job of some producers.
Choosing the right solutions
For Mark Barber, General Manager, Farmland Agency and Investments at Elders, there are some key considerations for producers introducing new tech to their farms.
First is understanding the business benefits in adopting technology.
“You need to know what you are going to achieve and how you will achieve these benefits with a whole of business approach,” he said, emphasising that tech must be part of the wider farming system, not a discrete element that sits outside the rest of the operation.
Next is deciding who will be accountable for ensuring tech investments deliver results, and Mark was clear on who it definitely should not be: “it’s not the tech manager.” In his view, accountability for on-farm results sits with the farmer or in the case of a corporate farm it’s the operations manager.
And finally, he says producers need to ask what the risks could be and how they might mitigate them.
Driving agtech uptake
Commonwealth Bank’s Carmel Onions told the audience that with so many tech options available and so much of it being capital-intensive, the agtech industry needs to do better at showcasing their products as enablers.
“Producers need to be able to see how tech can help them achieve their goals and how it complements their business strategy,” she said.
“Whether that’s through building supply chain transparency, helping solve labour force challenges or changing the farming model to give producers more downtime.” She believes there’s work still to be done on articulating the story about how tech improves business outcomes, especially through enhanced decision making.
And then there’s the challenge that comes from so much choice, so many options.
“Across the industry we also really need to start thinking about what data we actually want and need. Request for, and supply of, data is coming at lightning pace, and the organisations receiving it need to have the processes built to analyse, report and store it,” said Carmel.
While getting the narrative right and being mindful of the fringe benefits of agtech are both important, Carmel says that ultimately there needs to be strong, specific financial incentives for adoption. This could include Commonwealth Bank’s Agri Green Loan that offers a significantly reduced interest rate for eligible on-farm investments that improve environmental outcomes, which could include some agtech.
“The fringe benefits of on-farm tech” was presented by evokeAG. 2023 Platinum Partner Elders. It was facilitated by Michael Macolino, Managing Director, SVG Ventures Thrive APAC and featured Commonwealth Bank’s National Director of Agribusiness, Carmel Onions, agtech consultant Dr Ben Baghurst and Mark Barber, General Manager, Farmland Agency and Investments at Elders.
Listen to the full panel discussion here. If you would like to read more stories from global leaders, farmers, startups and innovators from the event, head here or sign up for our newsletter to get the latest news straight to your inbox.
For information about Commonwealth Bank’s suite of sustainability-related finance products for agribusiness, visit their website.
If you have a complaint in respect of this information, Commonwealth Bank’s dispute resolution service can be accessed on 13 22 21 or commbank.com.au/support/compliments-and-complaints.