Digital Agriculture Bytes against Hunger Translating local and personal approaches of digital agriculture

SEEDS

IoT CROPS

BIG DATA

FARM

VALUE CHAIN Contents

Introduction 3 Background 3 Challenges 4

Scope 6 The agricultural value chain 7 Digitization of the yield – machinery or donkey? 10

Opportunities for digital solutions 12 Digitization of seeds and crops 12 Big data 14 15 Intelligent automation 16

IoT – connected agriculture 18 Platforms 19 Connected services 20 Track and trace 22 Digital business development 23

Capgemini’s holistic approach to digital agriculture 24

References 26

Contact details 27

2 The information contained in this document is proprietary. ©2018 Capgemini. All rights reserved. Introduction We are pleased to present you with our latest white paper on digital agriculture. Our objective is to share our point of view on the digital developments in , the challenges the industry currently faces, and how they can be overcome with evolving digital solutions. While agriculture is a broad sector, digital agriculture is of particular relevance to companies working with or supplying relevant data (e.g., meteorological) and equipment and supplies manufacturers. This white paper focuses on opportunities for these companies in the context of a relevant, local, and personal journey for the individual farmer.

Background The limiting factor has shifted from low yields due to a lack of mechanization via As an essential component of human excessive but unevenly distributed food life, agriculture has been challenged production (Alexandratos and Bruinsma, time and again by climate and natural 2012) to a lack of available farming area. hazards, population growth, and scarcity Mechanization allowed more area to be of arable land. The majority of the utilized with a smaller workforce. Higher world’s agricultural areas are clustered yields on stable area used was the in Africa, the Americas, and Asia, hallmark of the from totaling over 48 million km² globally, the 1950s to 1970s (Conway, 1998). or 37.2% of the land mass (FAO, 2017a; Given predictions World Bank, 2018a). Despite sufficient Additionally, agricultural employment that the world’s food production, 800 million people dropped from 43% in the early 1990s worldwide do not have adequate access to 26.5% in 2017 (World Bank, 2018c). population will reach to food. Given predictions that the Nonetheless, nearly two billion people 10 billion by 2050 and world’s population will reach 10 billion are employed in the sector, primarily as by 2050, and in light of the dietary shifts smallholder farmers. in light of the dietary occurring in developing countries (FAO, shifts occurring in 2017b), agriculture is once more faced In light of a declining workforce and with a tall order. increasing demand, it is necessary to developing countries, develop the agricultural sector with new agriculture is once Previously, natural catastrophes and products, practices, and technologies. resource restrictions limited human The agricultural sector has a significant more faced with a tall population growth (Meadows et al., potential for digital tools as it is order.” 1973). Technology has the ambiguous currently the least-digitized, far behind role of both facilitating unprecedented industries such as hospitality and health population growth and providing a care (Goedde et al., 2015). potential solution to the resulting challenges. In this respect, technological Therefore, the challenges incorporate aspects such as big data and IoT, or both technological step-changes developments in crop growth or and the intricate adaptation to new biological soil enhancements all provide conditions –climate and technology. It key and interlinking developments. is not a one-size-fits-all approach, but

3 instead requires close assessment of no approach to sustain and increase the situation to focus the journey to yields can be considered universally adaptable agriculture both on the applicable or suitable. The importance tractor and the donkey – depending on of farming in a local context must also requirements, targets, and challenges. be recognized as well as its role in No approach to global food production requirements. Bearing in mind your individual sustain and increase approaches and storylines, and Challenge II – Farming set-up yields can be the climate and culture you live in, Farming is by no means uniform and Capgemini, as a global IT leader farming scale is strongly determined considered universally with deep roots in application and by geographic region. Europe and applicable or suitable.” innovation management, is able to the Americas represent 74% of take the digital journey with you larger than 10 ha whereas 85% of to overcome these challenges and those smaller than 10 ha are found in leverage your potential to accomplish Asia (Lowder, Skoet, and Singh, 2014). breakthroughs within the agricultural Thus, it is important to acknowledge value chain to face the future. the need for technology and suitability at various scales and to Challenges recognize the key opportunities that new technologies can bring to Currently, agriculture is racing to keep smallholder development. pace with basic food requirements and dietary demands within the context Challenge III – Individual, adaptable of a projected world population farming Digital agriculture cannot be of 9.7 billion by 2050 (FAO, 2017b). seen as a one-size-fits-all approach. Global factors such as climate change, The requirements for each farm or water availability, the labor force, and region, the current baseline, and the consumer demands challenge the famers’ personal aims need to be agricultural status quo. Other factors accounted for in any structural change. primarily result from the relevant local Supporting the adaptation of suitable baseline for the individual farmer and technology at scale and across regions their adaptability to technology and is key. Digital agriculture change. Regardless of the challenges, the pressing need to feed increasing Challenge IV – Industrial cannot be seen as numbers of people with nearly equal distribution Significant private a one-size-fits-all amounts of arable land within a short investments into agriculture can time frame remains. be observed and farmland prices approach.” are increasing (Eurostat, 2016). Key challenges, which are both Additionally, new opportunities geographically and technologically within the sector covering seeds, interconnected, need to be addressed crop production support, and farm by future-orientated agriculture management are attracting more and the technological advances attention from big players. Therefore, available under the umbrella of digital the challenge is to establish adaptable, agriculture. future-orientated agriculture by drawing on the opportunities created Challenge I – Agricultural disparity by the interlinking of companies The industry has various baselines and sectors. in terms of scale and mechanization depending on region, farming Challenge V – Modern utilities and intensity, and predominant production precision agriculture The analogy (i.e., subsistence farming or large- of tractor versus donkey provides scale consumer markets). Therefore, a key insight into the challenge of

