The importance of digital transformation projects in agriculture and the challenges of their justification assessment

Abstract

Today's complex and dynamic environment poses numerous challenges to the economy and society, among which population growth, hunger and environmental pollution are very significant. One of the ways to overcome these problems is the digital transformation of society. Digital transformation projects in certain areas are not simple, and therefore it is necessary to draw conclusions about their realization with great care and adequate assessments. The digitalization of agriculture has significant effects that enable the success of farmers, but also of society, in terms of achieving economic, social and environmental sustainability. The basic specificity of agricultural production in relation to industries is that agricultural production largely depends on climatic conditions and the quality of the soil itself. One more specificity of agricultural production is that the time period from the start of investment to the achievement of the first results is much longer than in other industries. In addition, the total income is not evenly distributed over the months, but arrives once a year, or at very short intervals. Due to the great importance of digital transformation projects in agriculture and the specifics that arise in their investment evaluation, the aim of this paper is to show the most important effects of these projects, challenges in assessing their justification, as well as to present an example of good practice in the implementation of such a project in Serbia, Bosnia and Herzegovina and Montenegro.

Keywords

• digital transformation
• agriculture
• feasibility assessment
• measuring quantitative effects of projects
• measuring qualitative effects of projects
• sustainable development goals