For farmers—and the tech companies that want them as customers—data has been a disappointment.
A few years ago, the agricultural world was full of promises about how the widespread use of data was going to change farming. Companies sprang up that offered to collect huge amounts of information about everything from weather patterns to the soil on farms to the health of crops.
The sales pitch: With all this detailed information, farmers would get untold insights into what was happening on their land. And they could use that information to boost production.
But the revolution has been slow to catch on.
Many farmers who used the digital services found it difficult to digest the mountains of information and figure out how to put it to use. Many others simply weren’t sold on the idea, or couldn’t afford the investment as crop prices fell.
This has changed the outlook to the point where venture capitalists, who drove much of the investment into data-based farming, are approaching agriculture in a different way. Instead of betting on legions of companies that provide farmers information, they’re now pumping money into companies that offer tools and services, such as robotic farm equipment, or on biotechnology and genetic editing of plants, that bring faster and more obvious results.
“It has been a challenge, because the promise of technology hasn’t been able to keep up with expectations,” says Rob Leclerc, chief executive of AgFunder, an online investment marketplace where companies seek funding.
In 2016, investments in data-driven agriculture—known as precision agriculture—fell 39% from a year earlier, according to AgFunder, due in part to a broader decline in drone investments. At the same time, investors see promise in agricultural technology that goes beyond data. Venture-capital investments in the agricultural sector overall rose to $560 million last year from $201 million in 2015, according to PitchBook—and that total excludes hardware like satellites that can be used in agriculture but also have other uses.
Meanwhile, many of the startups at the forefront of the drive toward data have struggled or shifted focus.
One of the better-funded data-driven startups, FarmLink LLC entered liquidation in February. Its harvesting equipment gathered data on yields as it picked grain, to give farmers insights about how to plan for the next year. Geoffrey Berman, who represents FarmLink creditors, says the Kansas City, Mo., company shut down after it couldn’t find additional funding.
The mania for data-focused farming was sparked largely by Monsanto Co.’s nearly $1 billion acquisition of agriculture-data firm Climate Corp. in late 2013.
