Use of satellite technology for decreasing risks in agriculture

The exploration of outer space and launching of satellites started in the 1960s. Having some romantic flair in the beginning, the satellite story went on and nowadays satellites are launched often and almost everywhere around the globe and their number is going to grow in the future. Together with that, a new question arose, what to do with a bunch of new information received? A huge lot of information has been gained in the satellite era, but its practical appliance can be seen only in certain spheres of economics.

One of the spheres where data received from satellites are used effectively is agriculture. There is a range of agricultural problems which can be solved with the help of these data. Satellites are classified into ones of high resolution, of medium and of small. Basically for agriculture satellites of medium resolution of 5–250m per pixel are used. What can be seen in such satellite images and what tasks can be done with the help of satellite data?
 

Garden City, Kansas

Using satellite data one can judge about the level of cultivation of soil in specified area, identify actively cultivated and abandoned fields and define their configuration. Also with the help of satellite data it’s possible to get information about the current state of things without visiting a specific field. Analysis of satellite data allows understanding whether agricultural events are properly conducted, whether the technologies of cultivation are not violated, and whether soil requires additional treatment for enhancing fertility. With satellite images it’s possible to evaluate condition of agricultural plants; the normalized difference vegetation index (NDVI) is designed for that. The normalized difference vegetation index is a simple graphical indicator of biomass active photosynthetically that is calculated via several spectral channels. Satellite possesses from 10 to 30 spectral channels. Any satellite has its own set of channels which can be visible, infrared, ultraviolet, thermal, etc. Satellites measure the reflectance of the planet in many spectral resolutions as Earth looks different in various spectral resolutions. Plants reflect light well in one spectrum while plants do absorb it in another spectrum. Correlation of these indicators allows defining live green plants from other objects. The NDVI is one of the most well-known and used index to detect live green plant canopies and to evaluate vegetated areas, their condition and quality.

Let’s see what tasks can be performed with the NDVI.

Monitoring of crop emergence.
Real-time monitoring allows supervising the current situation and forecasting crop yields. Using the NDVI it is possible to detect presence of plants, its dynamics of emergence and growth. Maps of the NDVI with dynamics (various seasons) let tracing peculiar features of seasonal vegetation, its deviations, allow planning, etc. For instance, knowing weather forecast, condition of plants and considering the current date, forecast about the amount of yield in the current year can be made. However, a specific feature of satellite monitoring should be taken in to consideration: satellite technology works for global tasks only, this technology is pointless for small farms. Small local farms do not need satellite technologies in their everyday operations. But this kind of information can be of great importance for wholesale purchasing companies. In this case information about extensive regions is of big interest: what region is more fertile, what plants grow widely and where wholesale can be done.

Field of green onion. Colombia, Aquitania

 Analysis of historical data.
Historical data is information on the cultivation of fields, evaluation of their productivity and the efficiency of the technologies used. Currently a large archive on a daily survey of earth surface is gained. For example, satellites of MODIS system orbit earth on a daily basis since 2000.
 In this archive history on any field cultivation for the last 15 years can be obtained. This is a great opportunity for insurance companies to receive information about a future customer and to decrease potential risks.

NDVI maps

Accurate land tenure.
Nowadays global manufacturers of fertilizers provide quite complex products. These are not only fertilizers simply, but also compound technologic processes for specific kind of plants, for peculiar weather conditions. Basically, a half of the cost of maintaining crop comes to expenses on fertilizers, and issue of proper use of fertilizers is an actual task for farmers. Evaluation of field condition based on satellite, weather and historical data is an available remote tool for analyzing the efficiency of land tenure, which lets significantly reduce commercial risks and expenses on fertilizers.

Evaluation of efficiency of water reclamation systems.
Condition of irrigation and drainage systems, their violation and failures can be estimated by comparative productivity of specific kinds of agricultural plants.

Evaluation of pastures and hunting grounds.
The NDVI allows effectively and at a low cost solving such tasks as assessment of quality of hunting grounds and of pasture productivity for planning of their usage and detecting violations of cattle grazing.

Mitigating of weather risk makes “the weather excuse” invalid

It is hard to overestimate the impact of the weather on human lives. The weather affects how we feel, what we eat and wear, where we plan travelling to — actually it has its impact on all human activities. This is true not only for aspects of everyday life but also for various sectors of the economy and industry. Any industry is subjected to weather risk to some extent.

Every time when devastating weather phenomena take place many companies gets hurt, there are among them property and casualty insurers, construction firms, real estate developers and shipping companies. It is also an essential issue for energy, oil and gas concerns, agriculture enterprises, ski resorts and many other companies from different spheres.

During many decades, “the weather excuse” was enough to explain poor financial results. In the face of global changing of climate the weather starts playing more and more important role in operational performance of companies, and nowadays there do exist technologies and tools to mitigate weather risk significantly, and thus to make “the weather excuse” groundless.

Steady ability to manage weather risk lets companies reduce direct financial losses and gives instruments to better execution of fiduciary duties to shareholders. Certainly a complex approach to detection and management of substantial business risks should include weather risk management.