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    Digital Technologies in Agriculture and Rural Areas: Status Report
    Digital Technologies in Agriculture and Rural Areas: Status Report
    Digital Technologies in Agriculture and Rural Areas: Status Report
    Ebook343 pages3 hours

    Digital Technologies in Agriculture and Rural Areas: Status Report

    By Food and Agriculture Organization of the United Nations

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    This identifies those aspects of basic conditions, such as those of infrastructure and networks, affordability, education and institutional support. In addition, enablers are identified, which are the factors that allow adopting and integrating changes in the production and decision-making processes. Finally identify through cases, existing literature and reports how substantive changes are taking place in the adoption of digital technologies in agriculture.

    LanguageEnglish
    PublisherFood and Agriculture Organization of the United Nations
    Release dateJul 22, 2019
    ISBN9789251316030
    Digital Technologies in Agriculture and Rural Areas: Status Report
    Author

    Food and Agriculture Organization of the United Nations

    An intergovernmental organization, the Food and Agriculture Organization of the United Nations (FAO) has 194 Member Nations, two associate members and one member organization, the European Union. Its employees come from various cultural backgrounds and are experts in the multiple fields of activity FAO engages in. FAO’s staff capacity allows it to support improved governance inter alia, generate, develop and adapt existing tools and guidelines and provide targeted governance support as a resource to country and regional level FAO offices. Headquartered in Rome, Italy, FAO is present in over 130 countries.Founded in 1945, the Food and Agriculture Organization (FAO) leads international efforts to defeat hunger. Serving both developed and developing countries, FAO provides a neutral forum where all nations meet as equals to negotiate agreements and debate policy. The Organization publishes authoritative publications on agriculture, fisheries, forestry and nutrition.

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      Digital Technologies in Agriculture and Rural Areas - Food and Agriculture Organization of the United Nations

      1INTRODUCTION

      Despite the well-known key trends that the future of food and agriculture are facing: such as growing food demand, constraints in natural resources and uncertainties for agricultural productivity (OECD, 2015a), the projected increase in world population from 7.6 billion in 2018 to well over 9.8 billion in 2050 has received a great deal of attention as an influence on world demand for food (UN DESA, 2017). In addition to this, a rapid rate of urbanization is expected in the coming years, with approximately 66 percent of the world’s population expected to live in urban areas by 2050, compared with 54 percent in 2014. Therefore, 40 percent of water demand in 2030 is unlikely to be met, and more than 20 percent of arable land is already degraded (Bai et al., 2008).

      Annual cereal production will need to increase by 3 billion tonnes by 2050 (Alexandratos & Bruinsma, 2012), while meat demand in LDCs will increase by a further 80 percent by 2030 and by over 200 percent by 2050. Although today we have food systems that produce enough food to feed the world, with more than 570 million smallholder farms worldwide (Lowder et al., 2016) and agriculture and food production that accounts for 28 percent of the entire global workforce (ILOSTAT, 2019), 821 million people still suffer from hunger.¹ Even though FAO (2017, p. 5) believes that the rising demand for food can be met, it is unclear to what extent this can be achieved in a sustainable and inclusive manner, thus posing the question How to feed 9 billion people by 2050?. To answer this, we need urgent agrifood system transformation at extraordinary speed and scale-up.

      At the same time, the Fourth Industrial Revolution (Industry 4.0),² is driving disruptive digital technologies and innovations thus transforming many sectors, and the food and agriculture sector is not exempt from this process. In the recent past, it was difficult to get information to or from smallholder farmers, on their basic needs and problems such as access to inputs, markets, prices, microfinance or learning. The spread of mobile technologies (smartphones), and lately the remote-sensing services and distributed computing, are opening new opportunities to integrate smallholder farmers in new digitally driven agrifood systems (USAID, 2018). The possibility of scaling up these changes exposes potential for the next agricultural revolution, which, without doubt, will be digital.

      The majority of the next wave of mobile connections is expected to come from rural communities, of which most are engaged in agriculture activities daily (Palmer and Darabian, 2017). The spread of digital tools has been rapid. Even among the poorest 20 percent in developing countries, 70 percent have access to mobile phones (World Bank, 2016a). More than 40 percent of the global population has Internet access and there are major initiatives under way to connect those left behind, especially in rural areas of developing countries (World Bank, 2016b).

