Digitalization and Platforms in Agriculture: Organizations, Power Asymmetry, and Collective Action Solutions

Martin Kenney, Hiam Serhan and Gilles Trystram

No 78, ETLA Working Papers from The Research Institute of the Finnish Economy

Abstract: Abstract Technologies such as digitally-equipped agricultural equipment, drones, image recognition, sensors, robots and artificial intelligence are being rapidly adopted throughout the agrifood system. As a result, actors in the system are generating and using ever more data. While this is already contributing to greater productivity, efficiency, and resilience, for the most part, this data has been siloed at its production sites whether on the farm or at the other nodes in the system. Sharing this data can be used to create value at other nodes in the system by increasing transparency, traceability, and productivity. Ever greater connectivity allows the sharing of this data with actors, at the same node in the value chain, e.g., farmer-to-farmer, or between different nodes in the value chain, e.g., farmer-to-equipment producer. The benefits of data sharing for efficiency, productivity and sustainability are predicated upon the adoption of an online digital platform. The conundrum is that, as the intermediary, the owner of a successful platform acquires significant power in relationship to the platform sides. This paper identifies five types of platform business models/ownership arrangements and their benefits and drawbacks for the various actors in the agri-food system and, in particular farmers. The types discussed are: 1) venture capital financed startups; 2) existing agro-food industry firms including equipment makers such as John Deere, agrochemical/seed conglomerates such as Bayer/Monsanto, and agricultural commodity traders such as ADM and Cargill; 3) agricultural cooperative such as InVivo in France; 4) various specially formed consortia of diverse sets of agri-food system actors including farmers, and 5) the internet giants such as Amazon, Microsoft and Google. The paper assesses the business models for each of these organizational forms. Finally, we describe the drawbacks each of these organizational forms have experienced as they attempt to secure adoption of their particular platform solution.

Keywords: Digitization; Platform Economy; Agriculture; Agri-food systems; Cooperatives; Platforms (search for similar items in EconPapers)
JEL-codes: L6 L66 Q1 Q13 (search for similar items in EconPapers)
Pages: 51 pages
Date: 2020-04-23
New Economics Papers: this item is included in nep-agr, nep-big, nep-ind, nep-ore and nep-pay
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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