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Future Farm, Future Crop: Utopia or Dystopia? Parts 1, 2, 3, 4, and 5 of 5

Business News/Analysis, Farming/Growing, Feedstock, Feedstocks, Field/Orchard/Plantation Crops/Residues, Forestry/Wood, Funding/Financing/Investing, Green Jobs, Infrastructure, Logistics, Opinions, Policy, R & D Focus, Sustainability
August 10, 2015

by Jim Lane (Biofuels Digest)  As America’s farmers hit retirement age and technology options explode, what comes next?

… The average age of the US farmer reached 58.3 years in the USDA’s 2012 Census of Agriculture. For sure, farmers have been older than the general population for some time. Why is it becoming important now?

First, one-third of all farmers are now over the age of 68. Second, Arama Kukutai, managing director at Finistere Ventures and one of the sector’s foremost thought-leaders, estimates that something like 75% of farmers do not expect to hand off the farm operation to their children.

Given that 97% of farms are family-owned, that means a wave of transition is coming, fast. and given that $2.5 trillion in land value is tied up in US farms, it will have impacts that roil markets far away from Iowa.

Especially if you consider the huge and not widely covered impact that land prices have on the US economy via the Wealth Effect, which we investigated in April, here.

The Choices that Farmers have

As with “Let’s Make a Deal,” we have doors 1, 2 and 3. Door number one, the children of farmers have a change of heart and decide to operate the family farm going forward. However, worth remembering that these children are increasingly in their 30s and 40s with careers of their own, and families locked in to other communities and a different way of life. Door number two? The families sell the farming operations — possibly to corporate farming interests, private equity funds, or other farmers consolidating the sector. Door number three, the farms are leased to professional operators.

Given the number of farm operations changing hands in the next 10-20 years, the leasing option may well prove the less disruptive model, avoiding a crushing depression in land prices owing to demand-supply imbalances in the land market.

What kind of farm operation might we see?  Think automation.

For one, those fun Google automated vehicles will probably be seen in farming operations long before you see them on US streets and highways.

Consider also the wiring of the field. Companies like CropX, with just three sensors on a given field, can reduce water consumption today by up to 30% through smart application of water based on plant dryness, as divined by the sensors. READ MORE

Part II: UTOPIA?  The Crop and Soil Technology Revolution, and what’s sizzling in drones, robotics and analytics.

It could be utopian, couldn’t it, the future that is, and right around the corner, perhaps?

Corn yields at the 300 bushels per acre level, with reduced inputs, and globalized. New healthy foods deploying from fermentation runs and tissue culturing. Run-off of nutrients minimized if not eliminated. Water inputs down 50% on a pound-for-pound basis. Sensors relieving the burden of long days in the sun; unmanned vehicles doing the hard yakka of planting and harvest.

Workers on the land becoming workers of the mind, managing vast banks of data and options in finance, input purchasing, transport, nutrient delivery, plant trials, soil condition, plant height, weed and pest detection, disease control and more.

An influx of knowledge workers into rural areas around the globe, which become high-wage, high-quality of life centers for a healing planet that is minimizing the impacts of climate change. A renaissance of Life Sciences research as DNA computing becomes the next platform of choice and computer sciences, agronomy, physics, chemistry, biology and engineering evolve into a seamless whole — The Materials Superhighway.

Possible, plausible?

Possible? Far more than that — parts of that scenario have progressed to plausible. One of the reasons we see huge deal volume as a Silicon Valley AgTech story —264 deals in all in the area of Agricultural Technology in 2014 alone. Hard to believe that the fields are outperforming the entire CleanTech field, but that’s the case.

30 percent of the deal flow, according to AgFunder, was in the emerging area of PrecisionAg, broadly defined as “a group of hardware and software technologies that help farmers improve decision-making with data-driven analytics”.

Digesterati Vonnie Estes, in a prescient essay in the Digest in February wrote: “… Any technology that involves a seed will have to go through established seed distribution systems to get widespread market adoption. Any sensor, drone, or robot that gathers data will need that data integrated and delivered to the farmer in a way that will allow for better decisions. Do not ask anyone to do things differently in the supply chain. If the product will go through the normal distribution channels, it needs to be able to withstand sitting in a truck in Iowa at 100 degrees or being stored in a warehouse for a year.”

