The Growing Need for Agtech
The global population continues to grow, meaning more mouths to feed and a strong appetite for innovation in the Agtech market.
- Our current food production must increase by 70% to serve an estimated global population of almost 10 billion by 2050
- Agtech is a sizeable market of $13.8 billion in 2020 and projected to grow to $22 billion by 2025; the necessity of new solutions has also made it one of the most prominent areas in recent years for venture capitalist investment
- Vertical indoor farming is gaining more widespread adoption, largely because of its sustainability benefits and remedy for the arable land availability struggle
- Artificial Intelligence is solving labor shortage issues and making farming decisions regarding harvesting and livestock wellbeing more informed
- Genetic editing technologies will become especially advantageous for bettering crop yields and plant survival if it can avoid the contentious reputation of GMOs
By 2050, the global population is predicted to reach 9.8 billion, which is a scary prospect considering there is already a struggle to meet food demands. Only half of this population could be served if current crop yields go unchanged. There must be a 70% increase from today’s global food production to satisfy future needs. Clearly, improvements in this sphere are imperative and urgent.
In general, commercial farming has been utilizing relatively unchanged equipment and processes for decades, resulting in the farming industries having difficulty keeping pace with modern demands. The agriculture industry has been suffering from a shortage of farmers, battles to attain high-margin crops, and an increasing need for government subsidization. The search for new solutions is especially pressing, given that the traditional ways farmers have tried increasing their output are being restricted due to serious concerns about the chemicals in synthetic pesticides and fertilizers, as well as nutrient stripping, herd infection requiring mass antibiotic deployment, and other unsustainable factors associated with industrial-scale monocropping.
A new fusion of agriculture and technology is evolving from a need to increase predictability, maximize yields as efficiently as possible, and turn greater profits, while remaining sustainable and safe for consumption. Agtech is a relatively new concept that has exploded as a market in the last five years. It is expected to increase in valuation from $13.8 billion in 2020 to $22 billion by 2025 at a CAGR of 9.8%. This growth can be attributed to to several factors, including heightened pressure on food supply, particularly in the wake of Covid-19 and supply chain difficulties; increase in adoption of modern technologies among farms; more attention to livestock disease detection; and demand for better quality food by a wider consumer base.
Agtech innovations are attractive for investment because they are not just trendy; rather, they are vital to reviving the farming industry. Venture capitalists invested $4 billion in agtech startups in 2018 and 2019, and funding continues to pour in for the many new entrants to this dynamic space.
Here are 3 Agtech Areas on the rise:
1. Indoor Vertical Farming Innovations
Much of the crisis of increasing food production is the scarce supply of available agricultural land, which is only getting smaller due to urbanization, industrial activity, and unsustainable farming methods which strips soil of nutrients. In trying to gain more arable land, there has been environmentally detrimental amounts of deforestation, greenhouse gas emissions, and a loss of biodiversity.
Vertical farming is a clever alternative that involves growing crops in stacked layers and employing controlled-environment agriculture technology to manage environmental factors indoors. Although this farming technique has been around for some time, it has become recently popular due to the convenience of reduced land area requirements, reliability of harvests and thus increased crop yields, and sustainability perks of utilizing up to 70% less water than traditional farms, as well as shorter supply chains.
Start-ups have begun to enter the vertical space with new technology. iFarm is a venture that has been in spotlight recently for raising $4 million in funding. Its goal is to make vertical farming more accessible and effective, providing indoor tech solutions for growing berries, greens, and vegetables in many locations around the world which would be otherwise unable to support such crops. As an industry, the vertical farming market is expanding, and anticipated to surge in growth in the next few years.
2. Artificial Intelligence
Introducing new digital technologies creates swaths of data now available to farmers. But these statistics are only helpful when they can be synthesized and interpreted in an insightful manner–which is where Artificial Intelligence can play a big role. For example, remote sensor technology gathers tons of detailed information about the soil conditions and weather of a field, but this constant monitoring can result in overwhelming amounts of data to sift through. A.I. can craft algorithms to predict outcomes of optimal harvesting times and other recommendations that allow farmers to make wiser farming decisions.
A.I.’s constant monitoring brings great video analytics capabilities, enabling detection of wild animal and human intruders that could destroy crops or steal valuable equipment. This advancement is especially integral for large-scale farming operations that cannot have someone on the lookout 24/7 and may be unaware of problematic areas for security breaches.
This technology also allows for comprehensive monitoring of livestock health, such as vitals, activity levels, and food intake. Better understanding the health of animals on a farm can improve their wellbeing, extend their life expectancy, prevent illness, and encourage more food production.
Another area where A.I. is making a splash is through machine-learning based tractors, agribots, and robotics. Because of the want for workers in the farming sphere, programming self-driving tractors and agricultural robots to distribute fertilizer means lower operating costs, increased precision, and a solution for labor shortages. Utilizing robots which can perceive changes in leaf condition, diagnose the cause of the problem, and then deploy treatment or inform the farmer, describes a steep advancement in crop management which allows small labor teams to scale the efficiency of their output.
3. Genome Editing Technologies
Genome editing technologies comprise another emerging field in Agtech which aims to help solve an impending worldwide food crisis. Although the field of genetically modified organisms (GMOs) has been developing since the mid-1970s, genome editing technologies offer a new and different take on food manipulation. GMOs have seen a lot of success in making crop yields larger and better able to withstand weather and disease pressures–over 95% of US corn crops are being genetically modified; however, this is very expensive technology, and controversial in terms of getting regulatory clearance and avoiding aversion from skeptical consumers.
Unlike GMOs, genetic editing does not involve inserting entire DNA sequences into a genome; instead, genome editing is the process of making precise changes to an organism’s native DNA. These edits can cut out undesirable genes in crops or alter behavior, extending shelf life and causing bigger fruit or greater yield. It is far cheaper than transgenics, and more reliable due to increased precision. Given that this science clips or adds individual genes from an organism’s true genome and does not place foreign DNA in the plant, there are hopes that consumers and regulators will be more open to trying this version of engineered crops. The need for science to intervene is also sharpened, given the seemingly unstoppable onslaught of climate change as a result of human activity, and how precise genetic modification could play a role in allowing crops to survive extreme conditions.
There are a few different techniques on the market, but one that has gotten a lot of attention as of late is CRISPR technologies. Pairwise, a Durham-based start-up established in 2018, has received acclaim for its expansion into this field. Pairwise utilizes a gene-editing platform built off technology licensed by Harvard and M.I.T. researchers to improve crops, particularly in terms of shelf-life stability and yearlong availability of traditionally seasonal crops. It has raised $115 million in less than three years, underscoring just how much promise there is within this aspect of Agtech.
Each of these exciting areas showcases how invaluable technology will be in stimulating the productivity of the agriculture industry to support our growing world. And these are just a few of many of the venture areas helping farms become smarter, more precise, and more efficient. From e-commerce networks improving the business side of agriculture to nifty gadgets like laser-equipped scarecrows, this is a space with a lot of fresh problem-solving in the works, serving the incredibly important purpose of nourishing generations to come.