By Carl Sudholz
Digital technology will never create the 10x returns so longed for by venture capital investors. Unless the technology fundamentally changes the natural systems that drive productivity on the farm, any talk of 10x returns is hyped up gobbledygook.
Agricultural productivity is driven by natural systems, not digital systems. The top drivers of agricultural productivity have very little if anything, to do with digital technology:
Against these factors, everything including farm management decisions falls into relative insignificance when it comes to increasing farm productivity.
So unless the impact of an agtech, farmtech or farm decision, fundamentally changes the natural systems of production on the farm, the productivity benefits achieved will only ever be in the range of 0%-2% over the medium and long term. Of course, benefits of tech may go higher or lower on the basis of an individual season, but always as driven by the natural systems of the farm.
The idea that farm productivity is in the complete control of the farmer, goes to the heart of why so often venture capital investments into technology in agriculture, so often miss the mark.
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