Published on the 22/09/2022 | Written by Heather Wright

While John Deere ups its SaaS play…

Cost, proof of ROI and a reluctance to move from manual systems that already work are slowing agritech uptake in New Zealand’s primary sector, despite the technology providing a ‘vital answer’ to demand and sustainability issues.

AgritechNZ’s Baseline of Digital Adoption in Primary Industries report shows while 59 percent of those surveyed lean towards the adoption of digital technologies – albeit for very different reasons and with different pathways – 41 percent say they don’t see much value in using digital to run their business. 

“Proving efficiency gains and integration with existing systems would have better adoption.”

And while adoption is higher on the business management side, areas such as water/irrigation, plant/crop and effluent management lag – areas considered crucial to sustainability and reducing emissions. 

Agtech is being pushed increasingly to the fore globally, not just for its potential sustainability role, but also as a potential way to assist with growing food demand – some say crisis – globally, while still limiting fertiliser and pesticide use. Add in labour shortages and the market is primed for rich pickings, if producers can be convinced.

Brendan O’Connell, AgritechNZ chief executive, says the 41 percent who don’t see much value in using digital is a high proportion, but not unexpected considering knowledge levels are low and the value of data sharing is still to be unlocked. 

“While there is a healthy population of trailblazers across all sub-sectors and age groups, on the whole the willingness to adopt early is lower than outside the primary sector,” O’Connell says.

“Proudly traditionalist farmers and growers are reluctant to change what has worked for their land for many years.”

He says while they may accept technology in the office, or tap into contractors for specific jobs, the key is that someone else is doing it. 

The report hints though at shortcomings on the part of agritech providers. Fifty-five percent of those surveyed noted it was difficult to work out what offerings might be beneficial for their business. 

There was also a relative lack of significance placed on evidence from other farms or opportunities to ‘try before you buy’.

“The research highlights that placing emphasis on proving efficiency gains and integration with existing systems would have better adoption impact,” the report notes. 

While the report could on first glance be perceived as confirming many of the stereotypes around the primary sector, it’s quick to bust some myths, including noting that a farm’s stage in its lifecycle has more relevance to adoption than farmer age.

“Farmers and growers of all ages are adopting technology and, whilst there is a drop off in older age groups, the stage of a farms lifecycle – expanding/growth, stable/mature, declining/exiting – has more influence on adoption decisions.”

Those in the dairy sector were more likely to be ‘trailblazers’ (34 percent), or early adopters across operational areas, followed by those in the arable sector 24 percent). Interestingly, the dairy sector also saw a high number in the ‘pressured’ category (34 percent) – a group reluctant to recognise the need to change or use ‘appropriate tools’. 

“For them, systems need to be easy to integrate and easy to use,” the report says.

Beef farmers featured strongly as traditionalists or conservatives, with conservatives needing easy access support during setup and easy stage usage to increase confidence.

The contrast between the cattle farms is likely due to dairy’s need for more routine digital data, and therefore a heavier reliance on technology, the report notes. 

Despite the apparent skepticism by many about technology use for their own businesses, 77 percent said they were happy to share data when it provided direct benefits for them, with just 24 percent believing the risks of data sharing outweighed the benefits, and 64 percent said they had confidence in the custodians of their on-farm data. 

“This is a seemingly positive result but is balanced by data that shows only half of farmers and growers are data sharing,” O’Connell notes. 

The remaining 50 percent said they only shared on-farm data with others when they were legislated or otherwise required to do so. 

The biggest barriers to data sharing were that farmers and growers didn’t believe their data would have value to anyone else.

“There is a low recognition of the value in the data held on farm and a difficulty in unlocking the value of shared data. 

“There is also a lack of clarity around who would want the information and why. This is what can lead to confusion, mistrust and fear. Confidence comes from knowing who is using it and for what.”

When it comes to future investment in technologies, 36 percent said they’re planning to invest in business management technologies in the next two years, with 35 percent eyeing up animal management and milking, and 34 percent planning to invest in crop protection and fertiliser/nutrient management. Effluent management investment is on the cards for just 13 percent.  

New Zealand is home to a strong agritech sector. The Technology Investment Network’s New Zealand Agritech Insights report earlier this year noted a landmark year in investment and significant profitability increases for the sector last year, with revenue and exports on the up. Exports topped $1.6 billion in revenue. 

The primary sector itself, meanwhile, is responsible for more than $50 billion in annual export earnings. 

But local agtech offerings have strong competition.

John Deere, the world’s largest agricultural machinery manufacturer, has been ramping up its software play, ploughing billions into agtech to harvest the new rich picking: Data.

It’s been rolling out self-driving tractors, sprayers which distinguish weeds from crops and has plans to equip machines to plant seeds using satellite imagery and soil data, integrating software-as-a-service offerings into some of its offerings. 

It wants 1.5 million machines in service and half a billion acres in its cloud-based John Deere Operations Center come 2026. 

It’s plans however, come amid a growing distrust by some farmers concerned that Deere’s use of proprietary software further restricts repair work to its own dealers, increasing the costs for farmers.

Deere’s not on its own with equipment rivals, agribusinesses and investors pumping billions into agritech systems – despite a lack of returns as yet from the investments for the most part.

With growing economic and sustainability pressure on farmers and growers, Deere and others invested in the market are no doubt betting on an easier sell for agritech and agronomic data.