Globally, demand for technologies to replace human labour and improve precision of agricultural operations has been a major driver of past mechanization and is currently the main driving force behind digital automation and robotics. Through general policies, legislation and investments affecting agricultural development, governments can shape the enabling environment for relevant stakeholders, from agricultural producers, to service providers, logistics operators and manufacturers.4 In particular, promoting and investing in agricultural development, for example, by improving infrastructures, can help promote the business case for digital automation technologies. Such policies and investments play a critical role in correcting market failures and reducing transaction costs caused by poor connectivity, electricity supply, data protection and access to services (e.g. finance, insurance, education), thus improving overall economic efficiency. The following sections highlight important areas of focus.
Improving transport infrastructure
Poor infrastructure can lead to high transaction costs in accessing production items and inputs, and reaching output markets, thus reducing incentives to invest in technology, including agricultural automation. Better transport infrastructure improves farmers’ access to high-value markets, reduces transaction costs for machinery, spare parts, repairs and fuel, and facilitates the emergence of (migratory) service markets.5 Improving transport is of particular importance in sub-Saharan Africa, where it is generally poor (see Chapters 2 and 3). However, it is also relevant in other low- and middle-income countries where there appears to be limited adoption of agricultural automation.
Investing in energy infrastructure
No automation technology works without energy. Most machinery relies on fossil fuels (although some are electric) and digital automation requires electricity. Even in countries where the electric grid extends to rural areas, electricity is usually only available in towns. Access in fields is rare, even in high-income countries. For this reason, many low- and middle-income countries depend on off-grid electricity to supply energy to rural areas – if they have access to electricity at all. Policies that improve electricity supply (e.g. through off-grid electricity from renewable resources) can help support the local manufacturing sector, and facilitate uptake of agricultural digital automation and mechanization (e.g. pumps for irrigation, and machinery for processing and preservation).6, 7 Governments may want to focus on the potential of renewable energy for power mechanization down the value chain.8 Renewable energy based on local investments can also buffer, at least to some extent, shocks in the energy sector and fluctuations in fuel prices that affect the profitability of agriculture.
Improving communications infrastructure
Improving communications infrastructure is particularly important for the uptake of digital and automation technologies. Poor connectivity is widespread in many low- and middle-income countries, but it can also affect some high-income countries. What is more, access to the internet is also essential for digital automation: it allows software updates, improves computer capacity (through cloud computing) and enables access to remote sensing data and other databases. Internet access in rural areas worldwide is often sparse and expensive, especially in low- and middle-income countries. Policies to encourage the development of rural digital infrastructure could include low interest loans for rural internet providers and support for communication cooperatives that offer data services. In Europe, connectivity has improved in rural areas through the implementation of a variety of solutions, including private, public and community-led initiatives, most involving collaboration between several different parties (see Box 26 for a case in Slovenia). These examples show the importance of public–private–community partnerships for improving rural connectivity and infrastructure.9 Legislation can also play a role; in some jurisdictions, internet access is a protected legal right (e.g. Finland).10
BOX 26Broadband open access network in Komen, Slovenia
In Slovenia, approximately 50 percent of the population – close to 1 million people – live in rural areas, on average 30 people per km2. The municipality of Komen, an area with a low and declining population in the Western Slovenian region of Carst, received funds from the European Union to build open broadband networks. A public–private partnership seized the opportunity, bridging the local digital divide through rapid deployment of infrastructures, and achieved high penetration rates. A strong focus on the project’s long-term sustainability and operational costs was key to its overall success.
The 103 km2 area of Komen comprises close to 1 340 households in 35 villages. A challenging, rocky terrain and low population made it unviable for commercial providers, given the high costs and minimal returns. The local municipality developed the project, with support from a private partner.
Work proceeded swiftly with very tight completion deadlines. The local authorities collaborated actively with the private partner; their help in overcoming permit issues led the municipality to issue the necessary paperwork promptly – key for respecting the work schedule. Communication and awareness-raising, aimed at all citizens of the Carst region, was very effective and smoothed relationships with the local population. This close cooperation between the partners during the buildout phase rapidly led to high penetration rates.
SOURCE: European Commission, 2020.11
Investments should also target associated enabling infrastructures, such as public datasets on weather forecasts and calendars for crop and livestock production. An example of a cooperative effort in this field is provided by the Digital Public Goods Alliance (DPGA), a multistakeholder initiative of which FAO is a member. DPGA facilitates the discovery, development and use of, as well as investment in, digital public goods in multiple sectors, including agriculture.
Improving general credit markets and exchange rate policies
Credit is critical for investing in agricultural automation and for financing agricultural technologies generally. Small-scale producers’ access to credit is usually limited, especially for women, due to a lack of collateral (e.g. land titles) and high transaction costs, among other challenges.12 Prohibitive interest rates often make it impossible to source credit to finance machinery5, 12 and other automation technologies. Unlike seeds, fertilizers and pesticides, automation technologies are expensive with the costs spread over several years. Interest rate policies can heavily influence automation patterns, as seen in various Asian countries.6, 13 Exchange rate policies can also affect automation due to their impact on the import costs of machinery, spare parts and fuel.5, 13 Guaranteeing affordable interest rates for credit and ensuring stable exchange rates are essential for long-term investments in most automation technologies.
Establishing transparent national data policies and legislation
Digital automation technology often collects massive amounts of data regarding crops, livestock, aquaculture and forestry. This may include proprietary information and thus raises privacy issues for agricultural producers. Data that are unprotected by privacy legislation can be a valuable commodity, and legal frameworks may be needed to clarify who benefits from use of the data. Transparent legislation on data protection, sharing and privacy is a key enabler of digital automation as it allows to build trust among farmers. In particular, there is a need for clear rules concerning ownership and control of data. It is recommended to consider the notion of “privacy by design”, integrating data protection into technology design.
There is also a need to support responsible and progressive digitalization of the agriculture sector, including development and support of national data infrastructure. Interoperability (accurate and reliable communication among machines) is vital for data sharing and needs to be technically defined and legally enforced. Legal interoperability defines the regulatory framework for data exchange, while protecting aspects such as privacy.
Another related area is the institutional and political capacity for digitalization and automation. Experience from low- and middle-income countries shows that powerful private technology companies often anticipate such a governance system, with potentially negative consequences. This is referred to as digital colonialism,14, 15 where power and influence are concentrated in large corporations through, for example, proprietary software, to extract data and profits from users. Most low- and middle-income countries cannot develop a competitive digital industry using their own resources. However, it is important to develop the capacity of national and regional governance to at least guide automation technologies, rather than the other way around. Cooperative efforts to address data challenges are also important, as exemplified by the diverse set of partners in the DPGA, which disseminates digital public goods. These efforts also emphasize the potential of digital communication to share information on automation technologies and raise awareness of their potential.
