New waves of IT in agriculture

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New waves of IT in agriculture

• David Zilberman
• Zilber_at_are.berkeley.edu
• University of California Berkeley

2
Overview

• New IT
• Lessons of adoption in ag
• Trend in ag and implication for IT

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New Waves of Information Technology

• CommunicationInternet, video
• Enhanced computing
• Remote sensing/ Geopositioning
• NetworksWeb
• Wireless
• MiniaturizationMicro and Nano

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Expanding Capabilities Meeting Latent Demand
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Identification and Tracingin regulation and
marketing

• Who did it ? Identification of source of
  pollution, etc. Transition from non-source to
  source-point pollution control policies.
• Who made it ? Identity preservation and product
  differentiation. Value capture in retailing and
  biotechnology.

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Differentiation Discriminatory Treatment in
Production

• Transition from uniform treatment of
  heterogeneous elements within the system to a
  precision system, where heterogeneity and
  variability are recognized and treated over space
  and time.
• Enhancement of productivity by
• Improving quality
• Increasing yield
• Reduced cost

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Aggregation Creating Markets

• Building a critical mass for differentiated
  products.
• Match-making
• Resale
• Cooperative buying and selling
• Enhanced price discovery
• E-marketing is in its infancy and worth 150
  billion annually.

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Overcoming Barriers of Space and Time in
production management

• Video conferencing
• Remote monitoring and treatment of living system
  applications in
• Veterinary medicine
• Pet control
• Wildlife management
• Water resource systems

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Elements of Agricultural and Environmental IT
Packages

• Package Multicomponent
• Requires multidisciplinary cooperation in
• Information science
• Natural science
• Decision science
• Engineering

Monitoring
Diagnosis
Prescription
Application
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Determinants of Technology Specification

• Technological feasibility
• Cost
• Demand
• High quality premium --gt investment in
  sophisticated quality control system
• Low value of saved inputs / minimal gain in
  output --gt reduces incentives for precision

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You can guess the use, impact, and value of a new
technology ahead of time but you cannot know
it.
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Research on adoption aims to understand
Who adopts and when How to market new
technologiesHow policies affect adoption
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• On the Adoption and Impact of Information
  Technologies in Agriculture, Resources, and the
  Environment

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Adoption-Dynamics ProcessS-Shaped Function of
Time
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Adoption within Diverse Populations

• Early adopters have most to gain from technology,
  tend to be younger and more educated.
• Adoption is triggered by crises, higher prices,
  or regulation.
• Credit constrains adoption.

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Lessons of Low-Volume Irrigation Drip,
Microsprinkler

• Diffused very slowly over 20 years, currently
  covers less than 10 of farmland.
• High adoption rates on high-value crops, fruits,
  and vegetables, and in landscaping.
• Gardeners are farmers too.
• Spurts of adoption following droughts.
• Adoption is higher in locations with high prices
  of water, sandy soil, and steep landlocations
  where the technology is most profitable.
• Drainage problems trigger adoption.

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Lessons of CIMIS

• Benefits in the early 1990s were estimated to be
  15 times the cost.
• Agricultural water savings, 10 to 40
• Yield effect, up to 10.
• Led to adoption of advanced management.
• Unintended major uses were also in
• Urban water use
• Pest control
• Legal procedures
• Spawned a private network of weather stations
  with software management strategies.

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Computers in Agriculture

• Slow adoption rates only 25 in 1990, today
  close to 75.
• Early adopter characteristics
• larger, with multicrop integrated operations
• younger, more educated,
• Adoption enhanced recently by
• Lower cost, user friendliness
• network externalities
• fun factors
• Most adopters used word processing, billing, and
  business applications much less use of
  managerial application.

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Technology leaders

• Small number of leaders push frontier
• DRIP,Computers,varieties,crops
• Innovation is tough
• Mostly in high value crops
• Automation
• Saves labor,chemical water
• Increase quality
• Reduce risks-physical financial
• Cheap inputs reduce incentives to innovation
• Regulations enhance adoption-
• Timing matters

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Agricultural Practices in the Information Era

• Software and remote sensing ease compliance to
  pesticide-use registration requirements.
• Electronic water markets.
• Web and e-purchasing of inputs.
• Cooperative electronic purchasing.
• Electronic consulting.
• E-marketing of flowers and other high-value
  output.
• And thats only the beginning.

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Precision farming potential in irrigation of
cotton
Realizing the potential requires perfect
information application
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Factors affecting gains from precision

• Ability to monitor the variables that count
• Correct reading of information- 5 misdiagnosis
  may lead to losses
• Timeliness
• Effective and diverse response options-
  e.g.heterogeneous field conditions may benefit
  from diverse genetic choices (Biotech and
  Precision may go hand in hand)
• Ability to replace or reduce polluting inputs

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Processes affecting agriculture

• Population growth
• Environmentalism
• Consumerism
• Globalization
• Privatization
• New technologies-
• Biotech
• IT

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Gains from quality
High quality
Price of peaches
1.00
Low quality
.30
Time
Midseason
Quality measured by sugar content flavor and size
can triple prices. Seasonality matters
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Willingness to pay for green and clean

• gt10 of consumers will pay gt25 for pesticides
  free crops
• Prime markets(Japan) reward minimal chemical and
  biological manipulation of foods
• Yard care industry grosses gt 40 Billion annually
  nation wide
• Golf courses gross gt 6 Billions in California
  annually
• Stigma effect of contamination reduce price of a
  unit of housing by gt50K
• During next decades
• Several Billions are planned to be spent animal
  waste
• Tens of Billions on water quality

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Complementarity of IT and new Biotechnologies

• New biology will increase varietal choice
• Need capacity for changing variety and treatment
  within fields
• Need documentation of treatment,state of plants
  and immediate response to changes

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Think Locally act Globally

• Ag and environmental IT will provide export
  opportunities- most ag and resource problems are
  outside the US
• With or without Kyoto CO2 emission reduction and
  sequestration will be rewarded- monitoring will
  be required
• Transition from water extraction to improve water
  efficiency- source of new global demand
• Development increases demand for environmental
  amenities- It will allow to provide them cheaply