4 Digital agriculture - point of view modern utilities. Not every innovation Challenge VII – Infrastructure is suitable for every agricultural Implementing new technology both opportunity. Especially considering drives infrastructure and is dependent the disparity in agricultural targets and on it. Rural areas may, even in high- scale across the globe certain methods income countries, lack a suitable can be of varied impact across regions digital infrastructure of internet due to data availability. or mobile phone coverage. Digital opportunities are challenged by the Challenge VI – Consumer demands requirements of the individual farmer Choices available and consumer within their local context under the demands in terms of sourcing potentially restrictive bottleneck of and sustainability sustainability of digital infrastructure. agricultural products have increased significantly in recent decades. Digital agriculture, when applied Consumer demand can be tackled with foresight and adaptability, is set with optimized systems, such as track to provide solutions to many of the and trace. Additionally, targeted problems facing the industry today. In assessment of food consumption other words, the only way the tractor and demand patterns would make will replace the donkey in the field is if it possible to cascade production the advances it brings are credible and accordingly and lever technology at deployable. suitable points.

Digital opportunities are challenged by the requirements of the individual farmer within their local context under the potentially restrictive bottleneck of digital infrastructure.”

5 Scope

Agriculture is spread across the globe high- intensive farming areas, and is relevant as a key resource for whereas they still contain areas of all of the world’s population. As a low agriculture income, subsistence result, approaches to agriculture agriculture, and limited mechanization vary greatly depending on levels (Eurostat, 2016). Thus, significant of commercialization, how deeply opportunities, both geographic and Agricultural connected the local population is to technological, are available. Aligning capacity varies the land and agricultural processes, these opportunities to the particular specific local features, needs, and needs and goals of each farmer is the on a sliding scale, potential. Agricultural capacity varies key challenge. from subsistence on a sliding scale, from subsistence agriculture to large-scale industrial set This white paper addresses the agriculture to large- up. Given these differences in scale, a challenges and opportunities scale industrial set up.” nuanced assessment that recognizes facing agriculture through a the different baseline conditions and mixed-perspective approach. Not common-core issues, such as global only large-scale farming, but also distribution of yields, accessibility smallholder agriculture, are of key of technology, feasibility of smart importance. Buzzwords such as mechanized farming, and the individual “digital agriculture” or “smart farming” requirements of the farmer is critical. dominate the discussion. Nevertheless, Agriculture is an it is important to highlight the concepts Geographic location is key for two and factors behind these terms and industry based on reasons. First, changing climate assess their impact on farming in terms personal experience patterns and abiotic conditions already of the industry in general and of local acutely affect yield and approach farms in particular. Adapting digital and individual farm- (intensive versus extensive farming) farming to its geographic context based records. and will continue to do so at an even and to its stakeholders is at the heart larger scale in the future. Secondly, of this overview. Socio-economic Data sharing and the geographic location of a farm challenges, available technologies, and integration along does not necessarily reflect farming economies of scale explain why farming characteristics. North America is undertaken and how it impacts the the value chain as and Europe are mostly considered farmers’ lives. well as across the industry could provide Figure 1: Background significant benefits.” Commercial Industrial farming farming Regional midsize Farming farming motivation mallholder farming

Subsistence farming

Low Knowledge and High Infrastructure Source: Capgemini 6 Digital agriculture - point of view Figure 2: Agriculture value chain

nvironmental biodiversity and sustainability Societal, reputational, consumerism

Produce Harvest Process Treat Pack Distribute Sell

Legal, regulatory, political conomic Technical Source: Capgemini

The agricultural Does the farmer get an honest value chain price for the products? The traditional agricultural value Taking the individual farm and farmer The change must be chain has a linear approach from as a starting point, the question production via distribution to sales. is how they can benefit from identifiable on a local This has supported a segmented these developments. The costs of scale, relevant to the flow of information, both in terms production are increasing because of of advice for agricultural supplies rising labor and working capital costs. farmers’ processes and origin, quantity, and quality The commercial market for agricultural and improving their forecasts of yield. Therefore, any products is very volatile because the lever points are placed sequentially weather influences production levels current workflow, along the value chain. Information and farmers’ yields. Additionally, and suitable to supply, advice, and sales processes food trends influence demand and, are concentrated at key points. They indirectly, prices. the personal are traditionally established but lock requirements of each potential for improvement with novel tools and disruptive new information farmer.” sharing opportunities. Agriculture is an industry based on personal experience and individual farm- based records. Data sharing and integration along the value chain as well as across the industry could provide significant benefits. The status quo of the value chain and lever points provide the advantage of an established, trusted system with numerous opportunities to scale the products and information. This inherent distribution of expertise along the value chain compartmentalizes knowledge and experience. Interconnected networks or general disruption and restructuring of the agricultural value chain would promote direct interaction or interconnectedness via a platform system gathering all parties.

7 Why? – Rethinking the Turning the value chain into a value- agricultural value chain gathering network repositions the intermediation and creates the Rethinking the value chain and allowing potential of removing intermediation digital tools to complement agricultural altogether in favor of direct information needs and knowledge transfer has and sales channels. These networks to center on three core principles: have the advantage of being both the change must be identifiable on a location- and type-specific. While local scale, relevant to the farmers’ generic sales channels are not able to processes and improving their current service the entirety of product variety, workflow, and suitable to thepersonal a network can encompass a variety of requirements of each farmer. farming types (crops only, only, or mixed farming) and scales while still Interconnected feedback between providing local and relevant expertise. participants and suppliers as well as information sharing can create networks. Such networks will reflect the capacities of the current chains, although they will be reorganized and centered around the requirements (technological, information, sales opportunities) of the farmers rather than around ingrained structures.

