Farming is in danger

Here’s how Digitisation can save farming and how you can help to make it happen, even if you are not a farmer.

When I first set up Small Robot Company with my business partner Ben, about 18 months ago, the very first thing I did was to go and talk to as many farmers as possible to try to understand if the problems they faced on their farms were the same as the problems we were facing on ours. Over the course of about three months I spoke to around 70 farmers. I have since spoken to many more. It was genuinely scary how much the conversations started to resemble each other after a while.
 
Three key dangers emerged repeatedly.

 Danger 1: Declining profits

On our farm, gross revenues generated from a hectare of cereal production are the same as they were 25 years ago.

I’m not talking about an adjusted for inflation figure, I’m talking about generating the same number of pounds per hectare as we did a quarter of a century ago.
 
It goes without saying that the costs incurred to generate those revenues have gone up significantly; fuel, machinery, labour, land rents, seed, chemicals, fertiliser and everything else associated with growing crops have all increased and largely continue to increase on an annual basis, yet the amount of crop produced and the value of that crop has not increased. When you discuss this with someone who works in a different industry and knows nothing about the finances of farming, they almost fall off their chairs. Yet, when you sit opposite a farmer and lay out this argument, as I have done many times, they glumly nod their heads and accept that it is, unbelievably, true.

We are therefore, as farmers, operating a business model which is fundamentally broken. If revenues are static, but costs are growing then we are all going out of business. The scale of your operation is not a defence. If you have a business which is ten times the size of mine then I accept that you have more time than me before your business is reliably unprofitable year after year because there is probably a bigger gap between your revenues and your costs, but you have not escaped from the trend. Eventually the costs will overtake the revenues. On our farm, I think we have two to four years left before we are budgeting for an annual loss from our arable acres.
 
This is a real problem and this generation of farmers could be the one that oversees huge swathes of farms going out of business or we could be the one that saves farming forever.

 Danger 2 : Stagnating Yields


There is plenty of research to show that yields of the most important crops in the UK, namely wheat, oats and barley, have not improved in a generation.
 
As I alluded to in the previous section, we have seen this trend play out on our farm. As I was preparing to write this book, I went up into the attic and dug out all of my father’s crop records, neatly handwritten in stacks of red books. As chance would have it, the first year I pulled from the shelf, 1990, showed exactly the same average yield for our wheat crop as we achieved in our 2017 harvest. As a proud farmer, this is a source of embarrassment for me. The point of farming, surely, is to feed the world. However, if national and global populations are increasing; as they are and the amount of available farmland both nationally and globally is not increasing; as it isn’t, then we are failing as an industry if we do not find a way to increase our productivity.

 Danger 3 : The Negative Impacts of Farming on the Environment

The third theme that came out of my discussion with farmers was around their frustration with their inability to do more to protect the environment.

 
Globally we know that farming is a huge energy user, a huge water user and, unfortunately, the source of a lot of pollution. A recent edition of the Economist stated that there is $800bn. of damage done annually to marine habitats through nitrogen runoff. We need to develop a farming system which is much kinder to the wider environment.
 
Locally, soil health is degrading as we operate a farming system which relies on heavy machinery and draft force, or pulling metal through the soil. Estimates vary, but some scientists think we have as a little as 30 – 40 years left before we have effectively eradicated soil fertility. More contentiously, we also know that our current methods of applying chemicals have a negative impact on beneficial insects.

All farmers want to leave the land in better condition for the next generation than the condition in which they inherited it but unless we adopt a different farming system, there is a very real danger that this is not achieved.

Whilst these were the three main dangers that emerged in our discussions with farmers, they are of course, far from the only ones. There is a danger that farmers continue to do what they have always done, that they rely on a vague “hope” (a word which occurs with depressing regularity when discussing their strategies for the future).
 
There is a danger that farm businesses are complacent in their view that farms have been profitable before and they will become profitable again; complacent in their view that the world will always need a food production system which looks the same or very similar to what we have today.

Hope is not a strategy

Too many farm businesses rely on hope.

 
Hope that food prices will improve, hope that production costs will drop or hope that regulations will become more favourable. Farms cannot remain inwardly focused, production centred  businesses. UK farms in particular cannot continue to produce commodity products in one of the most expensive countries in the world to operate a farm. They cannot hope to differentiate themselves through superior scale or efficient production alone. Farms must become outwardly focused, customer centred businesses who are completely clear about why they exist and who are they are serving.

Many farms are already doing this, and they will be the most successful farms in the long term. Farm businesses, like all businesses, must grow to survive. There is a danger in the UK that not enough farming businesses have a clear plan for growth and in particular how they will achieve this growth profitably. As has been suggested by Sebastian Graff-Baker at Andersons, the industry is measuring itself in the wrong way. Farmers tend to measure themselves by the scale of their enterprises, but they should instead be measuring themselves by the number of units they are able to produce at profit.
 
Just think about the implication of that seemingly subtle shift in mindset. Firstly, once you adopt the mindset and truly measure yourself against it, it becomes completely unacceptable to consider indulging in unprofitable activity. Why would you want to take on additional work which reduced the number of tonnes, or whichever unit that is relevant to your business, that you were able to produce at profit? Secondly, think of the number of business decisions and the amount of money that has been spent trying to continually make a farm business bigger. How much better would that money have been invested if it had been purely focused on making the business more profitable?

Of course, this is all well and good but it is almost impossible, using the technology that is currently available on the farm to have a full understanding of the projected profitability of an area of the field until it is too late, in other words, until after the money has been spent and the harvest has been completed.

This is one of the first key ways in which Robotics, Artificial Intelligence and Digitisation will enable a new way of managing farm businesses and this is exactly what Small Robot Company is working towards.
 
Within three years, by 2021, we will have the first iteration of a service that does all of these things commercially available for farmers.
 
If farmers have a digital view of their soil, in other words, if they are able to gain an understanding before they spend any money of what the nutrient content, moisture content, pH level of your soil is on a highly granular level they have a much better chance of making the right choices for their business.
 
When I say granular, I am talking about hundreds of thousands or millions of soil samples per field, not the few dozen on which our soil maps are currently based. Robotics will enable an exponential improvement in this level of accuracy. Our farm robots, Tom (monitoring) Dick (spraying)  and Harry (planting), will also be able to hold in their “heads”, through the development of AI driven operating systems, all of the available research that has ever been published anywhere in the world about the crop that farmers are growing and the soil type that they are operating on. It will use this understanding to make a prediction of yield, ultimately on a plant by plant basis rather than as an average of a field or a hectare. On top of this, they will have a fully up to date understanding of the market for the crop that is being grown and therefore a more accurate forecast for the likely achievable price.

How you can help
 
If you are a farmer, the time has come for you to be part of creating a better way of thinking about and managing your farms, not only for yourself but for your children and the future generations who you want to run your farm, but who you will never meet.
 
Small Robot Company is recruiting a group of 20 Farmer Advisors to help us build a farmer-led robotics and AI service. Each farmer member pays a £5,000 deposit on Small Robot Company services which gives them access to the latest technology as it becomes available and £10,000 of credit on Small Robot Company services when we launch commercially in 2021.
 
If you are interested in this, please contact me at sam@smallrobotcompany.com as soon as possible - places are filling fast!
 
If you are not a farmer, but you believe that this is technology which should exist in the world, you can support us through our IndieGoGo campaign, which launched last week.