Governing Value Chain Disruption in Agriculture and Agri-Food Production: A Behavioural Approach to Assessing Markets for Agricultural Data

Abstract

Many experts predict that the global economy is headed toward a future wherein ‘data is the new oil.’ The agriculture and agri-food sector is no exception, considering that agricultural data—data generated to improve primary agricultural production—holds a great deal of valuable information about the global food supply, present and future. As digital hardware and software rapidly introgress agricultural production systems, an on-farm transformation in productivity and efficiency is creating the conditions for an impending value chain transformation driven by ag-data. Though still on the horizon, policymakers should pay close attention to how this future unfolds and consider the oncoming role of policy in promoting the ideal conditions for growth, innovation, and mutual benefit among stakeholders.

Policymakers must strive to understand more about a variety of questions, including what disruptive ‘secondary uses’ of ag-data will be, who stands to win or lose, how much ag-data is worth, who will own it, and what ownership entails. One key issue is the rules and conditions under which ag-data will be exchanged. This thesis advances a behavioural approach to understanding the dynamics underlying an emerging market for ag-data, especially assessing whether the initial assignment of ownership affects the valuation and end-distribution of benefits—i.e. whether there is an endowment effect present in the exchange of ag-data. A secondary analysis considered the impact of subjects’ worldviews within the same transactional environment. A cohort of agriculture students at the University of Saskatchewan (USask) were surveyed as a proxy for agricultural producers. The results indicate a strong endowment effect, suggesting the initial allocation of property rights over ag-data may strongly influence their end-distribution in a transactional market. This finding suggests that policy intervention may be in the public interest.