The development of the Australian AgriFood Data Exchange (the Exchange) represents a unique opportunity to nationalise the exchange of information within agricultural supply chains. However there are concerns within the agricultural community as to whether data is appropriately gathered and how data collected by businesses will be protected.
We outline the Exchange and the data privacy challenges facing the agriculture industry.
Background
The Exchange was announced on 14 September 2021 as an initiative between accounting firm KPMG and red meat quality assurance company, Integrity Systems. It is overseen by an advisory council consisting of producers, growers, researchers and regulators, and an Independent Chairman, currently former MP Andrew Robb.
The Exchange is an open platform controlled by users and aims to provide centralisation of data systems to create standardisation and consistency of industry data. The data is exchanged between supply chain participants and agricultural producers. Under the Exchange, producers are the owners of the data, controlling access to the data they share.
Between December 2021 and March 2022 experimental trials were conducted by several ag tech and data management vendors used the platform, including AxisTech, Eratos, Rezare and a consortium of Telstra/IBM. The experiments were to determine the requirements and policies for the Exchange. For example, voluntary benchmarking was introduced for grain producers in Western Australia. The intention is for the Exchange to assist growers in making more informed decisions by considering objective comparison points, as a result of making data comparisons between the producers’ own information with industry averages.
In addition to the test use cases, the Exchange has received backing from key agricultural industry stakeholders, such as the National Farmers Federation (NFF), NSW Department of Primary Industries (DPI) and QLD Department of Agriculture and Fisheries (DAF). The Federal Government announced in September 2021 that the Exchange would receive $4 million in further funding.
Economic Benefits
Australian Farm Institute modelling suggests an increase in digital agriculture opportunities could increase the gross value of Australian agricultural production by $20.3 billion. The Exchange aims to deliver economic value to producers by:
- providing benchmarking to identify gaps and opportunities for improved performance;
- increasing access to greater capital, financing and insurance opportunities; and
- increasing the quality of Australian products to provide value differentiation against other exporting countries.
Data concerns of farmers
Despite the economic opportunities touted by the Exchange, the agricultural industry has maintained concerns about how their data is collected, used and disclosed. In 2019, research involving a survey of 1000 Australian farmers revealed the extent of the distrust between the farming community and technology providers. Funded by the federal Department of Agriculture and Water Resources and authored by experts from CSIRO and the law schools of Griffith University and University of the Sunshine Coast, the research involved stakeholders from a range of agricultural sectors. Key concerns included:
- lack of transparency as to the terms of use in data licences;
- general privacy concerns about data that may reveal potential profitability and income; and
- the sharing of this data and whether adequate consent had been provided.
These concerns were compounded by persistent complaints regarding the inequality of bargaining power between multinational manufacturers/technology providers and farmers, with farmers usually being forced to deal with standard-form contracts, leaving little to no room for negotiation of terms.
Interoperability was a further key concern, being the measure of the capacity for interconnection between different systems, and particularly how those systems exchange and use data. Farmers face high costs for switching between brands, with a study conducted by the Australian Competition and Consumer Commission (ACCC) in 2021 into the agricultural machinery market determining that interoperability is “not comprehensive across the industry”.
Legal Protections
The ACCC has identified relevant types of agricultural data, including machinery data (such as data on engine levels and outputs, application rates), and production data (information relating to the production output of an agribusiness, such as yields, weight gains or other measures of turnoff). The issue with these types of data is that they are not considered personal information under the Privacy Act 1988 (Cth). As such, while these types of agricultural data are potentially commercially sensitive or confidential, the protections and obligations under the Privacy Act and Australian Privacy Principles are not directly applicable.
Australian Farm Data Code
In the absence of legislative protection, farmers’ data rights are governed by their individual contractual agreements. In response to this deficiency and the data concerns raised by farmers, the NFF introduced the Australian Farm Data Code (the Code) in 2020. The Code is a voluntary initiative targeted at farmers (individuals and businesses) and service providers (entities contractually related to farmers who collect, interpret or manage data with the farmer). It outlines three types of data:
- Farm Data, comprising:
- a. Individual Farm Data: any data produced by a farmer, or by a provider in the course of providing a commercial service to a farmer, which relates to the operations, conditions or characteristics of a particular farmer of farm (including but not limited to production, sensors, soil, climate, transactions and environment); and
- b. Aggregated Farm Data: individual farm data which is aggregated or transformed so that the individual farm data, farm or farmer cannot be identified; and
- Public Data: data from any source which relates to a farmer or their business, excluding Farm Data and Private Data; and
- Private Data: data that has direct or indirect identifiers that could be used (whether on its own or through combination with other information), to identify an individual farmer or farm business.
Private Data, which can include personal information, is the most heavily protected of the three types of data. However, the Code does provide a number of principles relevant to the management of Farm Data. Relevantly, this includes the need for service providers to use “plain-English information” to facilitate the transparent collection, use and sharing of farm data. This is important because the Code additionally recommends that Farm Data should only be used by service providers for the “purposes specified in the terms agreed by the farmer”.
In response to the introduction of the Code, the ACCC has stated that it is “broadly supportive of industry-initiated, voluntary measures to help purchasers understand their data rights”. Despite this support, voluntary “Ag-Data” Codes of Practice in other jurisdictions, specifically New Zealand and the United States, have not been hugely successful due to a variety of issues, including limited participation from farmers and service providers and concerns about whether agribusiness service providers can be trusted to self-police given the voluntary nature of the respective codes.
Further compounding these concerns, the ACCC has expressly recommended against government regulation to specifically target agricultural machinery markets, suggesting regulatory intervention to address the concerns of producers is unlikely in the near future.
Ramifications
Whilst the Exchange promises to centralise and standardise farming industry data assets, there is limited guidance as to how this will be achieved and whether it will address the fundamental distrust that farmers have regarding the management of their data. The lack of legislative protection for data and perceived lack of enforceability in voluntary codes of practice heightens the potential for risks in the public sharing of agribusiness data, including through forums such as the Exchange.
Producers should continue to exercise caution when interacting with machinery and service providers and limit the possibility of sharing any commercial and confidential information in a public forum, particularly where concerns are held as to how that information may be being collected, used and disclosed.
For further information or discussion, please contact a member of our Intellectual Property and Technology team.