Feeding the world’s ever increasing population is big business, but it’s also an imprecise business and as the world’s population grows, improving efficiency to lift crop yields is going to become a priority for farmers.

Precision farming and digital agriculture will help the industry achieve this critical goal. Precision agriculture could lift crop yields 70% by 2050, creating a $240 billion market for farm tech over the same period.

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The world will need this uplift in output as analysts expect the global population will reach 9.7 billion by 2050, requiring a 70% uplift in global food supply from current levels. These figures are from a new research booklet on the topic of precision farming from Goldman Sachs.

The investment bank believes that the precision farming market could offer a tremendous opportunity, for both farmers and investors. The global crop production value in 2015 was $1.2 trillion, but there’s also plenty of waste in the system. Figures show that 40% of farm fields are over fertilised resulting in a yield loss of 15% to 20% from inadequate fertiliser application. Yields could be increased by around 18% by using precision fertiliser technology. Also, precision planting could produce a 13% improvement in yield while a further 13% improvement could be achieved via a fleet of smaller automated tractors. (According to academic research cited by Goldman, soil compaction — a result of large farm equipment — has decreased yields by 15% to 20% over the years).

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Precision Farming The $250 Billion Market
Precision Farming The $250 Billion Market

Further, it is estimated that farmers could reduce wastewater by 50% with precision irrigation systems paired with water sensors leading to a 10% improvement in yield.

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Some of these technologies are already in action and will be developed and refined over the next few years to enhance the product offering.

Precision farming market growing 

Some farmers are already making use of multi-seed planters, which have just started to enter commercial production. These planters give farmers the ability to combine properties of different seeds in one planting. Farmers have noted that are using two different seed types they can increase yields by around 3% to 8% by matching up the right seeds to the right soil types. Growers note that the optimal hybrid seed mix utilizes two seed types; an offensive and a defensive variety. These multi-seed planters also allow farmers to plant more seeds in parts of the field more susceptible to growing crops based on data regarding soil quality, access to water and prior history of fungus. Farmers have observed yield improvements of 5% to 20% by using this strategy.

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As the commercial production of multi-seed planters begins, some farmers are also testing precision fertiliser products. The magnitude of improvement from these initial tests ranges from 10% to 15%, and Monsanto estimates a 10% reduction in fertilizer application on 40% of the farmers’ field, equivalent to a total reduction in consumption of 4%, reducing input costs. The current payback period is 18 to 24 months.

Other technologies starting to get off the ground are big data, autonomous tractors, and drones but at current price points, these are out of the reach of most farmers.

Nonetheless, with such a large potential addressable market companies are rapidly developing scalable products for farmers of all sizes. For example, Monsanto is leading the charge in big data under the Climate Corporation umbrella. Climate integrates a powerful suite of tools to help farmers optimize their production planning and processes to maximize yields. The current products offered include: (1) Field View Prime, providing field level historical, current real-time and forecasted weather. (2) Field View Plus and Pro, which provides integration with key machinery providers. Other apps helping farmers manage fertiliser distribution, soil maps, and field conditions are available.  For 2016, Monsanto expects to invoice more than 12 million acres of premium services and have coverage, along with the basic Field View offering, on more than 90 million acres.

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Meanwhile over in Japan, Kubota is developing solutions for the country’s ageing farmers — a critical issue in the Japanese farming industry. Kubota has introduced power-assist suits for the elderly; the newest suit will weigh only 8kg(17lbs) to lift/load up to 200 cages.

These are just two of the vast number of 21st-century solutions that are being developed in the rapidly expanding precision agriculture industry.