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Farming by the sub-inch: What the future of food looks like

Halfway through 2015, investment in agricultural technology reached $2 billion.

Citrus trees sit below a barren hillside in Tulare County in California's Central Valley. In year four of the drought, many farmers are getting only a fraction of their historic surface water supplies.
Gregory Bull | AP
Citrus trees sit below a barren hillside in Tulare County in California's Central Valley. In year four of the drought, many farmers are getting only a fraction of their historic surface water supplies.

Farmers for decades have relied on gut checks and generations-deep knowledge to make crop decisions. This tradition of land stewardship has meant preemptively wiping out an entire field to thwart what might be, for example, a small localized pest problem.

But agriculture, like many industries, is increasingly digitized. More farmers are turning to technology, including tablets and real-time data-monitoring tools, to make pinpointed decisions about crops — down to the exact row location in a massive field. "So instead of farming a field, technology allows us to farm a sub-inch within the field," said John May, president of agricultural solutions for Deere & Co., the farm equipment maker.

So-called precision farming is a growing agricultural trend that harnesses a wide swath of data, including soil information, seed data and weather analytics. Sometimes also referred to as precision agriculture or "site-specific ag," for short, the strategy allows farmers to analyze and adjust nearly every aspect of their operations.

Growers essentially are able to manage large fields as if they were smaller, micro fields and subsequently tailor water, nutrients, seeds and other inputs to smaller sites' specific needs. The end goal is boosted efficiency and higher land productivity — or growing more food on the same amount of soil. This is a big goal for many researchers and scientists as the planet will exceed 9.7 billion by 2050 from around 7.3 billion, according to United Nations figures.

Adding to population pressures, China's ruling Communist Party last week said it will ease family planning restrictions and allow couples to have two children after decades of a one-child policy. It's early in the game to gauge whether the policy change will have an immediate or big impact on China's population of 1.4 billion people.

"The cultural and social norm of a smaller family size has been ingrained in the current generation," said Ryland Maltsbarger, an agricultural economist at IHS. Any cultural shifts about family size could take decades to unfold. "I am a little skeptical that the social norms would shift that quickly just because of the government's announcement," he said.

Meanwhile, China's growing middle class and mass migration to cities already are influencing the kinds of specialty crops American farmers grow and prioritize. Higher Chinese earners are stockpiling their kitchens, still filled with pork and vegetables, with more wine, almonds and milk products from California, the nation's largest agricultural producer and exporter.

Harnessing the power of data

Mark Young, chief technology officer, Climate Corp.
Qin Chen | CNBC
Mark Young, chief technology officer, Climate Corp.

Adding to growing threats to food and water security, the National Oceanic and Atmospheric Administration announced September was the hottest September on record, since the U.S. agency began tracking worldwide temperatures 136 years ago. With the planet getting more crowded and hotter amid human-induced climate change, how will we feed the world?

"I can tell you right now the productivity gains in growing, in agriculture, are not growing fast enough to be able to meet that demand," said Mark Young, chief technology officer at Climate Corp., a start-up that's using a data trove to help farmers better manage weather shifts and crop decisions. "As we stand today, we are not experiencing a growth rate to be able to feed all those people in 2050. So what do we do about that?"

It's a very good question and a potentially lucrative market that a lot of companies, from multinationals to start-ups, are chasing.

Halfway through 2015, investment in agriculture technology — including precision farming — reached $2.06 billion, according to forecasts by AgFunder, an online platform focused on ag tech companies. Prior to 2012, investment in ag tech was largely flat, hovering around $500 million annually.

In 2014, about $276 million was invested in precision agriculture alone, according to AgFunder. Midway through 2015, that figure had reached nearly $400 million.

Scientists at San Francisco start-up Climate Corp., for example, analyze national weather databases and soil data. They have access to roughly 30,000 acres of test farm data in 17 states. In 2013, the seed giant Monsanto acquired Climate Corp.

"Having access to all of that data allows us to model that for the grower, to allow the grower to make better decisions about which seed, which seed population, which soil zones will be best," said Young. "And we can even look ahead to certain weather patterns."

Read MoreHow China is changing America's food

Agricultural technology and land productivity will become more important amid precious water resources and a finite amount of arable, or farmable, land. This is especially true for China.

Despite China's vast landmass, plants and vegetation for grazing animals is relatively scarce. The mainland's farming complex is a patchwork of microfarms — a handful of acres down to mini scattered plots. While this backdrop makes scalable food production tricky for China, there are opportunities for agriculturally focused companies.