8 Digital agriculture - point of view Figure 3: The agribusiness value chain converts into business networks to respond to digital change

Integrated agribusiness offer Consumer products companies crop inputs and acquire land connect back to the farmer Agribusiness suppliers convert from product sales to (digital) services sales

etwork etwork

etwork etwork

etwork

ey business model changes

Source: Capgemini

9 Digitization of the yield – machinery or donkey?

The bulk of The bulk of agricultural labor is not carried out with tractors or other heavy agricultural labor is machinery. While some do conduct industrial farming on large plots of land, globally most farmers still work by hand and are family-operated smallholders who not carried out with lack the capital to own or rent machines. Thus, data is collected in different ways tractors or other and low-cost solutions are necessary. For example, in Columbia the best coffee grows in the mountains on small family-owned, one-hectare farms. Nonetheless heavy machinery.” there are a great many of them and they constitute a key part of the cultural heritage. In light of their uniqueness, such smallholders are best served with a totally different approach to digital farming – “the digital donkey.”

The digital donkey

The immense amounts of agronomic data offer insight, understanding, and quick learnings. Digital farming is particularly revolutionary for farmers in Africa and Generating data is the South East Asia where over 80% of farmers are smallholders as it has the potential backbone of digital to remove the current information asymmetry. In some areas, like the Himalayas, limited biology training and a lack of qualified people in rural areas restrict farming, but its true knowledge about weeds and pests. power lies in sharing Digitization transforms decision-making practices in agronomics. Previously, hard data.” work was only supported by personal and local knowledge. This is now contrasted by vast knowledge and experience available via digital solutions. Farmers can now profit from the learnings of other farmers around them. Due to climate change, much better information on how to farm and what actions to take is required. In other words: digital farming provides means for adaptable farming. Farmers can anticipate new situations better and faster. Digital farming can also decrease the negative impact of farming tremendously. Next to improving biodiversity and water quality, the use of fewer crop protection products is beneficial for the environment on the whole.

10 Digital agriculture - point of view As consumers we want to have data organizations, or from publicly food that is healthy for us, that has available resources, such as not impacted the environment in a local governments. negative way, that ideally was grown in our vicinity, and that is tasty. Buying Software can help farmers decide A key challenge Fair Trade coffee or bananas is possible, when and how much to irrigate a field is making the but for other products this is really based on soil moisture data, when to challenging. Digital farming can create plant and harvest crops based on yield technology adaptable more transparency on where food data or weather, and provides access to to the needs of the comes from and how it empowers weather predictions and information the community that produces it. By regarding crop health. farmer, regardless of reducing the impact farming has on applications can be much more the operational scale.” the environment, digital farming can prescriptive, based on factors such as have a positive impact on consumers’ soil nutrient availability. This enables perception of food and food farmers to save money on areas with production, contribute to a healthy fewer requirements and optimize yield ecosystem, and offer insight into the across a property. food production chain. One clear challenge is adoption and Generating data is the backbone of how to make the data collected digital farming, but its true power lies relevant and useful for the farmer. For in sharing data. Data that some see many agricultural operations, acquiring as worthless can be very valuable to and using a software system will be a somebody else. big adjustment from the spreadsheets and pen and paper approaches that Digital yield model many still rely on. Therefore, not only do agricultural big-data companies Hardware provisions focus on sensors need to convince farmers to make the in various formats for collecting data. switch, they also need to make sure These include devices for measuring that the interface is easily usable so local soil moisture or nutrient that the farmers can see an obvious availability and include devices fitted return on investment in a relatively to a tractor to measure crop yields, short time. weather stations, as well as image- capturing satellites and drones to map Some farmers might be relatively tech- land use and crop health. savvy and want an advanced system, whereas others are really starting The software side aims to collect, from scratch. Companies will need to process, and analyze the data, typically appeal to a wide spectrum in terms of with the goal of presenting rich technological ability, operation size, insights to farmers in a consumable and type of farming operation. The size format. Some companies offer both of the agricultural operation using the hardware and software in a vertically technology is also important. Many of integrated design—and usually those the options on the market today target selling hardware will have a software very large operations, such as those program included—whereas others found in the US. These are likely to be offer just the software. much more complex and feature more equipment and teams than smaller The software uses data from the operations. Thus, a key challenge is hardware, which is either owned by making the technology adaptable to the farmer or by hardware businesses the needs of the farmer, regardless of (such as machinery manufacturers) operational scale. that the software provider partners with. Alternatively, it will use data provided by farmers, third-party 11 Opportunities for digital solutions

Design thinking has its place in applications or equipment defined. agriculture. After all, farmers are the These two approaches of design best designers in the world, creating thinking and developing a new thought farming systems that fit their local framework are often intertwined, situation and optimizing the use but both call for design methods of available resources. Farming is that allow designers to deal with this also the art of adapting to changing environmental diversity. circumstances. Agricultural production is characterized by factors such as There are about 450 million smallholder soil, climate, available resources farmers around the world and they (area, material, manpower, cash, make up 80% of farmers globally. etc.), and market outlets for each Though they lack the technology, However, in order farm. Most agricultural systems knowledge, capital infrastructure, and to truly facilitate are therefore designed to be distribution networks, their biggest location-specific and are unique in asset is their diversity. digital farming, the terms of design and applicability. fundamental question Contrastingly, merchant innovations, The biggest win would be to adopt a such as chemical inputs and decision completely new approach in designing that must always be support tools, are generally generic the new digital farming paradigm; addressed is ‘why?’” approaches adapted to a wide range of one that is most beneficial to agricultural conditions. smallholders. This would create new possibilities; they can share To benefit from the new digital knowledge, get access to knowledge, farming framework, certain keywords gain new insights, and improve are always applicable: local, relevant, their competencies at low cost. and personal. New technologies can Smallholders are in a position to take align with this framework. Connecting the biggest leap forward. They can large-scale companies with local manage a diversity of crops and create farmers will be made possible with a sustainable new business model. digital technologies. However, in The biggest win order to truly facilitate digital farming, Digitization of the fundamental question that must would be to adopt always be addressed is “why?” seeds and crops a completely Taking into consideration the Why should seeds and crops be new approach in innovations driving new methods digitized? What does digitization offer designing the new of growing, new types of crops, new the farmers and other stakeholders? varieties, climate change, etc., the The aim is to create scalability and digital farming agricultural value of the farm’s a sustainable form of agriculture. paradigm; one that yield will be significantly affected. Farmers need to manage business Disagreement persists regarding risk and comply with regulatory and is most beneficial to whether crop or livestock farming financial prescriptions to keep their smallholders.” offers the best commercial value or is operating licenses. Their insight into most suitable for local conditions. To the market is key and knowledge about address such questions, a new thought yield prognosis essential. framework must be designed and starting points for building useful

