Businesses have used Software as a Service and its apps for years. It’s time to add the agriculture industry and Environmental Health & Safety to the list.
To a farmer, their land is their legacy. Sustaining it matters for future generations as much as it does for coming planting seasons. Of course, Mother Nature plays a role. She nurtures the farmlands that get planted and harvested season after season. But Mother Nature can also be harsh and unpredictable, which is why sustainability requires other measures.
Since the 1930s when the green revolution began, agricultural chemistry has increasingly become part of the global agriculture and farming industry. Often referred to as agrochemicals (or agrichemicals), fertilizers, pesticides, and other such products have become a necessary phenomenon. They protect crops from disease, kill weeds, fungi and insects, and improve the growth and fertility of plants.
Agrochemicals are also a global, billion-dollar business. According to the industry website, Statista.com, the agrochemical market worldwide in 2019 was valued at 243.1 billion U.S. dollars. The market is projected to increase to 300 billion U.S. dollars by 2024. Also in 2019, agricultural chemical shipments globally totaled 458 billion U.S. dollars. In the U.S. alone, those shipments were worth a total of 32.5 billion U.S. dollars.
Agrochemical market outlook: Innovation, technology… and evolving regulation
Producing higher yields and guarding against crop failure is a constant reality of farming. Despite persistent market challenges (and effects of the coronavirus pandemic), it’s this reality that will amplify the demand for agrochemical products going forward. The projection comes from a recent agricultural chemical industry outlook from consulting firm Deloitte. For agrochemicals and plant science businesses, Deloitte says, “the industry can continue a two-year trend (2017-2018) of improved performance by capturing value through innovation, resourcefulness, and digital alchemy.” That is, through research and development to introduce creative new products, and by then aligning those products with digital technologies that are making farming “smarter.”
To a technology extent, the outlook for agrochemicals businesses is being shaped largely by new agricultural methods such as integrated pest management (IPM) and precision farming. These approaches are being spurred by innovations like artificial intelligence, machine learning and other digital technologies, along with cloud technologies including Software as a Service (SaaS). Dataquest Magazine put this equation in context in a September 2019 article of how SaaS technology is ensuring food safety and security in India.
“SaaS-enabled smart farming,” the article explains, “is a precise and resource-efficient method to deliver higher productivity and sustainability in agricultural production.” Using a SaaS platform and advanced AI/machine learning algorithms, for example, farmers can process a combination of satellite data and ground truth data for decision making and more precise farming practices. Farmers can also benefit from climate-smart agriculture approaches, prevent the waste of water, fertilizer, and pesticide during the crop cycle, and better manage supply chains and warehousing. Thus the people of India are ensured an ongoing food supply.
Bigger picture, innovations like these signal agriculture’s continuing move toward a digital transformation for farming and sustainability. Even so, Deloitte analysts cite that farmers and agrochemical companies must continue to adjust their operational models to hedge against disruption. They must guard against things like erratic global economic factors, climate change, and the accelerated pace of emerging technologies themselves. Related challenges could come from constantly evolving — and more stringent — regulatory requirements for Environmental Health & Safety, or EHS.
The scope of EHS guidelines
For agrochemicals and their manufacturers, the scope of environmental health and safety is broad, both in global terms and in the range of regulatory guidelines. Worldwide, EHS policies are governed by agencies such as the International Finance Corporation (IFC) – World Bank Group and the Ministry of Environmental Protection (MEP). Companies in regulated environments around the world are strongly advised to follow Good International Industry Practice (GIIP) standards in their compliance efforts.
Environmentally, global EHS guidelines mirror those in the U.S. and focus on issues including wastewater and ambient water quality, hazardous materials management, waste management, and contaminated land, among others. For agribusiness and food production, chemically related guidelines were also recently established in 2016 for annual crop production and perennial crop production. Other guidelines for ag-related chemicals date to 2007 and encompass nitrogenous fertilizer manufacturing; pesticides formulation, manufacturing and packaging; and phosphate fertilizer manufacturing.