Precision Ag: Look at these technologies for a gander at the future

Semios: The Digest’s 2015 8-Slide Guide

PrecisionHawk: The Digest’s 2015 8-Slide Guide

The revolution in AgTech – The Digest’s 2015 8-Slide Guide

5 Trends to Watch, Now

Based on our discussions within the sector, here’s our outlook.

1. Consolidation in operation but not ownership. …

2. Automated vehicles now, crop & soil technology always. …

3. Annualization of as many plants as possible. …

4. From automation will flow analytics. …

5. The management operations center. …

READ MORE

 

Part III:  DYSTOPIA. As Automation Arrives in Force (and We mean, in Force) — Who Votes for Farmers When There Are No Farmers to Vote?

Are there downsides for feedstocks and supply chain if a technology wave goes wrong?

So, the opposite of everything going right with technology, is that everything goes wrong, usually wrapped in a blanket of best intentions.

The USDA reports:

Of the 2.1 million farms in the United States in 2012, 97 percent were family owned operations. Eighty-eight percent of all farms were small family farms, with less than $350,000 in gross cash farm income, and nearly 9 percent were midsize or large family farms. Only 3 percent of U.S. farms were not family owned, but they accounted for 16 percent of the value of all U.S. agricultural products sold. 

Even today, 1.4 million farms’ principal operator is “retired but continues to farm on a small-scale” or “has a primary occupation other than farming.”  Another 336,000 have gross farm income (that is, before inputs) of less than $150,000.

16 US states have more than 50% of their land devoted to farming, representing 639.6 million acres in all. But even these states have 1.11 million farms between them, out of 91 million in population. With 1.5 operators per farm, that’s around 1.68 million farm operators in those “farm states”.

Hmm, that’s 89.42 non-farm operators living in “farm states”, or 98.1 percent. In the “non-farm,” states, 99.3% of the population qualifies as “people not operating a farm”.

So, the land has no vote; it’s a Vote Desert, and should 75% of family farms not be passed along to the family in the next 30 years — why, we may see the “farmer vote” drop well below 1 million, nationally. Controlling some 900 million acres of the US.

After all, the wave of technology innovation could make it far worse, according to critics.

They cite potentially catastrophic effects from genetically modified crops, modern pesticides, and polluted run-off from farms into the water system.

Nina V. Fedoroff, science and technology adviser to the secretary of state from 2007 to 2010, and a professor of biology at Pennsylvania State University, wrote in the New York Times op-ed recently:

“Decades ago, when molecular approaches to plant improvement were relatively new, there was some rationale for a cautious approach. But now the evidence is in…The European Union has spent more than $425 million studying the safety of genetically modified crops over the past 25 years. Its recent, lengthy report on the matter can be summarized in one sentence: Crop modification by molecular methods is no more dangerous than crop modification by other methods.”

Why the disparity between perceptions, and science?

At one level, technology change produces its own special kind of fear, technophobia. A study published in the mid-1990s estimated that 29% of first-year college students had “high-level” technophobic fears, and a 2000 study reported that 85-90 percent of new employees at a given organization “are technophobic to some degree.”

Off-shoring of jobs

But wait, there’s more. We get to tie into another macro-trend that people just hate. The offshoring of domestic jobs.

In our future farm, future crop scenario, we see an awful lot of computing power required — screens of data assembled from sensors in the ground and drones in the sky — asessing soil health, water, pest threat, heat, plant development — and operating unmanned vehicles harvesting in the field.

Where might those arrays of data be best interpreted? Perhaps not in the living room of the family farm. Perhaps instead at international operations centers where decisions are made, and equipment operated, via algorithms.

Could rampant consolidation of land ownership — potentially cross-border — lead to price-controlling cartels? Or, the rise of farm-based equivalents of the East India Company, which once as a private company controlled the world’s largest standing army?   READ MORE

 

Part IV:  How Will Agriculture and Industrial Biotech Command the Attention They Need?

… Whether it is plant height, soil wetness, pest presence, or heat index — farmers of “smart fields” will produce more with lower inputs.

The Monster Impact of Farm Improvement on State-by-State Prosperity

In a state like Iowa (land of 185 per bushel corn yields), a 62 percent lift in farming income translates into a $19 billion direct jump in state GDP, or 13.1 percent.

