On May 19, the North Carolina Department of Agriculture announced that the economic impact of North Carolina’s agriculture sector had topped $100 billion for the first time. That is a fantastic accomplishment, and everyone involved in the extended supply chain of our state’s agribusinesses should be proud.
While North Carolina has a burgeoning agriculture sector, and with its continued growth in the industry, it is wise for state lawmakers to consider creating an agriculture regulatory sandbox. The sandbox concept has been proven in other industries and has demonstrated the value of reducing regulatory burdens for innovative businesses. It is high time for agriculture to benefit from the same type of regulatory relief.
First, what is a regulatory sandbox? A regulatory sandbox is a program set up by regulators that allows innovative startups and businesses to test their products, services, or business models in the real market with limited regulations and requirements. This “sandbox” enables entrepreneurs to experiment and innovate without fearing heavy regulatory penalties or restrictions.
Regulatory sandboxes also provide a safe environment for businesses to test new products or services with a limited number of customers while the regulators monitor and evaluate the results. The purpose of the sandbox is to support innovation and promote competition while managing the potential risks associated with new, untested products or services. Several states have created regulatory sandboxes in the past three years, including North Carolina, whose sandbox is specific to financial and insurance products. Utah lawmakers created the country’s first all-inclusive regulatory sandbox in March 2021.
The agriculture industry is ripe for innovation. Advances in technology and business models can create exciting opportunities, from precision agriculture and vertical farming to data analytics and blockchain technology. Innovation in agriculture often needs to overcome unnecessary regulatory hurdles that can stifle growth and progress. A regulatory sandbox would provide a controlled space where businesses can experiment and innovate without the threat of onerous regulations. It also allows regulators to learn about these innovations’ benefits and potential drawbacks before enacting rules that might hinder progress.
North Carolina is well-positioned to lead the nation in creating an agriculture regulatory sandbox. The sandbox concept differs from one in which taxpayers are asked to subsidize industry. Instead, it’s a concept in which state regulators step back, allowing entrepreneurship to thrive and fuel human flourishing. Entrepreneurs don’t need public dollars; they need a chance.
Benefits of an N.C. agricultural sandbox
Agriculture in North Carolina has been at the forefront of technological innovation in agriculture for years. By creating a regulatory sandbox, the state would attract businesses and entrepreneurs from around the country seeking a regulatory environment fostering innovation. This entrepreneurial environment would create jobs, stimulate economic growth, and position North Carolina as a leader in agricultural innovation.
The potential benefits of an agriculture regulatory sandbox are vast. For example, precision agriculture could optimize crop yields and reduce waste. At the same time, vertical farming could make it possible to grow crops in urban areas where agriculture is typically not possible. New business models could enable more efficient distribution and marketing of agricultural products, benefiting farmers and consumers alike. These innovations can potentially revolutionize agriculture, but well-meaning, cumbersome regulations often need to be revised to progress.
The Old North State could witness various innovative technologies and solutions in the agricultural sector if it adopts an agriculture regulatory sandbox. For instance, Croptracker has identified 10 emerging innovations in agriculture technology, such as bee vectoring, blockchain technology, and drones. The state could allow the testing of these technologies and assess their impact on crop yields, profitability, and land conservation. North Carolina could foster the development of these and other emerging innovations, transforming its agricultural sector into a more efficient, profitable, and sustainable industry.
State lawmakers could consider their own Financial and Insurance Regulatory Sandbox for a framework. But an example with a longer lifespan would be from the first regulatory sandbox, the United Kingdom’s Financial Conduct Authority (FCA) Sandbox, established in 2016. There, many businesses have benefited from the regulatory relief provided by the sandbox, and the program has successfully guided the creation of new regulations. An agriculture regulatory sandbox in North Carolina could succeed similarly, ensuring the state remains a leader in agricultural innovation.
North Carolina has a rich agricultural heritage and a promising future in the industry. Lawmakers can help ignite growth and innovation by creating an agriculture regulatory sandbox. The sandbox would provide a controlled environment where businesses can innovate freely and without the threat of burdensome regulations while regulators can learn about the implications of these new technologies. By creating an agriculture regulatory sandbox, North Carolina can position itself as a leader in agricultural innovation and set an example for other states nationwide.