The agricultural sector is in a “race towards automation,” says AGCO’s Matt Rushing, as he and Chris Rhodes tell The New Economy about the latest technologies helping the world’s growers to grow.

The agriculture sector is more inclined towards the use of advanced technologies, to meet the increasing demand of food grains and other food products, translating into big opportunities for manufacturers. With me now is Chris Rhodes and Matt Rushing from AGCO, a global leader in the design, manufacture and distribution of agricultural solutions.

The New Economy: Well Matt if I might start with you, from the traditional tractor how is the farm machinery and technology industry developed? And what machinery is most in demand today?

Matt Rushing: So if you look back across the last 50 years of agriculture, there’s been significant growth in machinery and also in the size in the machinery. We look at farms 50 years ago where they would traditionally have feed between 10 and 20 people. Now farms are feeding over 200 people.

So significant improvement in the machinery itself but also in the technology around the machinery, we’re seeing significant advancements in PrecisionAg technology which drives a lot of data creation on the farm. And the leveraging and using of that data to improve yields and reduce waste on the farms, has become very paramount.

The New Economy: Chris, you saw machinery worldwide, how does demand in different countries differ and where is the biggest market today?

Chris Rhodes: What’s really interesting about the agricultural equipment industry, is how that demand varies in different places. If you look at the US, Europe, Australia most of South America, everyone is mechanised it’s just a matter of degrees how much technology they are using. If you look at Africa and Asia and you see some of the biggest most sophisticated farms using the latest the technology, but you also see the potential in literally hundreds of millions of farmers who haven’t mechanised at all yet.

The New Economy: And farm subsidies are huge in the news in the UK at the moment, and in America there is a call for tax credits on farm machinery. So which side of the argument do you stand?

Chris Rhodes: AGCO for sure benefits in certain countries from farm subsidies, but on the other hand in some countries, and these are important agricultural countries, we’re at a disadvantage. That may be because of where we manufacture, maybe because where our public listing is or, what some of the technologies we have or don’t have on some of our equipment

So what we try to do at AGCO on the whole is pursue ethical business practices, and involve ourselves in as many government programs as really are applicable. As we look ahead about farm subsidies, there may come a time where farm subsidies will be based on farming practices, so the yield of the farm or which fields lay fallow all those types of things. And that’s going to require good data management technology, like ours that can collect and analyse and report data, so that the subsidies can be given out equitably.

The New Economy: Matt of course since the financial crisis farmers must have been spending less on machinery, this must have had a substantial impact on AGCO.

Matt Rushing: Well as in any industry there is always a pause, and right now we’re seeing a pause in the agricultural industry, but the future is still very bright. If we look at the population growth for example, we look at the change in everyone’s diets trending more towards protein we still see a lot of big growth coming for the future in agriculture.

One of the things you are going to see over the next several years, is the adoption of technology increase, so you’re going to see more and more technology not only going on new equipment but also on current equipment or older equipment, to help that farmer increase that productivity on the farm. There is going to be a need for that productivity gain over the coming years, just to feed more people.

The New Economy: So Chris, once farmers have made the initial investment in AGCO equipment and technology, what kind of savings advantages are they looking at?

Chris Rhodes: Well using Fuse technologies; which is AGCO’s technology strategy that connects everything on the farm together, we think we have some areas of advantage over our competition.

The first is we have a two pipe data strategy, that means we only ask for information from the farmers about the machines, we’re unique in that we don’t get any of the farmers confidential information about the farm.

The second area where we provide value is in our mixed fleet, so AGCO is a product of mergers and in fact we are just celebrating our 25 year anniversary this year. But we have always been a mixed fleet because of that, we understand that customers buy different equipment for different reasons, so we want to make sure that our system is open so that they can utilise their full fleet.

The third area of advantage for us is our focus on mobility, so we’re working with partners who are from the consumer side of the electronics industry, to make sure that we deliver on that promise. And in the fourth area is really about partnerships, we don’t think that any company can deliver the best solution for every agricultural challenge, so we are going to focus on the interface of integrating technology into our machines.

The New Economy: Well finally Matt, looking to the future now and what technologies is AGCO working on and what challenges are they designed to overcome?

Matt Rushing: You can see a lot of a race towards automation, less and less labour is available, less and less skilled labour is available, I think that’s where we are going to focus. I think we are going to see more and more sensor technology, more and more sensor fusion on the machine which would ultimately drive almost a central nervous system, where the machine almost becomes more aware of what it is doing and how it is doing it.

I think the other place that you are going to see a real revolution, is in the data side of what’s happening on the farm. There’s lots of data being collected on the farm, if you think about all the data points, sensors and other pieces of information that are collected everyday the farmer goes to the field, that data is not being adequately leveraged today to improve the operation.

So we can see in the future where more and more data is going to be collected, analysed in real time and then provided back to the grower, so he can utilise it to improve his business. We also want to leverage the data for the agronomic value that it provides right, there is lots of information coming out on how we can improve yields, how we can improve fertiliser application, how we can improve soil health. That’s where we really see the future going, and that’s where we see some real revolutions, and again Fuse technology is perfectly positioned to be able to provide that value.