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With so much data-driven technology positioned as a solution to many technical, time and labour-based issues that reduce food production efficiency, is money the main limitation when it comes to agtech investment, or are there more complex psychological or even cultural barriers at play?
Low agtech adoption rates in Australia form a large part of contemporary discussions surrounding the future of food production.
Grants are being implemented to drive uptake with the hope of enhancing industry productivity and sustainability, however producers still have reservations despite the promise of a return-on-investment.
In March this year, Shane Thomas from Upstream Ag Insights produced a report in collaboration with AgThentic Group titled “The Agtech adoption dilemma: irrigation”. Although focused on irrigation technology, the three key barriers identified are still applicable to a range of agtech across different industry verticals.
Barrier one is deep rooted in human psychology. In general, humans would rather avoid losing something as opposed to gaining something of an equivalent amount or value.
In farming, this means avoiding the possible failure, or lack of return-on-investment from agtech is a more powerful motivator than the potential productivity, yield and efficiency gains that could come from investing.
With the potential large costs that come from investing in agtech, you can understand why a farmer would rather avoid loosing money up front for example, as opposed to waiting for financial reward to manifest later on -it’s daunting, and perceived risk heavily impacts willingness to take action.
During an interview with AgThentic, Matthew Pryor from Tenacious Ventures outlined how agtech companies need to understand what their customer (i.e. the farmer!) values. For example, If you position and sell a product with “time saving” as its core benefit to somebody that “doesn’t value their time”, you will find yourself in a constant uphill battle.
The idea of aligning agtech value propositions to “what farmers think” is essential and arcs back to the “customer centric” doctrine of marketing itself. How you frame “value” impacts interest, desire and uptake. The value of agtech needs to be framed in a way that resonates with farmers, driving action and ultimately investment.
And finally, farmers need to know and understand how to use the agtech they are being asked to invest in. This is a combination of education and support. Product education for agtech is not as simple as having a product demonstration pre-purchase or a few dedicated “how-to” videos on your website. It involves an integrated onboarding process.
The network of knowledgeable professionals -be that irrigators, agronomists or ag consultants -may also be involved in the overarching skillset needed to install, operate and maintain much of the agtech entering the digital marketplace. This too represents a cost to farmers.
Thus, the ease of accessing education and assistance is pivotal to agtech adoption, alongside the internal perception of farmers regarding their sense of support and understanding of how an agtech technology can enhance their operation in a way that is sustainable both environmentally and commercially.
Market research and insights are crucial to agtech companies, be that in the product development stage or a marketing strategy meeting.
Getting close to customers is key and understanding perceptions and barriers for different industries and regions is critical.
KG2 conducts extensive qualitative and quantitative research for a range of Australian agricultural industry stakeholders, including peak industry bodies and agtech companies.
If you are looking for a trusted source of insight or need to conduct market research to align your value proposition to Australian farmers’ needs, get in touch today.
Click here to see the article discussed this blog, and to download the AgThentic report click here
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