Digital Agricultural Transformation under Climate Risk: A Policy and Financing Perspective within the National Economy Model

Abstract

Today, the global food system is undergoing a multidimensional transformation driven by climate change, population growth and rising food demand. Irregular precipitation regimes, increasing water scarcity and ecosystem degradation are making agricultural production increasingly unpredictable and fragile. In addition to these ecological pressures, shrinking arable land, the ageing agricultural labour force and rising input costs further challenge the sustainability of conventional farming systems. The growing frequency of extreme weather events demonstrates the vulnerability of existing production models and highlights the need for structural transformation in agriculture. Digital agriculture offers a potential solution through a technology-oriented paradigm shift. Technologies such as the Internet of Things (IoT), artificial intelligence (AI)-based decision support systems, remote sensing and precision agriculture enable site-specific resource management, reducing environmental impact while improving productivity. However, the adoption of these technologies is constrained by high investment costs and financial uncertainty, particularly for small and medium-scale producers. Therefore, integrating digital technologies into agricultural production depends on reducing financial and operational risks through effective public policy instruments. This conceptual analysis state-led strategic support mechanisms for digital agricultural transformation within the framework of the National Economy Model (NEM). The model’s production-oriented and cost-protection principles provide a stabilisation framework that may facilitate technological adoption. The study argues that public support mechanisms function not only as financial assistance but also as strategic policy instruments that enhance agricultural resilience and production continuity under climate-related risks.