I recently had two discussions about the commercial viability and potential of IoT technologies for agricultural applications. First, I spoke with Sara Olson, a research analyst who covers innovations in the agriculture sector for market-research firm Lux Research. Late last year, she published a report (titled “Sensing in Agriculture: How Can Technology Developers Drive Adoption?“), for which she led a team that researched the costs of deploying various IoT technologies versus their financial impact for farmers.
I later spoke with James Mahan, a plant physiologist with the U.S. Department of Agriculture (USDA), who has spent decades researching and developing a range of sensor technologies designed to help farmers better understand the actual (versus perceived) needs of crops and, therefore, use inputs (fertilizer and water) more efficiently.
What I learned is that IoT technologies can, in fact, revolutionize farming and enable the industry to meet the growing demand for food, while also reducing its demands on natural resources. But I also learned that none of that really matters as long as oil remains cheap.
OK, I’m exaggerating a bit here. But the point is, farmers are extremely wary of making technology investments in general. It’s not a sector known for early adopters. Plus, agribusiness is inextricably tied to oil—because of fertilizers and energy associated with irrigation, processing and transportation—and it has narrow margins. So when oil becomes cheap, farmers are far less motivated to invest in technology that has a main benefit of cutting the costs of inputs, even if it can also boost yield. This is especially true when the crop price falls as well, as it has for corn growers.
“Back when farmers were getting $8-per-bushel corn—which was sky-high—a lot of technology developers saw an opportunity to help growers make a better yield,” Olson told me. “But now, while we’re seeing all that technology development come to fruition, the margins farmers are seeing are too low.” On the day I spoke with her (Jan. 19), she told me the corn price was $3.69 per bushel. In recent weeks, it has dropped even lower. With the combination of such squeezed margins and oil hovering around $30 a barrel, farmers are hard-pressed to invest in new technology because they lack both the funds and the motivation.
It’s unfortunate, she said, “because these technologies could reduce fertilizer use, make better use of water and cut labor. And sadly, even if the [crop] prices rebound, the idea that sensors [and related technology] are too expensive for farmers… could be hard to change.”
The availability of water is another important variable. The epic drought that plagued California’s Central Valley throughout the past few years stoked interest and investment in water-saving technologies. While the drought is far from over, the 22-plus feet of snow that El Niño has brought to the Sierra Nevada this winter could mark a return to wetter days. Or, it might not. But, Mahan said, since the early days of irrigation, whenever farmers have had water in abundance, many have failed to use it judiciously.
“We’ve seen it time and time again. The issue with water is that if you have adequate water, the tendency is you apply a surplus if it is available,” Mahan explained. “What we found is that with good instrumentation, we can provide that water in a just-in-time method. So, with good monitoring, as long as we know where the crop is, we can take a lot of excess water out of the system.”
Mahan and his team at the UDSA have worked closely for more than a decade with Smartfield, an engineering firm based in Lubbock, Texas, to co-develop wireless sensor networks and imaging systems designed to collect and analyze temperatures, soil moisture, wind speed and a host of other variables. The goal has been to help growers better forecast and improve their yields while reducing irrigation and fertilizer use.
Mahan told me that working with Smartfield has led to improvements in the amount of data being collected in the test fields where his team uses the IoT equipment—they’ve gone from collecting 1 to 3 million measurements per season to now 30 to 40 billion, he said. And with that improved computing power has come far cheaper hardware. “When I started using them 30 years ago, infrared cameras cost thousands of dollars. Now, at $10 or so, they’re practically disposable.”
Yet, despite those remarkable gains (and billions of investment dollars being sown into agriculture technology), Olson said, growers are not fully embracing the types of remote monitoring and analysis products and services that firms such as Smartfield are offering. For the Lux Research report, she and her team conducted an affordability analysis and found that in many cases, “the technology costs more than… it can save a grower or increase their revenue.”
That is likely to remain the case as long as oil prices are so low.
It’s not all bad news, however. Olson’s research did find that many growers are able to afford new technology through a software-as-a-service offering or a financing model that allows the grower to pay over time. A corn grower, for example, may find costs of $4 to $8 per acre per season palatable, she said. Her research shows that potato growers can stomach a far higher per-acre technology investment.
But there is also the risk that technology could create a sort of digital divide between large producers and smaller-scale growers, and that is a concern to Mahan. “One of my goals in development is to figure out a pathway to implementation in [a range of] production environments,” he told me. “How can we downscale from the corporate farm to the independent producer [who] may not have a lot of resources?”
One pathway for farmers, big or small, could be to use carbon markets to raise funds to pay for IoT technologies. Last year, for example, California’s Air Resources Board approved a protocol through which rice farmers can sell carbon credits to big emitters who must offset their emissions through the state’s mandatory cap-and-trade program. To do this, they’d need to use an approved management practice in order to reduce the amount of methane generated by rice growing and cultivation. Growers need not be based in California to sell credits into its cap-and-trade market, either. Here’s a case study on how a rice farmer in Arkansas approached the carbon market. As you’ll see, it’s not a way to get rich quick (what farmer ever expects that, anyway?), but it can have ancillary benefits beyond financial ones.
IoT technologies could be a win-win for both farmers and our precious natural resources, and today’s low oil prices mark one of many hurdles to their wide deployment. What I learned from talking to an analyst and a technologist is that innovation in the business approach is as important as innovation in the technology.
Mary Catherine O’Connor is the editor of Internet of Things Journal and a former staff reporter for RFID Journal. She also writes about technology, as it relates to business and the environment, for a range of consumer magazines and newspapers.