Reducing Energy Footprint in the Agri Industry

How high-tech and the Internet of Things can drive success in the fast-transforming agriculture sector in South Africa

Agriculture is a high-pressure industry. It has faced drought and floods, late rain and early rain.  Climate change is an ongoing threat – along with enormous economic and social upheaval. Agri has had to focus on innovation to achieve sustainable growth and provide for returns on investment in an increasingly capital-intensive business. The bucolic vision of farming of yesteryear masks a high-pressure environment that requires high technology. This is the right time for farmers to adopt new approaches and to examine how IoT and AgriTech can support their needs more effectively – especially reducing their environmental footprint, in this energy-intensive sectory.

There are several trends that are having a significant impact on the agricultural sector. Energy costs keep rising, self generation of electricity is exploding, climate change is very real, and everyone wants to reap the benefits of automation and intelligence. South Africa is already more expensive than every European country for electricity. 92% of self generated electricity is produced from renewables globally, of which 61% is solar (says the Economist Intelligence Unit).  And according to our Department of Energy, we will see installed PV solar grow from 1.48GW to 3.6GW by 2026. This could reach 11GW by 2030 – a third of Eskom’s current 35GW of coal-fired capacity. 

In the agricultural sector, there is a rapid move to install solar power as farms become more automated, and require dependable, cheap power. However – large scale solar is a huge capital cost – so new funding models are starting to appear in this space. Combine this with farming itself becoming massively capital intensive to build ‘intensive production’ infrastructure, and you have a perfect storm driving fundamental changes in the sector. There is a rapid tendency to corporate-style professionalisation in agri – together with consolidation of ownership of many farms by agri holding companies.

Today, more farmers have tertiary agricultural qualifications than in the past, and more farms are being structured and resourced as businesses. What was a vocation where farming families handed skills down from generation to generation is becoming an industry with clear consolidation mandates, and planning  is now less about following the ebb and flow of the seasons and more about developing the intensive ‘agri-manufacturing’ capability. Business structures must be institutional investor-friendly, with centralised ownership and management across multiple farms. Hard numbers are not easy to come by, but examined as VAT-paying registered business, while micro farms (<R1m turnover) are dwindling,  small and medium farms (<R6m and <R10m) are holding steady, and large farms (>R10m) are growing in number, from 3 814 in 2009 to 5 135 by 2017. At the same time, the number of  dairy farmers (for example) is falling, from  3500 in 2009 to just over a thousand today. Less farmers, more farming. 

Bad news for farming communities, good news for the economy: large farms in 2017 accounted for 67% of all agri revenues in South Africa, and 51% of all employment.

Agriculture as an industry is looking at inventive ways of building shareholder value while developing new markets, all with the objective of capturing the attention of the right investors to fund all this modernisation. Most professsionalised farming concerns are realising the inherent value of technology to improve efficiencies and  operational management – and increasingly records and data management, and are looking for solutions that can help them achieve measurable results with intelligent tools.

The Internet of Things (IoT) is increasingly invaluable to this sector, largely because systems have come down so rapidly in cost and complexity. Today, IOT technology is easy to implement, flexible, and very affordable. Smart energy metering, management and automated control systems can improve factors such as effective use (or even operator misuse) of farming systems as well as manage energy (both fuel and electricity) much better. IoT has proven value across the three key tiers in farming of field and harvest management; packing and logistics; and farm operations. 

There are some important, agri-specific factors to consider to ensure that any solution will deliver the benefits expected. There are inherent practical issues in agriculture that can impact solution design, such as farm connectivity: the last and middle mile distances to get from a telecoms privder to the farm, and intra-site distances within a farm from field to factory. High tech in fields is definitely valuable, but it requires careful planning and a focus on fitness for purpose.

The farmer needs reliable sensor data from energy management devices; it also needs for these devices to be cost-effective and easy to use, plus they need end-to-end monitoring of IoT systems to ensure their telemetry and control capability is reliable. As the tech costs continue to come down, and the capabilities of these systems continue to go up, it is becoming increasingly accessible for Agri to adopt the high tech. What is still lacking is tech solution providers designing products that talk directly to the needs of this sector.  

Farms need local connectivity and compute onsite, they need the right infrastructure, and they need intelligent tools that can help them optimise everything from moving pallets to saving energy. This is what makes IoT such a rising star in the sector today. It’s easy and quick to install, it leverages off multiple connectivity options that can be customised to meet very specific location requirements, and it’s safe and cost-effective.

It’s a huge market for SA’s technology solution providers that is almost totally untapped. Remember those 8 to 10,000 medium and large farms? 

They need local connectivity and compute, with Wi-Fi between buildings for computerisation. They need replicated server infrastructure with Cloud-synch capabilities suitable to high cost/low bandwidth connectivity options. 

They need IOT connectivity for devices within the farm – LoRaWAN, 6LOWPAN, MIOTY, WiSUN and other technologies, with Wi-Fi and Ethernet backhaul.

They need farming-centric business software. They need Cloud application integration expertise. 

Just taking a back-of-the-envelope calculation for basic systems, and we’re looking at a R2-billion agri-focused tech services market. An opportunity just waiting to be seized. 

The future of the agriculture industry rests in the hands of connected technology systems – IOT and distributed computerised systems. Not just because this ticks so many productivity and automation boxes, but because it can fundamentally shift many legacy challenges around cost reduction, production improvement and long-term sustainability without costing the farm that proverbial arm and a leg.