3 AgTech Components that Promote Farm Profitability
The global agriculture farming business has significantly changed over the last century. Breakthroughs in industrial engineering and technology have allowed farmers to move away from labor-intensive practices, such as hand-sowing and hand-plow cultivation, to machine-based farming, up to today’s agricultural technology, or agtech, era. These constant introductions of better farming tools have always been geared towards improving agricultural processes to augment farm profitability.
In the 1940s, tractors and other mechanized farming equipment diminished manual agricultural processes and the reliance on animals on farms. In the 1980s, geographic information systems were introduced to farming for crop analyses. And in the 1990s, GPS was used for location tracking among farmlands. And today, farming has stepped into the agtech era, where smart farming technologies have been used to help detect irrigation levels and soil health, and even assist with automating machines.
These tools allow farmers to conserve crop inputs and lessen manual labor costs while reaping higher crop yields and managing more acres of farmland. These benefits, in turn, boost farmers’ bottom line.
Let’s take a look at three agtech components that provide farmers with enhanced productivity and farm profitability today:
1. Smart Irrigation
There are different types of smart irrigation systems, depending on the need and the scope of the field to be irrigated. There are drip irrigation systems for smaller plot lands, and sprinkler irrigation systems for larger fields.
Smart irrigation systems use sensors to monitor moisture levels in the field and provide the amount of water required for every farm area. Water delivery rates can also be modified separately based on zone demands. This kind of data-based irrigation system provided by smart irrigation paves the way for healthy crop growth, thereby assisting in farmers’ agricultural profitability.
According to studies, most smart controllers in smart irrigation can save up to 20% of the water used by a standard controller. And lower costs in water consumption mean cost savings added to the farmers’ bottom line, resulting in high-profit farming.
These advanced systems offer a more significant investment return than conventional irrigation systems. Traditional farm irrigation systems require pumps and permanent piping, which can cost between $1800 and $2500 per acre, according to the Natural Resource Conservation Service. This outdated method becomes rather costly, particularly for bigger lands.
More farmers are now using smart irrigation systems, and it is expected to increase further in the coming years. The smart irrigation market is anticipated to grow from US$ 1.2 billion in 2021 to US$ 2.3 billion by 2026, reflecting a CAGR of 14.9 percent from 2021 to 2026.
2. Variable Rate Technology
Farmers have used farming technologies, such as crop mapping techniques and variable rate treatment strategies, to improve soil, field uniformity, and farm profitability over the last two decades. However, utilizing ground probes to manually gather soil samples from presumed “optimal” places failed to provide an accurate view of the quality of the soil. Using variable rate technology (VRT) is an excellent method for finding that sweet spot.
This precision agriculture technology gathers information about operational farming processes and guides the automated and variable application of seeds, fertilizers, and chemical applications to farmlands. VRT can also automate soil sampling, wherein GPS guides the harvesting machines that collect soil samples. It can be programmed to extract samples and save data at predetermined intervals, ready for later review and collection.
Through the VRT’s automated process, farmers gain quick and accurate access to crop and soil information, which assists in making farming strategies. In turn, farmers can harvest healthier crops, which translates to an increase in farm profitability.
This is why the global VRT market is estimated to reach a value of US$ 13.7 billion by 2027, recording a CAGR of 13.2 percent from 2022.
3. Robotics and Automated Farming Processes
For years, farmers have used GPS technology for numerous farm operations, such as field mapping and farm planning. Today, robotics and automated processes are improving the use of GPS, and linking it with other advanced technologies, such as AI and sensors. These technologies are merged to power autonomous tractors and other farming robots, which assist with farming tasks, such as cultivating fields and spraying crops.
These farming robots can also detect crop health and provide information about the optimum amount of inputs needed by each land area.
The goal of autonomous farming equipment is to produce more with less time on the field and fewer resources while improving farm profitability. And indeed, because of this innovation, the number of hours workers need to put in is substantially cut down, thereby promoting productivity on the farm while also addressing labor shortages in the agriculture sector.
The automated processes allow farmers to tend to fields more quickly, effectively, and sustainably. In effect, the profit margin expands.
More farmers are expected to use agricultural robots in the coming years. By 2026, the agricultural robots market is forecasted to reach a value of US$11.9 billion, a CAGR of 19.3 percent from 2021.
Agtech: The Strategy for Farm Profitability
Farm profitability is critical to the continued existence of the agricultural industry. But in recent years, farmers’ bottom line has been impacted by a variety of issues, including falling commodity prices and rising input costs.
Farmers are beginning to recognize the potential benefits of utilizing agtech for farm profitability, which is leading to the expected further adoption of this practice. In 2021, agtech’s market value in North America was estimated to be roughly US$ 6.2 billion, the highest market value globally compared to other regions. The worldwide smart agriculture market will exceed US$ 43.37 billion by 2030, rising at a compound annual growth rate of 10.2 percent between 2022 and 2030.
It only shows that in today’s agriculture era, farmers who want to see better results are turning to agtech tools.
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