How tech is transforming agriculture in China
By Line Heidenheim Juul
China is testing out drones to spray pesticide, unmanned transplanters to seed, block chain to follow chickens, IoT-devices to monitor land and data to understand demand for produce more precisely. As the world´s population and food shortage will continue to grow, it is a national security issue to improve efficiency in food supply.
The major Chinese tech giants are moving in and testing out tech- driven solutions. Could this help China meet the growing domestic demand in the future? While the new ventures are very exciting, most of China´s farmland is still very manually operated.
According to Statista around 25% of China´s workforce are in agriculture, but the sector is based largely on small, family-owned farms, and it is in many cases still quite old fashioned. In part due to Covid, the global food shortage is growing, and China has for years known that there will be a battle of resources in the future to feed the world´s largest nation. One of the answers that is also backed by the national government is using tech to optimize output.
196% more strawberries with AI
Artificial intelligence (AI) is at the top of the national agenda, however mostly applied in sectors such as finance, healthcare and smart city solutions. A 2017 Mckinsey report made it clear that farming was one of the industries left furthest behind in smart technologies, but also one of the areas with the biggest potential to upgrade.
Since then, there has been experimentation across agricultural areas in China. One of the largest e-commerce platforms in China, PinDuoDuo, launched an experiment to see if the use of AI could improve strawberry farming.
The experiment ran over three and a half months, with four teams of experienced farmers competing with teams of scientists, who used AI, image recognition and machine learning algorithms for the farming process. The result was very clear, as the scientist teams on average produced 196% more output of strawberries. The aim of the competition was to encourage farmer-talents and show how tech can increase productivity.
Photo: Pinduoduo Inc. - Strawberries under cultivation in a Smart Agri Competition greenhouse in Yunnan, China.
Increasing tech upgrade
Photo: Pinduoduo Inc. - Monitoring equipment installed in the Smart Agri Competition greenhouse to keep track of plant growth.
The strawberry experiment is not singular. Tech giants Huawei, Alibaba and Jd.com have for years been experimenting with surveillance of pigs and cows, working with local farmers in China. Ahead of last years´ swine-flu, China was home to half the world´s pork population, and technologies like AI and image recognition has been helping farmers monitor and manage live stock. There have also been experiments were block chain has been used to log not only processed foods in the cold chain, but also to help raise more healthy chickens or cows.
The chickens are equipped with an IoT device (Internet of things) that stores info on a block chain, so that consumers may know that their Saturday night dinner has run over 1 million steps as a free ranging chicken. But information about the chickens nutrition, medical information and background on the farm, could potentially also be included.
Tech-solutions are not limited to software. Since May of last year, the Chinese central government has been pushing hard for more experiments using both AI, big data, drones and autonomous agricultural machinery. As of September 2021, 18 unmanned pilot agriculture zones for 14 types of crop across 12 provinces were set up, and the government has estimated that it could save up to 30% in pesticide and 50% of labor costs. Furthermore, the government is also incentivizing local farmers to employ drones, and partially due to last years Covid19 pandemic, drone-makers Yifei Technologies and XAG saw explosive growth on demand.
E-commerce training for farmers
Both Alibaba, JD.com and PinDuoDuo have put efforts into training farmers to sell via their online platforms. Alibaba’s so-called Taobao villages, started out several years ago, where the tech-giant on-boardet farmers, trained them in using their ecommerce platform and local governments made sure to provide internet and other infrastructure to make it easier for the farmers to develop. Since then PinDuoduo and others have done the same. These initiatives have further been sped up in the initial months of Covid, where all major platforms pledged to help more farmer onboard in efforts to meet food demand and to develop the infrastructure. And the tech giants are moving fast.
“We have developed a proprietary cold-chain logistics network system that we’re patenting, which seeks to minimize the loss and quality degradation of agricultural products and other perishables during transportation by planning the most optimal route from farm to collection point,” a spokes person from Pinduoduo explains.
These initiatives has transformed some rural areas, and it is the hope that it can allure the younger generation back to their hometowns as farmer-entrepreneurs. There will be a lack of workforce in agriculture because most younger people have moved to the urban areas in search of a better life.
insights for small farming
The advantages of large scale farming that many countries in the EU has, does not yet exist in China. But big e-commerce platforms, like Pinduoduo, who has grown to nearly 800 million active users in just 6 years, use insights from big data to give small scale producers insights on consumer patterns and trends. By employing a customer-to-manufacturer (C2M) business model on their e-commerce platform, they effectively cut out the traditional middle-man and harvest big data, that in turn can be delivered to farmers and producers to manage demand.
“We have insights into consumer spending patterns and demographic information that can give farmers more visibility into demand and plan out their inventory and logistics. We anonymize the information before analyzing it for behavioral patterns that may provide a better understanding of their needs. By shortening the feedback loop, we enable manufacturers to tailor their products to consumers much faster, resulting in cost savings through more targeted sales and reduction in wastage.” a spokesperson from Pinduoduo says.
This ultimately makes it easier for the small farmers to deliver on demand, and cheaper for the consumer. The upside to this model along with training and better infrastructure is obvious for farmers and consumers, who can save big on the group buying model. But it is squeezing on the local market sellers, who have felt the effects of an increasing number of consumers that buy their fresh groceries online
Food is national security policy
So why bring big tech to agriculture? It’s a sector where it is hard work to make money, and one that has been largely left behind in China´s great economic boom. But the need for food will be imminent. It is increasingly becoming security-policy to secure enough resources and become less dependent on imports. The world´s most populous country is also getting older and that means it will be harder to find hands for the farming industry. With an estimated silver-population of more than 14% turning 60+ by 2028, supply and demand from local farms will not be able to meet. In addition, securing the increased efficiency of the agricultural sector is a national security issue, so it is not surprising that tech giants, local governments and developing farmers are speeding up the development of this left-behind sector.
What are the opportunities for farmers and companies outside of China?
With massive investments in innovation for agricultural equipment, logistics solutions and an eagerness to improve the supply chain and food safety, there is an appetite for companies with solutions in especially food tech an agritech. The potential scale is there, the tech companies are in the game, and the interest in partnerships is there. Special priorities from the government are currently on promoting water-efficient farming and facilitating the Internet of Things in agriculture. Pinduoduo, which is currently the largest agriculture- and grocery platform in China, is looking specifically for partners in precision farming and food technology, and already partnered with agritech companies and knowledge institutions in the Netherlands and Singapore.
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