Broader digital application needed in agriculture
Digital technology is indeed being used in agriculture but is insufficiently widespread.
The application of digital technology in agriculture varies greatly in Vietnam. In some sectors, digital technologies are used everywhere, while in others there is still much possibility for improvement. The dairy sector in Vietnam is a great example of where digital technologies are used. Even small-scale dairy farmers use digital technologies. In other sectors, though, their application remains limited. For example, in the small-scale production of vegetables, spices and fruit, it is not yet common to use digital technologies.
The use of digital technologies in agriculture is a great way to improve farming. There are many benefits and improvement possibilities, for example lower production costs, less waste, less water consumption, and better quality.
In other agricultural sectors, such as vegetable farming, high technologies could also improve the sustainability of farming. For example, sensors could indicate when a plant needs water so that the farm uses less water.
It is true that investing in high-tech farming is complex. There are many choices, as many technologies have not been tested in Vietnam. I think the best way to overcome these challenges is to work together in the value chain. With this I mean that farmers work together with the buyers of their products. For example, many European companies that buy agricultural products in Vietnam help their suppliers. They do this because their customers in Europe require it or because they cannot otherwise meet export quality standards.
EuroCham is also working on sharing know-how, experience, and technology on digital farming in Vietnam. We do this through events and partnerships. In September we organized the “Vietnam-EU Forum on Sustainable Agriculture - Agriculture 4.0: Key to the European Market”, aimed at developing the export of traceable, certified, and safe agricultural products from Vietnam to the European market. EuroCham also signed an MoU with the newly-established Vietnam Digital Agriculture Association (VIDA) to support it and its members to apply digital technologies and encourage technology transfer from Europe and the export of agricultural products from Vietnam to the EU.
Today we hear a great deal about new applications in agriculture, such as IoT, blockchain, big data, and artificial intelligence (AI), which are going to open up a new era of agriculture where new farming practices will produce more food with less resources and without harming the environment.
Though we can foresee the benefits that technologies can bring to agriculture, the transformation is still very slow. Most applications are now in the pilot phase, to prove the benefits to farmers or to other stakeholders in the agricultural supply chain.
We can see farmers are now able to manage their irrigation on smartphones with IoT solutions or mark their brand with QR codes for product traceability on the blockchain platform but this is only happening with a few early adopters and more time is needed for others to do likewise.
Support from the government to speed-up the transformation process is now much stronger and is a necessary factor to shorten the way such digital solutions can match the reality of farming.
Despite there being many good signs, the application of technology is in the early stages and more time is needed to transform technology from “good-to-have” to “must-have”.
More than 70 per cent of Vietnam’s agricultural products come from more than 22 million smallholder farmers, so the local agri-business should not depend on major corporations only to promote innovative solutions. Solutions must also be identified for smallholder farmers to apply technology.
However, smallholder farmers going to mass markets is no easy task since farmers have used the same practices for thousands of years, so changing their mindsets will take a very long time. Furthermore, the existing farming land is quite fragmented (at an average of 0.3 ha per farmer, according to the FAO), which limits the application of technology since it is generally ineffective on small land plots. Such obstacles are a challenge and limit local agri-businesses in promoting solutions in the local market, but if these can be addressed then major success awaits.
The main applications of advanced digital technologies are found in the agri-processing sectors, where often we see recently-built facilities using the latest technology to ensure consumers are served with the standards they want. For example, Manufacturing Execution Systems are commonly found to enable traceability and ensure consistent quality; robots are often found at the end of line for picking and packing applications to ensure high efficiency; and the monitoring of key equipment like drives and motors helps ensure equipment is monitored and interventions made before lines stop unexpectedly. However, in the field / farm, digital technology has yet to make a significant impact in Vietnam.
The traditional way of growing fresh produce like vegetables, potatoes, corn, and beans is on outdoor farms in the countryside, far from the cities where most consumers are located. This way of farming traditionally involves a lot of water consumption and because it is in the open air requires the extensive use of herbicides and pesticides. As climate change becomes more pronounced, the difficulties these traditional farming methods face become even greater. However, solutions are now available using weather monitoring and drone technology etc. to more accurately target and therefore reduce inputs (fertilizers, pesticides, and water) to try and improve sustainability.
A major opportunity involves the use of advanced greenhouses to reliably and sustainably feed the growing population and the increasing demand for fresh food. Water scarcity and disease issues in open field production will drive the transition towards controlled production where the application of advanced technologies allows manufacturers to reduce the consumption of water and power and use soil and resources sustainably through the control of lights, nutrients, irrigation, temperature, humidity, or CO2 supply. Robots will become increasingly adapted to picking crops at the optimal stage of development to ensure waste is minimized. These techniques will enable higher yields and better product quality.
I think one of the main obstacles is limited capital, because transforming to high-tech agriculture requires a considerable up-front investment. Investment is also needed in the education sector when it comes to applying advanced technologies into production, which is also a common situation in other industries. The third obstacle is market and consumer confidence. High-tech agriculture also means better yields and building brands and winning customer confidence is challenging for new businesses. But this investment is vital to developing Vietnamese brands if the country is going to be successful in taking advantage of the export markets that its many free trade agreements give access to.
Digital technology in Vietnam’s agriculture sector will change a lot over the next five years, helping farmers avoid problems that may lead to total losses with early warning platforms.
Firstly, agriculture businesses are facing challenges because the local agriculture market is quite fragmented. Therefore, high technologies can change local farming if each solution addresses one or more problems. It can change local farming, the way crops are cultivated, the way farmers use distribution networks, or the way logistics networks are used. A lot of technological solutions will appear in the next five or ten years, and each will change the way farmers farm.
The market size for smart farming is huge, but the agriculture market is fragmented, divided into a range of solutions for each segment, and of course each segment’s market size is quite small. For example, with Smart Fertigation Machines, there are about 500 farms on over 10 ha in Vietnam using them but they cost from $10,000 to $15,000, so the market size is small. This is why large corporations in Vietnam are reluctant to spend much money on high-tech farming transformation. They may not earn a profit for three or four years because high-tech agriculture requires a lot of time on research and development (R&D).
The trend towards digitalization in Vietnam’s agriculture sector is increasingly active and diverse but occurring at a slower pace than in industry and services. Most local agricultural enterprises applying digital technology have invested in such technology and automation in production and traceability management but too little to exploit the full potential or in other utilities where such technology brings applications for marketing and market research.
Digitalization in agriculture production management optimizes the use of resources, controls production costs, and creates products with uniform quality. This helps resolve weaknesses in traditional production methods, leading to improvements in the entire value of agricultural products.
The benefits from applying digital technology are obvious and useful, but to be able to do so effectively and develop faster it is necessary to have a group of technology experts who understand the characteristics and needs of each agricultural product, each type of farming, and different types of seedlings, etc.
Moreover, the application of digital technology allows farmers to organize automation in many stages and reduce the need for agricultural labor. This helps resolve the current dilemma of shortages in farming workers due to the infrequent demand for their labor.
The quality of data used in software systems is also of concern. Because of poor data quality, the software’s processing results are distorted, causing wrong decisions and unintended consequences.
Therefore, it is necessary to train cadres who are knowledgeable in agriculture (to understand the data), and with good knowledge of digital technology (to collaborate with technology experts). Applying digital technology to agricultural production would then maximize efficiency. VN Economic Times
Nguyen Ngoc Huong of HCM City’s Cu Chi District and her collaborators have jointly set up a start-up to produce freeze-dried powders from vegetables and leaves.
An ongoing issue in the digitalization of the agriculture sector is that IT workers know little about farming and farmers know little about IT.