Feasibility Assessment of Digital Transformation Projects in Agriculture

Abstract

The United Nations, as the leading international organization that brings member country governments to cooperate in the fields of international law, global security, economic development and social equality, has defined 17 sustainable development goals to reduce poverty and hunger in the world, healthy life, better and more accessible education, environmental protection, etc. One of the ways to achieve the set goals is the digital transformation of society (United Nation, 2022). Digital transformation projects in certain areas are not simple, and therefore it is necessary to draw conclusions with great care and adequate feasibility assessments of their implementation. There are significant challenges in determining all the effects of these projects, because in addition to quantitative, easily measurable, there are also qualitative effects that are very difficult to measure in money. Traditional methods of feasibility assessment do not take into account qualitative effects, which can significantly affect the abandonment of digital transformation projects, which are extremely important and can be very successful (Chen, 2001). The aim of this paper is to investigate and analyze the way in which digital transformation projects in the field of agriculture can be measured and evaluated. The basic specificity of agricultural production in relation to other branches of the economy is that agricultural production largely depends on climatic conditions and the quality of the land itself. This is a consequence of the fact that in agricultural production the climate is difficult to predict. Also, the climate is something on which the whole agricultural production depends, much more than in other branches in which it mostly affects indirectly, and the profitability of growing a crop directly depends on the place of cultivation. Better climatic conditions and land means higher yield, and therefore the production will be more profitable. Furthermore, the specificity of agricultural production is that the time period from the beginning of the investment to the arrival of the first results is much longer than in other branches of the economy. In addition, the total income is not evenly distributed over the months, but arrives once a year, or in very short intervals.