12 Digital agriculture - point of view How to decide which stop-gap opportunities are handled seeds are best? depends on the initial situation. For smallholder farms, the gap will be First of all, the right seeds with bridged with knowledge very quickly New situations do the right DNA – or the right basic and they will take a big leap forward. It algorithm for the program run will also work for industrial commercial not always have a – must be identified. While the farmers, albeit to a different degree. clear answer, though commercial market demands certain characteristics, the choice needs The goal of all digital approaches someone somewhere to be made based on the farmers’ should be sustainable and scalable probably dealt with experience. This choice can also come farming. Supporting the local as automated advice based on wishes requirements of the farmer via the same challenge. If and context. One benefit would be interlinked knowledge sharing you can connect that the added global experience and its allows for essential aspects of yield application to a local situation. This is increases on equivalent land area experience to your the starting point of digitized content or even lower inputs. Key aspects of context, it will give that ads value for the farmer. supporting crop growth would be providing information and plans for you the right tooling.” Once the seeds are planted, the typical scenarios in weed and pest farmer has limited influence on what control, fertilization requirements, and happens next. Nature makes this irrigation planning. Furthermore, the unpredictable – no year, location, or supported elements will allow yield crop are ever the same – every year maximization under optimized inputs is unique. This makes farming an art. which will, with harvest guidance, lead Although a crop cannot be engineered, to financial returns at scale. Therefore, the best possible circumstances can be supporting the farmer with experience identified. And digitization can help to and knowledge by proxy makes it trace those circumstances. possible to approximate ground truths for yields and input requirements. Digitization covers two gaps – This creates a reliable prescriptive The goal of all digital experience and attention. There dimension for the required inputs approaches should are always blind spots when growing resulting in improved deployment of crops. New situations do not always capital. This is especially important be sustainable and have a clear answer, though someone for small and medium farms and scalable farming.” somewhere probably dealt with the developing countries, improving same challenge. If you can connect agricultural yield quality and quantity. that experience to your context, it will give you the right tooling.

The attention gap is also well known. Every new crop planted requires full attention in order to ensure growth and yield. In later growing seasons, less attention is paid to the formally new crop. Digitization can support triggering events, based on what happens and direct attention and effort in the right direction. How these

13 Big data These opportunities can be increased thanks to new technologies or new Big data is a buzzword in agriculture, biological insights. but what does it mean and how does Agriculture is an it need to be positioned in the current Agriculture is an industry which industry which ecosystem? The big data environment requires that farmers and is a black box in which a great deal make innumerable requires that farmers of history and potential insights are decisions every year. Therefore, and agribusinesses hidden. Big data is a phrase that agriculture is an obvious target for big has recently integrated the world data. Climate change effects how farm make innumerable of technology across industries. It operations and the network around decisions every year.” involves capturing relevant data them are run. Big data analytics can from a huge number of sources alert farmers to problems on a certain and translating it into actionable field, such as a pest infestation or information to improve business drought conditions, thereby reducing processes and solve problems at the need for regular manual checks scale and speed. Building a big data of every piece of land. Shifts along Big data analytics environment based on current biases value chains and logistic distribution can alert farmers to in agriculture may result in missing out offer vast possibilities for big data on some breakthroughs in thinking. integration. In addition, the arguably problems on a certain harsher conditions casued by field, such as a pest Monsanto is now utilizing soil climate change make the use of data fertility supported by mycorrhiza as consistently more relevant for farmers. infestation or drought a new asset. This approach would It enables them to base their critical be traditionally based in the organic farming decisions on data patterns and conditions, thereby agriculture movement and showcases insights. With existing and increasing reducing the need for the way agriculture is developing: the labor shortages in agriculture, the ecosystem is open for new insights and ability for big data analysis to create regular manual checks the system will be quickly adapted by efficiencies that reduce the need for of every piece of land.” innovations that support new tools physical labor is an important benefit and approaches. Farming is the art of for the industry. being adaptable to new opportunities.

14 Digital agriculture - point of view Precision satellite telemetry, sensors, drones, Precision agriculture and farm management software – all agriculture of which are becoming available at an demonstrates that it unprecedented rate in the fields. is possible to generate Farm-centric digital farming is still removed from fully fledged digital Precision agriculture strives to make a lot of data via agriculture. Precision agriculture farming more efficient. Agricultural farming machinery began in the mid-1990s with GPS giants, governments, and IT leaders equipment installed in machinery have all launched their digital and combining it and has been a great input source initiatives for agriculture. Smart farm with geosystems and for big data ever since. Precision equipment, drones, and robots are agriculture demonstrates that it is enabling precision agriculture. Big satellites, making it possible to generate a lot of data via data and algorithms in agriculture will possible to support farming machinery and combine it enable insights and optimization in the with geosystems and satellites, making field. Most of the initiatives are farm- operational farming it possible to support operational centric, directed toward row crops. with location-specific farming with location-specific Core markets for row crops, such as the data tags. The initial slow onset of US, are showing increasing costs for data tags.” technology is now being eclipsed by lower crop value. Consequently, farm Figure 4: Precision agriculture