Deere & Co. in China

Members of the public look at tractors of John Deere at a China Jiangsu International Agricultural Machinery Exhibition (AGMA). (File photo)
ChinaFotoPress | Getty Images
Members of the public look at tractors of John Deere at a China Jiangsu International Agricultural Machinery Exhibition (AGMA). (File photo)

Part of Deere's strategic push includes China, where farmers in the world's second-largest economy are working to modernize and scale up food production. The company doesn't break out sales by country. But net sales for equipment operations for Asia, Africa and the Middle East combined reached $2 billion in 2014, nearly doubling from around $1.1 billion in 2008. Deere has about 2,500 employees in China, and six manufacturing facilities in three cities — Tianjin, Harbin and Jiamusi.

And while Chinese farmers might buy equipment or hire the services of a planter or combine they can't afford to buy, turns out Chinese farmers want what any producer wants: higher crop yields. "China is adopting technology quite rapidly and the government has supported that by subsidizing growers to purchase more advanced tractors and more advanced combines," said May of Deere & Co.

Read MoreChina is hungry for the world's food

Beyond regional strategies, Deere has invested in a variety of technology, including precision agriculture; telematics that allow machines to communicate remotely with one another; and sensor technology to capture exact field data.

Land productivity's side effects

Sandra Garcia, a crew picker in the Central Valley, says drinking tap water sourced from a groundwater well makes her family sick.
Qin Chen | CNBC
Sandra Garcia, a crew picker in the Central Valley, says drinking tap water sourced from a groundwater well makes her family sick.

But as farming technology advances to feed more people, there are consequences to pushing food production to its outer limits. Low-income residents in agricultural regions, for example, have been feeling the impacts of full-throttle farming for years, especially as more crops are produced and tailored for export, 365 days a year.

"If the rancher has an order, he wants to quickly grow the grapes and that's why he puts chemicals in them," said Sandra Garcia, a crop picker in California's Central Valley. "If he wants to make them color quickly, he puts another chemical in them. If he wants them to make them sweeter, he puts another one in them," Garcia said. "So we make and do everything by force."

It's August in the Central Valley, and the afternoon heat is on full blast. Sitting in her front yard, crew picker Garcia said adjacent groundwater pumping over the years has made her tap water unsafe to drink. She said drinking her tap water can cause diarrhea, vomiting and headaches. So she pays up to $80 a month for bottled water she can't afford. It's cheaper than visiting a doctor. Crew pickers earn less than $10 an hour, on average, or $15,000 to $17,000 annually, according to University of California, Davis figures.

In a key 2012 report on nitrates in California's drinking water, UC Davis investigators including Thomas Harter and Jay Lund found about 254,000 residents at risk for nitrate contamination of their drinking water in the Tulare Lake Basin and Salinas Valley. Many communities in the studied area are among the poorest in the state.

Thomas Harter and other UC Davis researchers have investigated nitrate contamination in California drinking water.
Qin Chen | CNBC
Thomas Harter and other UC Davis researchers have investigated nitrate contamination in California drinking water.

While nitrogen is a nutrient that feeds crops, excess nitrogen not used for crops has the potential to become groundwater contamination. Nitrogen is a key input to agriculture production and comes from fertilizers and animal manure. Excessive nitrate levels can trigger breathing problems among humans, including infants.

The UC Davis investigation focused on regions of the Central Valley that includes Poplar, where Garcia resides.

Since the report, the State Water Resources Control Board made several recommendations including a funding source to ensure all Californians have access to safe drinking water. "Funds will accrue and be available within several years," according to a July 7 update on the water board's website.

More crop per drop

Tory Torosian, a farmer in Dinuba in Tulare County, sells produce at San Francisco’s Ferry Plaza Farmers Market. He says the growing population has heightened the drought's effects.
Heesun Wee | CNBC
Tory Torosian, a farmer in Dinuba in Tulare County, sells produce at San Francisco’s Ferry Plaza Farmers Market. He says the growing population has heightened the drought's effects.

Global food demand, meanwhile, will only march forward. "This idea of water limitations, agriculture production and food production is a major world issue," said Putnam of UC Davis. "With rising demand in Asia, rising demand in Africa and other parts of the world, whether it's produced here in the United States or produced elsewhere, we need to figure out how to produce it [crops] more efficiently with better technology.

"As we say, more crop per drop," Putnam said.