agriculture policy brief
The digital transformation of the agriculture and food system
February 2019
Digital technologies provide new opportunities for the agriculture sector and the global food system, including smallholders, offering new solutions to meet old and new challenges. Policy makers can also benefit from digital technologies, which can support the design and implementation of agriculture policies, supporting better targeting and efficiency. olicy makers must consider both the characteristics and needs of the agriculture sector in P broader digital strategies.
What’s the issue? New opportunities to create and share information are shaping the digital transformation of the agriculture and food system. These new opportunities are particularly important in the context of the challenges of climate change and in an increasingly integrated global food system. The OECD is exploring opportunities and challenges offered by digital technologies for both the government and the agro-food value chain, to understand what roles governments can have in facilitating this transformation. Whether and how digital technologies provide opportunities to address traditional constraints in the sector, but also whether they can create new challenges that governments should take into account. Digitalisation of agriculture and farms is occurring across a broad spectrum, from low-tech solutions using mobile devices and platforms to provide management decisions services, to high-tech “digital farms”. But more than the “digital farm”, the digital transformation of agriculture is about data and the use of data. The agriculture sector is now becoming both an important consumer and supplier of data, potentially across borders, enabling value creation both upstream and downstream of the farm. Upstream of the farm, this includes providing new services using on-farm data to customise services to farmers, research and development, or finance. Downstream, farm data can feed into to the rest of the value chain: food processors, wholesalers, retailers, or
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government, for traceability and more broadly for public and private standards in line with evolving consumer preferences. Helping to overcome information gaps and asymmetries, digital technologies allow stakeholders with different preferences and incentives to work better together, creating an opportunity to improve policies for the agro-food sector as well as new market opportunities, including for small stakeholders. The ability to use digital technologies in agriculture depends not only on access to basic connectivity infrastructure (broadband, telecommunication services, etc.), but also on the development of data collection and analysis services, and on the regulatory environment. Together, this data infrastructure enables a series of feedback loops that can inform stakeholders at all levels of the agro-food value chain, including governments, to gain knowledge for decision making, increase the efficiency of existing production, and better manage value chains and policy processes. However, government should be aware that the policy and regulatory environments, or the lack thereof, at each stage of the data infrastructure influences the extent to which digital tools are available to stakeholders (see figure), as well as value added distribution outcomes. In addition, digital technologies are not a silver bullet, and old issues might still prevail, or some new problems might arise.
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