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The article briefly summarized
- On the way to a more climate-friendly agriculture, new industry trends act like a catalyst for new business models.
- Agricultural traders can benefit from new nutrition trends, for example as suppliers of raw materials for vegan meat substitutes.
- The digital trading of agricultural resources and raw materials enables all participants to have access to goods and services or customers, regardless of time and location.
- With the increasing demands on resource-efficient agriculture, the use of robots is also becoming more and more interesting.
- The structural change offers many opportunities in which the Raiffeisen goods cooperatives can participate through cooperation in individual areas in order to secure competitive advantages for themselves.
Since millions of mainly young people have taken to the streets for more climate protection, there has been even more discussion about sustainability in agriculture. The agricultural sector is facing the challenge of satisfying the hunger of a growing world population under increasingly extreme climatic conditions. On the way to a more climate-friendly agriculture, new trends in the industry act like a catalyst for new business models. They will not only change our image of agriculture sustainably, but also our menu in the long term.
Vegetable proteins can replace meat
A high consumption of meat and the production of animal protein products are considered a burden on the climate balance. The trend is towards reduced, but selected meat consumption, also because there are more and more alternatives for food products with animal protein that the consumer tastes good. In the future, plant-based meat substitutes could therefore be on our table more often. As suppliers of raw materials, agricultural traders could benefit from such new nutritional trends, for example for the production of vegan meat substitute products, most of which contain pulses and vegetable oils. As part of its specialty strategy, BayWa, for example, has continuously expanded its trading portfolio in recent years, opening up the market for specialty grains and oilseeds as well as vegetable proteins from conventional and organic cultivation even more.
Speaking of organic: BayWa is also continuously expanding its collection structures for organic products in the German agricultural business. In this country, the proportion of organic products recorded by BayWa is less than one percent. Four BayWa locations in Bavaria and Baden-Württemberg are currently certified to accept organic raw materials. As with the recording of conventionally produced goods, BayWa wants to be represented across the board in the medium term when it comes to recording organic products.
In order to have long-term success as an agricultural trader in the organic market, two things are decisive: sufficient storage capacity - currently the limiting factor for organic products - and ensuring extensive quality management so that the consumer is guaranteed that where organic is on the label is really organic.
Digital platforms are gaining in importance
Organic and conventional agriculture will converge in the future - provided we see digitalization as an opportunity. For resource-saving and therefore more ecologically sustainable agriculture, "digital farming" is a unique solution to combine simpler and better management of farms with climate protection and higher productivity.
Not only here in Europe, but also in Africa there is a trend towards site-specific cultivation: Exactly only as much fertilizer or water is applied as the plants need for optimal growth. The data basis for this is provided by satellites, sensors and soil analyzes. In combination with innovative cultivation technologies, expanded crop rotations with site-adapted varieties and improved operating resources, the function of the soil as a carbon dioxide sink and water reservoir is supported.
The additional creation and refinement of digital models for data-supported yield forecasts can decisively support the processes in retail and, above all, in the subsequent supply chains - for example agricultural traders, in order to be able to plan the necessary storage and logistics resources more precisely based on the expected flow of goods.
At the heart of such solutions are digital platforms, the importance of which will continue to grow in the coming years. The use of farm management systems, for example - which is already a driver for networked farms - will find its way into more and more farms. In addition, the proportion of farmers who purchase operating resources and agricultural machinery via online channels and sell their products via digital trading platforms will increase in the future.
The digital trading of agricultural inputs and raw materials enables all participants - manufacturers, producers, traders, processors - to have access to goods and services or customers, regardless of time and location. This saves time and allows faster reactions - both for the farm and for dealers in the direction of their customers. At the same time, such platforms also increase price transparency for customers in some places and enable greater efficiency in logistics and handling processes in agricultural trade.
Every second farmer is already using the Internet on a regular basis, and surveys show that 18 percent buy their resources online. In the COVID-19 crisis, in which personal contact was restricted, digital closeness became extremely important: apps, chat services and digital platforms were increasingly used as information, shopping and advice channels. Since BayWa was always fully able to deliver during the crisis and has continuously expanded its range, regional agricultural retailers also used the BayWa portal as a reference channel in order to be able to fully deliver to their customers. Future generations of farmers will be even more digital. The performance of an agricultural trader will therefore in future be measured less and less by the number of its locations, but rather by whether the right product is made available at the right time at the right place.
Robots help with field work
With the increasing demands on resource-efficient production methods, the use of robots in agriculture is also becoming more and more interesting. As part of BayWa's strategy and innovation program, the “Agro Innovation Lab” launched a “Robotics Challenge” in 2019 and identified 127 technology companies around the world that are working on agricultural robots for use in the field.
The first prototypes that autonomously chop or burn weeds, fight powdery mildew - one of the most common diseases in cucumbers and strawberries - with UV radiation or support people in physically demanding work such as harvesting asparagus have long been around. In contrast to the agricultural trade, however, the developers usually have no access to the market and they lack personal contact with the farmer - especially if they are not part of the industry. The greatest plus of the rural retailer, on the other hand, is close customer loyalty. In this way, he can bridge the gap between research and practice and at the same time offer his customers specific solutions, for example in dealing with extreme weather, the fertilizer ordinance or more restrictive measures in plant protection. However, it was still too early to close the gap in harvest workers that arose in the COVID-19 crisis due to entry restrictions: Corresponding business models are only just beginning here, and there is no legal framework for the use of artificial intelligence on arable land .
Agricultural robots are also needed to solve the growing problem of a lack of labor. BayWa has been involved in the US start-up Abundant Robotics since 2017. Abundant has developed a picking robot that visually recognizes ripe apples and picks them gently. After the world premiere in 2019 on the apple orchards of T&G Global, the BayWa subsidiary has already used the robot in the latest New Zealand apple harvest for the second year. In the field, it helps to further specify the functionality. Since the robot picks mainly from higher tree levels, the primary aim is to reduce the physical strain on employees and possible safety risks.
Participation in the Raiffeisen goods trade
Conclusion: Agriculture is under pressure to change. This is also a challenge for German agricultural trade. The structural change also offers many opportunities in which the Raiffeisen goods cooperatives can participate through cooperation in individual areas in order to secure competitive advantages for themselves.
Raiffeisen-Warenhandel already participates in the results of the BayWa testing system, which are incorporated into the recommendations of the BayWa crop production consultancy. This also applies to new business models from the areas of digitization and agricultural robotics, which BayWa is promoting in order to make new technologies usable at an early stage for the benefit of farmers in this country as well. BayWa can also be a strong partner on the product side - this is shown by the efforts in the specialty trade and organic products.
Prof. Klaus Josef Lutz is CEO of BayWa AG.
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