Impact of Technology on Agribusiness Value Chain

As in other sectors, IT is having an increasingly important impact throughout the agribusiness value chain. For input suppliers, it is creating new innovation platforms, as with bioinformatics and seeds or precision agriculture. For farmers the explosion of mobile phone ownership facilitates access to better market and agronomic information on crop prices and weather conditions, and financial resources and products such as credit and insurance. It is having an especially strong impact with small farmers where IT is redressing some of the information asymmetries they suffered from in the past, allowing them to improve the efficiency of their transactions. In the case of food companies and retailers, social media has become an integral part of their marketing strategies and engagement with customers. IT not only impacts individual stages in the value chain but also helps integrate them by tracking the progress of crops and foodstuffs from production to consumption, providing the information needed for traceability.

While the benefits of IT are being felt throughout the agri-food chain, the way in which IT is being used is becoming increasingly sophisticated, moving from general applications centering around the provision of information, such as crop prices and the weather, to more customized and transactional types of use, such as crop insurance, as shown below.