November 29, 2016
Farming may sometimes seem the most traditional of activities, but it has never stopped innovating. Every generation has brought technological and organisational advancements, from when stone-age man first used primitive tools to the use of disease-resistant crop varieties. Now, digital farming is ushering in the latest revolution in humanity’s agricultural practices. Will Europe benefit as much as it could?
As the world’s population continues to grow towards an expected 10 billion over the next few decades we must increase yields while ensuring sustainability: produce more with less. Digital innovations make agriculture even more efficient and sustainable. Big data and analytics are set to transform the world of agriculture as we know it. Machinery for working the land is becoming smarter and more autonomous. Combined with data collection and data analytics, smarter machinery can begin to tap into the potential of micro-climates. The promise is for an agricultural sector that is smarter, leaner and cleaner. Technologies such as self-driving tractors controlled by satellites, drones, sensors, robots, big data and cloud services are already turning farms across the world into smart farms and offer possibly huge new business opportunities to the whole value chain.
Europe’s farmers must not miss the boat and will need to be provided with the tools and know-how to drive competitiveness in the coming decades. A favourable enabling legislative environment will be critical in driving the widespread uptake of digital farming across the EU. This snapshot looks into the promise of digital farming for Europe’s farmers, and provides an overview of related regulatory aspects in the European Union.
Digital farming (or precision farming) is essentially the use of IT in agriculture to optimise efficiencies. The European Parliament defines precision agriculture as “a farming management concept based upon observing, measuring and responding to inter and intra-field variability in crops or in aspects of animal rearing”(1). Essentially, it is a system of farm management that uses IoT devices, satellite positioning, remote sensing and proximal data gathering to optimise agricultural production and yields and reduce inputs and the environmental impact of farming.
Digital agriculture has become possible thanks to the development of sensor technologies that link mapped variables to farming activities like planting and seeding, fertiliser and pesticide application, and of course harvesting. Digital farming techniques are still being developed, refined and improved as the collection and analysis of vast amounts of data becomes ever-more cost effective. Currently, the main tools and drivers of digital farming include automatic machine setting, autonomous guidance, steering systems, machine monitoring, yield mapping, nitrogen sensors, soil sampling, and variable rate maps.
The benefits that farmers get from these include decision-making based on accurate and objective information, minimised overlapping, input optimisation and reduced stress. The environment will also benefit. For example, by determining the exact level of nitrogen, farmers can calculate the exact amount of fertiliser needed. Big agricultural companies such as Bayer have indicated that the adoption of such technologies will inevitably decrease the use of pesticide and other input.
COP21 underscored yet again the need for agriculture to become more efficient and climate friendly. Digitisation of the agricultural sector is an opportunity to revitalise the European economy and tackle some of the biggest challenges facing our society, including, climate change, environmental protection, food insecurity, and rural poverty and unemployment. It will help make farming more efficient and profitable, and less labour-intensive, which will be important in attracting young farmers to the sector and stemming haemorrhage of the next generation who are abandoning family farms. It is hoped that it will create new opportunities for growth and employment in rural areas. Improving the competitiveness of European farmers will help keep the European countryside alive and vibrant and could also benefit consumers thanks to possibly lower prices.
Proving digital farming’s worth as a driver of profitability will therefore critical for farmers to invest in the technologies. Farmers will be loath to make the significant investments if the returns are not clear and quantifiable, and the providers of farm-ready tech solutions – whether the established agritech companies or start-ups and SMEs – will need to work hard to show the clear economic benefit to farmers. A recent review(2) of 234 studies showed that precision agriculture was profitable in an average of 68% of cases. That percentage will need to improve if we are to see widespread uptake of digital technologies across the sector. The economic benefits of guiding systems in the UK for a 500ha farm were at least at €2.24/ha. Benefits grow as more complex systems are adopted, which could lead to additional returns of €18-45/ha for winter wheat.
The European agricultural sector will need to digitise more quickly if it is to reap these benefits and remain competitive on a global scale. According to our calculations on the basis of data collected from Eurostat(3) and Roland Berger(4), digital agriculture amounts to less than 0.5% of the European agricultural sector. Compare that with the average growth of digital agriculture worldwide, which is estimated at 12% for the 2014–2020 period.
Encouraging uptake is an issue that therefore needs to be urgently addressed, and ensuring the right, light regulatory environment will be an important factor in creating a business climate favourable to European digital agriculture.
The EU institutions have an important enabling role to play. In the case of digital farming, policymakers need to introduce sensible, proportional regulation to allow safe and efficient use of new technology, and to actively facilitate the development and uptake of such technology.
