Good Governance creates value

The Panama Papers are making the headlines these weeks: several persons have been confronted in public with data on their behaviour, which was perhaps not illegal but at least embarrassing. Concerning data, secrecy seems to be in short supply these days. Hacking can happen everywhere. Nevertheless it also raises the question to whom you deliver your data: Who do you trust to manage your data?

Not necessarily big companies. The ANWB, the Dutch automobile association, surveyed their members this winter on the Connected Car – the car linked to the internet that collects data on the state of the car and the driving patterns. Six out of ten members think that the car companies will handle the data without much care. Diesel gate, the emission software scandal at Volkswagen, clearly didn’t help. These members want to limit access to themselves. Only one third of the car drivers are willing to give the motor companies access. And nobody wants to see them in the hands of other commercial companies.

How does this relate to our Farm Digital project? It shows that the business model and governance of the service to digitise compliance data matters. Of course the small print of the contracts that farmers sign when becoming a user does matter: What is the platform allowed to do with the data? It makes a difference if they pay for the service or if it is a free service. In the latter case, the income has to come from another source, such as advertisements. As consumers are regularly told: when it’s free, you yourself are the product. It probably makes a difference if such a service is owned by a farmers’ organisation, an independent (commercial) organisation, the government or a food processor or retailer that is interested in having the data.

In Farm Digital we are investigating those issues. The research team took a look at platforms for agriculture in the USA and in Europe: Fieldscripts, Farmers Business Network, Farmobile, 365FarmNet and many others. There are clearly different governance and business models. Some are owned by input suppliers such as Monsanto, or farm equipment producers such as Johh Deere, others are or seem to be more farmer-owned. Also, in the latter case outside (venture) capital is involved, sometimes from an ICT company such as Google, as such platforms do not come cheap but ask a high upfront investment.

The research shows that there are several design variables for a specific situation that can be very decisive for the success of a new platform. This underpins the point that innovations are not only technological innovations, but have important social and economic aspects.

In general, farmers and others in the food chain have to learn to share data to realise the value of data – as that often comes from sharing and aggregating. However, such sharing arrangements require a dedicated business model and governance structure to create and capture the value of information and to balance the interests of different parties. It is important that in such arrangements partners are owner of their own data and can exercise such an ownership right by controlling where, to what end, and under what conditions the data are accessed and used (i.e., an authorisation structure). That implies that they should also pay for the service of a platform, if they wish to prevent becoming the product themselves. From a farmer’s viewpoint it is even attractive to own the platform and consequently dominate the governance structure, but that would also require providing the funds for the investment. If such ownership in a cooperative or through a farmers’ organisation is not realistic, it is attractive from the farmer’s point of view that the platform owner is an independent organisation (e.g., non-profit organisation) and not an input company or food processor. But it is these chain partners that have the highest interest in such platforms, as they provide access to the farmers’ data that they need for their own decisions. 

Krijn Poppe

Voorzitter Stuurgroep Farm Digital

(LEI Wageningen UR)