Technology Revolution or Evolution?

“Understanding the Market Chasm”

What Makes Farmers Tick?
So why haven’t we experienced the revolution in agricultural technology that many are expecting to occur in the next few years? There are a lot of factors that should be considered in the analysis of the situation, some of which might include the following insights and observations:

·        Growers are, by nature, cost managers as most, not all, do not control the price of their finished products and can only manage expenses as a means to achieve profitability. Many view something new as simply an added cost of production. Farmers buy retail and sell wholesale.

·        Growers who are doing well financially will rarely change their practices in the hopes of achieving even greater gains. It is difficult to argue success.

·        Growers who are struggling financially will not invest in some new technology unless absolutely forced into that decision. Most farmers are “cash conscious” (taxes are filed as cash basis)  and view the balance in their bank account as a good indication of success or failure. You don’t buy what you can’t afford.

·        Change assumes risk and most growers are conservative by nature and risk averse. Farming is already inherently risky when dealing with the weather.

·        The average age of farm owners and managers is 56 and trending up slowly. The point being that many do not think in terms of “technology as solution” in their decision processes. “Just Google it” is not in the farmers’ vocabulary.

·        The majority of crops are harvested annually. A producer has one chance every year to do everything right and turn a profit. Changing the formula for success is not something that is taken lightly. You get one shot every year and you can’t afford to mess it up.

This peek into the psyche of the American farmer should not be a surprise to many who have experienced first-hand these behaviors. It may be that this is an observation of human nature in general and not restricted to those people engaged in the business of farming.

Not Just Growers Need to Change
The technologists should also assume some of the responsibility for the slow adoption rate. Many of these companies have entered the market with the latest wiz bang disruptive technology tool that only complicates the decision processes further. Generating more and more data may not be a solution to any problem. When so many new products only address a single or maybe just a few aspects of the total number of decisions that growers are making daily concerning pests, nutrients, genetics, water, equipment, labor, weather, marketing and many more, spending too much time on one challenge may not be the best use of a producers’ time. If the new “thing” does not simplify a growers’ life it will not be used for very long.

Talking 'Bout a Revolution
What will it take for the changes to occur in farming that will truly revolutionize farming the way that hybrid corn did in the 40s and 50s or GMO soybeans more recently?  Significant increases in yields, improvements in quality, optimization of crop inputs and greater profits for the farmer are within the grasp of the industry. Tech tools are currently available to enable huge efficiency gains in agriculture. Unfortunately, pulling all of the data from so many disconnected and disparate sources has not been easy to do. More importantly we are at the beginning stages in developing true decision making tools. Measure and monitor needs to migrate towards apps that control systems and hardware as they do in VRT. Morphing applications to those that optimize using predictive models will yield greater returns-on-investment as will the introduction of the final phase of automation where user interaction in the decision process is minimized substantially.

Across the Great Divide
Geoffrey Moore, in his book “Crossing the Chasm”, took another cut at the adoption curve that Everett Rogers had hypothesized and inserted a gap between a preliminary and secondary group of Early Adopters. This gap, or chasm, demonstrates what many of us already know about the technology revolution that will certainly be in our future. Getting the market to leap across a great divide may require some actions that have yet to be taken by both the technologists and the growers. More on that later.

Managing Expectations
In the meantime, technology entrepreneurs will need to temper their expectations as to the adoption rate for their products and services as we evolve agricultural practices and processes over time. And there may be steps that can be taken to shorten those market growth timelines given an understanding of the grower persona and behaviors. The potential for success is clear. The path to getting there will be challenging.

 

Agri-Food Technology Adoption

Industry Change Required

Revolution or Evolution
Recently a lot of attention has been given to the enormous opportunity for new technological advancements to transform the way we grow crops. The spotlight is on production agriculture now more than at any time before as investors and entrepreneurs seek to revolutionize the way that we go about the business of farming. Is it possible that this may be more of an evolution than a revolution and will require several more years than most high tech executives currently have outlined in their business plan timelines?

Technology Adoption Curve and Mr. Rogers
In order to fully understand the rate-of-adoption for agricultural producers one needs to look back at a study that was conducted on this subject by Everett Rogers, a professor at Iowa State University in 1962. Mr. Rogers grew up on a family farm where the primary crop grown was corn. He experienced first-hand, in the years of The Great Depression, the effects that disease and drought were having on their own crops. In 1925 an agronomist by the name of Henry Wallace developed a double cross inbred hybrid corn that possessed certain qualities that included a resilience to the adverse effects of weather and pests. Rogers noted that in a 1933 study conducted by the USDA only 0.1% of growers were planting the new variety even though it was proven that it was superior in many ways, including yielding on average 25% more than other available varieties. By 1946 the adoption of hybrid corn was at 70% for all corn acreage. It took over 21 years to achieve these levels of incorporating the new technology into the farming operations of most US farms. Through these observations Mr. Rogers developed a technology adoption curve (published in his findings in the book “Diffusion of Innovations”) that others, including Geoffrey Moore, author of “Crossing the Chasm”, used to explain how people and markets embrace new innovative tools for use in their businesses.

Quickened Pace But Fast Enough
To be fair, a lot has changed over the years and we are living in a faster paced world where it can take considerably less time to integrate new technologies into todays’ agribusinesses. If one looks at the adoption of GMO soybeans we see that this, in fact, is true. Within 8 years almost 80% of all fields were planted with the new seed over other available varieties. Another example of this change in rate of acceptance is the incorporation of precision agriculture tools like geo-referenced mapping, GPS guidance, yield monitors, variable rate technology and aerial imagery in US agriculture. Introduced in 1992 the yield monitor was being utilized on almost 45% of all soybean and corn acreage by 2006 (14 years). Variable rate technology did not experience the same rapid growth as yield monitoring with 8% of soybean and 12% of corn acreage deploying systems 10 years after its’ introduction.

Ch-ch-ch-changes
Growers are using smart phones and tablet computers to access market, weather and agronomic information to help them make better decisions. But to truly transform their decision processes requires something that may not be an integral part of their DNA. Change. Changing the way that they go about the business of farming from one that uses intuition, tribal knowledge, past experiences and an increasing reliance on the recommendations of their trusted advisors to a methodology that is data driven by economics and science is not an easy transition.

A better understanding of the farmer persona may provide answers to some of the questions regarding how the technology rate-of-adoption can be accelerated. Or it might just provide an explanation as why we are where we are along the curve that Mr. Rogers hypothesized so many years ago.