Digitization is changing the way business is done by making many processes more efficient and profitable. Agribusinesses are embracing digital technologies more than ever from on-farm management, to managing finances, and more. In an effort to feed a rapidly growing population, adoption of such technologies is necessary. While adoption of any new product takes an investment of time and money, the outcome will have a lasting impact on the world. Many times, the focus of innovators and investors can be on larger farms and agribusinesses. While this is important, it is equally important to focus on the small and medium enterprises. The United States Department of Agriculture (USDA) reports that in 2022, 97% of United States farms were considered family farms. Let’s explore some of the digital technologies transforming and empowering small and medium enterprises as they work to feed the world.
Precision Agriculture
The term precision agriculture is often heard of on large scale farms and is not as common with small and medium farms. While many of the precision agriculture technologies were meant for large scale production, agriculture experts are also finding ways precision agriculture can benefit smaller enterprises. Precision agriculture involves using tools to observe, measure and respond with the goal of improving efficiency, reducing error and maximizing yields. For smaller farms, adoption of the larger scale tractors and machinery proves difficult with lower budgets and less room for error. While adoption is continuing to evolve, the industry is working to scale precision agriculture practices to smaller farms globally. Some of the ways precision agriculture can help smallholder farms include the use of smartphones to access data analytic tools, utilizing satellites to make informed on farm decisions, and drone usage for input application and field monitoring.
Financial Services
Various digital financial services are bringing solutions to small and medium agribusinesses. The standard in agribusiness has been checks or cash for decades, but the industry is moving to digital payment methods. This allows agribusinesses to receive money in a timely manner as well as manage money coming in and out in a more organized way. Market access is another giant step in digitization for small and medium enterprises. The ability to buy and sell online aids farmers in reaching more customers and maintaining competitive pricing. Climate change or a natural disaster can be devastating to any farmer, but small and medium agribusiness are especially vulnerable. Financial technologies companies are able to use data and satellite images to provide insurance coverage and assess risks for farmers and provide some security in the face of uncertainty.
Final Thoughts
Agriculture experts expect digitization to continue to transform the agriculture industry. While small and medium enterprises may experience more difficulty in affording and adopting new technologies, digitization will become the standard in many aspects. Innovators must consider small and medium agriculture enterprises and adapt technologies for use on farms of all sizes, when appropriate. Digitization will continue to improve efficiency, sustainability and profitability for agribusinesses small and large all over the world.
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