Big Farms Are About to Get Bigger
Wednesday, December 11, 2013
Nothing is more important in agriculture than place. What is successful on one kind of soil in one kind of climate won’t necessarily work in another place with a different soil or different weather patterns. Farmers have always gained the knowledge necessary to understand a place through hard-won and rarely transferable experience. What farmer Brown knows about his land might travel down the road a few miles, but it is less applicable on a similar farm in a different part of the country. This idea of place is what drives the local food movement. Wineries brag about the perfection of the marriage between their varietals and soil. On our farm, every acre that I’ve farmed for 35 years and that my father has farmed for 65 years has a story. We know which weeds grow where, when the wet spots will appear, and we all remember that time the combine caught on fire down by the hackberry tree. Farmers’ personal relationship to place, one of the salient facts that distinguish agriculture, is about to change.
Precision technology will allow managers to cover more acres more accurately and will likely lead to increasing size and consolidation of farms.
Most combines traveling across fields in the Midwest this fall had a GPS receiver located in the front of the cab. Although agriculture has been experimenting with this technology for a decade or so, only now is the industry starting to consider all the uses of this transformative technology. For several years, farmers have had the ability to map yields with global positioning data. Using that information, firms can design “prescriptions” for the farmer, who uses the “scrips” to apply seed and fertilizer in varying amounts across the field. Where the yield maps show soil with a lower yield potential, the prescription calls for fewer seeds and less fertilizer. This use of an individual farmer’s data to design a different program for each square meter in a field spanning hundreds of acres could replace a farmer’s decades of experience with satellites and algorithms. What we have gained in efficiency and by avoiding the overuse of scarce and potentially environmentally damaging inputs, we may be losing in the connections of the farm family to the ancestral place. Precision technology will allow managers to cover more acres more accurately and will likely lead to increasing size and consolidation of farms. While Michael Pollan, Mark Bittman, and Alice Waters continue to argue that we need to turn back the clock on technology in agriculture, much of the world is moving in a quite different direction.
Advice for individual fields is only the beginning of the uses for this technology. The leading agricultural equipment firm, John Deere, is running a pilot program this fall with 500 farms and 1,000 combines across the Midwest. Data is uploaded every several hours to the cloud, where it can be used… well, we don’t really know all the ways it can be used. If 1,000 machines randomly spread across the Corn Belt were recording yield data on the second day of harvest, that information would be extremely valuable to traders dealing in agricultural futures. Traders have traditionally relied on private surveys and Department of Agriculture yield data (the latter delayed by a month this year because of the government shutdown). These yield estimates are neither timely nor necessarily accurate. But now, real-time yield data is available to whoever controls those databases. The company involved says it will never share the data. Farmers may want access to that data, however, and they may not be averse to selling the information to the XYZ hedge fund either, if the price is right — but that’s only possible if farmers retain ownership of the data.
What we have gained in efficiency and by avoiding the overuse of scarce and potentially environmentally damaging inputs, we may be losing in the connections of the farm family to the ancestral place.
One of the most important issues around “big data” goes directly to property rights. As Christopher Caldwell points out in the latest issue of the Claremont Review of Books, just because Facebook, MasterCard, or Google keeps track of what I searched for or where I buy lunch, it is not altogether clear why they should assume ownership of that data. For many of us, the convenience and enjoyment we receive for free from Facebook or Google may well be worth the loss of privacy. The value relationship between farmers and the companies that collect their data is considerably different. The risks to privacy that the farmer endures, such as his pesticide or GMO usage that may be accepted practice but not politically popular, are considerably greater than the fact that Amazon knows I have a weakness for thrillers and murder mysteries. Not only that, but the individual farmer’s data has considerably more value than the average consumer’s data. Many farms are fairly large businesses, spending hundreds of thousands on fertilizer and seed and producing millions of dollars of crops. It’s not difficult to imagine a smart phone ad arriving within seconds of a farmer encountering weed or insect damage while he’s harvesting his crop. Farmers’ information is valuable to the companies sponsoring ads, so farmers should be compensated when their data is sold. Farmers need to protect their data and make sure they bargain wisely as they share data with suppliers and companies who desire access to their information.
