How a Winnipeg-based firm has become a global player in agtech.
Barnes helped run his family’s beef and mixed crop farming business before studying agronomy, which combines science and technology for both crop production and environmental protection. Driven by the idea of harnessing emerging digital tech for agriculture, Barnes co-founded Farmers Edge in 2005 with fellow agronomist Curtis MacKinnon, Head of Technical Services.
Today the company is on track to have 400 staff by the close of 2017, with customers in Canada, the United States, Brazil, Australia and Russia.
“We’ll be (operating) on over 18 million paid-for product acres worldwide by the end of this year,” says president and CEO Barnes.
Bringing data into the fold
Farmers Edge is part of a new crop of agtech firms bringing data-based decision making to farms. Agriculture is full of risk and uncertainty due to variables like weather, pests and disease. Now soil and crop-based sensors, wireless communication, analytics, automation and imaging technology can dramatically reduce and manage those sorts of risks, by making data analysis more timely and accurate than ever before.
“Easily, at a very basic level, you can say there’s ROI (return on investment) of 30 per cent. But to be honest, we believe it’s a lot higher,” says Barnes. “It saves a farmer’s field by telling him when and where to spray fertilizer or pesticide when maybe they wouldn’t have otherwise.”
Besides boosting crop yields and saving on costs like labour and materials, farmers can reduce environmental impact by using less water, fuel, fertilizer and pesticide.
Barnes says the first wave in the data-based farming trend was precision ag, which gave farmers a higher quality and quantity of data so they could decide what action to take. The second wave, which he calls decision ag, uses predictive analytics and machine learning to create fully formed decisions and suggest them directly to farmers.
“We can predict how much nitrogen is in the field without having to soil test,” Barnes explains. “From that, instead of an agronomist making a recommendation, it actually mimics what the agronomist would do and sends it to the grower. We can predict what stage the crop will be in, what the potential yield will be. We also tell farmers, hey, your crop is at this stage and vulnerable to this disease and here’s the next step you need to take.”
What sets Farmers Edge apart
Although data-based agtech is a competitive sector, Barnes believes a few things differentiate Farmers Edge from other players in the field. First, the company generates its own crop and environmental data wherever possible, rather than relying on public data sources like government agencies.
“Our data is better because we’re putting (sensors) out on the farms … every kilometre, not just every 25 or 50 kilometres, or in Brazil every 200 kilometres,” he says.
Second, Farmers Edge collects and analyzes data from its customers’ farm equipment and machinery, not their just fields. It’s part of the company’s shift from precision agriculture to what Barnes describes as “implementing digital infrastructure on the entire farm.”
By analyzing equipment data, Farmers Edge helps customers track things like fuel usage, repair scheduling and labour productivity. Barnes hints that machinery and vehicle data could one day extend his company’s reach into industries beyond agriculture.
“We think we’re getting ready to disrupt the insurance industry, for example. Don’t you think the farmer’s insurance company would like to know that (equipment) data?”
Venture capital takes notice
Companies like Farmers Edge have drawn venture capitalists to take notice of Canada’s flourishing agtech roots. According to the Canadian Venture Capital Association’s most recent figures, $153 million in venture capital (VC) was invested in Canadian agtech firms during the first three quarters of 2016, up from just $27 million in all of 2014, and $42 million during 2015.
Farmers Edge has raised a total of $115 million in VC since 2012, the bulk of it since 2014. This impressive backing is a testament to the relevance of their business, especially when high-profile investors take an interest. One of its VC investors is Silicon Valley’s Kleiner Perkins Caufield Byers, an early backer of Amazon, Google, Uber and Twitter.
“Canada is thought of in other countries as a global leader in agriculture — that Canada builds great technology,” Barnes says.
Besides bringing big money, data science is bringing big changes to farming.
“A farmer can actually scout out five acres (with data) more effectively than actually being out in the field. They can sit and have a coffee instead. That, suddenly, is a new change,” says former boyhood farmhand Barnes. “Instead of them babysitting the field, it’ll change their life.”