Innovating AgTech Episode 1 | Why do we Need AgTech?

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[Music fades up, sounds of farm animals, tractors, computer clicks and digital noise]

Hannah Senior: About 10,000 years ago, all around the world, our ancestors were discovering agriculture; deliberate cultivation of plants and livestock to feed their communities. Human civilizations and agriculture go hand in hand, contributing to our species ability to thrive, and our population to grow. And ever since then, we’ve been on a journey to bring technology into agriculture, to make it more productive and more efficient. As in every other sphere, advancements in technology in the 20th century turbocharged this, allowing our global population to increase fourfold from about 1.5 billion people in 1900, to over 6 billion people by the turn of the millennium.

But by today, another two decades and another few billion people on the planet, it’s clear that things are not going brilliantly. Around the world, many farmers are struggling to run viable businesses with low margins and high costs. The environment is straining under what we know is an unsustainable system of feeding ourselves. And yet, the world population is projected to hit almost 10 billion people by 2050; more mouths than ever to feed. I believe part of the solution to these huge problems lies in innovations brought forward by agricultural technology businesses, also known as agritech, or AgTech. This is a six part podcast series, in which I’m going to attempt to unravel complex interrelationships between agriculture, business, and entrepreneurship, in an effort to find answers to some of these problems, new ways of thinking and tangible actions that can be applied in the real world.

Throughout the series, we’ll be hearing from farmers, investors, entrepreneurs and thought leaders from all over the world, in an effort to lay out new and better ways forward.

[Theme music plays. A tractor sound passes]

Hannah Senior: I have spent decades around food, agriculture and business. I grew up in a farming community. My career included a lot of time working for large international companies, including many years at the retailer, Tesco. I did an MBA at Stanford Graduate School of Business, but then changed from big corporate life to acquiring and running a company of my own, which works with global plant breeders and seed producers. I also have advisory and board member roles with several organizations in the AgTech world. All this is perhaps an unusual combination, but it’s given me a real insight into both agricultural technology and the global food system. I come to this work with an unshakable optimism about innovation, a faith in entrepreneurship, and a huge respect for the skill and tenacity it takes to be successful in agriculture and horticulture.

I’ve been asking questions for years about how we could be using technology to do things better; develop sustainable agriculture, food systems that will support our growing global population, give farmers and farm workers around the world a decent life, and do all that without destroying the planet we live on. This podcast investigation started by asking myself how we encourage more entrepreneurial success in this area, how we create a more vibrant entrepreneurial ecosystem.

I initially thought I’d explore what we in the UK could learn from other parts of the world. But it quickly became clear that I wasn’t asking the right question. I needed to think more broadly than that. And in any event, it was clear that the solutions do not sit within any country’s boundaries; they’re International. In the course of this investigation, I’ll keep coming back to certain questions. Whose interests are we serving? What are we optimizing for? And how are all these pieces interrelated? I will own it: much of my focus is on the developed world. But, like the problems we face, the context is global. But before we get to that, we need to start with the basics: why do we need new technologies in agriculture? This is the first question, the one I’ll explore in this episode.

[Theme music plays]

Hannah Senior: So why do we need more technology in agriculture?

Let’s start with labor. Over the last 100 years, well, since the Industrial Revolution, really, there’s been a steady decline in the number of people globally working in agriculture, in part due to mechanization, but in part also due to workers leaving the industry. Agricultural work often relies on many pairs of hands doing grueling, repetitive, uncomfortable, and sometimes dangerous work. In the developing world, this is a major reason subsistence farmers frequently aspire for a different life for their children; children that eventually migrate into cities. It’s also why in the richer world, economies struggled to find enough locals willing to be agricultural laborers. This aversion to domestic agricultural labor was painfully highlighted in recent years when COVID-19 travel restrictions meant seasonal migrant labor was in short supply. Even industry giants have felt the labor pinch as Juliet Ansell, the head of global science innovation at the kiwi fruit giant, Zespri International, explained:

Juliet Ansell: In 2021, we had a shortfall of 4500 people. And we’ve predicted that that’s going to be at least six and a half to seven thousand next season. At the peak harvest time, it means we’re 20% short, and the impact is that we’re compromised. We’re picking more fruits with less labor, it’s not harvested at the optimum quality, we had to extend the harvest picking. So you know, the fruits have been (unpicked) slightly too long. And then that flows into the supply chain, so we get problems with soft fruit, soft fruit affects other fruit and there’s food waste. In terms of what that cost us, we’ve estimated that’s about $440 million of revenue that will have cost us.

Hannah Senior: So how did we get to the point that so few people want to work in agriculture? From my perspective, it can be a fascinating and incredibly rewarding sector. But clearly, it’s not like that for everyone.

To understand the root of this labor challenge, we need to look at history, says Sarah Mock, an agricultural and rural issues writer and researcher. She noted, agriculture has a long history of using cheap or free labor; that might be family and child labor, or the historical system of serfdom. For a long time in many countries such as the US, it was slavery that kept productivity up and labor costs down. She explained that in the colonial era, to own land required putting it to use.

Sarah Mock: Looking at the history of labor in America, one of the key reasons why enslaved farm labor was required in the United States was because too few people owned too much land. Coming to the United States, suddenly, individuals had control of tens of thousands of acres, hundreds of thousands of acres, but didn’t actually have any cash. (They) didn’t actually have the resources to put that land to work. And what did you do if you had a ton of land that you got for free by way of, you know, royal declaration, but you didn’t have any cash to hire Europeans to farm in the European style? How do you turn no money and a lot of land into productive agricultural land? Well, you need something for free. We got for free, basically, was slave labour.

Hannah Senior: Sarah suggests that slave labor set the foundations of much of modern agriculture, because the massive plantations and farms as allowed created the expectation of cheap and abundant food. Her research is focused on the farming system in the USA, but the questions she poses are uncomfortable for many other parts of the world.

This was not territory I was expecting to be delving into. But it’s perhaps an example of an uncomfortable truth we prefer not to think too hard about when we’re putting food in our mouths. Although slavery has technically been abolished, its legacy; the expectations of low cost commodity crops and food staples, has continued to influence agriculture to this day.

Sarah Mock: I think the idea that slavery is not going on in the world today is a bit misleading. There definitely is slavery and probably the food system is the number one place that still has it. But I think it pales in comparison to what the Atlantic slave trade was, which was a truly dynastic, deep, system where people born of slaves were enslaved.

Generations and generations of people were enslaved. And what that meant in terms of wealth accumulation for people who owned enslaved people and what that meant in terms of lowering labor costs in agriculture and keeping them exceptionally low over time. Certainly, part of that is about holding down costs and that cost of food. Because of growth economics and the nature of a commodity system, it is supposed to fall over time. If the biggest cost on your balance sheet is labor, how do you make labor costs fall over time when people want

more money over time, not less? I think that is kind of the route that underlies our labor system today, whether or not we want to acknowledge it.

Hannah Senior: Modern labor laws outline protections, such as minimum wages, workplace safety and working hours. But it’s widely acknowledged that agriculture is still an industry often marred with labor issues. In particular, Sarah goes on, while grain crops have been largely mechanized, dairy and horticultural production in particular, is still reliant on cheap and often undocumented human labor.

If the local labor force refuses to work in the low paid physically challenging workplaces that agriculture so often presents, and yet, businesses can gain access to cheap, often immigrant or international labor, it creates an environment where exploitation becomes possible. Shipping in workers from economically weaker countries, for example, the USA’s H-2A temporary agricultural workers visa program, can on one hand, create much needed work for those people, which shares some wealth. But it also continues to conceal very real problems in food production: reliance on cheap labor to keep costs down, is implicitly part of the way the system is expected to operate, to keep businesses viable.

