Global shortage of semiconductor chips causing challenges for farmers wanting to embrace ag tech

If you are trying to get your hands on a new car, the latest phone, or gadget, you may have had to wait due to the global shortage of semiconductor chips.

But the tech crunch is not just disrupting manufacturers of electronic goods; it’s also impacting farmers trying to modernize their operations.

Ag tech entrepreneur Tom Mills develops remote monitoring systems but has had to re-design his products.

“For the custom-made components, what we need to do now is essentially look forward at what chips are available, pre-purchase those chips, and then design our equipment or refine our designs around that,” he said.

The chip shortage comes at a difficult time, as many farmers need labor-saving technology to combat worker shortages and improve productivity.

“We’ve fallen behind because we’ve not invested in this technology to date,” Mr Mills said.

“That’s why a lot of the automation technology you find in dairies is sourced from European countries because they’ve had to pay staff a lot more over there for some time.”

What caused the chip shortage?

A close up of computer chips — Lockdowns and the rush to work from home prompted a huge surge in sales of electronic devices.(Supplied: Axonite)

Semiconductor chips are the backbone of a vast array of electronic devices but supply has been constrained since the outbreak of COVID-19.

Lockdowns sparked a consumer electronics boom, as workers and students rushed to buy devices to help them work from home.

While demand soared, supply was hit by a severe drought in Taiwan, which crippled the water-heavy production of chips by the world’s largest manufacturer — TSMC.

The shortage may ease as the disruption of COVID fades and the US rolls out more than $50 billion of stimulus to boost production.

Two men chat in an old, tin pump shed in a sprawling family farm. — Farmer Charlie Mackinnon talks to ag tech provider Tom Mills at his family farm in Longford.(ABC Rural: Lachlan Bennett)

In the meantime, early adopters like Tasmanian farmer Charlie MacKinnon are already reaping the rewards of ag tech.

Prior to installing remote monitoring systems, the Longford man spent hours every day driving across his property to check every single irrigator and water pump.

“And if there were any problems, back down to turn it off, back up to the pivot to sort out the problem, and back down to the pump to start it up,” he said.

“And then also going to bed at night with the irrigators running, waking up in the morning to see if anything has gone wrong.”

Tech crunch not limited to chips

A young and proud woman stands in a field with a broad brimmed hat. — Ag tech entrepreneur Fiona Turner from Bitwise Agronomy helps farmers facing labor challenges.(ABC Rural: Lachlan Bennett)

Labor constraints in the berry and viticulture sectors prompted Fiona Turner to found automated crop analysis company Bitwise.

While the software-focused start-up had not been hit by the chip shortage, cloud computing had been an issue.

“With the power shortages and costs going up globally, that’s going to have a massive impact on our costs to use cloud providers,” Ms Turner said.

“So we’re watching that very closely.”

James sits on a crowded ag tech desk, with a big smile as he shows off one of his gadgets. — James Walsh of Farm Pulse says farmers are already facing delays for new machinery, so they are not put off by the chip shortage.(ABC Rural: Lachlan Bennett)

James Walsh, director of remote farming technology company Farm Pulse, said his company had avoided the worst effects of shortages by not being reliant on a single technology or manufacturer.

But they still had to “manage expectations”.

“Anyone who’s in technology and trying to source raw materials has had problems,” he said.

“But most of our clients have been very understanding because they realize across everything at the moment there are shortages.”

Despite the challenges, Mr Walsh said the chip shortage had not dented demand.

“Progressive farmers are always looking for that edge,” he said.

“With agriculture being so buoyant at the moment, people are looking for those efficiencies for when things might get a bit tighter. So they’re willing to spend money on technology.”

Creative solutions to chipper challenges

In a sprawling tin shed, Andrew holds up a big black drone, as large as an arm span. — University of Tasmania tech solutions hub manager Andrew Willoughby says drones have great potential for improving productivity on Australian farms.(ABC Rural: Lachlan Bennett)

Those who could not get their hands on technology were getting creative, according to University of Tasmania tech solutions hub manager Andrew Willoughby.

“The chips are really difficult to come by and some of our students are now creating their own chips, manufacturing their own chips for use in robotics and other electrical components,” he said.

“As part of their own course, they’ve gone further than expected.”