Integrated farm management Dronesatellite • All data is gathered and analyzed here field monitor • Internal data from sensors, etc. as well as external • Picture analysis from data like weather reports, news (Big Data) drone or satellite footages • Alarms directly on Grower’s mobile device with all required information • Information is fed into the farm mgmt. system • Automated action initiation possible

Automatic precision farm machinery

• Farm machines without drivers, networked for maximized efficiency • Cultivating, seeding, fertilizing, using automatically with absolute precision and minimal waste

Genetically optimized crops • More yield, shorter growth periods and higher resistance • Specific features, like blossoming at a specific time

Field sensors • Measuring soil irrigation, fertilization, humidity

Source: Capgemini

15 management solutions enabled by big RPA, both within agriculture and data and precision farming (observing, in general, is a set of technologies measuring, and responding to using software as a virtual employee Precision agriculture variability in crops) are being adopted to manipulate existing applications strives to make since they provide higher yield with (e.g. ERPs) and to execute repetitive little investment. rule-based processes. This virtual farming more workforce helps minimize (or even efficient.” Equipment manufacturers have eliminate) human intervention in started using this opportunity for the execution of tasks or decision- their own benefit, collecting data on making. Although RPA has not yet usage, crops, life cycles, etc. via their reached the investment levels it machines. This allows them to predict has in other industries due to the equipment maintenance and use and varied background and baselines in to develop new commercial service agriculture, it does provide significant concepts. In return, the farmer receives potential in interconnecting and operational security. This creates the streamlining repetitive farm processes context for commercial industrial to compliant standards. Robotic process agriculture, which enables the scale automation (RPA) and thus the profit margins that large- Since robots work faster and more scale manufacturing companies are accurately than humans, process speed provides the transition aiming for. and process stability will improve from services- significantly. In the context of digital Precision agriculture has been used farming, RPA can provide high-income through-labor to as a lever by equipment manufactures countries with a double solution to the services-through- to drive down the operational costs challenges faced due to current and on the farm. Nevertheless, yield levels future labor shortage and increased software.” have not improved correspondingly. regulatory demands. Therefore, the The yield rise is dependent on taking risk of compliance breaches, such in the right actions with the right teams the handling of agricultural product and using the crops and varieties that at farm- and trade-level, is minimized. have the right market position. The Once designed, the RPA procedure proven value of precision farming is will work 100% routinely according to debatable and dependent on various prescribed conditions and maintain factors. adherence to standards.

RPA is a significant Intelligent RPA is a significant lever to utilize lever to utilize potential to increase process automation efficiency, robustness, and product potential to increase quality. Its applicability is centered on Because the agricultural sector repetitive processes, high transaction process efficiency, has been pursuing cost reduction volumes, and cost-critical processes. robustness, and strategies for several years, various Since RPA is focused on rule-based, process optimization projects and structured processes, complexity product quality. outsourced activities to lower costs is a natural delimiter of possibilities. Its applicability is have already taken place. To continue Value-added services tend to be the journey started with these complex and versatile, making them centered on repetitive initiatives, robotic process automation resource-intensive as they are harder processes, high (RPA) provides the transition from to automate. services-through-labor to services- transaction volumes, through-software, with a provision for and cost-critical further cost reduction. processes.”

16 Digital agriculture - point of view Artificial intelligence: the outputs. AI-driven functions such as industry challenge – lead image analysis (satellite telemetry, or be left behind plant health, weather, etc.), predictive analysis (demand trends for agricultural The transformative technologies products, demand cycles/peaks), and that comprise artificial intelligence machine learning (continued analysis of take automation to the next level: passive sensor data) are key aspects of simulating human cognition processes the technological potential. Moreover, to support a business’ capability to big data is the foundation feeding overcome the limitations of labor and into intelligent automation platforms open new sources of value and growth. that enable the implementation and utilization of AI. For the farming The key is to consider AI as a hybrid of industry, the question is no longer human and technology. The collective whether adopting automation and AI value is greater than that of its parts. as strategy should be considered, but Not only does AI replicate labor rather “what” in terms of automation activities at greater scale and speed, strategy should be done and “how.” but it can also perform activities beyond human capabilities. To be able to utilize these benefits, it is key to incorporate AI into the thought concept of digital farming and the agricultural sector. AI applied to its full potential in farming can support a step change in the sector, transforming business operating models and creating sustainable growth. AI provides a host of opportunities. It may be used to analyze what is available in the cloud/internet, combine internal and open-source data, or identify algorithm-driven search patterns to optimize farm-specific and relevant

17 IoT – connected agriculture

IoT is seen as a major driver behind emotional one that will play a key role the agricultural movement called in addressing the challenges of IoT connected agriculture. in agriculture.

The framework behind IoT is a network Promise or prophecy? of sensors that deliver data to a back end on top of which applications can Machine manufacturers in the farming- be created and data utilized. These equipment sector really do believe sensors can deliver information about in the added value of connected temperature, soil moisture, nutrient agriculture. It will provide them content, and use-imaging techniques. with extensive information from IoT is seen as a major Livestock, sound, movement, relative and about the farmer. Additionally, driver behind the position, etc. can even be transmitted. if manufacturers hold proprietary The key challenge is to integrate this data rights over a network of farm agricultural movement data into a platform. The next step is machines that communicate with called connected building the applications that add value each other, they will have control. for users, consumers, and stakeholders Commercialization of this in a service agriculture.” in the ecosystem. model can contribute to financing working capital in the next stages. What are the benefits of IoT? Examples of this are already out in the fields and very interesting IoT will be an extra cost factor and will smart machines, such as sprayers increase dependency on technology. that water an individual plant based The discussion The discussion about data-sharing on real-time prescriptive advice standards and compliancy between from an agronomist’s algorithm, are about data-sharing different machine manufactures already being built. Once more, the standards and is significant. Farmers want a most important issue is how this choice based on long-term goals: a will benefit the farmer – locally and compliancy between sustainable business and the freedom based on their personal requirements different machine to make independent choices. and circumstances. Therefore, the discussion around manufactures is open-source software is a relevant, if significant.”