Sarah Mock: To this day, agriculture still enjoys, essentially, universal exemptions from labor law. We know that farm workers die at an exceptionally high rate on farms. We know that they’re largely unprotected in terms of health and safety. Workers within the H-2A program are more protected than undocumented workers in the dairy industry, but both of those sets of workers can be incredibly vulnerable and be put in incredibly vulnerable situations – and we built systems that create blind spots. We use farmers or growers…Processors use labor contractors, instead of hiring people directly themselves.There are a myriad of ways to create deniability, to create space, to create cracks that vulnerable people can fall through.

I’m going to split the dairy industry apart from the produce industry to firstly say, there are billionaire farmers in produce. There are millions, if not billions, of dollars available in produce. I don’t think there’s a good excuse for ”we can’t afford to pay people”. You can afford to pay people. We just don’t force anyone to. If you’re not being forced to, if there’s no regulation, then

no one’s going to do it voluntarily. No one’s gonna start paying their agricultural laborers $30 an hour, just because they’re valuable and they are important to us.

Hannah Senior: So you might think, Well, why don’t we just raise wages for farm workers? That would seem like an obvious solution. But for many farm businesses, they’re already being squeezed from both sides of the supply chain.

Sarah Mock: What I’m hearing from farmers on the ground is more like: “Wait, raising wages? But agricultural wages are so low!” It is truly difficult, you’d have to… Doubling wages might make a difference, but is that really possible for most businesses? No.

Hannah Senior: In any event, it’s not just about money. Agriculture in the UK this year had some serious labor shortage issues, and some farms offered £30 pounds nearly $40 US per hour to harvest produce, but they still couldn’t find enough workers. The work is often seasonal, and frequently remains physically demanding and uncomfortable. So perhaps AgTech can contribute to improving the human working conditions to help close that gap.

Juliet Ansell: When people that are looking into the future see things as a problem, they’re not often felt by the people delivering the operational side. And when the operational people start to feel the pinch, it’s too late.

Hannah Senior: That’s Juliet Ansell from Zespri International again. She explained that her company is already invested in the development and use of novel agricultural technologies in an effort to support the ongoing growth of the company. I asked her about how Zespri are looking to AgTech for assisting the human labor force.

Juliet Ansell: I think our growers are definitely aware there’s a lot of technology out there. And I think it’s been really accelerated internally in our business because of the pain that was felt last harvest. In terms of helping with harvesting, we can look at human assist. The apple industry has been looking at something like this, which is a sort of a picking platform. So it’s still basically people doing the picking, but you make their lives easier, faster, maintaining quality. So there’s various different prototypes that we’re working on, or about start working on, I should say, in that human assist area. So one of the problems with the kiwifruit canopy is that

it – depending on how tall you are, it’s just just not quite tall enough to get under. It’s not like Apple Rose. So I guess the other other solution we’re thinking about is actually designing the architecture of the orchard to make it much more amenable to robotics. So yeah, we are thinking about robotics, but because that’s longer term that needs time to develop. Eventually, we would have, hopefully, a selective automatic harvester that can go 24 hours a day, up and down, or up or down, depending on how we’re growing then.

Hannah Senior: So AgTech could still mean a significant improvement to the conditions in which the work takes place. Timing is also critical for many harvests; being able to mobilize hundreds of workers in a short period of time is both financially and logistically really challenging.

Juliet Ansell: Everything we need to do is squashed into very short time windows. We have a whole industry and a whole picking and packing labor force that really only picks over a couple of months. And we need to pick the fruit in optimum condition in order to ensure the quality,

Hannah Senior: We’re still a long way off from the futuristic world of completely automated systems, although there are a lot of robotics and AI companies working on this. And yet, even being able to make a really challenging job a little less challenging, would be useful, suggests Sara Mock.

Sarah Mock: Some of these jobs, perhaps there’s no good versions. Maybe there’s no good version of picking and bundling garlic for 12 hours a day. It has to be picked very quickly; there’s a very small window to do it. So unless you can get 2000 people to show up somehow at your field and get it all done in a few hours, I don’t know how you would make that job not super repetitive, not stooping, not damaging to people’s bodies.

So technology might be able to make those jobs less miserable. And then maybe the job there would be to manage the technology. Maybe it’s a handheld tool, something you use while you’re standing up instead of slouching over. Or maybe it’s a mechanized thing that you don’t have to bunch and wrap garlic with your hands, you can do it with a tool so it doesn’t lead to repetitive injuries. So maybe there’s space for technology for that.

Hannah Senior: It has to be a good thing, if technology makes farm work less dangerous and grueling. And yet, there may be other implications

Sarah Mock: If the technology is a giant tractor or a giant piece of equipment that plucks 12 rows at a time and packages it. At the end, you have a giant bin full of garlic after three passes through the field and it took you half a day – I guess that’s good that a human didn’t have to do that work and damage their body in that way. But at the same time you now have a lot of unemployed people.

Hannah Senior: You’re likely already getting an idea of how complex and interwoven agricultural labor issues are. AgTech is not a one stop shop for solving these issues. Immigration reform, conditions and wages, improved health and safety will also need to be addressed to attract and retain the future workforce – alongside the greater use of technology.

But beyond the labor economics of agriculture, there’s another even more pressing concern facing the global agricultural and food system: the environment.

[Music fades up. Sounds of wildlife]

Whether we like it or not, agriculture is as a whole, really bad for the environment. Agriculture is one of humanity’s crowning achievements. The fact that the human population has exploded but fewer people die from starvation than ever before is amazing. But, fundamentally, however we do it, feeding 8 billion people and growing takes a huge toll on our planet. And yet, well, we can envisage a world without using fossil fuels or single use plastics, we can’t have a world without food.

Brent Loken: So when we’re talking about climate change we tend to focus a lot on the other sectors. We might talk about transportation, we might talk about buildings, we might talk about electricity, and those are all bad, but food systems themselves – all the acts of producing food, land use, wasting food, and landfills – contribute about 29% of total global greenhouse gas emissions. Twenty nine percent. One third.

Hannah Senior: That’s Brent Loken, Global Food Lead Scientist at the WWF. His work involves understanding the science behind the cause and effects of climate change, agricultural industries and the food system, in an effort to find a sustainable balance for the future.

Brent Loken: When we’re talking about biodiversity loss, we tend to see images of trees being cut down and all these terrible things happening. But that is mainly driven by food, and the food that we choose to eat and how we actually produce it.

When we’re talking about water use – we’re seeing a lot right now in terms of rivers running dry, and extreme droughts in some parts of the world. Seventy percent of all freshwater that’s used is actually driven by food to irrigate our crops. So a lot of the environmental damage that we’re seeing today, exceeding and actually crossing these planetary boundaries, is driven by food; how we produce it and the food that we consume. It’s probably the single largest driver of environmental degradation on our planet. We’re starting to realize that we cannot address the environmental crisis that we’re facing without fixing our food system.

Hannah Senior: So how does almost 1/3 of all greenhouse gas emissions come from agriculture and the food system? I asked Francesco Tubiello, a senior officer at the United Nations Food and Agriculture Organization, to break it down for me,

Francesco Tubiello: Up to a third of all of the emissions, when you think about food systems, can be linked to agricultural and food activities, specifically agriculture thought as “farm gate emissions”. So those that come from processes directly linked to crop and livestock activities cover about 10% of the total emissions in the world.

Another more or less equal amount is added by those emissions caused by land use changes, so let’s say, quote unquote “destruction of ecosystems and natural ecosystems” to make space for production. So that adds another 10%. And then just recently, we began quantifying emissions along the supply chains. So what happens after food leaves the farm and it gets processed, and then distribute it, and then eating it and on and on. And that adds the other 10%. So we go up to the third that I mentioned before.

Hannah Senior: The primary greenhouse gasses emitted as a result of agriculture are nitrous oxide, methane, and CO2, or carbon dioxide. Emissions from within the farm gate and mostly non CO2. And about half of this category, that’s 5% of the global greenhouse gas emissions, is methane.

