Crop protection as we know it today is on borrowed time. Technological, agronomic, and societal changes are reshaping what businesses will look like in the next five years for the entire value chain – manufacturers, formulators, trading houses, import/export companies, distributors, and retailers. Every business is susceptible to broader disruptions. The Precision Application Asia Conference held Nov. 5-7 in Bangkok outlined how crop inputs and the value chain might change in near future as a result of compounding pressures.
Here are a few of the many insights shared at that meeting on disruption for the demand for crop inputs:
- In almost every country around the world, farmers are aging, laborers are difficult to find, and farms are consolidating. These three factors will usher in rapid adoption of technology to manage farm operations. In Japan, where the average age of the farmer is 67 and farm workers are hard to find, about 80% of spray applications on rice is delivered by UAV. Emerging economies will see a similar plight, but it will happen much faster because the technology is more accessible. UAV and other new application methods are more effective, efficient, and require optimized formulations.
- Technological advances will allow Asian farmers to leapfrog over 100 years of mechanization and other technology to bolster yields. Tractor-sharing platforms, UAV-sharing websites, and other Uber-inspired startups will give agronomists and farmers unprecedented access to cutting-edge technology that will ultimately provide on-farm decision support to smallholders and large plantations alike. Digital farming platforms are feasibly driven by smartphones and affordable connectivity. Improved agronomic support and better mechanization will provide more guidance behind seasonal fungicide applications.
- AI, advanced imagery, and sensor technology will drive decisions on the farm that result in optimized variable-rate applications of crop protection and fertilizer products. Green-on-green weed recognition systems (Blue River, Bilberry, WeedIt) can provide real-time spot spraying for herbicides. The largest pesticide sector could see an 80% decline in overall volumes when selective spraying becomes mainstream. Although many of these systems rely on tractors and other mechanization to carry the technology, it won’t take long for these systems to be commercialized in UAVs (Precision.AI, Saskatchewan) which will make the technology available in more crops on variable terrain in developing economies around the world.
- Vertical farming will significantly reduce input volumes of water, pesticides, and fertilizers. Indoor farming of all kinds lends itself for more integrated automation and robotics, including mechanical weeding. Indoor farming is exponentially more efficient than traditional farming (some startups claiming up to 390-times higher yields) because of the ability to produce multiple cropping cycles and optimize production techniques. Vertical farms might not have the scale to feed the world on their own, but they will produce enough food to impact traditional farms demand.
- Consumer demand: Plant-based and clean meats have given rise to a new diet: Flexitarian, which is a largely vegetarian diet that allows meat in moderation. It’s the new, hip, and socially responsible version of omnivore. They might enjoy meat, but they are consciously eating less of it by evaluating how food is produced, whether it’s sustainable, nutrition values, and opting for replacements when feasible. Plant-based meats and lab-grown meats (clean meat) greatly reduce the amount of corn and soybeans needed to feed livestock, and along with other disruptions on this list, will incrementally cut into the overall use of chemistry.
- Sustainable sourcing: Consumer demand is forcing commodity brokers and food processors to monitor and direct production standards like never before. Responsible sourcing and fair trade initiatives have become commonplace for oil palm, coffee, cocoa, and other plantation crops. Demand for organic, GMO-free, and other perceptively marketed produce and processed foods will ebb demand for inorganic products on the farm.
- Facebook science continues to demonize traditional agriculture and agriculture technology, including GMOs, the judicious use of pesticides, inorganic fertilizers, and other land and climate conservation practices on the farm. From chemical leaching to fertilizer runoff, agriculture has become a bit of a scapegoat for polluted waters, air, and climate change, and it provides fertile ground for chemophobia and anti-science organizations throughout the world. The plight of misinformation will follow the plight of social media itself. Personally, I don’t see a rise in fact-based information or science-based discourse percolating through social media any time soon.
- Product bans: In an environment where emotional misinformation prevails in public discourse, elected officials can pander to the larger population by reacting to popular fear by banning products. The latest example is Thailand, where elected officials have overruled the scientific communities (regulators, researchers, and industry studies) to gain popular approval with the banning of glyphosate, paraquat, and chlorpyriphos. Germany, Austria, UAE, and many more are considering all-out chemistry bans. Sri Lanka was the first to ban glyphosate in 2014 as a precaution to stem a mystery kidney disease in agriculture workers, however it lifted the ban in 2018 due to extensive crop losses. Endocrine disruption criteria in Europe could eliminate dozens of chemistries in the coming years.
- GMOs bias, meat alternatives, and product bans put significant pressure on the production of soybeans and corn. These two crops propel $15 billion of the world’s $61.8-billion crop protection market (Kleffmann). Disruption in planted area of these staple crops could impact chemical markets quickly. In the U.S., for example, planted area for soybeans fell 14% this year due to a variety of factors. The U.S. pesticide market is expected to follow with 6%-7% decline in value.
- Ecommerce: Direct-to-consumer purchasing programs will disrupt traditional trading houses in the same way Amazon disrupted retail stores. It’s only a matter time and whether agriculture companies will disrupt themselves or allow outside influencers to disrupt it. Already multinational companies in crop protection and retails are creating outcome-based purchasing models that guarantee crop yields in an attempt to move away from product price points and into a system of collaborative digital agronomy that maximizes technology investments. This evolution in business models will affect retailers faster and deeper than manufacturers, formulators, and distributors, but eventually the entire value chain will feel the pinch.
The takeaway: Crop protection companies throughout the chain no longer work in a silo and convergent technologies impact agronomics and economics at every level. Progressive companies are following the trend and transforming into digital farming companies, and long-term players will need to develop a strategy to follow suit. Transactional companies who compete solely on price and volume will be replaced by those willing to invest in the success of their clients and other companies upstream and downstream in the channel.
Published by AgriBusiness Global