Agriculture, the environment, and ERPs
Agriculture is the oldest industry still active today. Right now, though, the landscape is changing and farm owners are subjected to a mountain of different legislative measures, regulations, and codes of practice. The pesticides they use must be monitored, their foodstuffs must meet high food safety standards, the products they supply and seeds they use must be traceable from end to end. On top of all of this, they must now meet many environmental & climate change mitigation requirements. Public opinion is also changing and demanding transparency even in areas where regulation does not. Consumers want organic, non-GMO foods where certifications require extremely detailed documentation and are subject to inspection at any time. An ERP system, especially one developed specifically for the agriculture industry, helps farmers keep on top of all of these legal responsibilities and new expectations.
How does ERP software help with compliance?
If your agricultural business grows, processes or sells food products, then you already know – it’s subject to strict regulation that promises to protect consumers. The recent Safe Food for Canadians Act calls for comprehensive, auditable documentation that can be drilled down to the specific lot, grower, or harvest. You also need to be able to share this information with various bodies, such as the office of the Minister of Agriculture and Agri-Food in the event of a recall, or the Canadian Food Inspection Agency (CFIA) to ensure compatibility with export activities. An ERP solution naturally helps with documentation, but one specifically created for agriculture, like Sage X3 for Agriculture, makes this a lot easier, along with a number of other areas.
One example is in livestock, where animal health regulations are in place to stop or limit the spread of diseases both among livestock and between meat products and consumers. Agricultural ERPs have dedicated verticals for registering the use of medications for livestock, and incident histories for all operations, making the Ministry of Agriculture & Land’s surprise inspections less stressful for everyone.
With the magnified emphasis on climate impact, there are even more things to document: carbon emissions, use of controlled substances like pesticides & manure, and any safeguards in place for the soil & water. In Sage X3 for Agriculture, you can use the Slurry Management tool to see how much slurry you produce, how you can use it best, and keep levels within the legal limits allowed for your farm.
Creating, maintaining and filing all of this documentation can be a massive time-sink for agricultural companies. When it’s for a grant application, this becomes especially troublesome – you need to dot the ‘I’s and cross the ‘T’s. ERP software’s biggest boast is end-to-end information tracking. Your accounts information can be reported against the cost of production, delivery and logistics costs, and other overheads. The ERP platform thankfully automates most of the filing & collection of information, and employees can easily find documents to use for both business reporting and compliance submissions, taking a chunk of work out of grant applications and day-to-day operations. This is invaluable for grants such as AgriInvest, a fund to help farmers “manage small income declines, and … mitigate risks or improve market income,” which requires applicants to prove they’re compliant across several initiatives before being eligible for funding.
The sanctions for non-compliance with any of these regulations can be severe. The CFIA has powers to impose warnings, fines, suspend licenses, and make appeals to the Public Prosecution Service of Canada for prosecution. ERPs not only cut down the time needed to organize the data but streamline your business processes involved in communicating with the relevant authorities, leading to the big benefit: cutting down that risk of non-compliance.
What about other environmental measures?
“Going green”, or adopting environmental measures was previously thought of as cumbersome and a threat to the bottom line. Now, however, it is reported that one-third of the world’s farms have adopted environmentally-friendly practices while continuing to be productive.
Of course, there are more compliance requirements here, too. Pest controls & fertilizers are closely monitored and require diligent reporting, and equipment’s carbon emissions must be documented & reported. We already know that an ERP can handle the compliance documentation, but if a farmer wants to move to more environmentally-friendly practices, there are even more tools available in an ERP like Sage X3 for Agriculture to help them. For example:
- Agricultural lands play a vital role in a low-carbon economy in Canada, by absorbing and storing atmospheric carbon. Tracking your plantations (or separate grow operations) and carbon-efficiency helps promote a low-carbon economy. Rotation of grow areas for regenerative farming can be managed by giving each field area a designation in the “Plantations” area, and recording what it is being used for. This back-record can help with planning for regenerating the soil health.
- ERPs make it easier to cut down on excessive or wasteful practices. For example, you can stop over-buying fertilizer or fuel, and increase employee productivity by cutting out any overlap in how your sites are mapped and then tilled or fertilized, or comparing last year’s purchase size to the actual use. Reports let you see this information in easy-to-digest graphs and charts.
Climate protection measures and digital transformation don’t need to be two mammoth challenges for modern farms. Digital transformation, specifically the deployment of an agriculture-specific ERP, can actually help streamline processes and offer new ways of meeting environmental responsibilities. By organizing all of your data, your ERP can support audits from relevant state bodies, application for grants and bursaries, and an increase in overall efficiency.
 “Environmentally friendly farming practices used by nearly 1/3 of world’s farms”. Eric Sorensen, August 2018. Available here.