Digital Transformation in the Agri-Food Sector – Opportunities and Challenges

Abstract

The aim of the paper is to discuss the major opportunities and challenges that emerge in the agri-food sector as a result of digitization processes. Digital technologies with Big Data and the Internet of Things are widely considered promising new tools for both increasing productivity and competitiveness in the agri-food sector and ensuring a more sustainable use of resources. Knowledge and insights derived from ever-increasing volumes and a variety of digital data may help to optimize farm production processes, improve risk management, predict market trends and enhance strategic decision-making capabilities. Yet, advanced data analytics has also the disruptive power to reshape the whole string of markets within the agriculture value chain. Digitization may fundamentally change the relations between technology and input suppliers, farms, traders, processing units, retailers and consumers. The first evidence shows that farm data markets suffer from specific drawbacks and limitations which may constrain the transformative potential of Big Data in the food and agriculture sector. The major concerns raised relate to farm data ownership and privacy issues, market power of major agriculture technology providers and uneven distribution of benefits accruing from digitization.