The Goods, the Bad, and the Ugly: Data and the food system

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Photo Credit: Goodluz/Shutterstock.com

The business of agriculture and food is driven by data, making it the treasure trove of today’s agri-food system. Whether it’s today’s soil moisture, tomorrow’s weather forecast, or the price of rice in Riyadh, every bit of data can improve the efficiency with which the world’s 570 million farmers put food into the mouths of its soon-to-be eight billion consumers. Digital technologies are facilitating the flow of data through the food system, shrinking information asymmetries and fashioning new markets along the way. How can we ensure these new markets are appropriately contested, and the treasure does not end up in the hands of a couple of gunslingers? Is there a public sector’s role in generating and disseminating data that on the one hand encourages innovation and competition and on the other reduces opportunities for market capture? One place to look may be at the crossroads of internet and public goods.

We all remember from econ class that public goods can’t be efficiently allocated by markets because they are non-rival and non-excludable. There are precious few examples of true public goods – national defense, clean air, and lighthouses come to mind. That is, at least until Coase’s in “The Lighthouse in Economics” argued that lighthouses are excludable because it was possible to temporarily turn-off the lighthouse when a ship sailed by that didn’t pay their port fees.

Is data also a public good? In the era of Internet, this may very well be the case. This is because internet is a place where consumption of information by one does not preclude consumption by another; and exclusion from a given source of information is virtually impossible when the marginal cost of access to the internet falls to zero (think of the free wifi in your local library).

This idea is not new at all. In fact, the World Bank’s Open Data Initiative pioneered the concept by emphasizing early on that the benefits of Open Data include transparency, public service improvement, innovation and economic value, and economic efficiency. The potential is staggering with a McKinsey study estimating that open data can help unlock three to five trillion dollars in economic value, and this does not even include the agri-food system!

For agriculture, one example of a game changer that really stands out is LANDSAT data. The data include three decades of reliable data on land use change, creating endless possibilities for scientists and entrepreneurs. Since the day these data were made available for free in 2008, demand has grown exponentially. A report by the USGS in 2013 surveyed 11,275 LANDSAT users on the uses and value of LANDSAT Satellite imagery and found 43 percent of respondents started using LANDSAT after the imagery was made available at no cost on the web in 2008. Seventy-seven percent of the respondents stated they were dependent on Landsat imagery to do their job. And the economic benefit of Landsat data for 2011 was estimated to be $2.19 billion.

Another example of the value of open data can be found in Uruguay, where the state provides public access to soil information. Soil types are classified according to their productivity and measured by the index called CONEAT. An online open access map provides plot level information on soil type, productivity, and land use. The index correlates well with the price of the land, ultimately making the market more competitive through access to better information.

Are the soils and land use maps sitting in the basement of the Ministry of Agriculture one part of the buried treasure that we’ve been searching for? They just might be if they are scanned and made available for free on the world wide web, because they drive down the cost of businesses entering new markets. The key is defining the role of the public sector in making sure that this takes place in a way that increases efficiency, equity and sustainability.

We hope to crowd-in some of the world’s best minds to participate in a global conversation on food and technology through the “What’s Cooking? Rethinking farm and food policy in the digital age” blog series. We invite people with diverse backgrounds and perspectives to join us and comment below.

Authors

Kateryna Schroeder

Agriculture Economist, Food and Agriculture Global Practice

Join the Conversation

Mutaharra a w deva
November 02, 2018

Open data has no parallel for economic growth in the agriculture sector,provided farmers are able to use it properly. Data should be reliable and ground truthing is must before making it available to the agriculture sector. In our region land utility is decreasing due to infertility of soil caused by pollution and lack of knowledge for its proper treatment.

Julian Lampietti
November 26, 2018

Dear Mutaharra,
Thank you for your great comment and you are absolutely correct on the importance of the open data for the economic growth! Open large-scale data sets can provide farmers and value chain actors precise insights to increase efficiency and productivity. However, there remain unanswered questions on ownership, access, transfer of agricultural data. This poses a challenge in developing a regulatory framework that can account for the potential threats to the privacy and autonomy of individual players in the agri-food systems in an inclusive and dynamic manner, without impeding innovation. This is something we are further exploring in the ongoing study on the role of digital technologies in agricultural transformation.

Boanong Nestor Shey
November 13, 2018

This piece of information was very useful to me.
Indeed, information asymmetry is the major disincentive to small scale farmers in my local community.
tradesmen take advantage of the rural woman's lack of market information to exploit them. Also, they depend mainly on crude techniques and nature for farm yields. There is no available information concerning soil types and corresponding seed species that can do well on them. Another serious problem is lack appropriate storage and crop preservation technology. This makes farmers not to be able to enjoy the benefits of a bumper harvest since during this period tradesmen make them to believe supply exceed demand and as such buy at very low prices
My team is currently working on innovative solutions to these problems and more.
1. We are making market information on prices available to rural women.
2. We intend to do soil test on the various farms to know the best seed specie or crop suitable
3. We are working on improving quality of final product by providing better preservation and storage techniques. This is to make the final product more healthy and market competitive
4. We will be providing branding and packaging to add value to the farm produce.

Julian Lampietti
November 26, 2018

Dear Boanong,
Thank you for your comment and sharing your experience! Digital technologies can drastically improve efficiency by enabling farmers to obtain accurate and timely price and weather information. Lower price dispersion and search costs help farmers bypass middlemen and improves agricultural market performance at the macro level. Many smallholder farmers in developing countries have faced huge challenges as a result of climate change-induced weather effects. Most of these farmers rely on traditional methods to understand weather predictions, but localized satellite weather data, transmitted via digital technologies, can potentially provide information on best timing for planting and harvesting, as well as improve risk mitigation strategies. This has direct implications for agricultural efficiency and production decisions, and, hence, farmers’ livelihoods.

Oloruntoba Isaac
November 14, 2018

Access to data is very vital for optimal productivity and efficiency in every organization, in which agriculture particularly crop farming is not exempted. It will be a very great thing, if all farmers can have equal access to soil and weather data or the current happening in their localities, most especially now that we are in the era of serious damaging effect that faces our environment (Climate Change).

Julian Lampietti
November 26, 2018

Dear Oloruntoba,
Thank you for your excellent comment! Indeed access to data in the digital era is becoming even more important! In turn, this raises a question on the role of the public sector in generating and disseminating data that would on the one hand encourage innovation and competition and on the other reduce opportunities for market capture.

Nukkad wala
November 16, 2018

Thanks for sharing... Nukkadwala

Julian Lampietti
November 26, 2018

Dear Nukkadwala,
Thank you for your intertest! We are further exploring this and other topics related to the enabling environment for digital agriculture in our study “Digital Acceleration of Agricultural Transformation”.