John Deere Makes an Economic Case for Rural Broadband Expansion

Agripulse
Published: October 9, 2014

While a combine operator harvests feed corn at Clear Meadow Farm in northern Maryland, he explains that if a problem arises with his equipment, he can make a call directly from his data monitor and grant access to the farm owner or equipment dealer who can then remotely view the combine data system and suggest adjustments.

Large farms like Clear Meadow Farm in White Hall, Maryland, benefit from access to broadband and the ability to wirelessly connect data from machine to machine as well as with the grower's laptop or tablet. The connection saves time, money and natural resources, John Deere managers explained at an event at the 5,000-acre grain and beef operation. The information the equipment collects throughout the year, during planting, fertilizing and harvest, is collected in real time and stored in the farm's data system.

In the northeastern U.S., with its many population centers, “we grow as many people as corn and cows…so it's not hard to get connected,” said Mark Lewellen, manager of spectrum advocacy at John Deere. “But that's not the case in other areas of the country.”

There is a pressing need to strengthen wireless broadband service to rural America, FCC Commissioner Ajit Pai told a small group of Capital Hill staffers, agricultural organization employees and John Deere representatives, when he spoke at the event.

“Technology makes farms more productive and efficient. That can provide a shot in the arm to the economy,” Pai said. “And it all depends on wireless connection.”

He said a farm visit like the one hosted Thursday by John Deere and PCIA, the Wireless Infrastructure Association, is an effective way to “demonstrate the power of technology in a way most people don't think about.”

“Broadband is a great equalizer,” he said. For example, if enough cellular towers were built throughout rural areas to provide consistent broadband access, rural communities would have the same access to information and healthcare services as residents in urban areas. “Agriculture is where we can see a multiplier effect,” Pai said, because as agricultural technology grows, the demand for farms' access to the broadband system will continue to increase as well. 

“Machine-to-machine communication is the future when it comes to agriculture,” he said.

PCIA's CEO Jonathan Adelstein, a former FCC Commissioner, said broadband companies need to find a “business case” to build up in rural areas, because “subsidies only get you so far.”

A report released today by the market strategy consultant iGR [in conjunction with PCIA's member-driven Rural Wireless Broadband Working Group] focused on this topic, arguing that because rural consumers are demanding the services that broadband enables, “A different economic equation is therefore needed to justify the costs of bringing broadband to rural America.”

A model based on population will not work in rural areas, noted the iGR report, which PCIA's Rural broadband Working Group commissioned.

“Rationalizing investment in rural areas requires an economic justification - and for that, rural investment analysis needs to use different metrics than are used in the metropolitan markets,” iGR said. For example, the economic model for broadband in rural areas should be based on the number of devices and connections, not simply the number of people to be covered, it said.

Tyler Hogrefe, a senior technology product manager at John Deere, noted, “You can't just think about the number of people, but the number of connected devices in the marketplace.”

The iGR report also asserted that once a broadband network is deployed, it will create more economic activity that will help maintain or increase population in those areas, “further justifying the investment.”

Additional incentives for broadband companies to expand in rural areas can be through state efforts like proposed legislation in Iowa that would provide an accelerated depreciation deduction for income tax, a 7 percent tax credit and a 100 percent property tax exemption for broadband infrastructure deployed in targeted areas.

Hogrefe demonstrated some of the capabilities of John Deere's data manager system, which can help growers contain and manage information from every aspect of the farm - including inputs, machinery, yield data, crop insurance information -- in one digital location.

He noted that when a machine fleet is connected and able to collect data about planting inputs and yield in real time, “USDA recordkeeping and EPA compliance reports are all more timely.”

Wireless access throughout a farm's acreage saves time and money for the farmer, John Deere managers said. For example, when the farmer can track and monitor a planter in real time, they can stop a problem before it stretches across the farm, “which is important when you have a 120-foot planter and seed is $300 per bag,” Hogrefe said.

John Deere's presentations suggested that innovations through technology and wireless communication will continue to expand and become available to farmers, but they can only be useful if producers have access to the broadband highway. And while agricultural technology may make some manual labor unnecessary, it does increase demand for rural workers in the tech field.

“Demand for technological labor in rural America is growing,” Hogrefe said. “Dealers need more people that understand this technology. And that need is going to grow with time.”