It’s fair to say that livestock, especially ruminants, are the key factor in methane production, although rice paddies are also a significant contribution. The other half of this “within farm gate influence” is nitrous oxide, which is mainly linked to the nitrogen cycle and especially synthetic fertilizer use. By contrast, land use change and post farm gate impact is largely a result of CO2. Land use change in particular is often perceived as not connected to agriculture, going by the acronym LULUCF: Land Use, Land Use Change, and Forestry.

Francesco Tubiello: And LuluCF is an interesting term because it sounds neutral, except that it’s not true, right? Because the majority of the land use and land use change components of that acronym, are actually directly linked to agriculture. And so whether it’s the drainage of peatlands or deforestation, which we haven’t mentioned yet, you see that that’s a component, that it’s largely driven by the need for additional land.

Hannah Senior: Francesco also noted the link between higher emissions and land use changes clear when you review the global top 10 countries for greenhouse gas emissions. We sometimes hear that it’s all about livestock or the rich developed countries with high intensity farming that creates the most emissions. But developing countries are having a big effect too.

Francesco Tubiello: The balance gets flipped by land use change because, whereas modern industrial agriculture is already developed along its efficiency pathways to produce more with less, as we say, so having “high efficiencies of production”, so that you can do that on a limited amount of land. In many developing countries, not all but many – especially the ones that are moving from traditional to modern, this transition is linked to significant conversion of land into more production. And that land usually comes from natural ecosystems, so that destruction – the sheer destruction of the biomass, and the soil carbon and the alteration of those natural fluxes brings with it a significant amount of emission.

Hannah Senior: He also notes that the rich world finger-wagging the developing world for land use change is unhelpful.

Francesco Tubiello: Let’s remember that, you know, in the 8,000 -10,000 years in which agriculture developed, we in the so-called “developed world” have done our bit of deforesting our lands to produce the fields that we see today. So it’s a big story that doesn’t have culprates, I think it’s better to characterize it that way.

Hannah Senior: Part of the issues surrounding agriculture and the environment is that it’s a global issue. But the effects, and therefore solutions, must be considered on a national and local level, too. There is no one size fits all solution. As Brent Loken explains:

Brent Loken: When we tend to talk about the impacts of the global food system, we talk about it globally. But the thing about it is, impacts are mostly felt locally. The impacts are very different depending upon regions, but it’s different depending upon which environmental impact that you’re actually talking about. If you’re talking about water use, that’s going to have to be dealt with within individual watersheds. So on some watersheds, the impact is quite high. If you look at place like the Colorado River, that impact is very high. For other water systems, the water use is actually okay. They’re not, you know, exceeding their environmental limits.

Biodiversity loss is also felt very differently. At the moment, most of the biodiversity loss is felt within the tropics – it’s these cutting down of these old growth, ancient forests that we’re seeing that have extremely high levels of biodiversity, most of that is actually driven by food. Whereas in other parts of the world, they’re seeing trees coming back, and actually a net positive gain of trees.

Hannah Senior: Just like the effects of climate change affecting different parts of the world in different ways, the technology solutions that are needed will vary both from Geography and the type of farming practice in that geography.

Brent Loken: The technologies that might work on an industrial farming system might be very different from the technologies that will work on small shareholder farmers – of which there are

hundreds of millions all over the world. And being able to get those technologies into places that actually need them is also going to be very difficult. The last thing that we want to do is create a two tier system where we have all the technology going into certain places, which benefits the same group of people, versus making sure that the people that need it the most. These farmers that farm under two hectares of land, they also need access to this same type of technology.

Hannah Senior: Whichever way we slice it, and pretty much all environmental issues will find agriculture’s fingerprints. It might be unintentional, and it might be the result of an amazing mobilization of human ingenuity to feed ourselves, but it is there. So a second important role of technology is to find ways to reduce this impact. And let’s also remember that the effects of climate change are most definitely being felt by the very industry that’s helping to create it, meaning even more challenges and potential global food shortages in the future.

Francesco Tubiello: Also, let me say when we talk about climate change, that we always think of the role that agriculture has on the climate – forgetting that agriculture is perhaps the prime human sector that stands to lose from climate change. That can be such a characterization because it’s exposed to climate change in the bad ways that we know.

Hannah Senior: Widespread development and adoption of agricultural technology to help minimize both labor issues and environmental issues. Might sound like an easy fix. But there is more than one part of the puzzle that we need to look at. Any change, be it raising wages or implementing climate friendly agricultural techniques, comes with a price tag. From a business perspective, investing in making changes that will benefit your business in the long term makes perfect sense. But for a vast number of farm businesses around the world, just breaking even is a challenge and making a profit even more so.

[Music fades up, a truck drives by]

Hannah Senior: According to the research website, Full Fact, referring to the UK, ”Across all farms, subsidies make up around 57% of the total profit on average. Taken as a whole, farming is not a very profitable business to be in.”

Ethan Cleary: A lot of our farm leaders say “It’s hard to take green when you’re constantly in the red.” And that’s very true.

Hannah Senior: Ethan Cleary is in charge of the technology and innovation policy within the Irish Farmers Association, the largest agri-representative body in Ireland,

Ethan Cleary: Farmers are very justifiably worried about how this is going to affect and change how they make money, how they produce food, how they actually have a livelihood.

Hannah Senior: While Ethan is echoing the sentiments of Irish farmers, the same can be heard from farmers all across the world. Farming, especially small to medium sized farming, is more often than not a loss making business activity before any subsidies. So why is this and can technology make a difference? In simple terms, this is a product of the structure of the industry. Indulge me while I share a little MBA type academic theory with you to illustrate this point.

There’s a famous model called Porter’s Five Forces; a way of characterizing the competitive forces in an industry. Three of these, especially relevant to this discussion, the bargaining power of suppliers, the bargaining power of customers, and rivalry among competitors in the market. In agriculture, farmers themselves are made up of relatively small companies in the middle layer of a sandwich that typically squeezed between the much greater bargaining power of very large highly consolidated customers (supermarkets, green companies, etc), who largely set prices and the bargaining power of the very large, highly consolidated suppliers (seed feed chemical and equipment companies) who determine the cost of production. It’s a perfect recipe for poor margins across the industry as a whole. Layer on to that, two other factors.

Firstly, much of agriculture produces for and sells into commodity markets. In commodity markets, the goods are pretty much interchangeable. A particular class of corn, or type of wheat can be aggregated from thousands of different farms and sold as one consistent lot. This system does have a lot of benefits. For example, it allows a breadmaking company to obtain enough flour of the right type and quality without having to do deals with and quality

check the produce of dozens or hundreds of farmers who might be located around the world. It’s also great for consumers and for the overall price of food. Because over time, the price of a commodity falls, with ups and downs for changes in demand and supply, to little more than the cost of production. But this is exactly why it’s hard on farmers. Almost by definition, this commodity structure, which characterizes so many of our agricultural goods, results in many farmers having to sell into the commodity market at or below the cost of production, meaning minimal profits or even losses across the industry as a whole.

Secondly, the scale and professionalism of farms greatly affects the skills available to help deliver a profit consistently. Most farms are relatively small businesses. And like all smaller businesses, it means fewer seriously professionalized staff focusing on single responsibilities. Large farms may be able to afford marketing, business development and finance teams for example, whereas on smaller farms, it may be one person doing it all. Moreover, unlike other sectors such as medicine or construction, many farmers inherit their businesses. If they have relevant training, it often covers a multitude of farming related skills, but not necessarily business management. And if it happens that a farmer’s interests or talents lie in other areas than the business side, they can simply be outmaneuvered by others in the value chain. A lack of profit makes it hard to invest. And this can further reduce the resources to compete.