And also there’s the wealth effect. The USDA estimates that for every $1 change in the value of real estate, there’s as much as a 9 cent impact on GDP. That’s for the housing sector as a whole — we don’t have a specific figure for farm-related real estate. And as “Land values are determined by the income and the interest (discount) rate used,” according to Iowa State’s Center for Agriculture and Rural Development, we might add in another $13.6 billion in indirect impact, or 9.3 percent.

In all, that’s 22.4% real income growth.

If farm=prosperity, why do national political leaders ignore the agricultural sector?

Yet, we have 17 Republican presidential candidates tramping currently through Iowa in preparation for January’s Iowa caucuses, the first test of the election season, and only a handful offer more than tepid defense, if not outright opposition, to the Renewable Fuel Standard, directly credited by Iowa’s (Republican) administration as the state’s main engine of growth?

The problem of “never…have so many owed so much to so few.”

The problem of course is that presidential candidates have surmised that hardly anyone works directly on the farm anymore. It’s a Vote Desert, ..

So, given that we live in a world where many commodities are controlled globally by cartels, market structures for a successful advanced bioeconomy will not be imposed by a “majority that sees the obvious benefit”, the two usual conditions for political, social, or business action.

A lesson we can draw from societal changes is that statistics rarely move mountains, and neither do fact sheets. People change their minds, often in great sudden landscape-shifts (as we saw with gay marriage or votes for women, in the United States), because they tire of avoiding change demanded by an underclass more than they fear the impact of that change. “More of the same” becomes simply unpalatable by comparison.

That was then, this is now

Right now, we don’t see those conditions. There was a transitory time in 2004-2009 when, perhaps, the active hostilities in and out of the Middle East caused many, for a time, to consider that the risks of transformative change were more palatable than the risks of “more of the same”.

But the war faded, 9/11 has become a fainter memory, the Great Recession arrived, and new technologies unlocked a whole bunch of affordable oil & gas in the United States.

So, right now, “more of the same” doesn’t feel bad enough to people to restructure the economy to make way for an advanced bioeconomy, or much else either.

Future Dystopia sells movie tickets, not societal change. Misery usually has to be present, and personal. So, at every stage a dialogue should be stated in terms of things people want, and can’t get. Sputnik was well positioned as an American technical failure by rocket scientists, rather than a Soviet advance.  READ MORE

 

Part V: Who’ll Stop the Rain?

What happens when the rain moves, as it already is moving?  Are farms in the right places? Are cities? Are the rivers and lakes?

If you haven’t noticed lately, the rain is moving. It’s not raining exactly where it used to, the way it used to. So it says in a report published in Proceedings of the National Academy of Sciences, here.

For example, it didn’t stop raining in the United States this past winter, it just stopped raining between the 34th and 40th parallels along the California-Nevada border, where it usually becomes the kind of snow that attracted the 1960 Winter Olympics to Squaw Valley.

Rainfall in the Sierra Nevada powers the 6th largest economy in the world — move it 200 miles to the west and it falls uselessly into the Pacific. You may think that great cities are powered by industry, or agriculture, or mining, or tourism, but they’re really powered by watersheds.

BEEP! Why “Desalination” is the wrong answer

Oh, someone out there probably just said “desalination”. Which is perfectly fine as long as you have a super-cheap and abundant energy source, meaning nuclear, and you won’t. And that you don’t have to move the water you produce, which you will. And that you can think of something safe to do with the tonnage of salt you’ll produce, which you can’t.

If you don’t like the cost and hassle of reducing rain shift by using sustainable biofuels — because the cost of producing and moving, say, 600 gallons of fuel per capita from nature’s bounty instead of just digging it out of the ground — you’re going to really hate the cost and hassle of producing and moving water.

So, one way to think about renewable fuels and other carbon-mitigating strategies is simply as an insurance policy against the rain moving and more than it already is. And remember, it not how much rain a country receives, it’s where it falls, because when it falls in the wrong place, you get flooding and soil run-off and backing up sewers (if you have sewers), or rainfall sinking down into clay aquitards instead of aquifers.

Bottom line: anything you don’t like in a year of “new fuel sources” policy you can get in each and every 24 hours in a “new water sources” policy.  READ MORE

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