Granular: Your Farm IP Has Significant Value

Conversations around intellectual property (IP) on the farm has historically centered on the use and licensing of genetic traits and the companies that own them, writes Granular Co-Founder Mike Preiner in his latest blog post for the San Francisco-based ATP.

However, the concept of IP on a farm has rapidly expanded with the introduction of ag hardware and software tools. Sensor technology, equipment-based data and farm management software are creating a whole new class of agricultural IP: data and knowledge about the farm itself.

IP has always been considered an intangible asset that adds real business value to a business, even in industries that are considered commoditized. Trade secrets, custom processes, patents, and trademarks are all IP of a business that adds value beyond the hard assets, even when this value is often tricky to measure. When I ask farmers how they come up with the value of their business, they often simply add up the sum of their visible assets— land, equipment and buildings. This line of thinking reflects that no value is being placed on the IP generated by the operation.

Experts trying to accurately value a business often look at price-to-book ratios. Price-to-book ratios take the overall market value of the business (i.e. what people are willing to pay) and divide it by the book value (i.e. all of the hard, tangible assets). This is a strong indication that the market rewards something beyond than observable assets.

What is keeping farmers from significantly increasing value of their businesses through IP? Building business value through IP requires a significant investment. Farms (even large, professional operations) have historically invested very little in the right technology tools that would help them develop, document and share their IP.

To answer that question, let’s look at what other industries spend annually on information technology (IT). IT is considered a good proxy for the tools that allow business managers to create and capture IP. While some farms are investing in these areas, it is not yet the norm. As more data continues to stream off the farm, those that can capture it, analyze it, and make these learnings proprietary will greatly benefit. As a result, they will be able to use their labor more productively, utilize their equipment more efficiently and make more data-driven decisions (a topic at the heart of Danny Klinefelter’s Principles for Effective Farms).

A robust IT system has the potential to directly increase profit through improvements across all aspects of an organization by taking better advantage of the IP that is being created every day. Here are just a few of the ways in which we are seeing Granular customers significantly strengthen their bottom line by generating, storing and protecting their IP:

  • Succession planning. Technology systems help generations pass down knowledge on the land, agronomic practices and management decisions with relative ease. This ensures that the lessons from years of farming the same land get passed on quickly and accurately. More importantly, accurate records can help younger, newer farm managers uncover efficiency gains and growth opportunities.
  • Negotiations. Being able to show what has been done on the farm year over year reflects not only a farmer’s unique management practices but also his or her business objectives and ability to maximize resources. These factors can often result in substantially better terms on operating lines and land agreements, which have very real implications on a farm’s P&L (in the short and long term). Additionally, farmers are more likely to be able include their farm records as part of the overall farm sale and valuation if these records are accurate, professional and easily shareable. Anecdotally, a Granular customer sold some land a few years ago that had very complete field records, and he priced the records at $500 per acre. The buyer did not pay $500, but agreed to pay something around $150 per acre. The buyer felt that the value of trading info within a common platform where the records could be truly leveraged would make them worth it.
  • Profit sharing from “Big Data” opportunities. With the rapid emergence and evolution of ag data companies, some of these will inevitably pursue the business of licensing data to industry suppliers and other third parties. Farmers will be faced with the responsibility—and choice—to partner with companies who properly manage this data and fairly compensates them for it. However, in order to do that, farmers first need to generate, organize and collect the data.

For more information on Granular, visit www.Granular.ag

Topics:

Leave a Reply

Business Management Stories
Farming at Sunset
Business ManagementAgtech Issues: The Shiny Object Syndrome
September 6, 2017
Do you remember those cartoons where someone lures someone else by placing a piece of candy, small amount of money, Read More
Clay Mitchell
Business ManagementAg Tech Expert Clay Mitchell to Speak at Nebraska Community College
August 31, 2017
A fifth generation farmer and a leading investor in farmland and agricultural technologies will be bringing his message to Northeast Read More
Univ.-of-Illlinois-Palmer-in-soybean1
Business ManagementOpinion: How to Leverage Precision Agriculture to Launch Your Aggressive, High-Pressure Telemarketing Business
August 14, 2017
To continue where my last article left off (which you can check out here), a precision ag company that specializes Read More
Corn
Business ManagementCrop Pro Insurance Closes $8 Million in Series A Funding
August 8, 2017
Crop Pro Insurance today announced the close of an $8 million Series A round of financing co-led by top agriculture Read More
Trending Articles
Farmer with iPad
Australia/New ZealandAgrian Expands into Australia
September 20, 2017
In line with a familiar growth trajectory, Agrian Inc. is moving into Australia with a physical support and sales presence Read More
John-Deere-labs
Tools & Smart EquipmentHow John Deere’s New AI Lab Is Designing Farm Equipment for a More Sustainable Future
September 15, 2017
On a block in San Francisco’s SoMa district, near LinkedIn’s headquarters and dozens of startups, a 180-year-old company best-known for Read More
BASF Maglis grower retailer tablet
Data ManagementWhat Will Happen to My Data? Understanding Your Rights in Precision Agriculture
September 12, 2017
The use of precision agriculture-based decision making to determine fertilizer rates and hybrid types and planting rates is becoming more Read More
Robotics/Labor SaversBlue River, Deere Deal Will Accelerate Farm Robot Innovation
September 11, 2017
No, Blue River Co-founder and CEO Jorge Heraud has not been deposed — Gaddafi-style — by big, bad corporate overlord Read More
Farming at Sunset
Business ManagementAgtech Issues: The Shiny Object Syndrome
September 6, 2017
Do you remember those cartoons where someone lures someone else by placing a piece of candy, small amount of money, Read More
AgQuip overview
Australia/New ZealandAgQuip 2017 Displays New Ag Technology in Australia
August 28, 2017
The annual AgQuip field days took place in Gunnedah, NSW on August 22-24. Being the largest agricultural field days in Read More
Latest News
Australian Harvest
Australia/New ZealandAustralia: Data Deal to Make Digital Information More A…
September 25, 2017
The announcement of a three-year collaboration between one of Australia’s most well-known agriculture technology providers, Precision Agriculture, and Federation University Read More
Mahindra-Photo-Money-Control
AsiaDrones for Soil Mapping? Mahindra Says Why Not
September 25, 2017
The Mumbai-based company is in talks with the Indian government seeking approval to make drones a part of farming methods, Read More
deepfield-robotics-bonirob
Robotics/Labor SaversDeepfield Robotics to Showcase Precision Agriculture Te…
September 22, 2017
Deepfield Robotics is preparing to showcase its robotics and automation technologies for the agriculture market at the Agrilevante event, in Read More
Kray Drone Application
DronesCrop Spraying Drone Manufacturer Kray Technologies Gets…
September 22, 2017
Chernovetskyi Investment Group (CIG) has reached an agreement on investment into Kray Technologies company, which manufactures Kray Protection industrial robotic Read More
Imagery/SensingPlanet Announces New Hi-Res Imagery Products
September 21, 2017
Since our acquisition of Terra Bella, and the SkySat constellation of seven satellites, we’ve been focused on making this high-resolution Read More
Systems ManagementBayer Dismisses Antitrust Concerns about Digital Farmin…
September 20, 2017
Bayer said it was unable to propose the sale of any digital farming assets to allay EU concerns about its Read More
Farmer with iPad
Australia/New ZealandAgrian Expands into Australia
September 20, 2017
In line with a familiar growth trajectory, Agrian Inc. is moving into Australia with a physical support and sales presence Read More
Robotics Specialty Crops
EventsPrecision in Specialty Crops Gains Momentum
September 20, 2017
When John Deere acquired Blue River Technologies (BRT) recently, BRT’s See & Spray technology received plenty of play. Yet many Read More
Decision Support SoftwareSyngenta Helps Lead Efforts for Farm Management Softwar…
September 19, 2017
Ag data from tractors, combines, planters, and other farm machinery present a huge opportunity for growers to manage their operations Read More
Petra-Andren-Cicada-Innovations
Australia/New ZealandGrowLab’s Rocket Fuel for AgTech in Australia
September 19, 2017
Despite its superpower status as a producer and exporter of agricultural goods and services, up until now Australia has had Read More
CropIn-Team-Photo-credit-BW-Disrupt
AsiaCropIn Aims to be a Global Leader in AgTech Sector
September 19, 2017
Krishna Kumar created AgTech startup, CropIn Technology in 2010, along with co-founders Kunal Prasad and Chittranjan Jena. The trio went Read More
China-Beidou-Navigation-Satellite-System
AsiaChina’s Navigation System Gets Powerful Chip to I…
September 18, 2017
A new powerful chip technology has been introduced in China’s national satellite navigation system to provide high-precision positioning, according to Read More
Tablet Grower
Industry NewsFieldReveal Names Hesse New CEO
September 18, 2017
Matt Hesse has been selected as the Chief Executive Officer of FieldReveal, a newly launched joint venture formed to deliver Read More
John-Deere-labs
Tools & Smart EquipmentHow John Deere’s New AI Lab Is Designing Farm Equipment…
September 15, 2017
On a block in San Francisco’s SoMa district, near LinkedIn’s headquarters and dozens of startups, a 180-year-old company best-known for Read More
Wheat sunrise
Australia/New ZealandSparkLabs Group Launches an Agricultural Tech Accelerat…
September 15, 2017
SparkLabs Group, which claims to be the largest startup accelerator group in Asia, is stepping into agricultural tech with a Read More
Sensors/IoTCollaboration Leverages Internet of Things, Sensors in …
September 15, 2017
The vision of having license-free community sensor networks for agricultural users has made a giant leap closer to reality. A Read More
Young Corn Field
Data ManagementPurdue Online Tool to Help Farmers Make Precision Decis…
September 14, 2017
An innovative online tool developed by a Purdue University engineering professor will allow farmers to process data collected from their Read More
forbes-agtech-summit
Precision IrrigationImproving Water Management: Can Silicon Valley Help?
September 13, 2017
I recently attended the Forbes AgTech Summit in Salinas, CA, where roughly 50 start-up companies originating from Silicon Valley and Read More