The strategic importance of agriculture, the commodity system, and the fact that so many farms or small businesses are among the reasons given for government subsidies. An OECD study of 54 countries estimated that a combined sum of over 700 billion US dollars of subsidies are handed out to farmers globally almost every year. Government subsidies are, in part, aimed to mitigate challenges that the agriculture sector uniquely faces given the importance of its role in ensuring national food security. However, this is a huge and highly controversial area. Agricultural subsidies can have intentional and unintentional market distorting effects, both nationally and globally. Plus, philosophically, should we rely on subsidies? Would we tolerate it in any other sector? After all, New Zealand famously ditched agricultural subsidies in the 1980s, and they have a healthy agricultural sector. Surely, it’s simply better to have a thriving and profitable agricultural industry, rather than relying on subsidies to close the gap.

So could technology help to make farming more profitable? Well, maybe. It won’t solve all the problems, but it certainly may be able to assist in things like transparency and traceability in the food system. This in turn, allows farmers to capture more market share or demand higher margins if they’re using practices that consumers value, such as exemplary environmental stewardship, or particularly humane animal treatment. Technology can also help assist humans in planting, animal husbandry and harvesting as we talked about earlier. This, in turn, may lead to savings either in labor costs, or through more profitable end products, such as by harvesting faster for optimum quality and less wastage. It could also help farmers to find new routes to market – something we’ll hear more about in later episodes.

In short, new technologies can seriously disrupt existing industries, and shift where the profit ball set. Just ask industry giants who have had their businesses disrupted by new innovations, like the ones and giant photographic film company, Kodak, or the video rental company Blockbuster. But this is not a given. There are some seriously entrenched and powerful dynamics at play. In truth, this might be one of the weakest reasons to believe that new technology will change agriculture. Why? Because as with the environment and labor issues, farm profitability is a product of the way our agricultural and food systems work. There are a series of forces, feedback loops, structures and incentives that create the outcomes we see around us.

[Music fades in and out]

We’re going to hear a lot about systems in this series. So before I wrap up this episode, I want to touch on what this concept of “systems” means. Donella Meadows is a highly influential scientist and author known for her work on Systems Thinking. She defines a system as ”an interconnected set of elements that is coherently organized in a way that achieves something”. The purpose of the food system is to ensure humans have food to eat, and is itself made up of and connected to other systems; the health system, the economy, the environment. So what is the food system? Brent Loken, broke it down for me.

Brent Loken: So a food system is everything that we do to get the food from the farm, to the fork. So it’s everything from how we produce food, and the environmental consequences of that, how we actually transport food to get it from where it’s produced, all the processing that goes into the food, and then the waste. So if we throw food away, throw it into the garbage, it goes into the waste dump. So it’s all of those systems and processes that we put into this complex web of activities that we call the food system. There is one global food system, which has this interconnected, local and regional food system. There’s food systems everywhere. There’s food systems in backyards, there’s food systems within cities. But when you add up all those collective activities, you’ve got the global food system and the impact that that has.

Hannah Senior: We’re already beginning to see in this story, how massively intertwined all these issues are. Not only does this bring together lots of different industries, it also means that when we’re thinking of food, we’re switching back and forth between global national and regional pictures.

Brent Loken: So, you’re having a meal and your meal is composed of maybe a little bit of meat, fruits and vegetables and maybe some legumes, right? Most of the time that food comes from all over the planet. So you might get fruits and veggies in an avocado shipped in from Mexico. You might get lettuce greens shipped in from some other place, you might get the meat locally produced and then you might get the legumes or rice shipped in from Brazil or China. So anytime that we’re having a meal, most likely that meal comes from many different countries.

Now I know that there is a push at the moment to localize food production and to eat locally. And I think when and where possible, that is great. But at the end of the day, we’re never going to be able to completely localize food systems; there’s always going to have to be some sort of transport and trade of food. And there’s always going to have to be some sort of impact from that. That’s one of the things that we have to realize with this food system is that it is a global food system. And that moving forward as we add more people into it, and as more people get access to more food, and we’re trying to lift individuals out of poverty and make sure that everybody has access to healthy food, not just food, but healthy food, that’s going to require

more trade in food, more of this global connections than what we have right now. And that’s something that we’re going to have to definitely start to wrap our heads around. So it’s a very globalized, interconnected system.

Hannah Senior: In short, these problems are extremely complicated. And when we’re thinking about systems, we need to use a different set of tools to when we’re thinking about how to improve one particular piece of a problem, because lots of issues are connected. As Sarah Mock noted:

Sarah Mock: You can’t just pull on one string because the way you pull on one string affects every other string in agriculture. Every other string involves things…Like, it just goes on to the zenith. You can’t create agricultural technology without affecting poverty. You can’t affect agricultural technology without affecting immigration reform. It goes in so many different directions and at such a velocity. We think of   AgTech kind of alongside the guy who’s making a laundry delivery app. It’s just different to build technology in agriculture, it is more complex. It’s a more complex world, it’s a more complex context.

Hannah Senior: And just as there is no one size fits all answer, we also need to recognize the technologies we will need will be different depending on where you are in the world. As Brent Loken noted earlier, in some places to stop converting more wild land into agricultural land, we’ll need to use existing or new technologies to increase production to make more from less. In other places it’s not about the need for new technologies, but about the need for improved human coordination. A smallholder farmer might need more fertilizer, meaning they need to be able to buy it, know how to use it, and avoid causing localized environmental damage. We also need to think about how we distribute food so that everyone has access to it and less goes to waste. It’s not necessarily about increasing production, that making sure that we make the most of what we do produce, and that it’s efficiently and equitably distributed.

Brent Loken: What we need to do is we need to start connecting the dots between some of those knowledge systems. But what we don’t need though, is to kick the can down the road and say we just have to rely on technologies – we just have to rely on some invention of something that’s going to come in and save us and renew, you know methane emissions or

make farming practices all the more environmentally friendly, because we know what exactly we have to do. We have the practices in hand, it’s more just creating the conditions and allowing them to happen.

Hannah Senior: Technology is a tool in the box. Much like the hype that goes with entrepreneurship, we mustn’t swallow the line that tells us that technology will solve all our problems. Policy, politics, international trade deals, ethics, consumer demand, and so on, will all play a role. But technology does matter. And it’s an important ingredient. And that’s why it’s a focus for this series.

[Theme music fades up, farm animals can be heard]

Hannah Senior: We need new technology in agriculture for lots of reasons, and among them are reducing the environmental impact of agriculture. Whether we’re talking about feeding the current human population or the population of the future.

Increased water use efficiency, waste reduction, reduced greenhouse gas emissions, less pollution and agricultural runoff are all needed, as well as reducing land use change. We also need technology to meet labor shortages and to make agricultural work less grueling and damaging for workers. And we needed to help keep the most vital industry on the planet economically healthy. Without agriculture, the entire human population will suffer. But if farmers can’t make a living, improve their businesses or raise their families while keeping a roof over their heads, the situation will only get worse. We’ve seen at high level that technology can be really useful in tackling these types of issues, but it’s certainly not the only option available to us. Tackling these complex problems will need a systemic approach as well as localized technical solutions.

I am confident that AG tech is part of the solution to the problems agriculture is facing globally. And hopefully this episode has highlighted why I believe this is the case. But you might be scratching your head about how and why entrepreneurs fit into this puzzle.

Join me for the next episode and I’ll answer that question while we dive into the world of the entrepreneur. I’ll be exploring why entrepreneurs may hold solutions to problems that the

existing players in the agricultural world do not, the opportunities and challenges they face, and the dark underbelly of entrepreneurship that we so often gloss over.

Until next time.

[Music fades up, farm animal sounds]

Hannah Senior: Thank you for listening. I asked my interviewees for recommended background reading about the topics we discussed in each episode. You can find many of these and other references I found helpful in the show notes.

For more information on ag tech entrepreneurship, including interviews with the contributors and other AgTech resources, visit AgTechThinking.com.

