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Ag Data at Center of First-of-Its-Kind Lawsuit
A farmer’s data is his prized possession. It holds the key to how he manages his fields and the ingredients he uses to maximize yields. Compromising control of that information is unsettling.
Data privacy and security are two topics many ag companies have addressed recently. Farmers have been assured that they are the owners of their data, and that they alone control who they can share their data with. But what happens when the data being shared is used against the farmer to price-fix or suppress grower compensation?
In a recent lawsuit filed by Oklahoma poultry growers, those allegations were claimed against Tyson Foods, Perdue Farms, and other integrators. In short, the complaint claims that Agri Stats, Inc., which is a data hub, allowed the integrators to collect and share growers’ data. The integrators then used that information to suppress compensation to the growers.
A recent blog by Todd Janzen, Janzen Ag Law, breaks down the lawsuit and offers insight into the implications the case could have for agriculture as a whole.
“While the case is interesting for its anti-trust implications, the suit may help answer some of the ag industry’s burning questions about data: Who owns ag data? Is production data something that the farmer can own and control? Can companies share ag data anonymously without running afoul of anti-trust issues? To what extent must geographic information be stripped from ag data to make it truly anonymous?” questions Janzen.
“This lawsuit is an example of how little growers understand or consider the implications of giving their data to large agriculture companies or to small start-ups that are often acquired by big companies,” says Douglas Hackney, Enterprise Group Ltd.
One aspect of this case, he asserts, is the reality of encrypting or removing personally identifiable information from data sets so that the individuals whom the data describes remain anonymous.
“As I’ve stated before, anonymization of ag data is a myth,” says Hackney. “For crop data to have any value, you must know the soil type, soil test data, rainfall, tillage type, crop, variety, plant date, emergence date, input application data, harvest date, etc. It only takes a few of those data points to pinpoint a location. Only a single grower produces a single crop in a given growing season in a given area. That means for data that matters, there is no anonymization.”
Consequently, he says, providing production data to companies that already control your financial future via pricing power of your most costly inputs is extremely risky.
“Providing production data to small, start-up companies that are often sold to large companies is also high-risk,” notes Hackney. “The only way to ensure that your data – data that can unlock insights to lower costs, better yields, and higher margins – is not used against you is to own and control your own data and your own data system.”
The Farmer Perspective
“As a beef cattle producer, this lawsuit gave me an uneasy feeling of foreshadowing cattle market trends,” says Indiana farmer Aaron Ault. “It became painfully clear to Holstein beef farmers a couple of months ago how monopolistic the packing industry has become. One packer announced, for reasons they refuse to share, that they will no longer buy Holstein beef. It completely collapsed the national Holstein market overnight. Divide and conquer, I suppose: collapse 20% of the beef industry to force it toward vertical integration owned by packers so that the remaining 80% become easier to segment and wrest under control. To me it’s existential.”
Ault also serves as the project leader for the Open Agriculture Data Alliance (OADA). He believes that getting a handle on your data means creating an open-source platform for analysis tools.
“As someone who buys food for my family, using data analytics to identify inefficiencies in the supply chain, which can result in lower food prices, is a good thing; in fact, it’s a great thing,” he says. “However, as a farmer, the ability of a few large players in the supply chain to distort the overall market means I’m more likely to lose my farm as the troughs of volatility reach ever lower. I think where those two come together is that a more consolidated market can lead to greater swings in food supplies. The prevalence of free markets among our food products is the primary reason that most of us in the West conceive of famine as a historic problem like the Bubonic plague. Remove those, and you risk the few players left making bigger mistakes that have further reaching consequences.”
Ault believes it boils down to an argument that you typically see misstated in political debates.
“One side argues that some tool has been used for great evil and, therefore, should be banned,” he says. “The other side argues that it has been used for great good and, therefore, should be increased. In reality, they are both arguing that the tool is powerful rather than inherently good or bad. Big-data analytics can be callously deaf to the cries of the oppressed, and it can also free mankind to achieve qualities of life across all people that were never before conceived. It is powerful, and it is through cases like these that we’re going to try to figure out how that power will be used. The one thing I do know is that the more I have used data in my own operation, the better my operation has become.”