18 Digital agriculture - point of view Figure 5: IoT is driving value for agribusiness companies

HM C A A R I F SO Digital core R C S Business scenario innovation

• Smart products • Farmer portals • Field and farm • Inventory • Track and trace with embedded and collaboration task automation movement control from farm to sensors fork • Rural sourcing • Energy • Transportation IoT-based • Field, animal, management management • marketing and farm • Track and trace • uality control • Demand operations from farm to fork management • Predictive sensors • Asset monitoring collaboration maintenance Production RD Procurement Supply Sales and and chain marketing manufacturing

Value creation through Business Process Business model networks innovation innovation Collaboration in business • Track and trace from farm • Performance-and network scenarios to fork usage-based (network of networks) • Sustainable production contracting and billing • Energy management • Predictive maintenance • Outcome-based and service services

Source: Capgemini

Platforms As a substantial machinery producer, John Deere’s initial approach of selling A key buzzword in digital agriculture their equipment with integrated is “platform.” Who will be the first sensors provided a suitable starting to have an impact such as Facebook, point. However, acceptance by Amazon, Uber, or Airbnb did? As markets and farmers was adversely leaders in their field, they connect affected once the company claimed social contacts, products, services, ownership of generated data and and the biggest tourism network refused to share it with other of the world. All evolved out of the equipment manufacturers, or indeed, same idealistic goal – to create a more the famers. This issue was closely accessible and better-connected world. followed in Europe and reversed In agriculture, there are different the initial positive developments of approaches for service provision and connected agriculture. respective platforms: proprietary, collaborative, and personalized As a reaction, coops started launching services. their own initiatives. One of them

19 is JoinData, formally known as As a prerequisite, the approved seed SmartDairyFarming, founded by the and chemicals would have stakeholders of the dairy industry in had to be purchased as well. This In agriculture, the Netherlands. After initial trials, a “one‑stop-shop” approach to providing strategic realignment was undertaken supplies, information, and insurance there are different to change their model towards one must be considered as the new service approaches for that provides an infrastructural model within the agricultural sector. highway for farmers’ data. Farmers service provision and are in control of their data and can Connected respective platforms: authorize partners. Only then can these companies use the farmer’s services proprietary, data to deliver value for that particular collaborative, and farmer. Although they are in a Technology is not only changing the restructuring phase, they are ones to way we live and work, it is profoundly personalized services.” watch. changing business models across industries. In a traditional context, Another important approach is customers would buy products or highlighted by ClimateCorp, which is services related to these products. especially interesting in light of the However, a shift toward pay-per-use Monsanto takeover by Bayer. Initially and pay-per-output is taking place. an insurance company, ClimateCorp Customers are paying for the benefits delivers value by collating farmers’ of the product rather than the product data, providing personalized crop itself. The provisions of services such advice, and insuring respective yields. as data and information based on,

20 Digital agriculture - point of view for example, equipment use across Figure 6: Connected services the farm is becoming more and more prevalent in the framework digital Consumer electronics igh architecture. Agriculture and Discoverers forestry Masters Maturity levels Maturity levels These new business models are Innovative, Automotive High maturity, market-leading innovative examples of connected services service offerings offerings but small and broad Trucs and buses (Capgemini Consulting, 2018). They market coverage market coverage connect products to the cloud to Turbines monitor equipment condition or ining and construction Automation and predict maintenance requirements. robotics From a manufacturer’s perspective, ealthcare Connected Service Offering Connected ailway connected services provide many Observers Developers Maturity levels Maturity levels benefits. Not only can customer needs Low maturity, Aerospace Basic service basic offerings, hips and boats offerings be better met, but also differentiation and small but broad from competitors achieved, and a market coverage market coverage and tools ow constant revenue stream ensured. ow Connected ervice mplementation igh Moreover, connected services can provide higher margins due to Key findings Manufacturing companies differ in WHAT connected services higher willingness to pay for services they offer (innovativeness and smartness) Manufacturing companies with direct impact rather than for differ in HOW connected services physical products. are implemented (market coverage)

Industries generally vary in terms of which connected services are offered and how these are implemented. Source: Capgemini A difference in pace in adopting connected services allows companies to identify their focus and learn from each other in terms of which services and masters. Depending on maturity, should be offered and how they are breadth of services offered, and to be implemented. Also, levels of the difference in market cover, the commercialization necessary and companies can be assigned to the demanded in the agricultural market respective quadrant: A difference in are shaping connected services. pace in adopting • Observers have limited market Industries can be divided into four coverage, providing basic service connected services quadrants for connected services: offerings (communication and allows companies to observers, developers, discoverers, information) and have not yet reached the higher maturity levels of identify their focus their products and services. and learn from each • Developers provide a similar basic offering, though with distinctively other in terms of broader market coverage, allowing which services should for a cross-sectional comparison Technology is not only of implementation. They offer be offered and changing the way we small market cover but innovative how they are to be service offers. live and work, it is • Discoverers are on the leading implemented.” profoundly changing edge of the market. With increasing maturity and market spread, they business models will move towards the masters’ across industries.” quadrant.

