Driving Farm Profitability through Farmer-centered Data Approaches

Data is a linchpin of business success—whether you are in agriculture, energy, finance, or other sectors, data drives good decision-making so that businesses can be profitable and resilient during economic downturns and opportunities. That’s why it’s time for the federal government, especially the United States Department of Agriculture (USDA), to think of farmers more as customers when it comes to data to help ensure farm profitability, sustainability and build robust rural communities through extreme weather events and global market pressures.

Farmers and ranchers generate an abundance of data on soils, inputs, yield, planting, pest and weed management, nutrient management, and on conservation practices like tillage and cover cropping. But right now, producers face barriers to data collection, sharing, transparency, and privacy and often do not see the benefit of providing data to the federal government.

Ron Alvarado, retired Natural Resources Conservation Service State Conservationist and beginning farmer, agrees that farmers need more support on data sharing, including clear value generated from the provision of such data.

“Better USDA data is essential to provide the technical assistance farmers, ranchers, and forest landowners need to ensure the profitability and sustainability of their operations. Streamlining data collection so privacy is protected and data is useable for important cost/benefit analysis and improving farm programs is key to helping farmers be profitable as well as to make the case for data collection.” -Ron Alvarado

The first step in making the case for data collection and sharing by producers is listening to their needs. The AGree Coalition interviewed several farmers and ranchers from across the country to better understand their relationship with agricultural data and what they need to better inform their practices.

According to producers, a few key factors are essential in helping support farmers in embracing data collection and sharing. The first is a return on investment (ROI); farmers are business owners, and they will share data if they can see it will help their bottom line. Second is trust; farmers are more likely to share their data with organizations they view as trustworthy and helpful. In our interviews, we found that local agricultural retailers, extension services, and farmer-engaged organizations like Precision Conservation Management (PCM), Progressive Farmers of Iowa (PFI), and FINBIN, managed by the Center for Farm Financial Management, all help build confidence for farmers who want to share data. Farmers see data as a tool to help them make informed decisions about their farm management. If producers receive an analysis of their data (such as ROI on investments like conservation), they can learn from it and adjust accordingly to ensure they’re optimizing their operations, especially given increasing market and weather-related risk.

A few key barriers prevent farmers from embracing data collection and sharing. Many farmers have concerns about who has access to their data and what they will do with it. During our interviews we heard different views – some farmers thought that data collection for programs like crop insurance and conservation should be expanded, while others expressed concern over data sharing without more transparency and results back to the producers. Many also felt that there were too many data requests, and the sheer volume could be overwhelming. Further, some farmers did not see the value of sharing their data because they never saw the results, or they weren’t immediately apparent. Fortunately, these barriers can be overcome by integrated data collection requests from USDA, ROI and other analyses provided to producers based on their data, and transparent data privacy rules and controls that ensure privacy.

The current administration is keen on harnessing data as a way to verify federal policy and improve investments in rural America; supporting farmers by investing in better agricultural data fits that bill. Of the major American economic sectors, agriculture is an area where comprehensive data and analysis is arguably most lacking and, therefore, presents the greatest opportunity for the government to benefit an economic sector. Key ways to demonstrate the efficiency and effectiveness of better data begin with providing farmers with solutions and opportunities. For example, the government can incentivize farmers through compensation models and provide farmers with tangible benefits in exchange for data sharing (like ROI). Other incentives could include receiving financial insights, market data, and agronomic advice, reflecting the benefits of data sharing. If farmers can see that sharing their data will result in improvements to their farm’s profitability and long-term sustainability, they will be more likely to provide data.

To help farmers overcome barriers, USDA can help build trust by establishing data transparency standards and sharing controls. Many farmers interviewed said that clearly communicating with farmers about how their data will be used, providing contracts, anonymizing data, and offering farmer-led models would give them the security they need to participate. Further, interviewees suggested creating a centralized, trusted clearinghouse like a data cooperative as well as exploring ways to integrate platforms like John Deere’s FieldView system. These approaches would help simplify data collection and reporting data analysis back to farmers while improving program implementation.

As Professor J. Arbuckle at Iowa State University research shows, trust is crucial.

“Farmers want to know how data, whether their own or from other sources, can help them be more profitable. Data management systems that are transparent about potential benefits and risks will likely be more accepted.” -J. Arbuckle

Of course, implementing these suggestions will take embracing new approaches to data collection and use, but USDA can further ag data innovation by developing policies that advance this work to support farmers. From a policy perspective, USDA could focus efforts on developing data privacy and ownership protections for farmers, so they retain control over their own data and how it is used. This includes limits on commercial use, so companies who want to use the data must receive explicit permission from the farmers.

USDA should also explore creating additional incentives for conservation programs to ensure   more comprehensive, interoperable, and accurate farm data. This could include support from policymakers for more regional, farmer-led organizations that incorporate data collection into their programs.

Lastly, USDA must improve data collection and reporting for farmers. The Department should work to standardize data collection and reporting across agencies like the Farm Services Agency, Natural Resources Conservation Service, and Risk Management Agency to make it less burdensome for farmers and at the same time make data more usable. This would eliminate duplication and create more efficient and effective data sharing and analysis. USDA might even explore how to best use AI and leverage it for this work. These actions would help usher in a new area of data-driven farm policies and reap improved results for farmers as they face increasing economic and weather-related pressures.