Digital Disruption in Agriculture: Are We There Yet?
Digital disruption is happening in every sector including agriculture business. The agricultural input suppliers (seeds, fertilizers, and crop protection) have not yet fully embraced the use of big data to enhance their interactions with customers. Growers remain mostly dependent on their own experience and agronomic advice from third-party advisors/consultants in making decisions on what, when, and how to plant, to make profitable produce using big data. As a result, the farmers are not able to see the full benefit of big data. However, that's about to change. Some technology-oriented companies are already moving into the competitive landscape of agriculture with digitally enabled business models to respond faster to growers’ needs.
Factors that are transforming the environment in which agricultural-input suppliers conduct business are:
1. The New Agriculture Paradigm
The agriculture value chain used to be a supply-based model. Farmers grew crops to provide essential commodities for food processors, which then marketed and sold their products to retailers and consumers. However, a new demand-based shift is taking over, forcing farmers to balance the desire to boost yield by utilizing less agricultural inputs to produce healthier, safer and nutritious food more sustainably.
2. Shift in Value-Chain
Large-scale mergers have occurred in the ag industry in recent years. These mergers embark on combining forces to develop integrated operations improve flexibility and variability in their operations, and lower costs. As the big players are going to squeeze the independent distributors of agricultural inputs, they will continue to explore new revenue opportunities both up- and downstream in the agriculture value chain.
3. The Ongoing Digitization of Agriculture
Suppliers are entering the market with a variety of digital tools to produce, gather, and analyze data. Moreover, that data is being used to improve agricultural productivity and efficiency, by catering optimized solutions and services to growers to enhance the customer experience and also transparency. However, no supplier has completely cracked the code yet.
To achieve the maximum potential of digitization, agricultural-input suppliers must follow the following imperatives:
Develop the products which are easy to integrate into farming practices and affordable.
Continuous improvement in the go-to-market model to tap on new opportunities.
The key to success in the agricultural inputs business lies in understanding the needs and expectations of customers, creating innovative products and services that best fulfill those needs, and taking them to market effectively. Every supplier understands that there is considerable value to be captured by leveraging data and digital tools to get closer to customers and to meet their needs better.