What does non-extractive AgTech look like?
Introduction
We are currently in the middle of an agriculture tech (AgTech) boom. There is a plethora of solutions being developed that help make the farmer more data-informed. This boom is happening following a general rise in awareness of the poor shape the farming profession is in, and the very strong link that has to many environmental problems we are currently experiencing. Many startups are very optimistic about the impact they desire to have, but they do not always hit the mark on improving an already fragile system.
This is why in this article I attempt to simplify and summarise the current state of the food system, and which principles data-focussed AgTech businesses should adhere to in order to not simply extract more value from the farmers. It also should serve as a tool to help stress-test your own theory of change.
The food system status quo
The food system we currently obtain our food from is based on a value chain built on top of farmers.
This value chain has naturally sought to increase the price of goods at every step of the chain. In the setup of this system more and more of the farming / scientific knowledge was extracted from the farmer into companies that sell them inputs. And the % revenue given to the farmer in this chain has steadily decreased over the last few years.
This was facilitated by the fact that farmers are slightly barred off and away from the business world. This makes exclusive knowledge silos easier to maintain.
The resulting system is one where (as depicted below):
- The consumer expects unreasonably low prices for food from the food distribution companies
- Food distribution / food brands are very large, very centralised and extract from the farmer at relatively high margins
- Input companies insource the scientific knowledge in order to best place products where relevant to in turn sell more of their products to the farmer (hereby extracting knowledge and profit)
- The farmer is crammed at the bottom of this inverted unstable pyramid, bearing the weight and somewhat crushed by the value chain
- In turn the farmer is pushed to overexploit the land in order to be able to survive and be profitable
This system we are somewhat locked into needs to take a turn on a narrow path. If we go too far to one side on this path, food security is threatened by non-scalable risky/experimental solutions and we might endure shortages or highly increased food prices. If we go too far to the other side by maintaining the status quo, land degradation is accelerated and eventually we also reach compromised food security. So we need to dance a very elaborate march out of the current state in order to reach a new equilibrium, and rebuild this pyramid in a way that is more resilient and adaptable to changing environmental conditions. What might that look like?
Those in the weeds should be empowered to take local decisions
Let us imagine that you are a sales executive at a company. You are responsible for a specific niche — let us imagine you sell pots and pans, and you specialise in the local tourism industry. You meet prospective customers on a daily basis and you are the person in your company most familiar with this market niche.
One day your head of sales imposes a new strategy based on a study they made in HQ on how to approach this market next quarter, given that the targets have increased. You slightly contest this approach because you are fully aware that this strategy does not fit your niche (e.g. a marketing campaign that is not a good way to target your prospects). But your manager insists because they have more experience and that the study was thorough.
This is exactly the state the food system is in; an inverted pyramid. Very top-down driven decisions, that do not take sufficiently into account the input of the individuals in the weeds.
It is the same with farmers and them having the granular sensibility of their land. They do countless amounts of daily observations that a far-removed input provider or food sourcer cannot possibly match. Local context in agriculture is key and is quite necessary to complement broad strokes centralised planning.
The question here is: how might we remarry the farming profession with the scientific knowledge of the land? In order to solidify and broaden the base layer of the pyramid that is the food system
To look at this question through the lens of how data and technology might empower farmers, let us look at Big Tech.
Local context in agriculture is key and is quite necessary to complement broad strokes centralised planning
What is an extractive tech company?
At inSoil, the company we have founded through the Fresh Ventures program we are specifically interested on using data and data insights to inform farmers on their transition to more regenerative practices. That is practices that regenerate the soil and ecosystems. These support the long-term stability of the farm production and farmer livelihood.
Inevitably I tend to look at other industries to see how the generation of data favours certain parties and others less so. Let us look at social media as an example.
Social media around 2006 seemed too good to be true. Free platforms where we could connect with all of our friends, upload all of our photos and remain connected to a global network. Seemed like all give and no take, right?
Back then they were in their expansion phase, and the sole goal was to attract as many users as possible and therefore add as much valuable data to the platform as possible. In a second phase, which is the more extractive phase, these networks were focussed on finding monetisation models on the data they had gathered from us as users. Famously: if you don’t pay then you are the product.
