Farming the depths of digital development

03 January 2019

What will tomorrow’s farmer look like? Will they have weathered faces and muddy boots or drone licenses and iPads?

Technology is driving huge changes in the agricultural sector, revolutionising the way it grows food, manages farmland and looks after livestock. As pilot projects prove themselves, farmers throughout the world will start to adopt a variety of transformational techniques and technologies.

The new approaches they implement will alter the risk profile of their businesses dramatically and understanding where future exposures and liabilities lie will be key to managing and mitigating these risks as they unfold.


The world’s finite resources must support increasing demand for food from a growing global population, which the United Nations estimated would rise from 7.6 billion in 2017 to reach 9.8 billion by 2050.

Additionally, our cities will become bigger and by 2050 they will account for 70% of the global population, up from 55% today. The challenge is to produce not only more food, but also to increase the proportion distributed to urban areas.

Ironically, a dairy farm in Rotterdam has moved offshore to find solutions to these issues. The logic is that by building a floating farm in the middle of the city’s Merwehaven harbour, it can bring the milk herd much closure to the end consumer and free up land.

Robotic milking machines will reduce the farm’s labour needs and 80% of what the cows eat will be waste products from Rotterdam’s food industry. These will be delivered by environmentally-friendly electric trucks that may one day be driverless. The multi-level facility will also house crop cultivation under LED lights and generate renewable energy.

From controlling the atmospheric environment and lighting systems, to milking the cows robotically, technology is central to this floating farm. Understanding the liabilities that come with this technology and the impact of system outages on ongoing production and third-parties is essential.

There are then the new liabilities that come from the farm’s location. Will insurance respond if the platform sinks and the cows drown? What if manure leaks into the surrounding marine environment?

If the platform slips its mooring and damages ships or cargoes in the harbour, what insurance cover is in place?

These risks are not uninsurable, but they are new so far as dairy farmers and agricultural underwriters are concerned. For any farming enterprise making changes, assessing how new practices will impact current exposures, liabilities and insurance policies will be central to success.

Not all changes will be as dramatic as moving a dairy herd into the harbour, but they should still be fully appraised from a risk perspective.

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While cattle are moving onto the water, fish are swimming onshore. Land-based fish tanks are not susceptible to damage from rough seas, do not contaminate the surrounding marine environment and offer no escape routes for fish.

Sophisticated sensors monitor metrics such as oxygen, temperature and nutrient levels in these onshore recirculating aquaculture systems to provide a constant and highly controlled environment for fish. In addition, many producers have combined them with hydroponic crop cultivation projects to create what is called aquaponic operations.

These onshore, indoor and sometimes underground farms use waste water from the fish tanks to feed plants stacked vertically on shelves, which in turn filter the water before it is re-circled into the tanks. The closed-loop system has sensitive high-tech sensors, intricately engineered biofiltration units, and automated lighting systems.

Heavily reliant on technology, aquaponics needs only 2% of the water used in conventional farming and can be located in built-up areas, bringing food closer to the end consumer and reducing transport miles.

GrowUp Urban Farm in London and Urban Organics in Minnesota are two examples of successful aquaponic operations that are pioneering new approaches. From their inner-city location and reliance on technology, to their use of automated lighting and filtration systems, they have significantly different risk profiles to conventional fish and crop farms.

Agricultural underwriters need to assess the risk of having huge water tanks housed in commercial properties. They need to analyse cyber threats and understand the business interruption and third-party liabilities attached to system failures and outages.

These risks can be quantified and underwritten, but they are not the norm in the agricultural market. Well at least not for now.


Other producers are focusing purely on the hydroponic side of cultivation. One such example is an organisation called Plenty in San Francisco. It has raised over USD 225 million in funding and its vertically stacked indoor plant racks can produce up to 350 times more per square foot than traditional farms. It is literally reaching for the sky.

It super-charges production through very precise use of water, nutrients, temperature control and light, and is more often referred to as an ag-tech company than a farming business.

Earlier this year a senior engineer from Tesla left the electric car and renewable energy company to become senior vice president of engineering at Plenty. This is not a job title that is often used in the agricultural sector, demonstrating just how far and how quickly things have already moved.

Nor was his switch isolated and he joined at least a dozen former colleagues who had already made the same move to Plenty.


Technology is enabling farmers to monitor every aspect of their operations. Drones use imaging and location technologies can assess crop quality and monitor livestock.

Winemakers now use automated quad bikes packed with imaging, location and machine learning technology to harvest grapes robotically from the vine.

Driverless tractors are already in use on some farms, and the number of automatic vehicles and the functions they fulfil is growing.

Bonirob, developed by Bosch’s Deepfield Robotics, is a mobile laboratory and farm labourer. The vehicle drives over the crop using imaging and machine learning technology to analyse plant health and analyse their resistance to pests and insects. It calculates the optimal fertiliser application and can identify weeds and then smash them with an inbuilt ramrod.

Sensors can now automatically monitor and instruct robotic irrigation and feeding systems. They can determine the right amount of fertilizer and pesticide to apply and pinpoint where it is most needed.

These systems can be airborne and delivered by drones, or land-based and managed through driverless vehicles.

Technology opens up vast swathes of land that have previously been seen as too remote, infertile or inclement. Technology can create the atmospheric environment needed, improve productivity while minimising the use of natural resources, and reduce the need for human input.

Between 1950 and 2010 the International Labour Organisation estimated that agricultural labourers, as a percentage of the global workforce, declined from 81% to 48% in emerging countries and from 35% to 4% in developed countries.

Technology will accelerate that shift, reducing the work available to migrant agricultural labourers. How this change impacts and destabilises global societies remains to be seen and governments and international agencies will have to work through this evolving risk.

But farmers have their own challenges to overcome as they seek to improve production, minimise their environmental impact, and increase sustainability. Technology will help them achieve these goals, but it will also change the nature of their job, the skills they need to do it, and the commercial risks and exposures they face.

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For more information please contact Simon Lusher, Head of Food & Agri on +44 (0)20 7459 5550.