21 Located in the discoverers’ quadrant, and in the majority of cases says little agriculture and forestry equipment about what really happened. companies offer innovative connected services but have not yet achieved high Therefore, the best option is to have a adoption rates among their customers. direct link between the farmer and the Key players in that industry offer consumer – going to the local market The best option services like condition monitoring, fleet and looking the farmer in the eye, management, and precision farming. sharing stories about the hailstorms is to have a direct Condition monitoring encompasses that devastated a certain crop, learning link between the real-time monitoring of agriculture and about the freshness and excellence of forestry machinery, leveraging data a product – this local-for-local approach farmer and the captured by machine sensors. Precision works in certain circumstances. consumer this local- farming leverages location data in combination with external data sources Agriculture is a global business with for-local approach to, for example, optimize seeding and commodity crops, such as soy, coffee, will work in certain harvesting. As the agricultural industry or cotton. A potential issue is that continues to drive a digital farming growing standards for agricultural circumstances.” agenda, the commercial use of these products must be documented services will provide a large market accordingly. Many of these crops are share and the industry shifts into the grown on smallholders’ farms – any masters’ quadrant. record-keeping requirement could add extra cost. The initial set-up of Achieving connected services mastery documentation and therefore the is a complex task. Different units of majority of the work burden is with the a company need to be involved to farmer. Once the product is the supply understand customers’ needs, the chain only its direction and location of The first mile is product, and the requisite technology. the trader are added, and thus keep While multiple solutions are available, the records compliant. the most critical in experience has shown that there is no the ‘farm-to-fork’ one-size-fits-all solution. The first mile is the most critical in the “farm-to-fork” concept. It delivers concept. It delivers Track and trace all the tradeable characteristics for all the tradeable the rest of the supply chain. It clearly We all want to have information about highlights who the target clients are, characteristics for the products on our table. We want how the products are processed, and the rest of the supply to know the origin, how the food how and where they are traded. is grown, and what has been done chain. It clearly to keep the crop or animal healthy. Environment, sustainability, highlights who the Who raised it? How much fertilizer and fair trade was used? How sustainably was the target clients are, crop grown? To support sustainability along the how the products are value chain, it is essential to determine We trust that the system will deliver whether the products originate from processed, and how quality and healthy food, but when environmentally sound producers and where they are something goes wrong, we want to (preventing slash-and-burn cultivation know exactly who is responsible and for palm oil production). Additionally, traded.” where/when it happened. This gives products sourced from fair trade rise to an administrative burden to suppliers who focus on the quality of create and maintain records. A trigger life of farmers, safety of the workers, event happens when people fall ill or and sustainability of the business and worse. The paper trail documenting agriculture practices (certification in the production processes is expensive, the coffee or chocolate industries) will support traceability of the product.

22 Digital agriculture - point of view Connecting smallholders Digital business development is best to the value chain – adding undertaken as clearly structured three value to crop production phases approach to ensure in-depth understanding of farmers’ and dealers’ Unique crops with specific value-adding requirements before business models If the product can be characteristics are not always identified are selected. A three-phased agile traced from origin as “special” to the market. Smallholders development would typically include can have a unique product, but due to discovery and immersion, followed by to consumer, this limited information dispersal, it can go validation and synthesis, to be concluded information can unnoticed. In other words, commodities with incubation of the identified solution. are not always commodities (coffee stand out; and with with a unique flavor profile gets lost During phasing and development, tools supporting in the mix of a very large production the initial focus would be to both despite potentially being able to understand the farmers’ market this track‑and-trace command a higher price). If the product position and its current business approach, smallholders can be traced from origin to consumer, value and exploit the in-house this information can stand out; and with business development potential will be accompanied on tools supporting this track-and‑trace of larger agricultural companies. their journey towards approach, smallholders will be Furthermore, any promising ideas and accompanied on their journey towards opportunities should be approached digital and adaptable digital and adaptable agriculture, and in an agile setting in order to enable agriculture, and their their potential and value of their crops rapid development and short time- will be recognized. to-market/implementation. Within potential and value the first phase, this would translate of their crops will be Digital business into collecting and documenting any ideas and benchmarking them recognized.” development against existing ones. Discovery sprints throughout the portfolio make Digitization has driven major changes it possible to identify and develop across numerous industries. The portfolio of clustered opportunity agricultural sector is no different spaces to guide focused ideation and it is recognizing the potential of creation. Throughout the middle interconnected, cloud-based, and other phase, highly promising opportunities digital services. Overall, the agricultural out of the innovation funnel need sector, due to its dependency on natural to be assessed and validated against processes and variables, provides an previously defined criteria. Iterative ideal background to provide innovative processes will enable the creation and cross-sectional digital solutions. of early potential assessment and The key sources of machine and public prototyping through innovation data as well as new digital technologies races.This is also a crucial phase The agricultural drive agricultural companies to develop in the involvement of all farm sector is no different and set up new digital business models. employees in order to build Leveraging the available sources and internal capabilities for self- and it is recognizing the continuously increasing amounts reliant business development the potential of of data mentioned earlier provides in the future. Lastly, the great potential to all involved parties, incubation phase will make interconnected, such as the company itself, farmers it possible to develop and cloud-based, and dealers. Therefore, a significant accelerate the product or amount of digital business development service. Further factors and other digital ideas and innovation initiatives are run. such as financing, financial services.” However, the large number of ideas and projections, sales, and innovative solutions require a structured, additional capacity building transparent, agile, and prototype-driven also fall into this phase. approach.

