News has been swirling this week that Bayer will be implementing “data science” pricing across its agriculture portfolio. The discussion began after an AgWeb article was posted last week, stating the company had plans in the U.S. to price inputs based on whether they worked or not.
Essentially, the idea is to connect the pricing of a product, to the return on investment (ROI) achieved by the grower.
Since then, Bayer CropScience Canada has told RealAgriculture that the Canadian business will not be running a pilot project at this time. A spokesperson for the company said earlier Tuesday that “Outcome-based pricing is a unique pilot program Bayer is running in the U.S. this year. It’s an example of how—by using data science—we believe we can help growers sustainably improve yields and better manage risk. That said, this is a pilot program, and we need to keep customers at the centre to understand if and how it will benefit their operation. There is still a lot of work to be done before moving forward on this in Canada.”
Reaction from growers has been very mixed — regardless of their location — with many twitter threads showing discussions of growers both seeing the value in risk-sharing with the manufacturer, and others seeing no winning end to the equation.
Liam Condon, president of Bayer Crop Science is quoted as saying, “[With our data science] we can make specific recommendations to the grower and give them outcome-based pricing. If you don’t achieve the outcome, we predict you don’t have to pay for that outcome. If you achieve more, we share in that incremental value.”
In terms of the timelines for when data science pricing would come to Canada, the Bayer CropScience Canada spokesperson stated to RealAgriculture that “as with any pilot program, we identify locations and specifications for the program to determine its viability and the potential for it to expand—whether in the U.S. or in new geographies, such as Canada,” adding, “After this season, Bayer will evaluate the pilot and collect feedback before determining the direction and scope moving forward.”