Matija Zulj, CEO and Founder AGRIVI, examines the importance of agricultural digitisation to improve not only local food production and competitiveness, but overall community health.
Prior to the COVID-19 pandemic, the issue of global versus local food production has been primarily discussed in academic settings and international politics. What is more, the discussion revolved around highlighting the advantages and disadvantages of different countries’ over-reliance on one or the other extreme.
At the same time, the issue of strengthening local production was predominantly examined in relation to its potential for rural development and in the context of boosting food security. All the while, we have long been aware of the consequences – both economic and social – of poor nutrition. Strong local food production could bolster both food security and nutrition, providing holistic benefits to communities’ wellbeing.
The Socio-Economic Consequences of Poor-Quality Food
There is strong scientific evidence to support the notion that various forms of malnutrition can have severe social and economic consequences for developing and developed markets alike. Poor-quality food, resulting in either undernutrition or obesity, costs companies around the world approximately 38 billion USD from reduced worker productivity, as estimated by Chatham House.
Furthermore, the US administration claims that, each year, one in six Americans gets sick from poor-quality food. And yet, these facts have not been enough to kick-start a comprehensive discussion on the necessity of introducing changes to agricultural production management on the local level. However, the arrival of the COVID-19 pandemic has suddenly rekindled the interest in this particular issue, pushing it immediately into the political arena.
The Role of Digitisation in Local Food Production
The European Commission had recognised the need for shorter supply chains in food production even before the pandemic hit, by expanding the scope of the European Green Deal to include food production – a move that has proven to be of considerable importance during the pandemic. The main reason for that is to increase the productivity of the European Union’s agricultural production and self-sustainability when it comes to food production. However, with goals as ambitious as that, there is always the question of how to achieve them.
For many, the digitisation of agriculture has been recognised as the only sustainable solution. It allows farmers to make substantial savings across all production stages, as well as to increase their productivity by sharing best production practices. At the same time, it increases the transparency for the end users by ensuring production traceability.
According to a McKinsey analysis, global agricultural production is becoming increasingly more competitive, especially in the most developed markets, such as in the United States and the European Union. Shortening supply chains in food production and digitising the production have only accelerated the trend, which means that farmers who are not catching up will be unable to keep the pace and will drop out of the race. This has been the dominant trend for some time now.
In the period between 2005 and 2016, the European Union lost a quarter of its farms (more precisely, 4.2 million of them), and small-sized farms have been hit the hardest. If we thought that the tempo has been set by the global market in previous years, we now need to bear in mind that trends in local markets will be key to changes in developed nations.
The Digital Future of Agriculture?
What will agriculture in the most developed markets look like in the coming years? Presently, both the European Union and the United States are at a rather advanced stage of precision agriculture, which is based on production digitisation. An analysis by McKinsey claims that only the farmers who have mastered precision agriculture will be able to take advantage of the fourth era, next-generation agriculture technologies.
This era will enable the advanced use of technologies such as biotechnologies, gene editing, and increased automation, including agricultural robots that will monitor and process the production. Taken together, these hold the potential to increase local agricultural productivity and competitiveness, as well as the nutritional value of crops.
Such trends are putting enormous pressure on farmers around the world. Increasing the focus on creating as productive local production as possible is further accelerating the introduction of the necessary changes to agricultural production, which entail an increase in digitisation and transparency. The future of agriculture is bright, both locally and globally; however, only those who recognise the changes and embrace them as soon as possible will eventually succeed.