In the U.S., primary regulatory agencies for agriculture and farming include the Environmental Protection Agency (EPA), the Department of Agriculture (USDA), and the Occupational Safety and Health Administration (OSHA, a division of the U.S. Department of Labor). Most of the laws and regulations that apply to an agricultural operation by statute, whether farming or agrochemical production, fall under the EPA’s jurisdiction.
Notably, while the EPA is a federal agency, all 50 states in the U.S maintain requirements in association with those of the EPA — although state requirements can often be more rigorous. Other EPA requirements apply only after a certain threshold is reached; for example, the quantity/volume of chemicals, their geographical location for production and storage, and so forth. While compliance with the following guidelines is key for farming and agriculture, they’re applicable to many U.S. industries.
- Emergency Planning & Community Right to Know Act (EPCRA)
- Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA)
- Resource Conservation & Recovery Act (RCRA)
- Comprehensive Environmental Response, Compensation, and Liability Act
- Toxic Substances Control Act (TSCA)
- Clean Water Act (CWA)/Safe Drinking Water Act (SDWA)
- Clean Air Act (CAA)
- Worker Protection Standard (WPS)
Within USDA regulatory requirements for urban farming, a major safety concern is the risk of contaminants, lead or other heavy metals in the soil. Compliance with this specific issue requires investigating the history of the land where produce is to be grown, especially if the land is near a former industrial site. The USDA recommends that soil tests be conducted and verified for all new sites designated for farmland.
To a different extent, OSHA guidelines for agriculture focus on the physical safety of farm workers in relation to general environmental controls. In this case, controls can pertain to lists of chemicals used, safety data sheets for each chemical, and safe practices when handling such materials.
EPA Tier II and EPCRA reporting
Tier II reporting from the EPA requires facilities, by state, to report their possession of hazardous chemicals over 10,000 pounds, plus Extremely Hazardous Substances (EHS) stored at 500 pounds or the Threshold Planning Quantity (TPQ), whichever is less. A Tier II form contains specific information on each type of hazardous chemical present at a facility; requirements and procedures for Tier II reporting vary by state.
As appropriate for the needs of their community, and since the promulgation of the final Tier II rule published in 1987, states have been given the flexibility to specify their own hazardous chemical inventory reporting requirements. Facilities governed by Tier II requirements must submit report form each year, and often submit EPCRA filing in tandem. Facilities that fail to submit a Tier II report on time risk having to pay significant fines and can face other penalties. This is why EHS compliance teams view Tier II as the most critical (and often dreaded) component of the compliance reporting process.
SaaS, the missing link for EHS compliance management
The agriculture industry and its markets for agrochemicals is healthy and expanding. EHS regulatory guidelines are constantly changing. And in the U.S., EHS compliance remains further complicated by 50 states having their own non-standardized guidelines for Tier II reporting. Consider these issues alone and managing a compliance program in any corner of the ag and farming industry is complex.
Adding to the strain, EHS compliance management has historically been a manual and paper-intensive process. Compliance teams have long been known to rely on volumes of spreadsheets, binders full of paper, and endless manual labor just to gather data, manage it, and try to make sense of it for Tier II and EPCRA filing deadlines. While some companies have turned to automation for the compliance process, at least to a degree, many have not. “It’s how we’ve always done compliance reports…”
There’s a certain irony here. For many years now, enterprises have used software tools for everything from ERP and CRM to accounting, collaboration, HR, strategic planning, business intelligence and analytics — everything except managing EHS compliance. These tools are all courtesy of cloud technologies and Software as a Service, which has been around since the early 2000s. Yet the agriculture, agrichemicals and farming sectors have been relatively late to adopt SaaS as a technology solution.
To their credit, however, this collective industry has more recently begun to realize the power of SaaS (see SaaS-enabled smart farming earlier). In tech terms SaaS is a “mature” technology, meaning it’s been honed, well tested and widely adopted. The draw for SaaS is both its simplicity and its versatility.