I would like to thank the Elizabeth Creak Charitable Trust for their generous support, which made this podcast possible. The project arose as a response to being accepted as a 2020 Nuffield Farming Scholar but finding my travel plans were frustrated by the Covid19 Pandemic.

[Music fades down]

Hannah Senior: I have spent decades around food, agriculture and business. I grew up in a
farming community. My career included a lot of time working for large international companies,
including many years at the retailer, Tesco. I did an MBA at Stanford Graduate School of
Business, but then changed from big corporate life to acquiring and running a company of my
own, which works with global plant breeders and seed producers. I also have advisory and
board member roles with several organizations in the AgTech world. All this is perhaps an
unusual combination, but it’s given me a real insight into both agricultural technology and the
global food system. I come to this work with an unshakable optimism about innovation, a faith
in entrepreneurship, and a huge respect for the skill and tenacity it takes to be successful in
agriculture and horticulture.
I’ve been asking questions for years about how we could be using technology to do things
better; develop sustainable agriculture, food systems that will support our growing global
population, give farmers and farm workers around the world a decent life, and do all that
without destroying the planet we live on. This podcast investigation started by asking myself
how we encourage more entrepreneurial success in this area, how we create a more vibrant
entrepreneurial ecosystem.
I initially thought I’d explore what we in the UK could learn from other parts of the world. But it
quickly became clear that I wasn’t asking the right question. I needed to think more broadly
than that. And in any event, it was clear that the solutions do not sit within any country’s
boundaries; they’re International. In the course of this investigation, I’ll keep coming back to
certain questions. Whose interests are we serving? What are we optimizing for? And how are
all these pieces interrelated? I will own it: much of my focus is on the developed world. But, like
the problems we face, the context is global. But before we get to that, we need to start with the
basics: why do we need new technologies in agriculture? This is the first question, the one I’ll
explore in this episode.
[Theme music plays]
Hannah Senior: So why do we need more technology in agriculture?
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Let’s start with labor. Over the last 100 years, well, since the Industrial Revolution, really,
there’s been a steady decline in the number of people globally working in agriculture, in part
due to mechanization, but in part also due to workers leaving the industry. Agricultural work
often relies on many pairs of hands doing grueling, repetitive, uncomfortable, and sometimes
dangerous work. In the developing world, this is a major reason subsistence farmers frequently
aspire for a different life for their children; children that eventually migrate into cities. It’s also
why in the richer world, economies struggled to find enough locals willing to be agricultural
laborers. This aversion to domestic agricultural labor was painfully highlighted in recent years
when COVID-19 travel restrictions meant seasonal migrant labor was in short supply. Even
industry giants have felt the labor pinch as Juliet Ansell, the head of global science innovation
at the kiwi fruit giant, Zespri International, explained:
Juliet Ansell: In 2021, we had a shortfall of 4500 people. And we’ve predicted that that’s going
to be at least six and a half to seven thousand next season. At the peak harvest time, it means
we’re 20% short, and the impact is that we’re compromised. We’re picking more fruits with less
labor, it’s not harvested at the optimum quality, we had to extend the harvest picking. So you
know, the fruits have been (unpicked) slightly too long. And then that flows into the supply
chain, so we get problems with soft fruit, soft fruit affects other fruit and there’s food waste. In
terms of what that cost us, we’ve estimated that’s about $440 million of revenue that will have
cost us.
Hannah Senior: So how did we get to the point that so few people want to work in agriculture?
From my perspective, it can be a fascinating and incredibly rewarding sector. But clearly, it’s
not like that for everyone.
To understand the root of this labor challenge, we need to look at history, says Sarah Mock, an
agricultural and rural issues writer and researcher. She noted, agriculture has a long history of
using cheap or free labor; that might be family and child labor, or the historical system of
serfdom. For a long time in many countries such as the US, it was slavery that kept
productivity up and labor costs down. She explained that in the colonial era, to own land
required putting it to use.
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Sarah Mock: Looking at the history of labor in America, one of the key reasons why enslaved
farm labor was required in the United States was because too few people owned too much
land. Coming to the United States, suddenly, individuals had control of tens of thousands of
acres, hundreds of thousands of acres, but didn’t actually have any cash. (They) didn’t actually
have the resources to put that land to work. And what did you do if you had a ton of land that
you got for free by way of, you know, royal declaration, but you didn’t have any cash to hire
Europeans to farm in the European style? How do you turn no money and a lot of land into
productive agricultural land? Well, you need something for free. We got for free, basically, was
slave labour.
Hannah Senior: Sarah suggests that slave labor set the foundations of much of modern
agriculture, because the massive plantations and farms as allowed created the expectation of
cheap and abundant food. Her research is focused on the farming system in the USA, but the
questions she poses are uncomfortable for many other parts of the world.
This was not territory I was expecting to be delving into. But it’s perhaps an example of an
uncomfortable truth we prefer not to think too hard about when we’re putting food in our
mouths. Although slavery has technically been abolished, its legacy; the expectations of low
cost commodity crops and food staples, has continued to influence agriculture to this day.
Sarah Mock: I think the idea that slavery is not going on in the world today is a bit misleading.
There definitely is slavery and probably the food system is the number one place that still has
it. But I think it pales in comparison to what the Atlantic slave trade was, which was a truly
dynastic, deep, system where people born of slaves were enslaved.
Generations and generations of people were enslaved. And what that meant in terms of wealth
accumulation for people who owned enslaved people and what that meant in terms of
lowering labor costs in agriculture and keeping them exceptionally low over time. Certainly,
part of that is about holding down costs and that cost of food. Because of growth economics
and the nature of a commodity system, it is supposed to fall over time. If the biggest cost on
your balance sheet is labor, how do you make labor costs fall over time when people want
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more money over time, not less? I think that is kind of the route that underlies our labor system
today, whether or not we want to acknowledge it.
Hannah Senior: Modern labor laws outline protections, such as minimum wages, workplace
safety and working hours. But it’s widely acknowledged that agriculture is still an industry often
marred with labor issues. In particular, Sarah goes on, while grain crops have been largely
mechanized, dairy and horticultural production in particular, is still reliant on cheap and often
undocumented human labor.
If the local labor force refuses to work in the low paid physically challenging workplaces that
agriculture so often presents, and yet, businesses can gain access to cheap, often immigrant
or international labor, it creates an environment where exploitation becomes possible. Shipping
in workers from economically weaker countries, for example, the USA’s H-2A temporary
agricultural workers visa program, can on one hand, create much needed work for those
people, which shares some wealth. But it also continues to conceal very real problems in food
production: reliance on cheap labor to keep costs down, is implicitly part of the way the system
is expected to operate, to keep businesses viable.
Sarah Mock: To this day, agriculture still enjoys, essentially, universal exemptions from labor
law. We know that farm workers die at an exceptionally high rate on farms. We know that
they’re largely unprotected in terms of health and safety. Workers within the H-2A program are
more protected than undocumented workers in the dairy industry, but both of those sets of
workers can be incredibly vulnerable and be put in incredibly vulnerable situations – and we
built systems that create blind spots. We use farmers or growers…Processors use labor
contractors, instead of hiring people directly themselves.There are a myriad of ways to create
deniability, to create space, to create cracks that vulnerable people can fall through.
I’m going to split the dairy industry apart from the produce industry to firstly say, there are
billionaire farmers in produce. There are millions, if not billions, of dollars available in produce.
I don’t think there’s a good excuse for ”we can’t afford to pay people”. You can afford to pay
people. We just don’t force anyone to. If you’re not being forced to, if there’s no regulation, then
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no one’s going to do it voluntarily. No one’s gonna start paying their agricultural laborers $30
an hour, just because they’re valuable and they are important to us.
Hannah Senior: So you might think, Well, why don’t we just raise wages for farm workers?
That would seem like an obvious solution. But for many farm businesses, they’re already being
squeezed from both sides of the supply chain.
