Study investigates how digital platforms are transforming the agricultural sector

Digitalization is ushering in far-reaching change in all areas of our lives, not least in the agricultural sector. Researchers from the University of Bonn have now published a study in Big Data & Society on how international agricultural corporations and Big Tech firms are using digital platforms to transform the agriculture industry. They make it clear that, although the technologies harbor significant potential, they also risk amplifying existing power structures and creating new dependencies.

“If you think of agriculture, companies like Google or Amazon probably won’t be the first to spring to mind,” explains Monja Sauvagerd, first author of the study, who is working toward a doctorate in Professor Monika Hartmann’s team at the University of Bonn’s Institute for Food and Resource Economics.

“Our study shows that digital platforms have the potential to unlock more efficient agricultural practices but are also liable to amplify existing market structures and create new dependencies. As well as furnishing the technical infrastructure, Big Tech firms are also acting as the agricultural corporations’ strategic partners. They’re exerting a growing influence on the agriculture industry because it’s they who are supplying key technologies like cloud services and AI models.”

Oligopolistic platformization ushering in new forms of partnership

The researchers introduced the term “oligopolistic platformization” in their paper to describe the close cooperation between multinational agricultural corporations such as Bayer, John Deere and BASF on the one hand and tech giants like Amazon, Google and Microsoft on the other. Unlike where platforms are created in other sectors, this dynamic is magnifying existing power structures instead of radically transforming them, risking further concentration.

Digital platforms such as John Deeres Operations Center and Bayers Climate FieldView let farms make decisions based on real-time information. Sensors, satellites and tractors all generate data that can be integrated into digital twins to simulate and optimize agricultural processes, promising not only more efficient use of resources such as water and fertilizer but also higher crop yields.

Where efficiency meets dependence

The study shows that these technologies also bring their fair share of challenges, however. Many platforms are controlled by a handful of big corporations, putting the farms at risk of growing increasingly dependent on them. What’s more, the platforms offered by the individual firms do not connect up to one another.

This often leaves data stuck in isolated systems (silos), making it hard for farmers to use more than one platform. For example, the platforms offered by the major manufacturers of agricultural machinery are designed to only offer limited compatibility with their competitors’ products, restricting farmers’ freedom of choice and tying them to particular providers.

Challenges for society and the economy

The paper also shines a light on how agricultural corporations and Big Tech firms are developing data-driven business models that go well beyond traditional agriculture. Besides aiding the decision-making process, platforms also link it directly to their products, such as seeds and pesticides. Similarly, companies are working on tools to measure carbon emissions in order to encourage more sustainable practices and enable farmers to access carbon credits.

Despite their potential, however, most of these data-driven business models have not proven profitable to date. Instead, they are being cross-subsidized by the corporations’ established lines of business in order to secure market share over the long term.

“The platformization of agriculture differs from the situation in other sectors in that it is strengthening rather than weakening the market position of established agricultural companies,” Sauvagerd explains. “In view of the fast-paced developments in this industry, one has to ask how access to tech infrastructures and data can be made fair so that farmers don’t find themselves in an even weaker position.”