Farmers look forward to the ability to improve their yields and efficiency by comparing their results to neighboring producers. If my neighbor is receiving better results because of superior seed selection or because he times applications of inputs differently, then I’d really like to have that information. But this knowledge can have other results. If investors have data from all across the country, the access to better information could correct any market imperfections in the market for farmland. What has been a dispersed and unorganized market will likely be more accurate and rational with the advent of agricultural “big data.” Knowledge of soil types, weather patterns, and productivity has been limited to close neighbors, but now access to data maps will replace the value of local knowledge. Owners of the database will have a decided advantage when it comes to pricing agricultural inputs, whether seed or farmland.
Farmers need to protect their data and make sure they bargain wisely as they share data with suppliers and companies who desire access to their information.
Farmers are rightly concerned about data privacy. Even if an individual operator does everything to the best of his ability, following all the applicable rules, regulations, and best management practices, there is still concern that the EPA or one of the numerous environmental organizations that bedevil agriculture might gain access to individual farm data through subpoenas or an overall-clad Edward Snowden. This concern about privacy will likely slow the adoption of the technology. The data will be invaluable to regulators and to parties in future litigation, and it may also help protect farmers from accusations of wrongdoing. Of course, some farmers will never be comfortable sharing any kind of farm information with strangers.
Amazon and “60 Minutes” made headlines recently with the news that Amazon is beginning to experiment with the use of drones for delivery of purchases to customers. We’re a long ways from Amazon CEO Jeff Bezos’s ideas about the delivery vehicle of the future, but it is fun to think about what it might mean for agriculture. Nothing is more irritating to farmers than having to stop harvesting and travel dozens of miles for parts for their machines. With real-time monitoring of machine data and drone delivery, the local implement dealer may spot a bearing that is outside of the recommended temperature range, recognize an impending part failure, and dispatch a drone rescue mission before the actual operator of the machine realizes he is in trouble. That’s unbelievably efficient, but more than a little spooky. Although delivery by buzzing FedEx drones may be a part of the distant future, drones will certainly be part of the data revolution in agriculture in the here and now. Though the industry complained loudly when they discovered that the EPA was using aerial surveillance to monitor livestock firms, the advantages of cheap and ubiquitous drones to monitor crop conditions and forecast yields will be too valuable to ignore.
The advantages of cheap and ubiquitous drones to monitor crop conditions and forecast yields will be too valuable to ignore.
Big data on farming will also likely affect the private-public partnership that brings us subsidized crop insurance. In the present system, insurance rates are set to maximize enrollment in the subsidized program, because encouraging participation by producers is seen as a public good. Insurance rates in marginal areas are lower than they would be if prices reflected only actuarial risk. But with access to the data about individual farms, insurance companies will be able to identify the least risky, most productive farms, which will likely buy less costly private insurance. This will end the ability of the present crop insurance programs to spread risk and will increase costs for farmers in more marginal areas, if the government doesn’t increase subsidies further.
If a farmer can manage one machine guiding itself across a field by satellite, applying inputs and measuring outputs, reporting by-the-minute data on yields, oil temperature, and a gazillion other data points, what is to stop that same farmer from managing dozens of machines on farms the size of New Hampshire? Tyler Cowen argues that we’re about to see an even wider disparity in incomes between the 10 to 15 percent of the population that can relate well to computers and the vast majority of us who will deliver services to the computer-savvy class. Farming may be one of the first industries to explore the validity of Cowen’s thesis. All of us involved in agriculture will soon have to decide whether we want to occupy the nostalgic niche providing artisanal beets and heritage pork to Cowen’s 10 percent, or whether we’ll roll the dice on surviving the transition to a data-driven agriculture. Farming will be more efficient, more environmentally responsible, and easier to regulate and measure. But it won’t be the same.
Blake Hurst is a Missouri farmer and a frequent contributor to THE AMERICAN.
FURTHER READING: Hurst also writes “The Next Real Estate Bubble: Farmland,” “When Saving Is a Problem Not a Virtue,” and “Organic Illusions.” David Shaywitz wonders if it’s “Time for Biopharma to Jump on the 'Big Data' Train?” Vincent H. Smith says “The House and Senate Farm Bills Don't Make the Grade” and that “Lower Corn Prices May Deliver Many Farm Bill Blessings.”
Image by Dianna Ingram / Bergman Group