Sarah Mock: What I’m hearing from farmers on the ground is more like: “Wait, raising wages?
But agricultural wages are so low!” It is truly difficult, you’d have to… Doubling wages might
make a difference, but is that really possible for most businesses? No.
Hannah Senior: In any event, it’s not just about money. Agriculture in the UK this year had
some serious labor shortage issues, and some farms offered £30 pounds nearly $40 US per
hour to harvest produce, but they still couldn’t find enough workers. The work is often
seasonal, and frequently remains physically demanding and uncomfortable. So perhaps
AgTech can contribute to improving the human working conditions to help close that gap.
Juliet Ansell: When people that are looking into the future see things as a problem, they’re not
often felt by the people delivering the operational side. And when the operational people start
to feel the pinch, it’s too late.
Hannah Senior: That’s Juliet Ansell from Zespri International again. She explained that her
company is already invested in the development and use of novel agricultural technologies in
an effort to support the ongoing growth of the company. I asked her about how Zespri are
looking to AgTech for assisting the human labor force.
Juliet Ansell: I think our growers are definitely aware there’s a lot of technology out there. And
I think it’s been really accelerated internally in our business because of the pain that was felt
last harvest. In terms of helping with harvesting, we can look at human assist. The apple
industry has been looking at something like this, which is a sort of a picking platform. So it’s
still basically people doing the picking, but you make their lives easier, faster, maintaining
quality. So there’s various different prototypes that we’re working on, or about start working on,
I should say, in that human assist area. So one of the problems with the kiwifruit canopy is that
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it – depending on how tall you are, it’s just just not quite tall enough to get under. It’s not like
Apple Rose. So I guess the other other solution we’re thinking about is actually designing the
architecture of the orchard to make it much more amenable to robotics. So yeah, we are
thinking about robotics, but because that’s longer term that needs time to develop. Eventually,
we would have, hopefully, a selective automatic harvester that can go 24 hours a day, up and
down, or up or down, depending on how we’re growing then.
Hannah Senior: So AgTech could still mean a significant improvement to the conditions in
which the work takes place. Timing is also critical for many harvests; being able to mobilize
hundreds of workers in a short period of time is both financially and logistically really
challenging.
Juliet Ansell: Everything we need to do is squashed into very short time windows. We have a
whole industry and a whole picking and packing labor force that really only picks over a couple
of months. And we need to pick the fruit in optimum condition in order to ensure the quality,
Hannah Senior: We’re still a long way off from the futuristic world of completely automated
systems, although there are a lot of robotics and AI companies working on this. And yet, even
being able to make a really challenging job a little less challenging, would be useful, suggests
Sara Mock.
Sarah Mock: Some of these jobs, perhaps there’s no good versions. Maybe there’s no good
version of picking and bundling garlic for 12 hours a day. It has to be picked very quickly;
there’s a very small window to do it. So unless you can get 2000 people to show up somehow
at your field and get it all done in a few hours, I don’t know how you would make that job not
super repetitive, not stooping, not damaging to people’s bodies.
So technology might be able to make those jobs less miserable. And then maybe the job there
would be to manage the technology. Maybe it’s a handheld tool, something you use while
you’re standing up instead of slouching over. Or maybe it’s a mechanized thing that you don’t
have to bunch and wrap garlic with your hands, you can do it with a tool so it doesn’t lead to
repetitive injuries. So maybe there’s space for technology for that.
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Hannah Senior: It has to be a good thing, if technology makes farm work less dangerous and
grueling. And yet, there may be other implications
Sarah Mock: If the technology is a giant tractor or a giant piece of equipment that plucks 12
rows at a time and packages it. At the end, you have a giant bin full of garlic after three passes
through the field and it took you half a day – I guess that’s good that a human didn’t have to do
that work and damage their body in that way. But at the same time you now have a lot of
unemployed people.
Hannah Senior: You’re likely already getting an idea of how complex and interwoven
agricultural labor issues are. AgTech is not a one stop shop for solving these issues.
Immigration reform, conditions and wages, improved health and safety will also need to be
addressed to attract and retain the future workforce – alongside the greater use of technology.
But beyond the labor economics of agriculture, there’s another even more pressing concern
facing the global agricultural and food system: the environment.
[Music fades up. Sounds of wildlife]
Whether we like it or not, agriculture is as a whole, really bad for the environment. Agriculture
is one of humanity’s crowning achievements. The fact that the human population has exploded
but fewer people die from starvation than ever before is amazing. But, fundamentally, however
we do it, feeding 8 billion people and growing takes a huge toll on our planet. And yet, well, we
can envisage a world without using fossil fuels or single use plastics, we can’t have a world
without food.
Brent Loken: So when we’re talking about climate change we tend to focus a lot on the other
sectors. We might talk about transportation, we might talk about buildings, we might talk about
electricity, and those are all bad, but food systems themselves – all the acts of producing food,
land use, wasting food, and landfills – contribute about 29% of total global greenhouse gas
emissions. Twenty nine percent. One third.
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Hannah Senior: That’s Brent Loken, Global Food Lead Scientist at the WWF. His work
involves understanding the science behind the cause and effects of climate change,
agricultural industries and the food system, in an effort to find a sustainable balance for the
future.
Brent Loken: When we’re talking about biodiversity loss, we tend to see images of trees being
cut down and all these terrible things happening. But that is mainly driven by food, and the
food that we choose to eat and how we actually produce it.
When we’re talking about water use – we’re seeing a lot right now in terms of rivers running dry,
and extreme droughts in some parts of the world. Seventy percent of all freshwater that’s used
is actually driven by food to irrigate our crops. So a lot of the environmental damage that we’re
seeing today, exceeding and actually crossing these planetary boundaries, is driven by food;
how we produce it and the food that we consume. It’s probably the single largest driver of
environmental degradation on our planet. We’re starting to realize that we cannot address the
environmental crisis that we’re facing without fixing our food system.
Hannah Senior: So how does almost 1/3 of all greenhouse gas emissions come from
agriculture and the food system? I asked Francesco Tubiello, a senior officer at the United
Nations Food and Agriculture Organization, to break it down for me,
Francesco Tubiello: Up to a third of all of the emissions, when you think about food systems,
can be linked to agricultural and food activities, specifically agriculture thought as “farm gate
emissions”. So those that come from processes directly linked to crop and livestock activities
cover about 10% of the total emissions in the world.
Another more or less equal amount is added by those emissions caused by land use changes,
so let’s say, quote unquote “destruction of ecosystems and natural ecosystems” to make space
for production. So that adds another 10%. And then just recently, we began quantifying
emissions along the supply chains. So what happens after food leaves the farm and it gets
processed, and then distribute it, and then eating it and on and on. And that adds the other
10%. So we go up to the third that I mentioned before.
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Hannah Senior: The primary greenhouse gasses emitted as a result of agriculture are nitrous
oxide, methane, and CO2, or carbon dioxide. Emissions from within the farm gate and mostly
non CO2. And about half of this category, that’s 5% of the global greenhouse gas emissions, is
methane.
It’s fair to say that livestock, especially ruminants, are the key factor in methane production,
although rice paddies are also a significant contribution. The other half of this “within farm gate
influence” is nitrous oxide, which is mainly linked to the nitrogen cycle and especially synthetic
fertilizer use. By contrast, land use change and post farm gate impact is largely a result of
CO2. Land use change in particular is often perceived as not connected to agriculture, going
by the acronym LULUCF: Land Use, Land Use Change, and Forestry.
Francesco Tubiello: And LuluCF is an interesting term because it sounds neutral, except that
it’s not true, right? Because the majority of the land use and land use change components of
that acronym, are actually directly linked to agriculture. And so whether it’s the drainage of
peatlands or deforestation, which we haven’t mentioned yet, you see that that’s a component,
that it’s largely driven by the need for additional land.
Hannah Senior: Francesco also noted the link between higher emissions and land use
changes clear when you review the global top 10 countries for greenhouse gas emissions. We
sometimes hear that it’s all about livestock or the rich developed countries with high intensity
farming that creates the most emissions. But developing countries are having a big effect too.
Francesco Tubiello: The balance gets flipped by land use change because, whereas modern
