For most of modern history, agriculture has focused on achieving two main outcomes: productivity and profitability. But in the coming decades, this will not be enough.
As Australia recovers from one of the worst-ever droughts, California battles its most destructive period of wildfires and the Atlantic Ocean deals with the most active hurricane season in its history, there’s a new priority for agriculture: the global climate.
The challenges climate change poses to agriculture are complex, but the industry is well equipped to address them and unlock the opportunities they represent. As technology becomes more powerful, affordable and more widely distributed, the rate of advancement is also accelerating. New sources of capital are giving oxygen to innovation and enabling new business models to come to market.
Here are three ways these challenges can be re-imagined as opportunities.
Design for resilience, not just productivity
Traditionally, producers have tried to limit variability to optimize for yield and productivity. In the future, the emphasis won’t be on simply maximizing productivity, but also on ensuring viability in the face of harsher and more extreme conditions.
Emerging technologies are unlocking new practices that enable us to move beyond the traditional constraints and risks of production, in ways that align with sustainability-driven preferences.
For example, automation is unlocking more precise and less input-intense production methods, thereby saving on costs while meeting consumer expectations.
Expand the definition of agricultural production
Agriculture has traditionally been about the production of food and fiber, and there are strong identities associated with what it means to be a farmer. But as novel technologies such as synthetic biology create new ways of producing food and fiber, the lines between farming, manufacturing and food production are blurring.
As markets increasingly value and reward new outputs and outcomes – such as biodiversity, ecosystem services and renewable energy – there will be opportunities for new revenue streams and enterprise mixes.
The markets and business models of the future, even for outputs that are produced today, may look very different. Opportunities are emerging based on genetic propagation that optimize for performance in cellular ag processes, rather than optimizing for performance in the field and on the plate. These synthetic biology supply chains will need both plant- and animal-based feedstock.
Consider new roles along the supply chain
Increasing sustainability demands are creating new pathways for downstream engagement in production.
It’s not just that consumers are demanding more transparent and sustainable production – environmental, social, governance and other policy requirements have created a desire among other stakeholders, such as institutional investors, to better understand their supply chains.
Digital and social media platforms are increasing competition for consumer relationships while creating opportunities to drive value through data and analytics. Primary producers, processors and food brands alike are starting to invest in direct-to-consumer capabilities, and companies are engaging more deeply with their supply chains to both maintain consumer confidence and respond to institutional pressures. There are opportunities for new skills and expertise at each step of the value chain as the lines between traditional supply chain roles increasingly blur.
There will also be opportunities to engage with unlikely partners to drive access to higher-value markets, capture more consumer spend and protect license to operate. Partnerships with NGOs to demonstrate a commitment to sustainable practices, working with social media influencers to sell into premium markets or collaborating with the oil and gas industry to develop renewable fuels, for example, could all unlock untapped value for the ag industry.
Thriving in the future
Technological innovation and new business models are key enablers of progress. But to ensure that the changes taking place around us today are transformed into opportunities for ag, we also need to change mindsets and relationships – that is the real challenge.
Change is never easy, but the complex challenges of tomorrow necessitate new solutions and, for those willing to innovate, they present massive opportunities.
Sarah Nolet is a co-founder of Tenacious Ventures and Komal Patel is a principal advisor at AgThentic