15. December 2017
Courage for change – but also for recognizable company values
Klaus Josef Lutz on internationalization, digitalization and the acceptance of new technology amongst farmers
BayWa is a global trading company, focusing mainly on farming, energy, and construction. The company has bundled its digital offerings in the business section “Digital Farming”. Klaus Josef Lutz, chairman of BayWa will be bringing his expertise to the panel debate “Changing Trade” at the Farm & Food 2018. We spoke to him prior to the event about internationalization, digitalization and the acceptance of new technology amongst farmers.
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Farm & Food: Digital farming is high on your agenda. What do you see as your next steps of expansion in this sector, also internationally?
Klaus Josef Lutz: Everything we do has an international demand. We already have a leading position in the market in the digital farming sector in Germany and we want to extend this market leadership across Europe.
Farming has become a global business. Our primary goal needs to be to feed up to 10 billion people in the world by 2050. Digitalization will help us to optimize crop yields, but also reduce resources. This is important in light of sustainability and environmental protection.
We are active in future markets such as Africa and have founded a joint venture with Barloworld in South Africa in the agricultural technology and logistics technology sectors. We are also testing satellite technology on a pilot farm, one the one side to learn, on the other to optimize our applications and technologies for evaluating satellite data, considering climate change, water supply for international use on large farms. The average farm site in Africa is 1500 hectares.
In BayWa’s domestic markets, Germany and Austria, it is about increasing production efficiency and sustainability. There is still a lot of reservations regarding innovation and investment amongst farmers. We need to overcome these through consultation, explanation, standardization and non-proprietary compatibility. The goal is to lower farmer’s costs through process optimization.
What are currently the largest obstacles facing digital farming? What needs to be done, perhaps also politically?
Surveys in Germany about investment obstacles of farmers have shown the following top priorities:
- Investment cost of new technologies: Many farmers are uncertain if such an investment will be worthwhile in the mid to long term.
- Lack of compatibility between agro-tech and software
- Required digital infrastructure missing: Politics needs to provide the internet and broadband technologies in rural areas required for optimal implementation. This is a political infrastructure decision. Many European countries, particularly Germany are far behind the curve, which is a serious issue.
Why is Farm & Food 4.0 so important and what do you expect from your participation?
We always expect to learn something new, both from competitors as well as from companies further up and/or down the value chain.
There is the general trend that more and more consumers consider whether agricultural products are produced in a sustainable and environmentally friendly manner. Digitalization enables a substantial level of transparency and verifiability throughout the whole value chain, from producer to consumer.
This makes topics such as sustainability, environmental compatibility, environmental protection, animal welfare and organic farming more comprehensible. This is what Farm&Food 4.0 will be about. We expect an information exchange between diverse specialists in the farming and food industries.
So, quickly and concisely, what is the biggest challenge that companies have to confront considering the increase in digitalization?
Companies need more courage to question existing business models and change them. On the other side, traditional company values need to remain recognizable. BayWa feels obliged to do exactly that.