23 Capgemini’s holistic approach to digital agriculture

All of the digital solutions discussed in agriculture. Capgemini covers the above highlight ways to overcome the range of knowledge needed for such a challenges described at the beginning digital journey: IT expertise, agriculture of this paper and benefit from the expertise, and validation and go-to- new digital farming framework – market experience for digital solutions consistently considering the individual and business models. local, relevant, and personal characteristics of each agribusiness. As a global leader in consulting, Nevertheless, to make the digital technology services, and digital transformation in agriculture work, transformation, Capgemini is at the most of the action fields are missing a forefront of innovation to address the key component: integrators. entire breadth of clients’ opportunities in the evolving world of cloud, digital, Integrators, such as Capgemini, and platforms. Building on its strong are the crucial facilitators in this 50-year heritage and deep, industry- paradigm shift towards digitalization specific expertise, Capgemini enables

Figure 7: Capgemini’s holistic approach to digital transformation in agriculture

Design for digital ach segment and players in the Creating insights actions and value out food chain have specific needs and of data in one of Capgeminis specialities. Capgemini's first concern is making sure realities. Thans to an etensive nvisible that clients are getting the most out of eperience in agri-business nfostructure Capgemini can help them design their digital transformation. This is of the right digital tools for their crucial importance in agriculture where business. product margins are low and much is ou perience epected from technology.

e Collaborate

Thriving on SSTMS Data POPL

e believe this digital revolution in Digital agriculture does not agriculture is a fertile ground for new have to reinvent the wheel. more efficient, and fairer processes. sing its eperience in T Capgeminis goal is to create new value infostructure Capgemini pools in the food chain – benefiting promises a digital transforma- agri-giants and farmers alie in todays tion at the right value for any Applications uest to feed tomorrows world. nleashed player in agriculture. rocess on the ly

Source: Capgemini

24 Digital agriculture - point of view organizations to realize their business Innovation Exchange (AIE) enables ambitions through an array of Capgemini’s clients to take advantage services, from strategy to operations. of a global network of innovation Capgemini is driven by the conviction spaces to rapidly and securely gain a that the business value of technology competitive advantage in today’s fast- New digital comes from and through people. paced innovation environment. farming framework To raise awareness of Capgemini’s Regardless of the challenge you – consistently deep expertise in agriculture, a currently face or the digital business global team of experts focusing on model you want to implement, we considering the this particular industry was set up listen and talk to our clients and we individual local, several years ago. The team consists leverage our knowledge and best of agronomists, technology experts, practices to support you on your relevant, and personal data scientists, and researchers in individual journey towards digital characteristics of each the field of agribusiness. Besides agriculture – because we know that continuously tracking market trends agriculture is not a one-size-fits-all agribusiness.” and developments and keeping a business! close eye on agricultural start-ups, the concept of Capgemini’s Applied

25 References

Alexandratos, N. and J. Bruinsma. (2012) World agriculture towards 2030/2050: the 2012 revision. ESA Working paper No. 12-03. Rome: FAO.

Azadi, H., Ho, P., and Hasfiati, L. (2010) Agricultural land conversion drivers: A comparison between less developed, developing and developed countries. Land Degradation & Development, 22(6), 596-604.

Capgemini Consulting (2018) A Benchmark of Connected Services in the Manufacturing Industry. Available online at: https://www. capgemini.com/consulting-de/wp-content/uploads/sites/32/2018/03/connected-services-capgemini-consulting.pdf

Conway, Gordon (1998) The doubly green revolution: food for all in the twenty-first century. Ithaca, N.Y: Comstock Pub.

Eurostat (2016) Agriculture, forestry and fishery statistics. Luxembourg: Publications Office of the European Union.

FAO (2011) The state of the world’s land and water resources for food and agriculture (SOLAW) – Managing systems at risk. FAO: Rome and Earthscan: London.

FAO (2017a) Land use [Online data]. Available at http://www.fao.org/faostat/en/?#data/EL

FAO (2017b) The future of food and agriculture – Trends and challenges. Rome: FAO.

Goedde, L., Horii, M., and Sanghvi, S. (2015) Pursuing the global opportunity in food and agribusiness. McKinsey & Company [Online article] available at: https://www.mckinsey.com/industries/chemicals/our-insights/ pursuing-the-global-opportunity-in-food-and-agribusiness

Lowder, S.K., Skoet, J. and Singh, S. (2014) What do we really know about the number and distribution of farms and family farms worldwide? Background paper for The State of Food and Agriculture 2014. ESA Working Paper No. 14–02. Rome, FAO.

Meadows, D.H., Meadows D.L., Randers, J., and Behrens, W.W. (1972) The Limits to growth; a report for the Club of Rome’s project on the predicament of mankind. New York: Universe Books.

Trewavas, A. (2002) Malthus foiled again and again, Nature, 418, pp. 668-670.

World Bank (2018a) Arable land (% of land area) [Data file]. Retrieved from https://data.worldbank.org/indicator/AG.LND.ARBL.ZS

World Bank (2018b) Agricultural land (sq. km) [Data file]. Retrieved fromhttps://data.worldbank.org/indicator/AG.LND.AGRI.K2

World Bank (2018c) Employment in agriculture (% of total employment) (modelled ILO estimate) [Data file]. Retrieved from https:// data.worldbank.org/indicator/SL.AGR.EMPL.ZS

26 Digital agriculture - point of view For more details contact

Jacko Obels Bastian Thöle Thought Leader Agriculture & Head of Digital Organization & Commodity Trade Shared Services [email protected] [email protected]

Scotty Schulte Vanessa Pauling IT Transformation Director Senior Business Analyst [email protected] [email protected]

Marcel Müller Dr Henrik Hannemann Head of BTech Chemicals & Life Sciences Business Analyst [email protected] [email protected]

Dr Leonardo Weiss Ferreira Chaves Head of Digital Service Innovation for Manufacturing [email protected]

27 About Capgemini

A global leader in consulting, technology services and digital transformation, Capgemini is at the forefront of innovation to address the entire breadth of clients’ opportunities in the evolving world of cloud, digital and platforms. Building on its strong 50-year heritage and deep industry-specific expertise, Capgemini enables organizations to realize their business ambitions through an array of services from strategy to operations. Capgemini is driven by the conviction that the business value of technology comes from and through people. It is a multicultural company of 200,000 team members in over 40 countries. The Group reported 2017 global revenues of EUR 12.8 billion.

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