How smart farming is revolutionising agriculture

Farming, once considered a largely manual process, is undergoing transformation. With the addition of drones and robotics; AI-fuelled crop, water and soil monitoring software; sensors on machines and much more, agriculture has entered a phase of rapid digitalisation.

However, beneath the dashboards and data lies a story that is as human as it is technological. Smart farming and agriculture is about viability and resilience, evolution and change, and the ability for stakeholders — including consumers — to engage more deeply in a sector they might know little about.

For farmers and professionals in adjacent industries and consumers, the shift represents both challenge and opportunity. But first, what exactly is smart farming?

Practical solutions

Dr Anthony Kachenko, general manager, production and sustainability research and development at horticulture research group Hort Innovation, describes smart farming simply as “practical solutions that can address a problem and deliver an outcome to help the grower become viable and then maintain that viability”.

The emphasis on viability is critical, he says. Technology must help the farmer to overcome a real problem, rather than being an end in itself.

“The first question I ask is, ‘What is the problem that [the technology] is trying to solve?’,” Kachenko says. “Then, how can I integrate it into what I am doing, and will it return a net benefit to my business in an economically challenging environment to help me maintain viability and grow?”

 

"The fundamental role of a farmer is to farm. So, when supermarkets begin asking for information from them around what their Scope 1 and 2 emissions are, that is something that I think accounting professionals should be doing."

 

Suriyan Vichitlekarn, executive director at Mekong Institute, separates the smart farming concept into three layers.

“The first layer means it should make livelihoods and economic viability possible for farmers,” he says. “Otherwise, it will not be ‘smart’. But at the same time, by providing this, we need to ensure that it has some sort of positive contribution to the environment, climate change and social inclusion.”

The second layer, he says, is how stakeholders can call on the optimisation of technology, including the Internet of Things and artificial intelligence (AI), to enhance that first layer.

The third layer is inclusion.

“We should be able to bring in other people, particularly the consumer,” Vichitlekarn says. “The consumer should be able to send signals to the farmers in terms of, ‘This is what we want to eat, this is how we would like agricultural products to be taken care of, this is how we would like farm residue to be used instead of burnt off’, and so on.

The third layer is about engaging more people in the process outside of the farmer and the buyer, so signals can be shared.”

In this view, smart farming is not merely about precision agriculture. It can enable the creation of a new social contract around food production.

Reactive to proactive farming

The transition to smart farming requires skills that have previously been considered mainly relevant for urban and city residents.

SuniTAFE, in Victoria’s Sunraysia region, has developed a SMART Farm initiative to train people to assist in the transition.

Katrina Watt CPA is the senior manager of education delivery at SuniTAFE. She says the most significant shift as smart agriculture evolves is the move from reactive to proactive farming.

Farmers have long had to rely on intuition and the know-how gained from experience, she says. But now, and increasingly in the future, they will make forward-looking decisions based on data fed from sensors and from local, regional, national and global databases into farm dashboards.

“Rather than the old method — ‘it is looking like a dry spell, we will turn the water up’ — a lot of the decision-making will be around data analytics, and being able to utilise and understand the technology that is available,” Watt says. “It is more about precision farming, gathering that data and being able to interpret it into useful information.”

 

"Rather than the old method — ‘it is looking like a dry spell, we will turn the water up’ — a lot of the decision-making will be around data analytics, and being able to utilise and understand the technology that is available."

 

Here, the challenge and opportunity of smart farming become clearer. As automation reduces reliance on manual labour, the skill level of farm workers must adapt to manage technology and interpret information, which has not previously been a core part of farming.

In regional labour markets, that creates entirely new needs and risks.

The financial case for or against smart farming is not straightforward.

Omri Rahamim, Australia and APAC general manager at Fieldin, says data-driven insights can reveal and solve massive inefficiencies in areas such as machinery use, fuel consumption, spraying practices and other activities that can drive cost savings and improve quality and compliance.

“Our job is to help agricultural businesses identify their true potential and their true performance, then see what the gap is,” Rahamim says. “And then, it is to understand what can really move the needle, where they should focus to shrink that gap.”

In practice, this can mean optimising spraying to reduce chemical overuse, placing refill points at different locations across the farm to minimise downtime, or benchmarking performance against local or global peers.

However, while future cost savings are a worthy concept, the upfront cost burden must also be taken into account, says Patrick Viljoen FCPA, environmental, social and governance (ESG) lead at CPA Australia.

“To get to that transition point, there is going to be capital expenditure,” says Viljoen, who witnessed first-hand the financial realities of life on the land, having grown up on a farm. “You need to buy sensors. You need to buy, rent or at least get somebody in who can set up and operate drone technology, for example.”

