Smart farmers

Background

Boston Consulting Group: 5 trends that will reshape farming

According to the Boston Consulting Group, these 5 trends will reshape farming: precision farming, automation, consolidation, professionalism and labour shortages.

The report of the study executed by Boston Consulting Group (BCG), says that several mega-trends are combining to increase demand for agricultural outputs and thereby promote the development of productivity-enhancing innovations.

According to the Boston Consulting Group, these five trends will reshape farming: precision farming, automation, consolidation, professionalism and labour shortages. Photo: BCG
According to the Boston Consulting Group, these five trends will reshape farming: precision farming, automation, consolidation, professionalism and labour shortages. Photo: BCG

Increase in demand and production

Although the demand and production of agricultural outputs i.e. food, will increase globally, BCG expects their levels to differ among continents. North America and South America will see an increase in net exports of most commodities, while Asia (especially China) will see a corresponding increase in net imports. For countries in Western Europe, flat production growth will cause their net negative trade balance in agricultural products to persist. In Eastern Europe, a net export surplus in cereals and oilseeds is forecast; however, this will require political stability in Ukraine, the main contributor to the surplus.

Farmer’s interviews

In order to identify the major trends affecting farming structures through 2030, BCG interviewed European farmers in France, Germany, Poland and the UK and analysed patent filings from 2010-2014 related to mainly crop protection. “Enabling resistance to viruses would be revolutionary because antiviral crop protectants are not currently available.” According to the authors, the research focused on Europe, but the strategic implications are applicable globally.

European farmers feel that farmland consolidation and labour shortages will be among the major trends affecting farming structures through 2030. The labour shortage will intensify as a growing number of family members choose to pursue careers outside of farming. Combined with the drive to consolidate, this will force many retiring farmers to sell their land. Potential purchasers will include not only neighbouring farmers but also private-equity and sovereign wealth funds, although in some countries their investments may be limited by restrictions on farmland ownership. These investors may try to optimise yields and improve operational efficiency in order to increase returns.

In order to identify the major trends affecting farming structures through 2030, BCG interviewed European farmers and analysed patent filings from 2010-2014 related to mainly crop protection. Photo: BCG
In order to identify the major trends affecting farming structures through 2030, BCG interviewed European farmers and analysed patent filings from 2010-2014 related to mainly crop protection. Photo: BCG

Precision farming major trend

BCG concludes that precision farming will be the major trend reshaping farming worldwide. Precision farming uses data at the level of the square metre or decimetre, or even of a single plant, to optimise the consumption of inputs and make adjustments to accommodate variable characteristics within and among fields.

René Koerhuis

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