Simple: SaaS applications are quickly and straightforwardly deployed via a cloud architecture. They’re just as easily implemented. The only thing users need to access and use SaaS applications is an Internet connection and a web browser. Enterprises typically pay for the service and the apps they use on a managed-cost subscription basis, per user or workgroup.
Versatile: With SaaS, users can work from anywhere on any device, and organizations can scale to locations around the world. User, network, and data security is also unparalleled. These virtual capabilities come from the cloud architecture on which SaaS is built.
Better, any updates and fixes to an application are made by the app’s developer and then filtered down to users via the SaaS provider. So automatically, users always get the latest app release, use the newest functionality, and never pay for any of the back-end development and testing that goes into the upgrades. This has all made SaaS the dominant solution for enterprises to capitalize on applications for business.
Now, along with the innovative precision farming aspects of SaaS, the dynamics of EHS and Software as a Service have converged and are gaining rapid acceptance. For farmers, retail agribusinesses, and particularly agrichemical manufacturers and distributors, SaaS is paving an efficient new path to tools like automation and digitized data for EHS compliance management.
This is a path of both innovation and digital transformation that streamlines the compliance process and makes Tier II reporting easier and more consistent, accurate and reliable.
An example: Aligning SaaS, automation, digital technologies and EHS
Business users exposed to SaaS-based tools and digital technology work in ways that are simple and intuitive rather than manual and labor intensive. And not surprisingly, when organizations do incorporate these tools, front-line users are the ones who ultimately specify and employ needed functionality (not necessarily applications).
As an example, agrichemical makers routinely move inventories of regulated chemicals from one facility to another. In the U.S., facilities are often in different states that have different compliance and Tier II reporting requirements. For inventory purposes when changing locations, an EHS team member must many times conduct a walk-through of each facility housing the chemicals to manually verify inventory counts. The process, typically performed using a spreadsheet, is time-consuming and can invite inaccuracies in final counts.
Imagine, however, that the inventory data lives in a SaaS-based system that consolidates and presents the information across every site and state in the organization. The system also creates site-specific compliance profiles for each location and contains the appropriate Tier II reporting forms for each state. EHS staff automatically get the updated compliance applicability and view all details in a single all-inclusive dashboard. And if a walk-through is still needed, the team member does it using a mobile or wearable device, not a clipboard.
In EHS compliance environments, this kind of SaaS-oriented shift is now prompting many companies to merge business and technology philosophies for compliance management. By understanding how SaaS, automation, digital technologies and their EHS program align, EHS leaders are better qualified to advance strategies for cloud-driven innovations such as SaaS as well as a digital transformation.
Worldwide, the agriculture and farming industry is the latest sector to benefit.
A case study
Nutrien Ag Solutions™ is the retail division of Nutrien™ Ltd., the largest crop inputs supplier in the world. The company’s lineup of fertilizers, pesticides, and other full-acre solutions help growers achieve the highest yields with the most sustainable solutions possible. Nutrien offers its products through a network of crop consultants at more than 1,700 global locations, including 1,200 locations in the United States. While the company has been around for years, the Nutrien name dates only to 2018, the result of a merger of several regional companies. Nutrien has continued to acquire other companies since then.
For EHS compliance and reporting, executing corporate name changes across Nutrien’s many new assets posed two significant issues. First, the company had to ensure their compliance records were up to date with all regulatory agencies, especially in the (U.S.) states in which Nutrien maintains operations and facilities. Second, the company looked to reduce the complexity and time burden of reporting across locations and regional groups that had previously been reporting independently.
Nutrien deployed Encamp’s SaaS-based end-to-end compliance platform as a solution, and then adopted a phased approach to consolidating their reporting process. In year 1, they streamlined reporting for 371 facilities in 13 states. In year 2, those numbers grew to 782 facilities in 35 states. Year 3 will see all remaining locations and states added to Nutrien’s reporting process via the single Encamp platform. Nutrien’s EHS leaders have reported measurable gains both in efficiency and reporting accuracy, trends they expect to continue as they increase their use of the Encamp solution.
“Encamp streamlined the submission and payment process of reporting considerably.”
– Paul McCulloch, Nutrien