      Taking into consideration Industry 4.0, it is expected that over the next 10 years there will be dramatic changes in the agrifood system, driven by advanced digital technologies and innovations (blockchain, Internet of Things (IoT), Artificial Intelligence (AI), Immerse Reality, etc.), changing consumer preferences and demands, the influence of e-commerce on global agrifood trade, climate changes and other factors. To achieve the UN Sustainable Development Goals (SDGs) and going beyond to a world with zero hunger by 2030, FAO is calling for more productive, efficient, sustainable, inclusive, transparent and resilient food systems (FAO, 2017 p. 140). The digital agricultural transformation is crucial in providing opportunities for these achievements.

      Digital technology is the future and efforts to ignore it to or constitute against such technology will likely fail. Foreseeing several alternative future scenarios, which emphasize the different challenges to unpredictable degrees, can help in working towards implementation of digital agriculture to realize more of its opportunities and avoid possible threats to the global agrifood system such as the digital divide.³ This digital divide is no longer associated with poverty and rural areas, of which there are many, but digitization has widened the gap within different sectors and economies, between early adopters and reluctant parties, gender and degree of urbanization. For instance, of all world regions, the strongest growth has been reported in Africa, where the percentage of people using the Internet increased from 2.1 per cent in 2005 to 24.4 per cent in 2018 (ITU, 2018).⁴ Weak technological infrastructure, affordability, a low level of e-literacy and digital skills, as well as access to services, and other priorities of emerging economies, are creating a significant digital gap in the possibility of benefitting from the digital agriculture revolution. However, this situation also allows for introduction of different models and leapfrog power in incorporation of digital technologies into the field of agriculture and food. For policy-makers, international organizations, business leaders and individuals, figuring out how to navigate this new scenario may require some radical rethinking, business as usual is not the solution.

      Living in a world of globalization and dynamic digitalization, led by millennials and the fast pace of technology and innovation, the agrifood sector has been challenged like never before. Shifting the agrifood sector to digitalization is set to be a challenge. Major transformations of agricultural systems, rural economies, communities and natural resource management will be required for digital agriculture as a holistic paradigm to achieve its full potential.

      1.1 The digital agriculture

      Agriculture has undergone a series of revolutions that have driven efficiency, yield and profitability to levels previously unattainable. The first agricultural revolution (ca. 10,000 BC) enabled humanity to settle, leading to formation of the world’s first societies and civilization. Further revolutions introduced mechanization (between 1900 and 1930), the development of new, more resistant crop varieties and the use of agrochemicals (The Green Revolution of the 1960s), complemented (from 1990 to 2005) by the rise of genetic modification technologies. The latest, so called digital agricultural revolution could help humanity to survive and thrive long into the future. Digital agriculture offers new opportunities through the ubiquitous availability of highly interconnected and data-intensive computational technologies as part of Industry 4.0 (Schwab, 2016).

      The rise of digital agriculture could be the most transformative and disruptive of all the industries, because digital agriculture not only will change how farmers farm their farms, but also will transform fundamentally every part of the agrifood value chain. Digital agriculture will affect the behaviour of farmers, and also affect the way that input providers, processing and retail companies market, price and sell their products. It can be applied to all aspects of agrifood systems and reflects a change in generalized management of resources towards highly optimized, individualized, intelligent and anticipatory management, in real time, hyperconnected and driven by data. For example, rather than treating all fields, crops and value chains uniformly, each could receive their own highly optimized management prescriptions and animals could be monitored and managed individually. Value chains could have traceability and coordination at the lowest level of granularity. The desired results of digital agriculture are systems of higher productivity, which are safe, anticipatory and adapted to the consequences of climate change, to offer greater food security, profitability and sustainability.