industrial agriculture is already developed along its efficiency pathways to produce more with
less, as we say, so having “high efficiencies of production”, so that you can do that on a limited
amount of land. In many developing countries, not all but many – especially the ones that are
moving from traditional to modern, this transition is linked to significant conversion of land into
more production. And that land usually comes from natural ecosystems, so that destruction –
the sheer destruction of the biomass, and the soil carbon and the alteration of those natural
fluxes brings with it a significant amount of emission.
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Hannah Senior: He also notes that the rich world finger-wagging the developing world for land
use change is unhelpful.
Francesco Tubiello: Let’s remember that, you know, in the 8,000 -10,000 years in which
agriculture developed, we in the so-called “developed world” have done our bit of deforesting
our lands to produce the fields that we see today. So it’s a big story that doesn’t have
culprates, I think it’s better to characterize it that way.
Hannah Senior: Part of the issues surrounding agriculture and the environment is that it’s a
global issue. But the effects, and therefore solutions, must be considered on a national and
local level, too. There is no one size fits all solution. As Brent Loken explains:
Brent Loken: When we tend to talk about the impacts of the global food system, we talk about
it globally. But the thing about it is, impacts are mostly felt locally. The impacts are very
different depending upon regions, but it’s different depending upon which environmental impact
that you’re actually talking about. If you’re talking about water use, that’s going to have to be
dealt with within individual watersheds. So on some watersheds, the impact is quite high. If you
look at place like the Colorado River, that impact is very high. For other water systems, the
water use is actually okay. They’re not, you know, exceeding their environmental limits.
Biodiversity loss is also felt very differently. At the moment, most of the biodiversity loss is felt
within the tropics – it’s these cutting down of these old growth, ancient forests that we’re seeing
that have extremely high levels of biodiversity, most of that is actually driven by food. Whereas
in other parts of the world, they’re seeing trees coming back, and actually a net positive gain of
trees.
Hannah Senior: Just like the effects of climate change affecting different parts of the world in
different ways, the technology solutions that are needed will vary both from Geography and the
type of farming practice in that geography.
Brent Loken: The technologies that might work on an industrial farming system might be very
different from the technologies that will work on small shareholder farmers – of which there are
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hundreds of millions all over the world. And being able to get those technologies into places
that actually need them is also going to be very difficult. The last thing that we want to do is
create a two tier system where we have all the technology going into certain places, which
benefits the same group of people, versus making sure that the people that need it the most.
These farmers that farm under two hectares of land, they also need access to this same type
of technology.
Hannah Senior: Whichever way we slice it, and pretty much all environmental issues will find
agriculture’s fingerprints. It might be unintentional, and it might be the result of an amazing
mobilization of human ingenuity to feed ourselves, but it is there. So a second important role of
technology is to find ways to reduce this impact. And let’s also remember that the effects of
climate change are most definitely being felt by the very industry that’s helping to create it,
meaning even more challenges and potential global food shortages in the future.
Francesco Tubiello: Also, let me say when we talk about climate change, that we always
think of the role that agriculture has on the climate – forgetting that agriculture is perhaps the
prime human sector that stands to lose from climate change. That can be such a
characterization because it’s exposed to climate change in the bad ways that we know.
Hannah Senior: Widespread development and adoption of agricultural technology to help
minimize both labor issues and environmental issues. Might sound like an easy fix. But there is
more than one part of the puzzle that we need to look at. Any change, be it raising wages or
implementing climate friendly agricultural techniques, comes with a price tag. From a business
perspective, investing in making changes that will benefit your business in the long term makes
perfect sense. But for a vast number of farm businesses around the world, just breaking even
is a challenge and making a profit even more so.
[Music fades up, a truck drives by]
Hannah Senior: According to the research website, Full Fact, referring to the UK, ”Across all
farms, subsidies make up around 57% of the total profit on average. Taken as a whole, farming
is not a very profitable business to be in.”
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Ethan Cleary: A lot of our farm leaders say “It’s hard to take green when you’re constantly in
the red.” And that’s very true.
Hannah Senior: Ethan Cleary is in charge of the technology and innovation policy within the
Irish Farmers Association, the largest agri-representative body in Ireland,
Ethan Cleary: Farmers are very justifiably worried about how this is going to affect and
change how they make money, how they produce food, how they actually have a livelihood.
Hannah Senior: While Ethan is echoing the sentiments of Irish farmers, the same can be
heard from farmers all across the world. Farming, especially small to medium sized farming, is
more often than not a loss making business activity before any subsidies. So why is this and
can technology make a difference? In simple terms, this is a product of the structure of the
industry. Indulge me while I share a little MBA type academic theory with you to illustrate this
point.
There’s a famous model called Porter’s Five Forces; a way of characterizing the competitive
forces in an industry. Three of these, especially relevant to this discussion, the bargaining
power of suppliers, the bargaining power of customers, and rivalry among competitors in the
market. In agriculture, farmers themselves are made up of relatively small companies in the
middle layer of a sandwich that typically squeezed between the much greater bargaining
power of very large highly consolidated customers (supermarkets, green companies, etc), who
largely set prices and the bargaining power of the very large, highly consolidated suppliers
(seed feed chemical and equipment companies) who determine the cost of production. It’s a
perfect recipe for poor margins across the industry as a whole. Layer on to that, two other
factors.
Firstly, much of agriculture produces for and sells into commodity markets. In commodity
markets, the goods are pretty much interchangeable. A particular class of corn, or type of
wheat can be aggregated from thousands of different farms and sold as one consistent lot.
This system does have a lot of benefits. For example, it allows a breadmaking company to
obtain enough flour of the right type and quality without having to do deals with and quality
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check the produce of dozens or hundreds of farmers who might be located around the world.
It’s also great for consumers and for the overall price of food. Because over time, the price of a
commodity falls, with ups and downs for changes in demand and supply, to little more than the
cost of production. But this is exactly why it’s hard on farmers. Almost by definition, this
commodity structure, which characterizes so many of our agricultural goods, results in many
farmers having to sell into the commodity market at or below the cost of production, meaning
minimal profits or even losses across the industry as a whole.
Secondly, the scale and professionalism of farms greatly affects the skills available to help
deliver a profit consistently. Most farms are relatively small businesses. And like all smaller
businesses, it means fewer seriously professionalized staff focusing on single responsibilities.
Large farms may be able to afford marketing, business development and finance teams for
example, whereas on smaller farms, it may be one person doing it all. Moreover, unlike other
sectors such as medicine or construction, many farmers inherit their businesses. If they have
relevant training, it often covers a multitude of farming related skills, but not necessarily
business management. And if it happens that a farmer’s interests or talents lie in other areas
than the business side, they can simply be outmaneuvered by others in the value chain. A lack
of profit makes it hard to invest. And this can further reduce the resources to compete.
The strategic importance of agriculture, the commodity system, and the fact that so many
farms or small businesses are among the reasons given for government subsidies. An OECD
study of 54 countries estimated that a combined sum of over 700 billion US dollars of subsidies
are handed out to farmers globally almost every year. Government subsidies are, in part,
aimed to mitigate challenges that the agriculture sector uniquely faces given the importance of
its role in ensuring national food security. However, this is a huge and highly controversial
area. Agricultural subsidies can have intentional and unintentional market distorting effects,
both nationally and globally. Plus, philosophically, should we rely on subsidies? Would we
tolerate it in any other sector? After all, New Zealand famously ditched agricultural subsidies in
the 1980s, and they have a healthy agricultural sector. Surely, it’s simply better to have a
thriving and profitable agricultural industry, rather than relying on subsidies to close the gap.
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So could technology help to make farming more profitable? Well, maybe. It won’t solve all the
