AgTech & The Sustainable Agriculture Revolution
By Isabel Miranda, I-DEV Correspondent
This article was co-written with support from Ana Sofia Almagro, Associate at I-DEV’s office in Lima
There is a growing and critical need to focus on agricultural innovations and investments… With global population on the rise and set to reach 9 billion by 2050, global crop demand will increase by 100% over the next 30 years. This growing demand coupled with the ever increasing challenges of climate change and extreme weather conditions (e.g. droughts, floods, etc) are creating a huge drive for more sustainable and efficient farming practices that can help to reduce food insecurity, improve productivity, and meet global demand.
Around 500 billion smallscale farmers provide an estimated 70% of the world’s total food supply today — it’s even more in emerging markets like Asia and Sub-Saharan Africa, where smallholders provide up to 80% of the food supply yet productivity remains low. The Global Harvest Initiative estimates that productivity growth per year must be 1.75% vs. current rates of 1.3% to meet UN SDG targets across the globe.
In the last couple of years, the agriculture industry has begun leveraging technological advancements to transform the sector on a global scale. Better technologies and data can improve productivity and streamline value chains and reduce costs that currently avg. 33% across the industry. Call it AgTech, AgriTech, Smart Farming, Precision Agriculture– this burgeoning sector already attracted $US 4.6 billion in investment in 2015 alone! (Source: AgFunder)
Key Trends: What’s happening in Emerging Markets AgTech?
Some of the key trends we’ve been observing in emerging market AgTech center around the use of better data to drive adoption of tech innovations. Here are some macro-level trends we’re seeing:
- Financial Innovation: Currently farmers face a huge barrier to entry around financing options for AgTech. This is partly due to a lack of data that makes it hard for financial institutions to assess risk. Major financing providers in these markets are microfinance and agricultural focused banks, and with access to data from mobile penetration and payment solutions, they’re beginning to offer new AgTech financing alternatives, most notably: crop insurance, pay-as-you-go (PAYG) models, and other banking products that weren’t available before. In the future, competitive AgTech could include PAYG models for farming utilities enabled via mobile.
- Logistics Enabled AgTech: Agricultural supply chains are riddled with middlemen and distribution barriers between farmer and end consumer, especially in emerging markets. Companies are offering mobile apps that simplify ordering for consumers and connects them with their food source. This can drive lower prices to consumers and allow farmers to sell larger quantities of their produce to a larger consumer market. In the future, it will be easier for consumers to access affordable, healthy and fresh produce consumer as stronger supply chains are developed.
- Farm Management & Real-Time Data: Mobile-based information data platforms fare popping up left and right, offering farmers organized data and outputs on appropriate interventions to increase yields, lower costs of inputs and minimize losses- as well as pricing data on various crops. This is particularly relevant to emerging market farmers who often lack access to timely information, especially as they enter global supply chains and depend on understanding volatile commodity prices. Furthermore, farmers in these areas often apply too much fertilizer or seed, which is expensive and in fact, reducing productive yield. Better and real time information on pests and effective treatments will also even the playing field. These information portals could also become distribution and logistics connections, connecting farmers with the pesticides, seeds, and other inputs they needs- and also buyers.
- Smart Sensors– From the Ground to Space: High tech and precision agriculture driven by sensors still lag behind in emerging market agriculture, but these will be critical in obtaining high productivity gains and cost efficiencies. Although there is innovation taking place in this respect –especially through the use of drones, soil sensors and satellite data– the high upfront cost of installation could delay the uptake of such technology. Once applied both to supply chains (to track produce in export chains), and at individual crop level (to track water, sunlight, etc.) they could generate large shifts in the competitiveness of certain high volume, high water intake crops such as bananas. While drones and satellite data are expensive information tools, soil and other land-based sensors and test kits pose basic and lower-cost solutions that we expect will be adopted first, and yield powerful results.
Follow us as we share additional pieces highlighting AgTech innovators we’re seeing around the world!
About the Author