The Flip Side: Imagine Ag without Innovation

By Joli A. Hohenstein

When you think of technology and how innovation disrupts agriculture’s traditional methods, no doubt precision ag comes up as one of the first triggers. Some call it the “bells and whistles” designed to add yield, value and efficiency and make it easier to farm productively. In fact, research estimates new technologies could boost yield as much as 70 percent on the same land.

But what happens if farmers don’t adopt new technology? After all, technology adoption rates are under 50 percent by most estimates. Where will agriculture be if innovation and technology are not embraced and updated? Can we keep up with global demand for soybeans without it?

As global demand and the world population grows, protein will play a key part in feeding that new segment, says Russell Walker, Ph.D. and clinical professor at Kellogg School of Management, Evanston, Illinois. “Soybeans are a powerful part of the equation. They’re the only way to make amino acid complexes off the land. We’re adding three to four billion people by the end of the century. We need protein to do that,” he says.

Cry For Innovation

Embrace Change or Get Out of the Way

Soybeans are uniquely positioned to grab a piece of the growing protein demand pie if farmers are properly positioned to provide food and feed to the world. “People in developing countries do two things: Get a cell phone. Eat animals,” says Walker. “The new customer will be the emerging middle class. They are seeking out a meat-based diet, but they need a deal.”

Simply put, the world will eat more meat, but the people who become meat eaters are poor by U.S. standards. Walker says efficient production is needed to sell meat at an affordable price. And making that happen means getting even more from the land with technology as that key.

“The world has essentially used up the best land,” he says. “So, to feed the additional people, we will need to use that land more efficiently and differently. It’s a cry for innovation.”

Unfortunately, agriculture has a tradition of resisting innovation. “Technology has been disrupting agriculture for thousands of years, the plow, understanding fertilizer chemistry,” says Walker. “People who are adverse today will be run over like people who didn’t need the plow.”

For many farmers, “disruption” is a dirty word. It’s a conundrum, really. Disruption goes hand in hand with change, which can be hard to take for anyone. But industry watchers say disruption by technology has definitively positive effects, especially from precision ag technologies.

Business management technologies can have a supreme impact on today’s farms as well. Yet as many as 70 percent of farmers use paper and pen. Farmers with operations that are still growing in today’s down market climate are those that take business management software seriously.

“They can quantify the cost in every acre,” says Brett Sciotto, president and CEO of Aimpoint Research, a global multidisciplinary market research and competitive intelligence firm with deep roots and experience in agriculture. “They tighten control over the business of farming and improve their use of inputs.”

40% of farmers have grown their operations even in the midst of difficult times. They are early adaptors and innovators.

Become a Fast Follower

Technology adoption equates to increasing efficiency, withstanding downturns in the market, weathering disease crises and being able to operate at a lower cost.

“The farmers who are having the most success today tend to be early adopters and innovators,” says Sciotto. “Forty percent of farmers have grown their operations even in the midst of these difficult times. These farmers have characteristics that are different from their peers.”

Aimpoint Research recently completed a segmentation study of American farmers through their Farmer of the Future Initiative. Producers were statistically placed into one of five segments based on their psychographic and attitudinal profiles. Two groups he calls Independent Elites (IE) and the Enterprising Business Builders (EBB) comprise the top 41 percent of American farmers. The IEs are at the top; very successful, very reliable and steadily growing. EBBs are willing to truly be adaptive and innovative, doing anything they can to grow.

“With the aggressiveness of these two categories comes a caution, though,” says Sciotto. “There’s a risk of being on the bleeding edge. You can invest in things that don’t work.”

It’s about balancing risk and reward, not necessarily being a first adopter but in the early majority on the things that show return on investment, he advises.

Different groups adopt technology at different rates, Sciotto explains, but the most successful farmers have the characteristics and business savvy to navigate the complexities of the future. Others will continue to struggle in the increasingly complex environment of agriculture today.

Sciotto says those slow (or non) adopters include Classic Practitioners, who desire to grow but are struggling and don’t feel the future is in their control. Self-Reliant Traditionals hope to save their way to efficiency and have low appreciation for technology, and tend to be skeptical and cautious to the point of being resistant to change. And Leverage Lifestylers are enamored with the farming lifestyle and like new technology to their detriment. They can’t utilize it fully and overextend to get it.

Five  tenets to ensure consistent growth and success:

Where should producers start? “Agriculture has a great sense of tradition,” says Sciotto. “That makes agriculture great, but it is also means it is slow to adopt sometimes.”

Many operations are proud of their 100-year family tradition. But the business of the industry won’t allow century operations to succeed as is, he cautions. You have to adapt to succeed.

“Embrace new ideas and the next generation farmer earlier. Invest in your own education and awareness,” says Sciotto. “Think about who can help you improve and achieve your goals. Collaboration will be key to success and growth.”