I have written before about the data-driven revolution that’s taking place in agriculture today that will allow farms to radically increase their productivity and crop yields. Data collected from farm equipment and soil sensors allow farms to plant exactly the right seeds at exactly the right depth to maximize yields, all handled automatically by high tech farm equipment guided by GPS that can run itself autonomously. It’s an exciting future.
One of the key points of my earlier article is that a farmer’s data, by itself, isn’t that valuable. Knowledge comes from building a large enough sample of planting data from other similar farms in similar geographies in order to find benchmarks and best practices. Thus if you want data from your own farm to benefit your own farm, you need to pool your data.
But what if a farmer doesn’t want to make the needed investment to benefit from data-driven agriculture? Are there other markets for the data?
Well it turns out that there are. As an article in the Wall Street Journal makes clear, field level data doesn’t just benefit the farmer, there are others who will happily pay for it. For example, seed companies can get extremely detailed insights into what’s being planted and what’s growing best and where. They can use such data to inform both their R&D and their marketing and forecasting activities. There’s a Wall Street angle as well, with commodities traders looking for an edge by trying to get an early insight into what the forthcoming growing season will bring.
But even here, there’s a need for aggregation. The experience of one farm doesn’t help seed companies or traders very much. But the more farm data you can aggregate, the more valuable your dataset. The race is already on with companies such as Grower Information Services Cooperative, Farmobile and Granular Inc. are already duking it out to sign up the most farmers as quickly as possible.
The simple lesson here is that even though the same farm data can be monetized in multiple ways, there is a valid, indeed critical, role for an aggregator. We see also that first-mover advantage is critical in data plays like this. And as always, market neutrality is an important advantage: you’ll have a much harder time collecting this kind of data if you are a seed company as opposed to an independent information company.