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IoT Agriculture: 5 Ways to Grow your Business

In the first half of 2015 agtech startups raised $ 2.06 billion in funding (compared to $ 2.36 billion raised in 2014). Guess why? Farmers seek new ways to cut operating costs, increase productivity and use arable land more effectively – and that’s where smart sensors and analytics software come in handy. Here’s how your company will benefit from using the Internet of Things in agriculture.

Internet of Things: top 5 applications in agriculture

  • Cattle monitoring. By collecting and analyzing the data regarding location and well-being of cattle, farmers can timely isolate sick animals and prevent losses of livestock. Every year the UK dairy sector spends over $ 100 million on curing lameness and mastitis in milk cows. If you run a cattle company, you can now use solutions similar to Smartbell. The agtech startup designed smart temperature, movement and respiration sensors which you can put on your animals and track them in real time via a dedicated mobile app. Another example comes from Fujitsu. The Japanese company has launched a SaaS system that enables farmers to monitor cows’ walking activity at night and determine whether they’re ready for artificial insemination. The solution reportedly increases pregnancy rates by 67%;
  • Plant and soil monitoring. Overwatering results in water wastage and may have a negative impact on crop yields. AgriHouse, a successful biotech company from Colorado, has developed the Leaf Sensor solution that detects whether plants need watering. By putting a sensor on a single plant within the range of 20-30 acres, you can estimate the entire crop’s need for water and reduce irrigation and pumping costs by 25%. Monsanto went even further. In 2013 the agrochemical company acquired the Climate Corporation for $ 1 billion and launched the Farming Systems platform to provide field-by-field planting recommendations to US farmers. This year Monsanto partnered with a soil sensor startup from Kansas to create a network of agricultural products and technologies that will capture accurate weather, soil and plant data. Monsanto services are currently used on over 90 million acres of US farmland;
  • Equipment monitoring. With the help of smart sensors CNH Industrial, one of the world’s biggest agricultural and construction equipment manufacturers, managed to reduce machinery downtime by 50%. The company also has plans to use IoT-generated data for machine learning. The proactive approach will enable CNH Industrial’s customers to order equipment parts that will soon need replacement before the actual failure occurs;
  • Smart mapping and planting. The DroneSeed startup uses drones to create 3D maps of planting sites and estimate potential chances for tree survival and growth. While the startup’s primary goal is to battle deforestation, the IoT technology could also help agriculture companies reduce planting costs by almost 1000%. The John Deere corporation has already entered the precision farming market with its StartFire 3000 satellite receiver which acquires signals from GPS and Glonass systems from around the globe. By installing the gadget on agricultural equipment, John Deere can calculate a machine’s position down to 1 inch. Accurate equipment positioning will help you cut planting expenses by at least 10%;
  • Autonomous equipment. Case IH and Autonomous Solutions have recently introduced its self-driving agricultural vehicle designed to help farmers during harvest. According to Matt Nielsen, Autonomous Solutions’ marketing director, this year California farmers have failed to harvest 30% of their berry crops simply because they don’t have enough workers. Due to labor shortage, the US fruit and vegetable production sector is shrinking by 9.5% (or $3.5 billion) every year. The Autonomous Concept Vehicle (or self-driving tractor for short) is equipped with a radar, several cameras and motion sensors and operated via a tablet. You can potentially use it 24/7 for tillage, seeding and planting. Although there’s no talking about commercial production right now, self-driving tractors may become a $ 45 billion market in the nearest future.

IoT Agriculture: 5 Ways to Grow your Business

Agriculture revolution: 3 factors behind Internet of Things adoption

  • High operating costs. Agriculture companies consume nearly 70% of all fresh water and 185 million tons of fertilizer every year. Depending on the type of soil and farming equipment, the replanting costs for corn (US major crop) range from $ 78 to $ 105 per acre. Between 2010 and 2012, agriculture machinery costs grew by 15%;
  • Competition and low margins. The US dairy sector is now dominated by large enterprises (over 2 thousand cows in livestock). The number of small farms, on the contrary, has shrunk by over 20% in just 14 years. As crop and meat prices continue to decline, the consumption of agricultural products is growing at a fast pace. As a result, individual farms fail to cover revenue decreases and go out of business;
  • Environmental impact. The average farm wastes 50% of water because of over-irrigation. 60% of fertilizers used by agriculture companies is not absorbed by the soil and contaminates ground waters. As a result of human interference and climatic changes, America loses 9.5 acres of farmland every minute.

In order to stay afloat and – hopefully – outperform rivals, your company needs to collect and analyze data on crop condition, land use and asset management. Here’s how the use of Internet of Things solutions in agriculture changes things for the better.

Tom Farms, a North Indiana-based enterprise that grows corn and soybeans, employs John Deere trucks equipped with smart sensors and processes IoT-generated data using the Monsanto platform. They also have plans to leverage drones for seed replanting. Thanks to IoT technology, Tom Farms has expanded from 700 acres in 1970s to over 20 thousand acres today (while their neighboring farms continue to perish). Accurate sensor data analysis, machinery automation and smart irrigation helped Tom Farms increase ROI by over 11%.

IoT Agriculture: 5 Ways to Grow your Business

Agriculture Internet of Things: barriers to success

  • Sharp break with tradition. IoT solutions can surely tell you whether your crops need watering and how much fertilizer you should apply. Yet, you and your fellow farmers have been doing things your way for years – and won’t jump on the Internet of Things bandwagon unless you see clear benefits of using the new technology. If you consider building a complex livestock management system, make sure to address a reliable software vendor who will create Proof of Concept, conduct thorough research and determine whether the project is worth your investments;
  • IoT costs. Back in 2000, a simple tractor designed to harvest a few crops cost about $ 65 thousand. Today AGCO and John Deere enhance their equipment with sensors and portable computers, driving retail costs up to $ 500 thousand per machine. Although small companies can upgrade their old equipment with sensors and GPS trackers and achieve better productivity using IoT solutions that incorporate satellite imaging and can be managed via a mobile application, the smallest budget for an IoT project is $ 50 thousand. While large companies like Tom Farms reportedly make $ 50 billion a year, the average annual income of an individual farmer is just $ 85 thousand. Many companies cannot afford investing in new technology – and the situation won’t change until IoT product development costs go down;
  • Diversity vs specialization. If your farm majors in one thing (for example, beef production), you can install sensors across cattle facilities and start getting benefits right away. What about companies that grow crops, milk cows and function as seed dealers at the same time? The integration of several asset management systems increases the price, complexity and vulnerability of an IoT solution (and that’s not to mention maintenance costs). At some point individual farmers will have to choose between specialization (and increased productivity from day one) and keeping their diverse resource-consuming businesses.

The Internet of Things applications in agriculture range from cattle monitoring to tilling soil with a self-driving tractor. However, they are meant to solve one and the same problem - that is, automate labor and help farmers achieve better productivity with limited resources. Building an IoT solution now will help you outpace your rivals tomorrow – and that’s why should address a reliable vendor ASAP.

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