Tuesday, July 16, 2013

Return on Investment pt.2

The invention of agricultural equipment powered by internal combustion engines sparked the Green Revolution and changed America's and the worlds relationship to food in a permanent way. Jared Diamond makes a powerful case for the invention of agriculture as the necessary element for a society to exist at all, in his book "Guns, Germs and Steel". It is time for another powerful force of change to come from agricultural systems.

Currently the American automotive market is starting the transition over to hybrid and full electric vehicles. Every year a larger and larger percentage of the market is being embraced by consumers who no longer want the ever climbing price of fossil fuels to dominate their lives. The price of fuel will likely never drop below its current elevated threshold. If the automotive industry can do it, why can't the producers of agricultural equipment?

The greener John Deere might be just around the corner. In markets like the wheat fields of Washington State, where plentiful and cheep renewable energy infrastructure already exists, there is a ripe market waiting to be realized. When a farmer is looking to phase out older equipment, it shouldn't be hard to make a strong case for electrification. The money saved on maintenance and fuel costs alone could potentially make an even more expensive machinery investment pay dividends in short order.

In places where access to existing power infrastructure is less available, a more costly investment in solar collection arrays would be ideal for the longer term thinking agricultural market, when the concept of free fuel from the sun is disseminated. Starting with small solar powered pumping stations for irrigation, the growth potential for this market is immense, once the systems have become familiar.

From the produce consumers standpoint, limiting petroleum inputs into for their broccoli might start out as a boutique market, eventually the reduced cost by limiting this expense will make sense for a much broader consumer base. The appeal to environmentally conscious consumers however should not be understated. This is not only a remarkable business opportunity, but someday, it may make your salad just a little bit greener.

No comments:

Post a Comment