Editor’s note: This post was contributed by Jason Tatge, the CEO of Farmobile, the farm data company. He’s been working one-on-one with farmers for more than 20 years. You can follow him on Twitter at @jasontatge.
My company, Farmobile, made news when we paid farmers for their data for the very first time last month. It was an exciting moment, driving around to visit farmers in Minnesota and handing out checks for completed electronic field records. It was the first time they saw a concrete, bottom-line ROI from their data.
Up until now, farmers have been giving their data for nothing, sometimes not even realizing they were ceding control and ownership. But as agriculture goes digital as an industry, farmers are beginning to learn that data is one of the most valuable crops they can harvest. Especially in today’s difficult and uncertain economic environment, farmers need to be in control.
But there’s a lot of controversy around this approach. In fact, when we posted our news about paying farmers on LinkedIn, we got this response:
This is skepticism that we get often (though not from farmers themselves). And in some ways we totally get it. This is a net-new way to think about farm data, and it’s going to be uncomfortable at first. But we heartily disagree with the old way of looking at farm data and its value. We thought this warranted a response longer than the word count LinkedIn would allow.
The Tables of Power Must Be Turned
“The farmer is the only man in our economy who has to buy everything he buys at retail — sell everything he sells at wholesale — and pay the freight both ways.” JFK September 22, 1960.
Richard mentioned that the value of being a digitized sector is huge, and he’s not wrong. Just look at the music industry, the financial industry, or even the auto industry. The digital revolution is changing how we all do business.
The big problem that we see in agriculture, however, is that if farmers do not own their own data first, the real value will only be created for companies upstream of the farmer. In this scenario, everyone wins except the farmer. Sure, farmers might get marginally better equipment and prescriptions — and we’re certainly not suggesting that they give up using these services — but by not owning their data, they give up the right to analyze the data, compare prescriptions, and ultimately make their own decisions about what’s best for their farms based on their data and their generational knowledge.
They also lose the right to control a new revenue channel. Farmers take gigantic risks every single year, but they’ve never seen rewards to match. Owning their data helps stave off some of that risk by creating a new revenue source season after season.
We should also note that while having a density of data definitely results in better quality analysis, none of the analytics companies can collect all of the data a farmer produces. Most farmers we talk to own mixed fleets these days. As you can imagine, equipment manufacturers make it very difficult (if not impossible) to share data with their competitors.
We agree that the lifeblood for the digital-ag economy is high quality information from the farm operation. However, obtaining and standardizing this information is more difficult than most realize. Obtaining this information is a challenge because, although the sensor technology exists, there is a last mile problem. Standardization is a challenge because incentive structures are out of alignment.
Farmers are the only ones with the ability to paint a complete picture of their farms with data collected agnostically.
How Big Ag Fits into the Picture
Richard also mentioned John Deere and Monsanto, so I want to address them here.
Deere makes money from equipment sales and service. Monsanto makes money from seed and trait technology. In each case, market share matters, as does revenue extraction from the farmer. The goal of each is to extract as much marginal revenue without surrendering market share.
Offering up free data provides a window into surrendering farm operations. Not to mention the possibility that one or both of these companies are already directly monetizing the farmers data. It’s difficult for me to understand how this can be a positive approach for farmers.
It’s important to note that our approach doesn’t preclude players like John Deere and Monsanto from acquiring farm data. There’s nothing to stop them from collecting data that they own, and nothing to stop farmers from profiting from the data they own.
But there’s a bigger point to call out — Monsanto and Deere are certainly not the only two big data players in agriculture. Why should Big Ag have a monopoly on all of the farming data in the U.S.? Farmers can capture immediate value now by sharing their data with their agronomist or selling it to a genetics company. Waiting 10 years for one of the big companies to deliver on transformative solutions is a bet many farmers can’t afford to take, especially given the current economic climate.
Not to mention that there’s a major conflict of interest between what the farmers want (lowered costs, more yield) and what equipment manufacturers and genetics companies want (more equipment and seed sales, consistent yield). No matter how you slice it, unless a farmer owns his or her data, he or she will be taken advantage of by companies with greater bargaining power.
The Value of Data Today
Respectfully, Richard is dead wrong on this one. Google and Facebook data was also “dirt cheap” 10 years ago, but now it drives 85% of every ad dollar spent online. I will concede that the value of agronomic data is just being priced. But even at its initial offering, the figures are compelling enough for farmers to get off the sidelines and into the game. I live and breathe this every day.
Data vs. Data analysis
One point I do agree with Richard on is the fact that data in a vacuum is just that; analysis is key.
But I believe a free market with hundreds of thousands of data analysts is more powerful than a data duopoly. Also, left unchecked, how would the farmer ever know what a company like Monsanto and John Deere are prescribing is actually better? Without agnostic bodies for benchmarking and full transparency, farmers will continue to be manipulated and taken advantage of. That’s why it is critical for them to own and share their data deliberately, not blindly.
Especially in an environment where the economics around farming are tightening, one of the best things farmers can do to protect themselves in the long-run is to invest in a data strategy.