      Market forecasts suggest that digital technologies will transform agriculture and the food sector over the next decade. These technologies will have their own place and impact within the agrifood value chain. Their integration within the agrifood value chain will depend on complexity and stage of maturity of the particular part of the chain. Therefore, in this report we classified digital technologies according to the following structure, based on the complexity and stage of penetration of these technologies in the agrifood sector.

      a) mobile devices and social media;

      b) precision agriculture and remote sensing technologies (IoT, GNSS, RTK, VRT, PLF, UAV and satellite imagery);

      c) Big Data, cloud, analytics and Cybersecurity;

      d) integration and coordination (blockchain, ERP, financing and insurance systems);

      e) intelligent systems (Deep Learning, Machine Learning and Artificial Intelligence and robotics and autonomous systems).

      Research shows that, globally, digitization will lead to higher productivity and wealth. Digitization and smart automation are expected to contribute as much as 14 percent to global GDP gains by 2030, equivalent to about US$15 trillion in today’s value. As with all industries, technology plays a key role in the operation of the agrifood sector, a US$7.8 trillion industry, responsible for feeding the planet and employing over 40 percent of the global population (PwC, 2019).

      Although the benefits of digital agriculture are convincing, there are a number of challenges that must be addressed in this process of transformational digitalization. For example, there is a lack of standardization in the digital solutions in relation to data, generating problems with data use because of the disparate formats. There is no clarity in relation to the properties of the data, and with that on who will have access to the data and what can be done with it.

      It is important to note that this is disparate scenario, in which large international companies predominantly use digital transformation in agriculture in a context of agribusiness. This process also affects other organizations, such as governments, public sector agencies and local agripreneurs, which are involved in tackling societal challenges such as rural livelihood, women and youth unemployment and agripreneurship. In addition, this process generates a challenge in terms of how to take advantage of these emerging disruptive technologies that may affect the economic, social and environmental areas.

      The next section presents a framework in which the different elements we have identified in the transformative process of digital agriculture are related, to provide a holistic structure in their analysis. Even when this model is not explanatory, it allows establishment of different levels of analysis and evaluation of the current state of the art of digital technologies in agriculture and food.

      1.2 The framework

      The structuring of a descriptive model that allows us to identify, as a first measure, those elements that characterize the digital transformation in agriculture and rural areas, to the measure or describe its current state, will permit us to make advances in structuring of a common methodology that serves the identification of the opportunities and risk that the digital transformation brings in this sector. Even when this methodology is descriptive, that is, it does not intend to establish the explanatory mechanisms between the different variables, it is in itself an advance that allows structuring of a number of elements, such as technologies, in a holistic vision where not only is the technology an explanatory variable, but also a series of other elements, such as policies and incentives, business models, and in general the conditions that promote or suppress the adoption of digital transformation. The structure is simplified, and it is based on three main interrelated categories. On the one hand, it establishes the level of maturity of adoption of digital technologies, which can be established at the level of:

      a) basic conditions: these are the minimum conditions for use of technology, in which the most traditional correspond to its adaptability, including connectivity (mobile subscription, network coverage, and broadband and Internet access) and affordability; educational systems, literacy and employment (in rural areas and agrifood sector); and policies and programmes (e-strategy) for enabling digital agriculture;

      b) enablers for adoption of digital technologies: those capabilities that make possible or drive changes using digital technologies (use of Internet, use of mobile and social media), digital skills, agripreneurial and innovation culture (investment, talent development, sprint programmes).

      On the other hand, the areas of impact of applying digital technologies within the agrifood system, include:

      c) taking advantage of technology to improve economic (efficiency, productivity, etc.), social and cultural (food security, digital divide, social benefits, women and youth inclusion, fairness, etc.), and environmental impacts (climate change adoption and adaptation, resilience, sustainability, etc.) through the use of different types of resources.

      By understanding and measuring the level of digital maturity, it is possible to identify areas of improvement and acceleration that allow the benefits of this transformative process to be achieved. In general, adopting new technology is a starting point, but it is not a guarantee of achieving the expected results, there are many other elements that are necessary, often sufficient, to achieve these results. Too often, success is defined as implementation, not impact. It is for this reason that it is necessary not only to identify it, but to use it as the guiding element of the work that is developed.

