Digitalization for Value Creation — Digital Agriculture: Here are the opportunities and challenges
I was walking past Peet’s Coffee along East-West Highway in Silver Spring, Maryland reckoning back and forth between hilly pads of blossoming coffee trees in Vietnam’s highlands and its products on a shelf at an Asian Mart elsewhere in the US. Vietnam dominated the coffee industry as the second-largest producer in the world. Brazil is still the number one, no offense!
The connected sphere with its most vibrant keyword, digitalization, has brought Vietnamese coffee worldwide.
In 2020, during a health crisis, the country projected output of 32.2 million bags. Aloha, there is something to that.
Digitalization is about as sexy as a cup of egg coffee in the middle of Hanoi on a breezy winter day. Coffee is one of the most asked-for drinks globally, with more than 500 billion cups consumed every year. Business managers would think of coffee when they need a caffeine boost for the day or as a mundane excuse to leave a professional sphere behind.
It is so true, then what?
At some point, I found myself enjoying a cup of coffee with a friend at Peet’s Coffee. The term “coffee buddies” sounds very familiar to this modern life, to the extent that it almost turned into a routine of one’s life. Over the chat, we made comments often out of our curiosity about what exactly means by digitization for value creation.
Under the shadow of Industrial Revolution 4.0, digitalization is the socio-technical process of applying digital innovations in many aspects of life, from business models to education and even how people enjoy a movie party without going to the cinema.
In agriculture, digital technologies help farmers to maintain their productivity, improve traceability of their products and increase value by consistent, widespread branding.
Digitalization for value creation could include higher technological applications such as satellite imagery, sensors and electronic identification, and robotics in advanced economies.
Amid the pandemic, farmers in many countries have seen their produce piling up and rotting without knowing what to do or how to sell them. In fact, they are unable to receive advice in person from engineers or experts like before.
However, with digital tools, the farmers could connect directly with distributors. That means they do not have to go through any middlemen to sell their agri-products. They can also manage payments and arrange logistics per their planting seasons via digital applications.
By 2050, we have to produce 70% more food to feed the whole world no matter what. And there are so many parameters for this projected percentage, including climate change, food waste, and demographics. Advanced technologies can make that goal come true.
On one side, not all farmers have an open mindset for digitalization for value creation. On the other side, they could never resort to their intuition or personal expertise for cultivation anymore since so many factors have involved the process.
Analytics can help farmers as a reference point when making a decision. However, data also enable customers to be smarter buyers. It is now much easier for them to compare their food sources[1].
In a sense, the digitalization of agriculture reduces the costs of information, transactions, and supervision. Yet, the paradox is the farmers are not the only stakeholder. They need help from technicians, system engineers, policy-makers, business people, and of course, economists.
Data infrastructure is not a one-off investment; instead, it requires updates and putting together different components at one time or another. Without capable human resources and money, this threshold cannot be overcome. Unfortunately, smallholder farmers are not the ones who have much capital for investment.
After Covid-19, would this juggling process between solutions and expenses be enhanced or returned to the previous phase?
I guess not.
Reference:
[1] Scott Speck. (January 3, 2019) How Can Digital Agriculture Address the Top Challenges of the Future? https://www.precisionag.com/in-field-technologies/connectivity/how-can-digital-agriculture-address-the-top-challenges-of-the-future/
