Industry is ‘fertile ground’ for technology, BMI Research says
Climate change seen as major disruptor to firms, survey shows
Agribusiness companies may be on the cusp of a buying spree in technology as climate change emerges as the biggest disrupting element for the business.
Technological improvements from boosting crop yields to data-tracking systems will be required in coming decades as companies adapt to shifts in weather patterns, according to BMI Research. That may increasingly push agribusiness companies, especially grain handlers and input firms, into acquiring agritech startups.
"The rise of agtech use and ‘precision agriculture’ will benefit or disrupt a number of operations and businesses in the process," the company said in a report Tuesday.
Farmers and businesses around the world are poised to feel the impact of climate change as supplies get disrupted and farmland and yields come under pressure. At the same time, agriculture, one of the largest sources of gas emissions, will face action from regulators targeting livestock and soil management.
While agribusiness leaders have traditionally focused on efficiency rather than on research, development and technology, the question is whether companies can adjust their strategies to include more emphasis on technology-related investment, BMI said. Mergers and acquisitions are one way of mitigating this dilemma, it said.
Climate change will be a key disruptor to the current agribusiness model in years and decades ahead and executives will be looking to invest in energy and efficiency to combat its effects, according to senior industry decision-makers surveyed by BMI. Automation, robotics and the Internet of Things, and to a lesser extent artificial intelligence, are also viewed as disruptors to the business.
"The agribusiness sector offers fertile ground for a confluence of technology trends" from automated tractors to big data and drones, the report said. "Yield-boosting technologies will experience unprecedented growth."