problems, but it certainly may be able to assist in things like transparency and traceability in
the food system. This in turn, allows farmers to capture more market share or demand higher
margins if they’re using practices that consumers value, such as exemplary environmental
stewardship, or particularly humane animal treatment. Technology can also help assist humans
in planting, animal husbandry and harvesting as we talked about earlier. This, in turn, may lead
to savings either in labor costs, or through more profitable end products, such as by harvesting
faster for optimum quality and less wastage. It could also help farmers to find new routes to
market – something we’ll hear more about in later episodes.
In short, new technologies can seriously disrupt existing industries, and shift where the profit
ball set. Just ask industry giants who have had their businesses disrupted by new innovations,
like the ones and giant photographic film company, Kodak, or the video rental company
Blockbuster. But this is not a given. There are some seriously entrenched and powerful
dynamics at play. In truth, this might be one of the weakest reasons to believe that new
technology will change agriculture. Why? Because as with the environment and labor issues,
farm profitability is a product of the way our agricultural and food systems work. There are a
series of forces, feedback loops, structures and incentives that create the outcomes we see
around us.
[Music fades in and out]
We’re going to hear a lot about systems in this series. So before I wrap up this episode, I want
to touch on what this concept of “systems” means. Donella Meadows is a highly influential
scientist and author known for her work on Systems Thinking. She defines a system as ”an
interconnected set of elements that is coherently organized in a way that achieves something”.
The purpose of the food system is to ensure humans have food to eat, and is itself made up of
and connected to other systems; the health system, the economy, the environment. So what is
the food system? Brent Loken, broke it down for me.
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Brent Loken: So a food system is everything that we do to get the food from the farm, to the
fork. So it’s everything from how we produce food, and the environmental consequences of
that, how we actually transport food to get it from where it’s produced, all the processing that
goes into the food, and then the waste. So if we throw food away, throw it into the garbage, it
goes into the waste dump. So it’s all of those systems and processes that we put into this
complex web of activities that we call the food system. There is one global food system, which
has this interconnected, local and regional food system. There’s food systems everywhere.
There’s food systems in backyards, there’s food systems within cities. But when you add up all
those collective activities, you’ve got the global food system and the impact that that has.
Hannah Senior: We’re already beginning to see in this story, how massively intertwined all
these issues are. Not only does this bring together lots of different industries, it also means
that when we’re thinking of food, we’re switching back and forth between global national and
regional pictures.
Brent Loken: So, you’re having a meal and your meal is composed of maybe a little bit of
meat, fruits and vegetables and maybe some legumes, right? Most of the time that food comes
from all over the planet. So you might get fruits and veggies in an avocado shipped in from
Mexico. You might get lettuce greens shipped in from some other place, you might get the
meat locally produced and then you might get the legumes or rice shipped in from Brazil or
China. So anytime that we’re having a meal, most likely that meal comes from many different
countries.
Now I know that there is a push at the moment to localize food production and to eat locally.
And I think when and where possible, that is great. But at the end of the day, we’re never going
to be able to completely localize food systems; there’s always going to have to be some sort of
transport and trade of food. And there’s always going to have to be some sort of impact from
that. That’s one of the things that we have to realize with this food system is that it is a global
food system. And that moving forward as we add more people into it, and as more people get
access to more food, and we’re trying to lift individuals out of poverty and make sure that
everybody has access to healthy food, not just food, but healthy food, that’s going to require
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more trade in food, more of this global connections than what we have right now. And that’s
something that we’re going to have to definitely start to wrap our heads around. So it’s a very
globalized, interconnected system.
Hannah Senior: In short, these problems are extremely complicated. And when we’re thinking
about systems, we need to use a different set of tools to when we’re thinking about how to
improve one particular piece of a problem, because lots of issues are connected. As Sarah
Mock noted:
Sarah Mock: You can’t just pull on one string because the way you pull on one string affects
every other string in agriculture. Every other string involves things…Like, it just goes on to the
zenith. You can’t create agricultural technology without affecting poverty. You can’t affect
agricultural technology without affecting immigration reform. It goes in so many different
directions and at such a velocity. We think of AgTech kind of alongside the guy who’s making
a laundry delivery app. It’s just different to build technology in agriculture, it is more complex.
It’s a more complex world, it’s a more complex context.
Hannah Senior: And just as there is no one size fits all answer, we also need to recognize the
technologies we will need will be different depending on where you are in the world. As Brent
Loken noted earlier, in some places to stop converting more wild land into agricultural land,
we’ll need to use existing or new technologies to increase production to make more from less.
In other places it’s not about the need for new technologies, but about the need for improved
human coordination. A smallholder farmer might need more fertilizer, meaning they need to be
able to buy it, know how to use it, and avoid causing localized environmental damage. We also
need to think about how we distribute food so that everyone has access to it and less goes to
waste. It’s not necessarily about increasing production, that making sure that we make the
most of what we do produce, and that it’s efficiently and equitably distributed.
Brent Loken: What we need to do is we need to start connecting the dots between some of
those knowledge systems. But what we don’t need though, is to kick the can down the road
and say we just have to rely on technologies – we just have to rely on some invention of
something that’s going to come in and save us and renew, you know methane emissions or
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make farming practices all the more environmentally friendly, because we know what exactly
we have to do. We have the practices in hand, it’s more just creating the conditions and
allowing them to happen.
Hannah Senior: Technology is a tool in the box. Much like the hype that goes with
entrepreneurship, we mustn’t swallow the line that tells us that technology will solve all our
problems. Policy, politics, international trade deals, ethics, consumer demand, and so on, will
all play a role. But technology does matter. And it’s an important ingredient. And that’s why it’s
a focus for this series.
[Theme music fades up, farm animals can be heard]
Hannah Senior: We need new technology in agriculture for lots of reasons, and among them
are reducing the environmental impact of agriculture. Whether we’re talking about feeding the
current human population or the population of the future.
Increased water use efficiency, waste reduction, reduced greenhouse gas emissions, less
pollution and agricultural runoff are all needed, as well as reducing land use change. We also
need technology to meet labor shortages and to make agricultural work less grueling and
damaging for workers. And we needed to help keep the most vital industry on the planet
economically healthy. Without agriculture, the entire human population will suffer. But if farmers
can’t make a living, improve their businesses or raise their families while keeping a roof over
their heads, the situation will only get worse. We’ve seen at high level that technology can be
really useful in tackling these types of issues, but it’s certainly not the only option available to
us. Tackling these complex problems will need a systemic approach as well as localized
technical solutions.
I am confident that AG tech is part of the solution to the problems agriculture is facing globally.
And hopefully this episode has highlighted why I believe this is the case. But you might be
scratching your head about how and why entrepreneurs fit into this puzzle.
Join me for the next episode and I’ll answer that question while we dive into the world of the
entrepreneur. I’ll be exploring why entrepreneurs may hold solutions to problems that the
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existing players in the agricultural world do not, the opportunities and challenges they face,
and the dark underbelly of entrepreneurship that we so often gloss over.
Until next time.
[Music fades up, farm animal sounds]
Hannah Senior: Thank you for listening. I asked my interviewees for recommended
background reading about the topics we discussed in each episode. You can find many of
these and other references I found helpful in the show notes.
For more information on ag tech entrepreneurship, including interviews with the contributors
and other AgTech resources, visit AgTechThinking.com.
I would like to thank the Elizabeth Creak Charitable Trust for their generous support, which
made this podcast possible. The project arose as a response to being accepted as a 2020
Nuffield Farming Scholar but finding my travel plans were frustrated by the Covid19 Pandemic.
[Music fades down]

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