Last week I attended a conference at the World Bank on The Future of Work in Agriculture. We discussed rural-to-urban migration, job creation in the agribusiness supply chain, technology adoption, and youth participation in agricultural production. There is growing interest in how new technologies will impact agricultural production, labor demand, and requisite skills on farms as rural-to-urban migration advances in economies across the globe.
Understanding the dynamics of technology adoption is imperative to a smooth transition to a smaller farm workforce as younger generations transition out of farm work. Smart Technologies combine hardware (computing and mechanical operations) with software (data collection and processing). Agricultural technologies are increasingly utilizing data-processing technologies to improve performance, and improvements in rural internet connectivity enable machines at different stages of the agri-food chain to share data. These technologies could improve traceability, safety, and efficiency. Nevertheless, a number of potential barriers to technology adoption could slow the growth of these innovations. I summarize a few potential barriers below:
- Risk: When a technology is first introduced, no on has experience using the technology and there are many unknown factors that could decrease yields or profits. Government and universities may play an important role in investing in research and cost-benefit analyses to reduce risk and uncertainty.
- High up-front costs and economies of scale: Small producers may be precluded from investing in high-cost technologies since they lack the economies of scale to amortize fixed costs over large quantity of production. Rental markets can sometimes remedy these barriers. Developers of automated lettuce thinning technologies successfully created a custom rental market, reducing the up-front burden of purchasing equipment for individual growers. However, rental markets for some machinery, such as harvesting equipment, are not always feasible since the machinery must be used intensely over a large region for a short, time-sensitive season.
- Inadequate technical skills: Producers and workers may lack the required skills to efficiently utilize new technologies. Developers of automated lettuce thinners bundled operator skills with equipment by renting out custom service. The farm workforce of tomorrow will likely include more skilled technicians and mechanics with more years of education.
- Coordinating data collection: Many producers want a third party to collect and organize data from their farm equipment but do not want to share the data with the industry. There is growing demand for firms that can efficiently and securely collect and analyze data and return analytics to the producer.
Potential labor-saving technologies on the horizon include automatic weeders, which will reduce labor demand particularly on organic farms, and autonomous navigation systems for non-field crops such as orchards or vineyards. The throughput, efficiency, and accuracy of these technologies must improve before they are commercially viable, and policy-makers and industry leaders will likely need to address industry-wide barriers to adoption for these and other technologies.