It is at this moment that the quest for value extraction from users is bound to be an imbalanced model where the corporations win and the users lose if there is no feedback system in place.
The resulting system created is one where (as depicted below):
- Users generate data which can be aggregated into insights
- Social media companies can test and probe for these insights by running micro-experiments on users
- These insights are sold to corporations in order for these to either sell their products or even create the mental conditions for a product to be sold (the latter is proven to have occurred for e-commerce, where a user is more easy to sell to when depressed or anxious)
- Insights are also sold to governments in order for them to better target citizens for campaigns , better understand citizen dynamics in order to better govern, or even generate smart propaganda
- The result is that the user is at the bottom of this once again inverted pyramid, somewhat crushed by this extractive value chain resulting in degraded mental health
Does this structure remind us of something?
My intention with this post is not to demonise neither social media companies, nor agro-input companies. It is to point out that the systemic structure in both instances is very similar in that it is imbalanced, top-heavy, inflexible and thereby not resilient. There is a paradigm that is shared between both these and other industries.
We must move away from the upside-down pyramid.
What might a better model for agriculture look like?
As a human species it is key to acknowledge the fact that we are master-imitators and master story-tellers.
We are very good at biomimicry: we learned how to hunt from felines, we learned how to build nests/live in caves from other animals, learned how to sing from birds, etc. Some of it was intuition but beyond that we observed and imitated our surroundings and we tend to forget that.
If we are to build a more stable food system we should learn from the most resilient and stable ones: forests.
What one observes in the wood wide web is that there is a fair and balanced nutrient exchange between players. Every player of course wants to get the best deal and give out as little as possible. This is because if individual survival does not happen, then the whole system cannot survive either. Plants are in more of a position of power, creating carbon as long as they have access to sunlight, however mycorrhizal networks play a key role in this nutrient distribution. Somehow the ecosystem “knows” that the sum of its parts is greater if connected rather than having very productive trees live in isolation.
What is the mechanism that allows for this systemic “awareness”?
What is truly interesting here is how this system manages the tension between competition and collaboration, and how this equilibrium has been reached over a very long time span.
It is therefore natural for us as master imitator species to look for inspiration in this ancient system to transition to stability and flexibility, given the limited timeline we have.
So what does this system look like when transferred to a system of data exchange between farmers and other players in the ecosystem?
We must find a way to guard against imbalanced extraction in order to have a more stable and resilient system.
Here are 3 core principles one must adhere to:
- Data belongs to the farmer: If one goes from the principle that the data is the farmers (and not the tech company’s), we start off in the right paradigm. If data is yours, it means you do whatever you wish with it: share it, keep it, download it, delete it, sell it. You have the agency as an owner. => Correlates with: The tree owning and deciding what to do with its own glucose
- Most data insights go to the farmer: When it comes to data, most value is in the insights and not the raw data. It is often the complex correlation of multiple factors that can signal a specific characteristic (e.g. political leaning via behaviour on social media, or the fact that someone is pregnant via browsing history etc). Therefore if the data is yours, but the insights aren’t, then the value is still siloed away from you. => Correlates with: when there is a nearby threat in the ecosystem, insights are shared between all players, and insightful knowledge is not siloed
- Fair remuneration for insights: If those insights are chosen to be shared, then there needs to be a direct incentive for it as a farmer/user. If I send my data to a food company, they might be able to certify me more easily, or pay a premium for my food. Finding these business models is a key need in the innovative sphere. Building this flywheel is key to generating a sustained power balance between stakeholders. => Correlates with: The tree giving carbon and sugars, and receiving a fair amount of other nutrients and water in return
Conclusion
Fair exchange is hard and systems can easily derail to imbalance via self-reinforcing loops. However we are time-pressured to course correct and the sincere pursuit of more balanced models is a key factor in modifying what today is an upside down extractive pyramid.
This imbalance is often reinforced by the fact that corporations have deeper pockets than farmers and therefore products are sold to corporations. The farmer automatically ends up “being the product”, which in turn emphasises the imbalance. How might we propel ourselves out of this self-reinforcing reality?
If we stick to the above three core principles our chances of success are multiplied. If the paradigm is fixed for agriculture it will most probably be fixed for social media and other societal systems.
Let this be our blueprint.
