Digital Transformation in Agriculture: Making Farming Efficient, Precise & Productive

Amid the rising uncertainty and volatility in agriculture, there probably is no better way for farming systems to survive and thrive than digital transformation – all important data at the farmer’s fingertips 24/7.   

The global population is estimated to reach 9.7 billion by 2050, implying that agrifood demand will continue to rise worldwide in the coming decades. Specifically, a surge in the middle-class population among our neighbours in Asia bolsters the prospects for considerable growth in Australian food export. Meanwhile, our farmers continue confronting formidable challenges, such as increasing cost of labour, unavailability of skilled workforce, reduction in water availability, more frequent extreme weather events due to changing climate conditions, and fragmented value chains with asymmetric patterns of information sharing between trading partners. The COVID-19 pandemic has witnessed the weakness of traditional farming systems where empty shelves were seen in some supermarkets while, at the same time, surplus produce had to be dumped on farms. The country’s state governments’ health measures exacerbated the issues of labour shortage and excessive delays in farm operations. 

In the wake of these challenges, digital transformation – integration of digital technologies in business operations – was catapulted to the top of discussion to reinvigorate the current farming systems to prepare them for similar unforeseen events. Our research at CQUniversity examines the impact of digital transformation on agricultural operations. The analysis uncovers a significant difference in operational efficiency and productivity among the firms that adopt digital transformation compared to others that do not. We find that the performance and profitability significantly outweigh the costs incurred by digital transformation. Digital transformation substantially reduces labour dependency, input waste and the cost of doing business. The digitally connected farmers can receive real-time information on food demand, market dynamics and changing consumer preferences, lowering information asymmetries and transaction costs. The digital transformation thus revolutionises the farming systems in ways not previously seen. The following section sheds some light on the most popular digital technologies, and how they work to boost the efficiency, productivity, transparency, and profitability of farming systems.  

Internet of Things – The internet of things (IoT) describes the interconnected network of devices that contains sensors with data processors – constantly collecting, analysing, and transmitting data. The IoT devices can be controlled through an app on a smartphone. Farmers can constantly monitor the state of crops, soil moisture and nutrients, and exact need for fertiliser, pesticides, water, or livestock health and movement, among others. Monitoring of anomalies along the crop growth or livestock health allows farmers to reach optimal efficiency and reduce the risk of unexpected economic losses. At another level, IoT devices can be used to operate tractors for cultivation, spraying and harvesting. IoT-enabled livestock management systems help monitor the location, temperature, blood pressure, heart rate, readiness to mate, and grazing pattern of animals in real-time on a smartphone. A large amount of data, also known as “big data”, aggregated through multiple devices, can be utilised to predict diseases, pests, inputs, and yield, thereby making more informed decisions in a timely manner. For example, an apple and pear grower (Maurice Silverstein) in Shepparton East Orchard of Australia implemented the Internet-of-things (IoT) that connects all physical devices through the internet and the data between these devices are regularly shared. At Shepparton East Orchard, this IoT connected system supports irrigation efficiency by receiving real-time information on soil moisture, the need for irrigation in a specific part of the farm, and the need for fertilisers and pesticides, thus vastly increasing farm productivity and performance. A case study of Joe Loewith and Sons Ltd. Farms in Ontario Canada show that the application of IoT based smart farming technologies has significantly augmented farm productivity including tracking of animal health, digitally driven animal birth, timely disease control, and efficient crop management. Another case study on a rice farm in Suphan Burin Province of Thailand confirms the outstanding outcomes of IoT devices in rice farming operations.  

In greenhouse farming, IoT devices offer real-time information on temperature, lighting, humidity, soil condition, etc. which are difficult, if not possible, to receive manually. With IoT connected smartphone, a single farmer can manage a large field while sitting on the other side of the world. Given the recent issues of labour cost and availability, IoT implementation offers promising opportunities to Australian farmers for reshaping conventional business operations. Many farmers across the world, in countries such as the USA and the UK as well as Europe, have already started benefitting from IoT devices in farm operations. However, our research at CQUniversity shows that lack of investment, awareness, and training are among the key impediments to the adoption of this cutting-edge technology in the Australian farming system. 

3D printing – While our research could not find evidence of 3D printing in the Australian farming system, we believe that this technology could deliver tremendous gains to our farmers. While this technology has gained a place in the automotive industry, its large application in farming is yet to be established. Nonetheless, 3D printing offers a myriad of benefits for smart farming, for example, a farmer can manufacture small farming equipment and appliances on a farm with less cost. In a 3D printing machine, one needs to insert a prototype or map of equipment along with key ingredients. And, quite remarkably, with one click a piece of equipment can be produced. With rural Australia’s excessive exposure to natural disasters, 3D printing can greatly help Australian farmers recover and rebound by quickly producing damaged machines, appliances, equipment, medicines etc. The large 3D printers (which can be organised with government support) can also help rebuild the houses/shelters in a matter of days at a relatively cheaper cost.

