Why have we established Digital Agriculture Services? (Part 2: Agribusiness)
By “de-risking” global agriculture, we believe can not only have a positive impact on the lives of farmers and rural communities but also bring profound and positive change to the ecosystem that surrounds the farmer — from policymakers, to agribusiness, to the finance and insurance players that play a massive role in the industry’s growth and prosperity.
Why it’s important for agribusiness
- If agribusiness can accurately “rate” risk, the industry can bring new products to market.
Example: Access to innovative financial products — such as real-time lending for farmers — is still in its infancy.
2. Sub-optimal decisions are being made due to a lack of data.
Example: Less than 20 per cent of acreage today is managed or assessed using digital agriculture technologies. Technology uptake by farmers is also limited, with only 23 per cent of farmers using sensor data to help make decisions that lift profitability.
3. The right rural intelligence can drive opportunity, growth and advantage.
Example: One agribusiness leader is working with DAS on insights at a farm, region and market level. The resulting insights are focused on growing revenue, maximising revenue as well as better allocating capital and investment overall.
4. We are at a tipping point where the delivery of disruptive technology not only enables new products and services but will prove a competitive differentiator in the market.
Example: Investment circles believe ag-tech is where fin-tech was a few years ago — investment into early-stage companies is taking off — which is exactly what we saw before the fin-tech sector took off.
5. Simplifying risk, and making risk assessment as easy as using a smartphone, has significant implications for the high volatility profile of agribusiness.
Example: In Australia alone, agribusiness is the No 1 most volatile economic sector, ahead of finance, insurance, construction or mining. Farmers also operate in a business environment that an industry level involves double the level of annual revenue volatility of the average business. Agriculture, as an industry, remains the “last big sector” of Australia’s economy that superannuation funds haven’t entered on mass. Better rural intelligence can help shift the needle.