News Crop protection
Data determines Bayer's pricing resources
The American branch of crop protection giant Bayer Crop Science is starting a new way of selling products in the United States. The data is the basis for the price. If the product does not do what it promises, you will receive the money back.
The system is not new to Bayer. Since last year, it has been using data from farmers to advise on the purchase of seed. The program collects all the customer's cultivation data and thus finds out what the yield of a maize or soy variety was. This coupled with the location, the weather and the inputs can predict which breed will best suit your farm. This can also be a mix of different hybrids.
Not happy, money back
Bayer will now also use the data technology for crop protection products: in terms of price. If the product does not do what was promised by the manufacturer, you will get your money back. For example, if Bayer claims a yield increase of 3 bushel, but in practice that is 2 bushel, you will get the price difference of the missed bushel back. about this writes the American news site Ag Web.
However, the penny can also fall the other way. In this example, if the grower does not get 3, but 6 bushels of additional yield, the grower pays the manufacturer more for the drug. This price structure works up to a 10 bushel return on soybeans. Everything above that is in your own pocket. According to Bayer, this helps arable farmers to try more resources.
Data the key to success
Everything revolves around data in this system. That's where Bayer's trump card comes in. With the incorporation of Monsanto, it also acquired subsidiary 'The Climate Corporation'. Their FieldView software is crucial. This management program collects all cultivation data and then makes a decision. Since yields in the United States fluctuate very little, the yield fluctuation can be predicted with reasonable certainty.
There is no exact launch date yet, according to Liam Condon, the director of this section. There are still a number of complex issues to be solved. It is unknown whether Bayer will also apply the technology in Europe and the Netherlands. Bayer Nederland could not be reached for comment at the time of writing. The FieldView program is already being tested in Europe and was launched in 2017. Arable farmers in countries such as Germany, France and Ukraine make use of the beta.
In the Netherlands too?
Expanding the method here is not easy, because yields can fluctuate considerably due to weather influences. For example for a crop such as potatoes or onions. It is then extremely difficult to predict what the effect of the drug would be. It does clarify that collecting and using data can help companies to sell their products better. The 'giving away' of data is also an issue on which agricultural entrepreneurs are becoming increasingly critical.
Niels van der Boom
© DCA Market Intelligence. This market information is subject to copyright. It is not permitted to reproduce, distribute, disseminate or make the content available to third parties for compensation, in any form, without the express written permission of DCA Market Intelligence.
