Investing in agri tech & chasing yield… is it the right move?

By James Black, GM Figured Australia

Global agriculture is under going massive change with the ever increasing investment in technology and production. However, volatility in global soft commodity prices and the vagaries of inconsistent weather patterns remain. No matter how much we invest in technology, if it doesn’t rain the farmer is in a world of pain, which I think is a concept that is being forgotten as we continue to invest in technology and chase yield.

Whenever I attend an Australian ag Field Day, ag tech conference or some other ag industry event, all I ever hear about is production and yield. There seems to be a never ending list of experts in particular fields demonstrating their worth by encouraging farmers to chase production… increase on farm investment in ag tech, increase farm input and infrastructure spend.

This is great, but what if it doesn’t rain? Or there’s a global commodity price shock? Dairy industry, case in point. What amazes me is that I never seem to hear any talk about profitability or more importantly discussion about long-term strategies to remain profitable through the good times and bad.

Now there are a lot of great companies across the world right now doing some really impressive things in the ag tech space. The realm of the Internet of Things (IoT) in agriculture has exploded. Ag tech start ups who are into satellite mapping, GPS tracking, data sensing, drones (lots of drones) seem to be all the rage right now. They are all generating some really interesting data, but how much of it is actually being used? And therefore, how useful is it really?

I would argue that all this data is really interesting, but unless you can tie it back to your general ledger and reconcile it with your bank account, this data does not provide you with any real meaningful insights for financial decision making. Therefore, farmers are making decisions based on what may generate more production, rather than higher or more sustainable profitability. This to me is a fundamental flaw within the global trend of investing in more on-farm ag tech and chasing yield. I personally know a number of Australian farmers who have made the big leap into becoming what we perceive as modern farming best practice only for it not to rain… and they’ve lost it all. I am sure there’s many more out there I don’t know who have been through this devastating experience.

So, it’s all very well to write an article expressing my concerns about the latest trends in global agriculture. You will agree or disagree with my point of view. It doesn’t really matter. But what does matter is I can take great pride in the fact that I (along with my brilliant colleagues) are doing something about it. I am GM Australia of Figured, an ag tech start up (that is actually more in the fin tech space) that is bringing the world of ag tech data (IoTs, farm management systems) and traditional agribusiness data (dairy, grain, livestock, rural retailers) onto a single farm financial management platform (in the cloud of course) that will provide farmers, accountants and agribankers with meaningful insights allowing them to make real time and forward looking financial decisions.

We will be making a series of announcements over the coming months about data integrations with some of the worlds best cloud agronomy tools, livestock management systems, dairy and grain companies. We will also be releasing some game changing scenario planning and cropping functionality that will take agri accounting to the next level – so stay tuned.