Drones topped the list of AgTech investment areas in the United States in 2015. Below we bring you an overview of our report on data-driven agriculture.

Drones and Data: shaping future farming

L’Atelier BNP Paribas recently published a report on what has become known as ‘data-driven farming’. The report arose from a simple observation. A lot has been written about AgTech, and those reports often include information on innovation in the field of food production and distribution – FoodTech. However, startups in the FoodTech sector, which is an adjacent field to AgTech, do not have to deal with exactly the same challenges as those that specialise in agriculture. In addition, sums invested in this area are dwarfed by the colossal amount of capital flowing into, for example, the on-demand economy.

Hence the need to take a separate look at AgTech, which is revolutionising the farming industry through the collection and analysis of data. Accordingly, the report places 92 US startups under the microscope, examining the extent of investment in the AgTech field and seeking to identify the various trends in data-driven farming. The techniques involved include such innovations as unmanned aerial vehicles and robotics, sensors to monitor animal and crop production, imaging satellites, plus water management and weather forecasting.

Image de couverture de l'étude AgTech réalisée par L'Atelier BNP Paribas North America

Drones looming large

It may be rare to see unmanned aerial vehicles – better known as drones – buzzing wheat fields in Europe. However, things are very different over in the United States. In the States $320 million were invested in 2015 in startups specialising in drones and robotics designed for agriculture. In fact, more than a third of the startups examined for our report fell into this category.
This is perhaps not surprising given how much the US farming industry is now trending towards the adoption of this type of technology. Stateside farms are often huge, with very significant budgets. Meanwhile, the Federal Aviation Administration has just released its ‘final rule’ governing the use of what it calls Unmanned Aerial Systems for commercial purposes – excellent news for startups in the drone space.

We are also now seeing the arrival in the United States of young European tech companies, attracted by favourable legislation and a promising market. For example the Swiss startup senseFly created in 2009 and now part of the Paris-based Parrot Group is well established in the United States. They make high-quality drones equipped with cameras and other high-precision imaging systems.

Interestingly, Mavrx, a US startup which is also working in the drone space, has adopted a different approach. Its value proposition is to provide a platform which analyses images on behalf of farmers. The company deploys a fleet of drones to supply the images and also works with a number of partner firms.

Evidently there are a number of different possible business models or at least several ways of marketing the drone-data product. Some farmers have their own drones and then call on analysis providers, while others commission a startup to provide an all-in solution.

Learning to speak the farmer’s language

It is quite clear that these are easy-to-use products in the sense that they do not require any training or special familiarity with the data, and they provide actionable recommendations which offer fast benefits to farmers – an important selling point since the time factor is crucial in this business.
Nowadays drones are becoming more powerful and the various associated imaging techniques becoming increasingly precise, ranging from orthophotography – geometrically corrected aerial photography – to photogrammetry, i.e. the science of making measurements from photographs, and LIDAR surveying technology. These technologies enable a vast number of parameters to be measured – chlorophyll levels, leaf surface area, water sufficiency, soil condition, nitrogen levels, evapotranspiration, and other factors. Of course data scientists and researchers get very passionate indeed about all this data. However, raw data of this kind has very little value for the customer until it has been properly analysed so it is vital that the AgTech people learn to speak the farmer’s language and are able to translate all this information into key messages and recommendations that can be executed quickly.

AgTech has an impact beyond agriculture

The primary aim of data-driven farming is to help give birth to an ‘augmented farmer’, a real agricultural professional who is much better equipped to do the job. However, the effects of these innovations go far beyond the agricultural sector. The agri-food industry is the first area to be impacted, at the retail level. Nowadays there is real demand from consumers for precise information on the provenance of the produce they eat. Data-driven farming provides real traceability and transparency from all along the production chain.
When it comes to financial services, data-driven farming opens the way for product personalisation. One of the major benefits of the new Agriculture 3.0 lies in better forecasting. Farmers are now able to predict their next yields – and therefore future revenue – with greater accuracy, potentially a very useful advantage when discussing a loan with the bank manager.

Meanwhile as regards drone operations, one can envisage opportunities for banks in the leasing business. Precision agriculture thus leads to precision financing and it is only one small step from the credit business to the insurance business. Every year farmers insure their crops against natural weather disasters. Going forward they should be able to take out personalised insurance products geared more precisely to their harvests.

Data-driven farming is set to have an impact beyond farmers’ fields and barns. This revolution is perhaps not all that dissimilar to what is happening with the advent of self-driving connected cars.

By Agathe Foussat and Pauline Canteneur

Written by Pierre Pariente, Pauline Canteneur and Agathe Foussat, strategy analysts at L’Atelier BNP Paribas North America, the report –  ‘AgTech: Will technology feed and save us?’ – looks at the technology revolution currently taking place in the agricultural sector, especially data-driven farming, its impacts on farmers’ daily lives and on the economy as a whole.