Just like in the renewable energy transition space, the long-term operating savings may be real, but they must be weighed against the initial capital outlay and financing costs, he says.

“If someone is going to go down this avenue, they need to be very open and clear about the totality of all costs,” Viljoen says. “What is the totality of costs versus the totality of benefits you are going to get over the duration in time?”

Investment decisions by agriculture businesses or on behalf of agricultural clients must integrate capital expenditure, operating expenses financing structures, yield forecasts, input cost reductions, regulatory risk and more, he says, particularly as carbon accounting requirements intensify.

For farmers, climate resilience is far from theoretical. Changing weather patterns and events have an enormous influence on their bottom lines.

If a farmer is better able to manage their business around the forces of weather, it is a powerful competitive advantage.

Viljoen says it is quite simple to identify which farmers excel at coping with weather changes. “One gentleman showed me a picture of his farm during the drought season, and you could also see the adjoining farm. It was actually quite stark, the difference between the two.”

That difference, Viljoen says, was attributable to sustainable land management practices on one of the farms. Through those practices, soil health was preserved and therefore moisture was retained.

 

"Our job is to help agricultural businesses identify their true potential and their true performance, then see what the gap is. And then, it is to understand what can really move the needle, where they should focus to shrink that gap."

 

Rather than leaving farmers to learn by trial and error as the weather changes around them, technology can enable more precise irrigation, improve traceability of food for export compliance, reduce the need for chemicals as fertiliser or insecticide, and even reduce methane emissions through feed optimisation on dairy farms.

However, Viljoen warns against these and other administrative and informational ESG requirements being managed exclusively by farmers.

“The fundamental role of a farmer is to farm,” he says. “So, when supermarkets begin asking for information from them around what their Scope 1 and 2 emissions are, that is something that I think accounting professionals should be doing.”

ESG compliance data is clearly an important value offering for systems and processes that make farms smarter. However, there will also be a vital role for accountants to play in interpreting that data and developing clear and credible reporting frameworks.

Across the Asia-Pacific region, innovation in agriculture varies broadly by region and sector.

In South-East Asia, Vichitlekarn says, Thailand and Vietnam are leaders, partly due to their strong track record in research, their investment in infrastructure and their export orientation.

“I also would name Malaysia, Indonesia and the Philippines,” he says, noting that their product is predominantly consumed domestically.

In most South-East Asian countries, domestic demand is shifting as the ever increasing middle classes are pressing for higher-quality food and greater transparency around provenance.

Levels of advancement around smart farming also revolve around what is being farmed, Vichitlekarn says.

“If we can subdivide farming into three types, one is crop, one is livestock and one is fisheries,” he says. “Looking at it that way, it depends on the countries … [for example,] rice production in Vietnam and Thailand is already quite advanced, and now they are adopting what they call ‘low-emission rice production’.

“In terms of livestock, countries taking the lead will be Thailand, Malaysia and Indonesia, because they have more meat-based food tastes.”

Globally, Rahamim says, Australia and California in the US are hubs for crop innovation. This is driven in part by size and necessity — by labour shortages, wage costs, and stringent quality and compliance standards.

Vichitlekarn says farmers across South-East Asia who are operating at a much smaller scale, often on family plots, face different challenges. Individual adoption of advanced technologies is likely economically unfeasible for many without cooperative structures.

A collective model that involves the pooling of resources, coordinated irrigation schedules and the sharing of infrastructure, he says, could offer a blueprint for inclusive digital transformation in emerging markets.

Collaboration is needed

None of this happens without the right skills and the right people. 

Watt notes that even in this age of advanced technology, agriculture still struggles with perception challenges.

“We are trying to grow student numbers at SuniTAFE,” she says. “But what we really need to do is get the message out to students that a career in farming is completely different to what it was even a decade ago.”

SuniTAFE teaches data analytics, people management and GPS technology, among other topics, to future farm managers.

Viljoen sees skill gaps emerging as technology and infrastructure intersect.

“Farmers fundamentally understand the way that their farms operate … Does that mean that they are across technology? Maybe not,” he says. “Some might, some might not, but I do not think one size fits all.”

The missing piece, Viljoen says, is collaboration between farmers and technologists, engineers and accountants, to ensure solutions are absolutely fit for purpose.

“Success will come from bringing those together to have a conversation and really understand where the pressure points are and where potential solutions can come from,” he says.

Kachenko adds that it is important to note this is not a discussion about the future, it is all happening right now. The industry is already utilising robotics and other autonomous machinery, as well as data and sensors.

In Vichitlekarn’s three-layered definition, smart farming and the future of food succeeds only if it delivers economic viability, environmental sustainability and social inclusion. Anything less, he says, is not “smart” at all.