Monday, 16 September 2019 13:34

Digital tech adoption a way to improve productivity for agriculture businesses, says ACCC

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The widespread adoption of digital technologies by agricultural businesses is potentially one of the most important ways to stimulate improved rates of productivity growth in the farming sector, according to Australia’s competition regulator, the ACCC.

That’s the view put forward by ACCC commissioner Mick Keogh when he delivered an address to the ‘Growing a Digital Future for Australian Agriculture’ national forum at Parliament House, Canberra on Monday.

Commisssion Keogh said Australian farmers have already demonstrated a readiness to adopt digital technology, and to adapt it to the Australian farm environment.

He said the adoption of GPS systems in seeding and harvesting machinery, in combination with advanced digital monitoring systems, has enabled broadacre crop farmers to convert from paddock to square metre management, with associated increases in input efficiencies, and in some cases in yields.

But Commissioner Keogh said data portability was a key challenge for farmers, with many of them operating multiple enterprises and, by necessity, are likely to engage with a range of different digital systems.

“The ease with which data can be transferred from one system to another without degradation is important both to enhance adoption, but also for ongoing farm efficiency,” Commissioner Keogh said.

“There are also some parallels with current developments in the wider economy, including the mandating of an open banking regime.

“The objective of this Government initiative being progressed by the ACCC is to provide bank customers with the ability to efficiently and conveniently access specified data about them and requires banks to give customers more control over their financial data, and it includes a requirement on banks to seamlessly transfer data to accredited third parties on request.

“The aim is to remove some of the friction or inertia created by data access constraints, and facilitate greater competition in the finance sector.

“The next sector in which this initiative will be implemented is the energy sector.

“While there are no plans to include agriculture in this regime at present, the principals involved will likely be expanded in the future, with potential implications for those involved in the ag-tech sector.”

Commissioner Keogh said it was important to understand that the potential of technologies for the agriculture sector will not be achieved unless a number of impediments and challenges are overcome.

“First and foremost, especially in such a sparsely populated nation such as Australia, is the challenge of connectivity. Almost without exception, these digital technologies require constant or at least regular internet connectivity to achieve their full capability,” Commissioner Keogh cautioned.

“This is a particularly vexing issue for much of regional Australia. Some progress has certainly been made over recent years in improving connectivity to the farm, but there is still a long way to go before connectivity across the farm is improved to the standard required.

“The ACCC examined the issue of regional connectivity in its review of the potential declaration of mobile telephone roaming, in 2017.

“The issue under investigation in that instance was whether a decision to ‘declare’ mobile telephone services and thereby require the owners of mobile telephone infrastructure to allow competitors to access that infrastructure would improve mobile telephone coverage, and hence internet connectivity, in regional Australia.

“We concluded that such a declaration was unlikely to improve access to mobile telephone services, as it would remove the incentive for the major mobile telephone providers to invest in more infrastructure, even though it may have improved competition in areas that currently have coverage.”

Commissioner Keogh referred to the Australian and State Governments’ black spot programs, in combination with the deployment of the Skymuster satellite service, which he said still appears to be the best available option to increase regional access to the internet — “at least to the farm”.

“Internet access ‘across the farm’ is in some respects a greater challenge, although the emergence of several technologies that enable the development of private regional-scale or farm-scale fixed wireless networks provides some potential.

“These are certainly adequate to support low-data IOT applications, although of limited utility for high-volume data applications.

“Ensuring that these systems can interface seamlessly with existing mobile telephone and internet services remains a challenge, and both governments and the private sector could play helpful roles in addressing this.”

But Commissioner Keogh said inadequate support services for such systems are a continuing challenge in some regional areas, “with farmers understandably reluctant to invest while there is a significant risk they will be left with redundant systems in a few years’ time, or with systems no-one can repair”.

The Commissioner said a second issue that presented a continuing challenge was limited interoperability of different systems and applications.

“This is an important issue from a number of perspectives,” Commissioner Keogh said.

“Firstly, the nature of digital technologies operating at the farm level is such that the data and insights that can be generated become more valuable as subsequent years of data are accumulated.

“This means that the longer a farmer operates with a proprietary system, the greater the potential ‘lock-in’ to that system, with associated loss of competition, and constraints on new entrants into the market.

“Secondly, the issue is also important when it comes to decisions about which machinery and implements are purchased. The decision to buy a particular brand of tractor has the potential to also mean that the farmer will have less choice when it comes to purchasing implements, if different brands of implements are not compatible with the data and control systems of the tractor.

“Fortunately, the emergence of third party monitoring and data systems may provide continuing competition for the digital systems offered by the major machinery manufacturers, providing a solution for this problem in the cropping sector, even if it does mean a plethora of screens in the tractor cab,” the Commissioner said.

Similarly, in horticulture, the Commissioner said digital technology is enabling previously “unimaginable levels” of management precision — even down to individual tree monitoring — enabling significant improvements in water use efficiency, yield, and disease control.

And in the livestock sectors, electronic animal identification, in combination with remote sensing and automated weighing and drafting systems, had enabled significant improvements in feed conversion ratios, growth rates and livestock quality and uniformity.

“All these developments and many more are still in their early stages, so there is an enormous amount of work to do before these technologies and information systems become mainstream, and the potential productivity gains are realised right across the sector,” Commissioner Keogh said.

The Commission noted that the advantages that digital technology can bring are not limited to the farm, of course, and in fact some of the biggest gains in value are likely to be generated from the adoption of digital systems that extend seamlessly through the supply chain from farm to consumer.

“This is particularly the case given that some of the best avenues Australian agriculture has available to increase the value of output involve targeting higher value and premium markets,” Commissioner Keogh said.

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Peter Dinham

Peter Dinham is a co-founder of iTWire and a 35-year veteran journalist and corporate communications consultant. He has worked as a journalist in all forms of media – newspapers/magazines, radio, television, press agency and now, online – including with the Canberra Times, The Examiner (Tasmania), the ABC and AAP-Reuters. As a freelance journalist he also had articles published in Australian and overseas magazines. He worked in the corporate communications/public relations sector, in-house with an airline, and as a senior executive in Australia of the world’s largest communications consultancy, Burson-Marsteller. He also ran his own communications consultancy and was a co-founder in Australia of the global photographic agency, the Image Bank (now Getty Images).

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