The industrialisation of agriculture has led to an increasing dependence on agri inputs. This trend is further exacerbated by the commercialisation of farm practices and more market-driven approaches. As farms become larger and more focused on high-yield monoculture crops, they increasingly depend on these inputs to sustain productivity and manage pests and diseases.
With global food demand and consumer expectations rising, primary producers are facing the growing challenge of generating more food, while navigating tighter profit margins and stronger market competition. By identifying and sourcing high-quality, cost-effective agri inputs, primary producers can satisfy growing demands and gain a competitive edge.
The agricultural inputs industry is extensive, consisting of all external resources that are required to support and enhance crop and livestock production. This can range from pesticides and fertilisers, to seeds, feed, machinery, and on-site tools. The strategies required to source these agri inputs efficiently can vary greatly depending on what the input is, who it is supplied from, and the volume and frequency with which it is required. Efficiently sourcing a variety of inputs from a diverse network of suppliers involves managing intricate communication and partnership systems, and achieving this in a cost-effective manner presents a significant logistical challenge.
Implementing an effective agricultural input strategy is essential for maintaining profitable and sustainable operations. However, compromising on agri inputs can result in lower quality products, potential health and safety risks, and adverse long-term effects on productivity and environmental sustainability.
Agri inputs market trends and challenges
For primary producers to be productive and commercially feasible, they must be able to source affordable agricultural inputs in the correct quantities and at the right time. That said, their ability to secure these inputs is often impacted by external factors beyond their control.
One of the primary challenges faced by producers is the increasing volatility of agri input prices and their availability. According to the FAO, the price of key agricultural inputs such as feed, seed, and fertilisers are at an all-time high and are growing at a faster rate than commodity prices. Global events such as the Covid-19 pandemic and the Ukrainian conflict have exacerbated this by causing global trade restrictions, disrupting labour markets, and triggering supply shortages on inputs such as energy and seeds.
In many developing regions, agri input accessibility is also a barrier to production. While smallholder farms make up the majority of global agriculture, many smallholders have little access to yield-enhancing inputs or the capital required to purchase them. Introducing more modern inputs can have a tremendous impact. This is evident in Asia and Latin America, who experienced a surge in productivity after introducing more on-farm mechanisation. Meanwhile, Sub-Saharan Africa continues to struggle, with many smallholders having limited access to basic inputs such as enhanced seeds and fertilisers. Innovative and sustainable alternatives to traditional agricultural inputs are also becoming increasingly important, especially in regions where access to traditional agri inputs is limited.
Tools and strategies for input optimisation
Providing primary producers with more efficient and cost-effective agri inputs ultimately benefits producers, consumers, and economies, making it a priority for both public and private stakeholders. Identifying an optimal approach is both essential and challenging, as it involves understanding the unique needs of primary producers, the dynamics of the market, the evolving technological and infrastructural requirements of the area, and the environmental concerns at play. Key enabling strategies include:
Institutional support: Enhancing the agricultural framework through improved institutions, infrastructure, and clear regulations can streamline the procurement and distribution of high-quality agri inputs. For governments and multilaterals, this may include building roads to improve farm logistics, distributing high-quality seeds to farmers in need, or incentivising private investment in agricultural development.
Circular/regenerative systems: Implementing circular practices, such as recycling agricultural waste for fertilisers or employing crop rotation to naturally enrich soil, can diminish the dependence on external agricultural inputs, leading to more sustainable farming practices and lower input costs.
Artificial intelligence: Utilising artificial intelligence for predictive analytics can assist in forecasting the demand for specific agri inputs, enabling better inventory management, reducing waste, and ensuring that farmers have access to necessary inputs when they need them.
Precision agriculture: By implementing precision agriculture technologies such as GPS-guided machinery, drones, and sensor-based irrigation systems, farmers can manage inputs more accurately and efficiently, reducing overall usage while maintaining or increasing yield.
Collaborative purchasing and shared resources: Encouraging smallholders to collaborate in purchasing agri inputs can lead to bulk buying discounts and shared use of machinery and tools, reducing individual costs. Linking smallholders together in this manner can go a long way in bridging the financial and technical disparity between smallholders and larger agricultural enterprises.
Taking action
Agri input strategies are essential for agricultural productivity and are key to ensuring profitability, sustainability, and product quality for any primary producer. Identifying and executing the correct strategy can be challenging, but at Farrelly Mitchell we bring clarity and certainty to strategic decisions. Backed by a global network of industry experts, our consultants can provide actionable recommendations and key insights into agri inputs strategies that can drive operational improvements while enhancing crop performance, and creating sustainable farming practices tailored to diverse agricultural contexts.
Our supports cover the entire agrifood industry, ranging from primary producers, processors and manufacturers, and retailers, to governments, multilaterals and private investors. We can improve your agri input management by providing market intelligence, supporting agtech implementation, conducting feasibility assessments, and much more. Contact us today to leverage our insights and optimise your input procurement.
