Of all the recent innovations in ag, perhaps none is as ambitious and as groundbreaking as Earth Observation (EO) technology. EO systems use satellite imagery to provide quantifiable data for agriculture and beyond, from mapping farm locations to monitoring crop health to estimating time of harvest, and more. When integrated with Machine Learning, EO can provide powerful modeling solutions that can lead to better decision-making across the supply chain.
Over the last decade, the scientific and computational aspects of EO technology have improved dramatically, resulting in more accessible and precise applications for agriculture. The widespread adoption of EO technology would be nothing short of a game-changer, and has the potential to drastically improve everything from water management to soil health to anticipating climate cycles.
As EO technology gains prominence, its impact will be felt worldwide – not only in the developed world, but in emerging markets as well. Companies such as Environment Systems, a UK-based EO solutions firm, are helping to bring this revolutionary technology to Latin America.
Satellite Imagery of Irrigated Land in Imperial Valley, California
“Over the last 4 years, there has been quite a transformation in terms of the availability of satellite data,” said Steve Keyworth, co-founder and director of Environment Systems. “That in turn has meant some amazing things that we could never do before. We’ve seen a flood of raw data coming in from satellite images, which has allowed us to perform some very sophisticated analysis,” Mr. Keyworth told Farmfolio.
“We can do everything from tracking where crops are located to monitoring crop health to assessing field boundaries. That data can be used for a lot of different applications: supply chain insight, estimating harvest timing, planted area, etc. For example, we’ve been able to observe the banana industry in Colombia and assess the trends in terms of planted area, harvest timings, and more. There are all sorts of questions around that information.”
“We’re seeing a major change in the willingness of companies to use this data to make big decisions. We’ve gone from raw satellite data to really what is a business-level product that can inform data-driven decisions. This is powerful stuff, and companies are increasingly ready to take the data and use it. According to London Economics, the EO approach is about 6 times more effective than ground-based alternatives, because of the scale we can leverage from satellite data.”
Growth of Value-Added Data Services From Earth Observation (Solkovo Foundation)
This increased efficiency has not gone unnoticed. The market for data and services derived from EO technology is expected to grow at an annual rate of 9.4% for the next 8 years, reaching a total market upside value of $12.1 billion by 2028, according to a report by Euroconsult, a leading authority on the industry. This growth will be driven not only by the agriculture sector, but by defense and environmental applications as well.
For EO companies like Environment Systems, the major trend seems to be the transition from selling imagery to offering value-added services, many of which are driven by machine learning. Companies such as Orbital Insights and Descartes Labs have conducted capital raises in the tens of millions of dollars in the last 5 years. For agriculture, this change could have serious implications for supply-chain efficiency and product traceability.
“I think there’s going to be a big boom in the availability of this type of data,” said Mr. Keyworth. “We’re not talking about the technology as much, we’re talking more about what it can do in terms of benefits and outcomes, and I think that will help enormously.”
“There’s potential to expand into emerging markets with this kind of service. With the work we’ve done in Africa and Latin America, there’s an opportunity to bypass these huge capital outlays through data-driven farming practices.You don’t have to buy giant tractors and a lot of fertilizer, you can think differently. Things can be done in a smarter way.”
Projected Increase in Number of Small Satellites, 2019-2028 (Source: Euroconsult)
From an agriculture investment standpoint, EO technology can help investors gain a greater understanding of the long-term viability of potential ventures. “Being able to think about landscapes as interconnected is increasingly important, not just for NGOs, but particularly shareholders, who want to know their investment is secure in the long-term.”
“To this end, we employ climate scenario modeling and model land-use opportunities, which produces environmental indicators on whether your investment is likely to succeed. If the forecasts agree there is too little rain, for example, maybe that location isn’t ideal.”
EO technology has drawn the attention of governments, private businesses, and NGOs alike. In terms of sustainability, EO can serve a variety of purposes, such as tracking deforestation and the depletion of water resources. EO can track the long-term impact of environmental changes, which can help investors make more secure allocations. As agricultural technology advances, expect EO to be at the forefront of data-driven improvements to efficiency, sustainability, and risk assessment.