From seeds and sprays to data and digitization: the new agrochemical landscape

Posted: November 04, 2024

They say if you ate today, thank a farmer.  

While that is still true, the task of feeding the world grows increasingly complex, with arable land shrinking and the global population hurtling toward 8.5 billion by 2030. To address the global challenge of doing more with less, more and more high-tech businesses are sprouting up to support food production with digital farming solutions and precision agriculture techniques.¹  
 
Precision agriculture refers to a suite of tools and techniques that use data and technology to optimize farming decisions. Such tools include a range of tools like sensors, drones, and data analytics that help farmers maximize yields and minimize waste. It’s a trend that likely to continue², especially with the support of the EU and other governments that see it as a means to enhance food security and sustainability.  

This rapidly digitizing landscape has left the agrochemicals industry in flux. After all, a top reason for the EU supporting precision agriculture and other Industry 4.0 tools is to reduce the use of pesticides and fertilizers³. In response, the agrochemicals sector is embracing digital technologies, a shift that reflects a broader trend of digitization in the chemicals industry as a whole.⁴

How do precision agriculture and agrochemicals work together? 

Left in the hands of only farmers, precision agriculture poses a threat to agrochemical companies’ bottom lines, which have traditionally relied on selling fertilizers and pesticides by volume. Farmers using precision agriculture tools are empowered with data that enables them to these crop sprays more efficiently – and thus more sparingly – than before.⁵   

But as top agrochem companies are already showing: If you can’t beat ‘em, buy ‘em.   

The Big 5 in agrochem—Bayer/Monsanto, Corteva, BASF, Syngenta, and FMC— are spearheading a trend of heavily investing in precision agriculture through strategic acquisitions and partnerships. The aim is to provide farmers with new digital tools that profitably enhance the effectiveness of their chemical products. These alliances open up new revenue streams and allow agrochemical companies to position themselves as holistic “solutions providers,” integrating pesticides and fertilizers with advanced data technologies. Some companies, like Syngenta—once known primarily as a pesticide giant—now brand themselves as “agrotech” instead of “agrochem,” reflecting their pivot toward high-tech, integrated solutions. 

In 2013, Monsanto (now part of Bayer) took a pivotal step in the ongoing reorientation of agrochemicals by acquiring The Climate Corporation, a company that equips farmers with essential data to navigate increasingly severe weather patterns driven by climate change.⁶ The acquisition marked the company’s transition from a core business model of selling seeds and chemicals, to offering services and data, seen as a potential $20 billion revenue opportunity.⁷ Now that technology underpins Bayer’s Climate FieldView,  a digital platform used on over 220 million acres of farmland to collect and analyze data from their fields using satellite imagery, sensors, and advanced analytics.⁸  

Other sectors of the chemicals industry are also expanding their product portfolio with new data-based services enabled by digitization.⁹ After all, it is not only pesticides producers that face increased regulation; chemicals as a whole are subject to stricter environmental and safety standards, which are driving companies to seek alternative profit models.¹⁰

For example, chemical leasing is a rising alternative to the chemicals industry’s traditional volume-based sales. As a business model based on value over volume, it monetizes a chemical’s performance rather than the quantities sold. Digitization is crucial for chemical leasing, as it enables real-time monitoring and data analytics that help companies track and optimize chemical use, and ensure regulatory compliance.¹¹

Precision Agriculture and Innovation in Agrochemicals

Precision agriculture methods are also sparking innovation in the agrochemical industry, addressing two long-standing challenges: traditionally lengthy R&D cycles and the growing issue of insect resistance to pesticides.  

By combining generative AI with real-time field data from IIoT devices—such as sensors, drones, and satellite imagery—agrochemical companies can now accelerate the design of novel chemicals. These AI-driven tools analyze vast amounts of data on soil composition, climate conditions, and pest behavior, allowing companies to tailor agrochemical formulas to specific environments and crops much faster than before.  

And with the rise of insect resistance to traditional pesticides, companies are using AI and field data not just to identify new compounds, but also to predict how pests might evolve in response to new chemicals. This predictive capability helps researchers anticipate resistance patterns and design more resilient, adaptive formulations from the outset. What previously took years in lab trials can now be accomplished in a fraction of the time through advanced simulations and real-world data integration. 

 The Future of Farming

As precision agriculture continues to reshape the farming landscape, agrochemicals are projected to increasingly pivot to integrated digital strategies.¹² While this marriage of crop chemicals and data analytics promises increased efficiency and suggests a smaller environmental footprint, the trend is not without seeds of doubt.  

Some industry observers caution that pairing precision agriculture with agrochemical inputs may risk being more promotional than transformative. They argue that while these integrated tools may increase efficiency, they also necessitate deeper innovation and broader structural change to meet environmental sustainability goals fully.¹³  

Others criticize the risk of farmers becoming overly dependent on proprietary digital platforms that bundle data services with seeds and chemicals. When Bayer and Monsanto merged in 2018, 91.7% of farmers surveyed by the Konkurrenz Group expressed concern that the merger would enable Bayer/Monsanto to control data about farm practices.¹⁴ However, with transparent practices and collaborative design, these digital platforms could empower farmers by providing more tailored, data-driven insights while preserving their autonomy in crop management decisions. 

Integrated digital strategies may well be ushering in a new era of efficiency in agriculture, but long term food security will require ongoing collaboration between agrotech solutions providers, farmers, governments, and environmental advocates to ensure that these tools not only support productivity, but also truly advance sustainable and resilient farming practices.