Why data is key to making decisions about food and water security

Securing the future of the world's food and water systems is critical for a well-functioning society.

Water is a resource at risk, and agriculture accounts for 70 per cent of all surface and groundwater withdrawals globally, mainly for irrigation. Beyond the farm gate, however, the nexus between water and food systems is often misunderstood.

The Global Future Council on Food and Water Security, the World Economic Forum’s expert network, is bringing strategic foresight on the food-water nexus and the role of innovation in driving scalable impact.

Last year, on World Food Day, co-chairs Usha Rao-Monari and Ranveer Chandra described the opportunity presented by generative AI and other emerging technologies. They emphasized the use of a stack framework that aggregates data in one platform to empower stakeholders in decision-making and innovation adoption.

Now, on the occasion of World Water Day, council members describe how different stakeholder groups, from investors to farmers, can use this framework to hedge risk and improve water stewardship.

Food systems are complex, and production value chains are even more so. They are more globalized, more knowledge-intensive, data-driven, and ICT-enabled. Yet, most smallholder farmers continue to operate without access to these developments. Low productivity rates result from a lack of evidence-based decision-making, including in water management.

The food-water nexus has become a critical issue, with food production increasingly threatened by climate and water variance. Often, investment decisions regarding production do not consider the availability, timing or quality of water.

Unaccounted-for value and understanding of water result in a lack of appreciation and appetite for solutions and limited capabilities to deal with complex multi-variable intersections. The lack of availability of relevant data, tools and digital infrastructure, as well as prohibitive costs, presents a challenge.

Fragmented agricultural data impedes a cohesive understanding of the complex interplay between water resources and food production. The lack of interoperability exacerbates this challenge, hindering the effectiveness of decision-support tools. Additionally, data privacy and security concerns further complicate adopting data-driven approaches.

To surmount these obstacles, collaborative efforts are essential, focusing on the development of standardized protocols, improving data literacy and establishing secure frameworks. This concerted approach is pivotal for integrating data seamlessly into decision-making processes within the food-water nexus, fostering a more resilient and sustainable agricultural future.

A critical barrier for farmers implementing solutions that enable data-driven decision-making on water usage is the fact that water is very cheap. Implementing solutions for water savings can be complicated and costly, and it cannot provide farmers with enough benefits. This is especially the case in areas where farmers generate a low income.

Adding new technology asks for adopted business models and communication of value propositions, focusing on topics that matter to farmers: yield, fertilizer and chemical usage, and resilience to environmental shocks.

Working with small-scale farmers and farmer producer organizations (FPOs), the most common barriers that prevent them from making data-driven decisions for water are threefold: Firstly, connectivity or infrastructure issues and technical capacity for data application result in limited access to comprehensive, reliable and timely data on factors such as climate patterns, soil moisture, water availability and quality, input costs and market demand.

Secondly, farmers or FPOs would need to invest in technology to have data in a timely manner. Because of generally low yields, high production costs and low productivity, investment in technology or equipment is often not a priority.

Finally, the average small-scale farmer in Central America is approximately 50 and has been practising farming in well-established patterns for decades. They can find change and innovation in agricultural practices difficult and overwhelming, particularly when driven by technologies with which they are not familiar.

Digital technology and AI are game-changing. They will enable farmers to aggregate data and analysis from many sources to drive decisions. AI delivers pinpointed data on many areas and can recommend more water-efficient crops, optimize irrigation schedules, and predict short- and long-term precipitation patterns.

Data literacy is critical for farmers to embrace AI, and increasing understanding of this will drive more evidence-based decision-making. To create a data-based culture, communication methods must illustrate the value proposition for change in a creative but still practical manner. Approaches must be tailored, considering the widely differentiated nature of farmers in general and smallholders in particular.

Investment in backbone digital infrastructure will also be crucial. This is not only the domain of public financing but also creative and innovative public/private partnerships facilitated by international policies.

In the realm of crop nutrition, the integration of emerging technology and data tools has a transformative impact. Precision agriculture becomes achievable through advanced sensors and analytics, enabling tailored nutrition based on real-time assessments of soil conditions and crop health and predictive analysis to ensure optimal formulation and application schedules.

The streamlined supply chain, facilitated by these tools, enhances operational efficiency, minimizing wastage and improving overall resource utilization, benefiting farmers directly. By aligning nutrient applications with the broader context of sustainable water use and crop production, the industry can address challenges related to water and food security. Integrating data-driven decisions ensures a more holistic approach, optimizing the delicate balance between water usage, nutrient application and crop yield.

As a tech-focused venture capital company, Emerald sees lots of potential in data-driven solutions to support optimized farming practices. More than 50 multinational corporates invest in Emerald’s current funds to drive open innovation initiatives through collaboration with promising emerging startups and scale-ups. A growing group among this investor base is food and beverage companies who desire to drive sustainability across the entire supply chain. Digital approaches for farming, logistics and packaging ensure transparency and insights, as well as the reduction of emissions and an unnecessary waste of resources.

Emerald has made several investments in this space and continues to pursue more. One company in our currently active portfolio, for example, is xFarm Technologies, an Italian company providing farmers with insights on soil and plant conditions, enabling them to optimize their farming practices and inputs, enabling reduction of costs and emissions.

Emerging technologies and data tools provide tremendous benefits, including lowering production costs, increased yields, soil and water conservation, more stable commercial relationships, strengthened risk management and access to finance. However, these technologies must be localized to address specific needs for large-scale adoption.

At EARTH we very much believe that technology and data tools must be developed with an in-depth understanding and early input from the end-users for their full potential to be realized. This is part of what we seek to contribute through the University’s involvement with the GFC on Food and Water Security.

To conclude, data-driven decision-making is an enabler to the resilience and reliability of our food and water systems, as well as a tool to secure farming as a livelihood. However, the technology alone will not solve for impact, and there is a need for new models of collaboration that allow for the latest technologies to be fit-for-purpose and tailored to specific contexts.

When used effectively, a stack-based framework can enable cooperation across diverse stakeholder groups to spur innovation and allow water-smart production and consumption choices led by farmers. It can also bring together diverse expertise to protect our food and water systems for future generations. The opportunity for action is here and now. It requires unprecedented collaboration across stakeholders and sectors to ensure informed and sustainable decision-making by all.