Corteva and the Art of Sublinear Digital Agriculture

Have you ever wondered why is a mouse not the size of an elephant?

When an animal grows double in size, its number of cells also roughly doubles. But there is a catch. Its metabolic rate (how much energy you need per day to live) only increases by about 75%.

This was discovered by a biologist named Max Kleiber in the early 1930s. This ‘non-linear’ behaviour whose slope (in a curve) is three quarters, less than one, is what I mean by sublinear.

When you contrast how bodies grow with how cities grow, you would realize that while bodies grow sublinearly, cities grow superlinearly, in terms of GDP, patents, and crime, with each scaling superlinearly with population size, with an exponent of around 1.15, the power-law slope being greater than 1.

Now, why am I explaining concepts like superlinear and sublinear?

If you want to understand what it takes to digitalize agriculture on a superlinear scale, try and understand how Pinduoduo is growing.

“They look to set the industry pricing and want an established expansion mode. They are concerned with two issues: whether they can set the industry pricing if they invest 1 billion or two billion? The second is how do they expand in the future? If they acquire 1,000 mou of land, how do they expand to the next 1,500 mou of land?” - Cheng Biao in an interview

Today, thanks to simple but absurd maximizer metrics like GMV, every agritech player wants to grow superlinearly like cities and investors love such players.

While it is easier to digitalize agriculture on a superlinear scale in China, it gets slightly more complex to digitalize agriculture on a sublinear scale in a country of smallholders.

You could argue with me with data that the agricultural middle class is growing in superlinear terms.

How do you digitalize agriculture on a sublinear scale in a country of smallholders?

Alongside agritech startups with big ambitions, a good playbook is quietly being written by Big Ag players who are competing on the same turf with agritech startups with bigger ambitions

Many moons ago, when I wrote, “Big Ag Vs Small Ag: Who Wins?”, I wrote,

“It's tempting to think of David and Goliath, when you start looking at the bigger picture. Perhaps, nimble Goliaths of small Ag may not have the distribution muscles of the Davids of Big Ag world. But, that isn't a disadvantage, if you know how to play against your opponents.”

Over the previous editions of Agribusiness Matters, I have explained how Bayer, UPL ($) and Syngenta are going ahead with their digital agriculture gameplays. Today, I want to consolidate the bigger picture with Corteva Agriscience, a “pure ag” player, in my colleague Shane’s words.

While each of these players has a varied set of digital agricultural initiatives, in order to reach out to farmers and scale sublinearly owing to constraints at the last mile, these players have built these full-stack integrated farmer-channel engagement initiatives respectively.

Here is the first obvious point when you look at all of these players: Most of these digital ag game players are heavily focused on vernacular/native languages. In fact, other than news announcements, I couldn’t find many marketing materials about Corteva’s farmer engagement programs in English.

Most of them were in a combination of Hindi, Telugu, and Kannada, focusing on Rice growers, targeting the Brown Plant Hopper disease, primarily as the hook for farmers with alarm notification capabilities. Look at the image below

When you contrast all three digital agriculture gameplays for Bayer, UPL, and Corteva, the commonalities that bring them together are quite striking

1. How do you bring together farmers and channels and your products through digital agricultural initiatives?
2. How do you build foolproof authentication mechanisms for products being sold at channels to farmers?
3. How do you incentivize farmers and channels to increase engagement through referral/loyalty mechanisms?
4. What is the hook - the immediate pain point - for which you are offering a solution? (In the case of UPL, it was stubble burning. In the case of Corteva, it is the Brown Plant Hopper menace.)
5. How do you link these digital agriculture initiatives in line with Sustainability?
6. How do you target crops with a large enough population?

And the most important trait of this scaling gameplay is this:

How do you grow digital agricultural initiatives without expending too much energy? In other words, how do you double in size spending only 75 per cent of your energy?

Pay attention to D Narain in this Economic Times interview where he talks about Better Life Farming Centers and their plans to bring carbon credits alongside UPL, which recently announced their carbon credits program tied with stubble burning.

Beyond these commonalities, Corteva is very unique in many ways. Unlike Bayer, they have been relying more on their own channel to move their products. I wrote about them briefly in the Amazon Unbound Agriculture edition:

As Shane’s analysis of Corteva’s 2020 Annual Report shows, their dedicated channel focus comes from their distribution focus

The essential point in these Big Ag digital agricultural plays is this: How do you balance the priorities of channel and farmers while building the digital infrastructure pipeline for future service deliveries?

I am writing a piece consolidating the digital agriculture plays of all the Big 6 Players that will go out to subscribers later this week. In the meanwhile, do share your thoughts and questions you may have.