Agriculture in the age of digital technologies 

Economy October 24, 2018 01:00

By   SPECIAL TO THE NATION 

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DIGITAL TECHNOLOGIES, such as Artificial Intelligence (AI) and Internet of Things (IoT), nowadays have disrupted and transformed not only IT-related industries, but also other manufacturing and services, such as automotive, health care, financial services, among others. In particular, it helps these businesses to stay competitive in the fast-paced world.



According to Statista, global businesses adopting AI are projected to generate revenues US$31.2 billion (Bt1,204 billion) in 2025 with a 52.59 per cent CAGR from $1.62 billion in 2018. 

Agriculture is one of those industries that have started embracing these technologies. This is a great opportunity for Thailand such that it is not only the backbone of our country, but also widely recognised as the kitchen of the world. Moreover, agriculture is a foundation of agro-processing and food industries which it contributes to 60 per cent of food revenues. 70 per cent of these sectors is supplied to the world. 

Despite the abundant opportunity, challenges still exist in the operating environment of agriculture in Thailand which AI and IoT will definitely help overcoming them. Four key challenges consist of supply uncertainty, inefficient planning, low productivity and supply chain management.

Supply uncertainty derives from uncontrolled factors, such as climate change, flood, drought. Enabling digital technologies, however, will help controlling soil and field environment that are best for each specific type of crops. It also helps monitoring soil quality, sunlight, humidity and temperature using sensors and mobile applications. This technology, therefore, creates a sizable supply, that meets the demand, and enhances production, leading to predictable and stable price of agriculture products. 

Inefficient planning could be one of the common predicaments for the farmers. Moreover, handling end-to-end process ranging from planting seeds, cultivating crops, to sorting yields is very complex to manage. These are because of too many relevant factors around the process of planning resources, for instance, labor cost, crop quality, waste and pollution management. Adopting big data analytics and artificial intelligence (AI) like Decision Support System (DSS) can help analysing and forecasting demand, weather and proportion of inputs.

By applying digital technologies to increase productivity, time and labor costs could be saved and would rather be utilized on others like R&D for even better efficiency. Also, these technologies offer greater accuracy, safety and accessibility in all areas. 

While drone, GPS, sensor system and Global Navigation Satellite Systems (GNSS) can be employed to observe new area, specify field, track plantation and even spraying fertilisers in real-time, automations – eg UAV (Unmanned Aerial Vehicle) and VRT (Variable Rate Technology) – can aid with soil preparation, sowing, seeding, fertilising, watering, pesticide protecting, and yield sorting. 

On top of that, digital technologies can ease supply chain management in agriculture sector. These days there are several agriculture-related mobile applications and tech firms including Ricult who offers high-quality product delivery, connects farmers to buyers, supports farmers’ financing access and provides data insights and analytics. These will finally improve farmers’ living standards. Farm owners can employ the technologies to utilise arable land, reduce labor, ensure crops quality and minimize wastes as well as negative environmental impacts on the society. 

In terms of a case study in Thailand, the Mitr Phol Group has adopted digital technologies in its business processes fully from planting, harvesting, packing, to e-commerce across 18 companies within it. Data on fields and crops were collected using satellite, UAV, GPS guided tractor, sensor for soil and weather and yield map. These IoT technologies integrated with cloud, mobile application and big data analytics support greater efficiency in plant maintenance, supply chain management and inventory management. As a result, the Mitr Phol Group has improved customer satisfaction of 90 per cent and saved a large amount of its costs – Bt12 million in inventory and 84 per cent cost reduction in system changing-over.

Although digital technologies seem to have various advantages to all business sectors in the present and upcoming future, there is no guarantee that simply employing digital transformation in businesses will bring success to all. There are three key factors influencing the success of digital technology adoption in business.

First, both farmers and farm owners need to know how to empower this digital disruption effectively and ethically. Thai farm owners can take the short course “Agricultural System Integrator”(ASI) by the National Science and Technology Development Agency (NSTDA).

Second, since the cutting edge technologies are costly, their adoption is probably worthy for only large corporates because of the benefit from economies of scale. In case of small farms, supports from government are still needed to adopt the technologies. 

Third, although knowledge and know-how may take some time to acquire for the optimisation of the technology adoption, the transformation needs to be implemented at the right time. Corporates may want to accelerate employing the technologies due to current supports from government and other institutions in Thailand. 

In a nutshell, the digital transformation needs to be done at the right time with the right process in the hands of the right person for the businesses’ success. 

Contributed by CHANIPUN CHATRUNGRUEANGCHAI and WIRUNPON ROCHANAVIBHATAVANICH. They can be reached at tmbanalytics@tmbbank.com

Views expressed in this article are those of the author and not necessarily of TMB Bank or its executives.