Blockchain – Modern conscientious consumers demand the complete history of the food they buy and consume including where and how it was produced, what kind of and how much fertilisers and pesticides were applied, and how it was stored and transported. Blockchain helps answer all such questions in an effective and reliable way. Blockchain is a digital ledger accessed and updated by all members in a supply chain network. Ideally, each member is connected through an app on the smartphone and shares/traces all information from input suppliers to farmers to consumers. Each member of a network constantly uploads information, often in real- or near real-time, on routine operations which are being verified by relevant authorities and other members, reducing the risk of information tempering, price manipulation, and fraud. With the blockchain platform, farmers can directly sell their produce to buyers eliminating multiple layers of commission agents. In case of a complaint about the quality and safety of the product, its source can easily be traced, allowing for the elimination of such products from the food chain. That said, the blockchain is a perfect solution to deal with issues like the “pins in strawberries” stunt that occurred in September 2018. It can also facilitate regulatory bodies to trace a case. To enhance traceability, trust, and visibility in transactions, companies like Auchan retail, Walmart, and Carrefour Italia have successfully piloted blockchain in collaboration with farmers and other stakeholders. The blockchain has also been productively used by olive farmers in France and pork meat and horticultural farmers in China. In Australia, AgriDigital has successfully piloted blockchain in the Australian grain industry and is slowly moving to other industries as well. Nonetheless, our research at CQUniversity (interviews with managers in the Australian agri-food supply chains) shows that the pace of blockchain adoption in the Australian farming system is slower than in other developed economies. This is mainly due to the following impediments: deficit of strong collaboration and resource sharing among the trading partners (especially downstream supermarkets); low level of awareness among many farmers about the potential benefits of technology and how it works; and cost of implementation alongside a lack of sufficient financial support from the government.       

Drones – Drones are amongst the most advanced Agritech for smart and efficient farming. Drones can perform multiple tasks that previously required labour force such as spraying pesticides and fertilisers. Aerial visuals taken through a drone can help identify the infected plants in the field of animal health quickly, providing specific remedies before the disease spreads and economic losses occur. It appears that the use of drones is much more cost-effective and efficient than fixed- and rotary wing- aircraft used in farming systems. Drones with hyperspectral sensors can detect which part of a field is receiving too little water, allowing for irrigation adjustments. They can also identify water pooling in the field, reducing damage to sensitive crops. Farmers can receive all the information and related statistics on their smartphones. Drones can reach areas that are hard to access with other heavy machineries (e.g., tractors), such as too wet ground, steep terrain, and smaller areas requiring localised treatment. Given their repertoire of benefits, it is suggested to enhance the drone’s adoption in the Australian farming system.

Robotics – Automated robots are massively reshaping farming operations around the world. They help reduce waste and labour costs, thereby increasing operational efficiency and productivity. The use of robotics is increasingly popular in Australian farming practices and is currently found in seeding, planting, harvesting, loading, and grading. Our study at CQUniversity shows that the farmers who use robotics have better operational efficiencies, productivity and profitability compared to those who are performing tasks manually. In the dairy industry, robotic milking has gained huge acceptance in Australia. In our interactions with dairy farmers, it was reported that robotic milking systems offer better udder health and improve milk quality. With an ageing population and high labour cost, robotics serves as a great alternative to human labour and could ensure continuity of business operations in case of unforeseen upheavals like the current pandemic.

Concluding remarks

The global digital agricultural technologies market size is rapidly growing and is expected to reach $3.2 trillion by 2025 compared to $320 billion in 2021. However, the speed of digital transformation in the Australian farming systems is slower compared to numerous developed countries. Nonetheless, digital transformation could offer a myriad of benefits to our farming systems and animal welfare, such as improved efficiency and productivity, cost-saving, waste reduction, enhanced quality, safety, and more control over internal processes. Several complex operations can be effectively managed with the smartphone alone, which is an exciting revolution of this era. The following measures could help speed up the digital transformation in the Australian farming system: technical and financial support from the government and NGOs to the business, particularly to the resource-scarce small- and medium enterprises; training and awareness campaigns; digital infrastructure; more collaboration; and resource sharing among the trading partners in the agricultural value chains. Growth in the industry will offer several economic, social, and environmental benefits which include, but are not limited to: GDP growth; more employment; increased access to food at optimum prices; development of the regional/rural businesses; and reduction in waste and greenhouse gas emissions.

Dr Imran Ali, PhD, MBA, BSc. (Hons.), is a lecturer in Operations and Innovation Management at the School of Business and Law, Central Queensland University.