Currently there are three issue clusters that will affect digital farming: digitisation, data and automatization. The regulatory situation is quite uneven, with certain areas seeing a total lack of regulation (e.g., self-driving vehicles), while others face potential overregulation (e.g., data). To complicate matters, the three key EU institutions have emphasised different issues in the future of digital agriculture.
Several Commission-led initiatives on precision farming and smart machinery exist. These include the Working Group on Smart Farming under the Alliance for the Internet of Things (AIOTI) under DG CONNECT; Farm Advisory Services (FAS) and various activities under Horizon 2020; and the European Innovation Partnership on ‘Agricultural Productivity and Sustainability’ (EIP-AGRI), both coordinated by DG Agriculture and Rural Development. But it is unclear whether a regular, intra-institutional dialogue exists between them.
In April 2016 the Commission came up with a Digitise EU package (as part of the Digital Single Market) that includes three initiatives: on IoT (related working staff document mentions smart farming); on digitising European Industry (including agriculture), and lastly on the European Cloud Initiative and connectivity. The package relies on a variety of predominantly non-binding measures and has thus rather a limited enabling power.
The Commission is also promoting a variety of R&D programmes related to digital agriculture. €3.6bn is available at EU level between now and 2020 to fund synergies between research and practical application in agriculture. Around €64m is dedicated to precision farming and digital technologies in the agriculture sector. €30m will be invested in the implementation of an IoT Large Scale Pilot on smart farming and food security.
Lastly, while it may be too early to debate the concrete measures under the revised Common Agricultural Policy (CAP) after 2020, DG AGRI has noted in a series of Brussels-based events on the topic that the digital economy will be part of CAP in some form.
In 2016 the Parliament adopted two encouraging own-initiative reports calling for a pivot toward innovative and technological solutions in agriculture policy. The first report led by MEP Anthea McIntyre, ECR, UK on technological solutions to sustainable agriculture(5) in the EU recognises the potential that “precision farming and digital technology integration can have in making agriculture more attractive for young farmers and creating new opportunities for growth and employment in rural areas.” The report points to issues like skill development, knowledge transfer, and big data and informatics, and calls for further investments in the development of these technologies.
A second report led by MEP Jan Huitema (ALDE, The Netherlands) on enhancing innovation and economic development in future European farm management(6) specifically points out that “climate-smart farming practices could have a triple-win effect by increasing sustainable production, ensuring climate-resilient farming that is better able to cope with changing and adverse weather patterns, and reducing emissions from the agricultural sector by encouraging productive, resource-efficient and circular systems.”
Although EU Agriculture Commissioner Phil Hogan – who often publicly calls for digitisation of European agriculture – endorsed both reports, these own-initiative reports are a non-binding political instrument that only express MEPs’ position rather than paving the way for new legislative proposals on digital farming.
The position of EU Member States is much less clear so it is quite difficult to foresee how the debate will evolve in the near future. Above all, Member States have their own national programmes which means an unequal deployment of digital farming practices across the EU as a whole.
CAP provides EU Member States with a number of instruments to drive the growth of digital farming. Particularly measures within the second pillar of CAP support Member States and regions to develop agritech tools in their Rural Development Programmes. This can for example happen through investments in physical assets or more robust cooperation measures.
A further avenue for support which is worth Member States exploring is the European Fund for Strategic Investments, part of the so-called €315bn Juncker Plan, the duration and financial capacity of which is expected to double to the end of the current Commission’s mandate. A number of agritech-related projects have already obtained loans under this fund.
More clarity and binding guidance is missing in certain areas in the context of EU policy framework. While driverless cars for general traffic are only beginning to show up on the horizon, robot farming is a hotbed for innovation. The regulatory framework is however completely missing in the EU.
A key area that will need to be addressed is farmers’ concerns regarding data ownership and transfer (primarily between companies). Interoperability of machines and platforms from different suppliers must improve or farmers will be reluctant to sign up to services. Some even argue that a common European platform should be built to contain the data from all farms across the continent. This issue should hopefully be tackled via the upcoming Data Economy package in January 2017.
What is also required is aggressive investment into the further development of smart agricultural technologies and their widespread adoption in an integrated way that encompasses climate, energy, agricultural and digital policies. The commercialisation of agritech should be facilitated by improved access to internet networks in Europe’s rural areas and education programmes for farmers, not all of whom are aware of the technologies currently available.
Ultimately, if legislation manages to address underlying uncertainties, not only farmers, but also the environment will largely benefit. Digital farming presents an opportunity to move away from the notion that farming is a low-tech sector that is often presented in advertisements as romantic craftsmanship rather than tough labour that struggles to make profit. The promise of digital farming will be realised only if it is actively supported by the right type of enabling regulation, by overcoming concerns about data ownership, and by educating farmers about the new technologies available, without overpromising on or overpricing them.
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