      1.2.1 FOCUS ON SDGS

      The 2030 Agenda for Sustainable Development, adopted by all United Nations Member States in 2015, provides a shared blueprint for peace and prosperity for people and the planet, now and into the future. The Sustainable Development Goals (SDGs) were set to transform the world’s economy, society and environment. They recognize that ending poverty and other deprivations must go hand-in-hand with strategies that improve health and education, reduce inequality, spur economic growth and leave no one behind – all while tackling climate change and working to preserve our oceans and forests.⁵

      In this context, the work developed in this report considers the three basic areas as the axes to identify the state of digital technologies in agriculture and rural areas, identifying possible areas for improvement and acceleration. In particular, these axes correspond to:

      a) economic: agricultural practices and technologies can contribute to increase productivity, reduce production and logistic costs, reduce food loss and waste, increase market opportunities, bring sustainability at the levels of farmers, value chains and countries, and increase the sector and national GDP;

      b) social and cultural: technologies can create an integrating effect at a social and cultural level through the communication mechanisms they provide. However, at the same time, those who do not have the possibility of accessing them (digital divide) are excluded from their benefits. Some factors that influence this exclusion correspond to age, gender, youth, language and rurality;

      c) environmental: smart agriculture, or precision and digital agriculture, allows for monitoring and optimizing of agricultural production processes, as well as value chains and delivered products. The use of digital technologies allows prevention and adaptation to climate change, as well as the best use of natural resources.

      Even though these areas of work or observation are somewhat generic, they allow us to distinguish how different digital technologies impact on them, some in a specific way, others in a more multifaceted way. A greater analysis is carried out herein, allowing identification of the current state and empty spaces of the application of digital technologies in agriculture and rural areas.

      1.2.2 RESOURCES

      In this final aspect of the framework, we identify resources that are affected or not considered as an essential element of digital technologies in agriculture and rural areas. The related classification does not intend to be exhaustive but identifies different elements in the digitization process as reported in this document. The resources considered are the following:

      a) natural resources: one of the basic elements used in agriculture corresponds to natural resources such as soil, water, forests, etc.;

      b) human resources and talent: the need to have, develop and incorporate into digital agriculture is a key element, with this the possibility of considering gender and youth in this process is important for development of local capacities;

      c) policy and regulatory framework: the regulatory framework, in conjunction with policies that encourage and regulate the use of digital technologies, provides the necessary incentives for sustainable ecosystem;

      d) vision and strategy definition: a clear definition of what we want to achieve (vision) and the mechanisms to achieve it (strategy) show a political will that allows advancement in a guided and sustainable way.

      These types of resources allow for measurement of the intensity of their use and how they are impacting the results of the digitalization of agriculture and its adoption in rural areas.

      1.2.3 SETTING ALL TOGETHER

      Digital transformation is predominantly used in a business context by large international companies, it also impacts other organizations such as governments, public sector agencies and entities involved in tackling societal challenges such as rural livelihood, youth unemployment, gender inequalities and agripreneurship, by leveraging one or more of these existing and emerging digital technologies. In some countries, such as Japan, digital transformation even aims to impact all aspects of life with the country’s Society 5.0 initiative,⁶ which goes far beyond the limited Industry 4.0 vision in other countries. Society 5.0 aims to tackle several challenges by moving beyond just the digitalization of the economy, towards the digitalization across all levels of the Japanese society and the (digital) transformation of society itself.⁷

      This digitalization process brings both risks and benefits. As digital information and tools can be accessed everywhere, the choice of location and partnership for the agrifood industry, agribusinesses and farmers becomes more flexible. However, there are concerns that socio-economic development will concentrate in certain areas, mainly urban, because of better developed digital ecosystems. As well as this, ongoing megatrends such as urbanization and the rise of the middle and rich classes settling in cities (UN DESA, 2018), make it even more likely that only certain areas will gain from such digitalization. In this sense, digitalization could lead to further socio-economic and urbanrural disparities and could possibly deepen the existing digital divide.

      For example, the digital divide is a manifestation of exclusion, poverty and inequality and continues to be exacerbated because of the effects of unemployment, poorly functioning digital skilling programmes and sociocultural norms in some economies, depriving women equal access to digital services.⁸ FAO and other UN agencies are committed to bridging such digital divides, to ensure that everyone is able to take advantage

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