AgTech has become one of the hottest investments sector, with a lot of inventive entrepreneurs introducing technological innovation to traditional farming practices. Advancement in biotech, digitalization in other technologies means that there are many more tools available to disrupt agriculture. Drones are one example of these promising AgTech tools.
Drones are becoming an increasingly common tool for farmers, and there is potential for huge growth. With this article, we aim to provide an overview of the benefits and drawbacks of agricultural drones.
UAV stands for Unmanned Aerial Vehicle, a category that includes both autonomous drones and remotely piloted vehicles (also known as RPVs). Cruise missiles are not UAVs: to be considered one, you must intend to recover it after each use.
Private companies have been relatively slow to adopt drones: chronologically, the technology has gone from military and governmental use to recreational use and lastly to the private sector. But times are changing: it’s apparent from the number of certified remote pilots that commercial industries are the ones driving growth, as opposed to consumers as in years past. Agriculture is one of the leading industries in which drones are becoming an important tool. Other industries that are increasing their drone usage include public safety, insurance, telecommunications, construction, mining, oil & gas, and survey engineering.
For farmers, drones have many uses. Most of them rely on the fact that healthy plants reflect more near-infrared and green light than unhealthy plants. Agricultural drones are usually equipped with sensors that capture infrared data, which is run through software that interprets how much light is captured and creates photographs that color-code inconsistencies within fields of crops. Other sensors use thermal and hyper-spectral imaging. These allow farmers to identify potential problems at an earlier stage than they might have otherwise, such as pests, diseases, weeds, fungi, or failed irrigation systems. This is helpful for both organic and conventional farmers, and in the case of the latter, can decrease the amount of chemicals that are needed. Drones also decrease farm expenses, and are are a cheaper investment than tractors or other large equipment.
In certain Asian and European countries, drones are already being used for more than photography and data collection: they are actually spraying fields. Proponents say that this increases crop health and yield by reducing soil compaction from machinery. In places like China, it is also allowing farmers to grow on steep hills and other terrain that is hard or impossible for tractors to access. In Japan, drones are part of the way that the country is dealing with an aging population of farmers. And in Colombia, drones are part of a larger effort to limit cocaine production, with herbicide-spraying drones that track and destroy coca plants. Currently, drones are most effective on farms smaller than fifty hectares (or ~120 acres). Depending on how low the drone is flying, the results can be accurate to a centimeter.
Legally, in the U.S., every drone operator has to have a Remote Pilot’s License, and must be within eyeshot of the drone for the entire duration of each flight. This limits the distance and length for drone flights. They are also not allowed to be flown above 400 feet. Additional difficulties stems from the lack of cell coverage over much of the farmland in the U.S. For drones to be effective on those farms, they must have the ability to store data locally, or the farm must invest in connectivity. Laws are frequently changing, though, and those using drones on their farms must be constantly aware of the laws affecting their individual state, county and city.
Technology is also evolving quickly, but there are still many things that drones cannot do. Critically, drones cannot yet tell plants apart with much accuracy, particularly when it comes to distinguishing plants from weeds within a row of crops. Drones also cannot fly in inclement weather, which can be limiting. There are even accounts of birds of prey attacking drones. Battery life and flight time is another limiting factor, but this is likely to change within the next several years. A recent drone flight in Spain lasted almost five hours, double the previous record and ~14x the average drone flight length of twenty minutes. It is also likely that the longer-flight drones will become cheaper over time—battery life is currently one of the main factors that affect drone prices.
A few drone crashes have been widely publicised, like the drone that landed on the White House lawn in 2015 or the one that crashed in front of Angela Merkel in 2014. There have also been several near-misses with large aircraft. In 2015, there was a drone crash in Mexico that was found carrying methamphetamine. Though there have been relatively few of these incidents so far, with an increase in drone use comes more accidents. These incidents have prompted FAA and other safety groups to lobby for even more regulation. There are also strict laws when it comes to privacy and flying over private land. In studies asking participants about their privacy concerns when it comes to drones, most people indicated that they were more concerned with governmental drones than privately-owned.
The Chinese Company SZ DJI Technology Co., Ltd (or simply, DJI) leads the drone industry, with an estimated 74% market share. The massive collapses of some of the most promising venture-capital funded drone startups including 3D Robotics, GoPro, and Airware, are due in part to DJI’s superior position. Instead of relying on contract manufacturers, DJI designs and manufactures all of their own products. When American companies advertised their plans ahead of their release, DJI was able to manufacture their own versions of these features. But even when GoPro had learned this lesson and released their drones more quietly, they sold damaged drones and did not have enough money /big enough margins? to continue making drones. Meanwhile, DJI is dominating the consumer market, professional photographic market, and enterprise drones for businesses, and have partnered with PrecisionHawk (based in Raleigh, NC), a company that makes special sensors and software for agriculture, energy, public safety, government, infrastructure, and construction.
There are downsides and upsides to drone usage in agriculture, and ultimately, they are not a magic wand. However, it is likely that drones will become increasingly important in global agriculture, as the potential gains in increasing food production are so large. Agriculture technology is advancing quickly—Walmart has filed a patent for “robot bees”, drones small enough to pollinate crops, and scientists in Japan are working on a similar concept. The possibilities likely extend beyond our current collective imagination.
Disclaimer: FarmTogether is not a registered broker-dealer, investment adviser or investment manager. FarmTogether does not provide tax, legal or investment advice. This material has been prepared for informational and educational purposes only. You should consult your own tax, legal and investment advisors before engaging in any transaction.