I feel like the industry of agriculture that Yield Lab serves is a bit behind the times when it comes to organizing and interpreting big data. Whether it is on the science side of things or the precision agriculture side of things. Agriculture has been putting a lot of time and energy trying to figure out how to harmonize these different data sets that take many different shapes and forms. That is the lens I am looking through when it comes to big data right now.
Everyplace in the world whether it is Asia, Africa, Europe, North America, South America, food is grown. It is all over the place. There is a certain element to farming or agriculture that is very sensitive and uncontrollable which is the weather. Many livelihoods are greatly affected by temperature, by droughts, by other forces of weather. Many farmers are starting to try to hedge the risk, against some of the downfalls that can overtake them before a harvest. So they are taking out insurance policies with larger insurance companies but one of the issues that the insurance companies are running into is that they really have no way of interpreting what is a risky parcel of land and what is a profitable part of the land. So we made an investment in an international company located out of Buenos Aries called S4. What S4 does is that it collects weather data from other agronomics sources of data and what they do is that they pool all of this together and what this enables is financial services for firms or insurance companies can take this abrogation of data and build out actuarial tables, insurance policies and figure out how to assign premiums and thresholds. Financial institutions can figure out how has this land performed in the past. What are the current commodity prices and what kind of credit lines I can issue to these farmers? So S4 from a B2B standpoint has really figured out agronomic data into something that can be used by financial services companies.
The industry that I come from we really look at two things. One, where are you in relation to your customer. Two, how are you going to leverage the region or the geography that you occupy. We have really come to the conclusion that if you are going to be a successful agriculture company, no matter what kind of data set that you have it is important to have a global presence. I think you should have the vision to have a global presence, but to leverage the geography that you are currently occupying is certainly a good indicator of future success.
One of the major issues that we flagged is some of the regulatory hurdles that Agro businesses are facing as it pertains to the government. Most recently U.S. beef is now allowed to be sold in China and the regulatory hurdles for that beef to be imported is significantly high. So by utilizing blockchain technology from a traceability standpoint to understand where that cow came from, what it was feed, did it receive any vaccinations or antibiotics. Those are all very important things that can be delivered to the regulators and to the entire supply chain all the way to the consumer including the government which this has to get over, so I think blockchain is going to play a big role in overcoming some of the large regulatory obstacles that people across the world are currently facing.
The United States Department of Agriculture publishes statistics every quarter annually very consistently. The way that they collect their data is through postcards. This is a very primitive way of gathering information that has a massive financial impact. So we are working with a company right now that is trying to figure out ways of using big data professionally as more and more farmers are now using mobile phones and they can use that to deliver information back to the USDA. So now somebody does not have to sit in a dark room and count up statistics on these postcards. This would be one example of how they can collect more accurate information as well as more information that would make all of the analysis more statistically significant.