AgTech investments: Digitizing the agricultural sector

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  Quantumrun Foresight
• January 12, 2022

Insight summary

Agricultural technology, or AgTech, is reshaping farming by offering a variety of tech-enhanced solutions, from precision farming to agriculture financing. This technology enables farmers to access previously unavailable information, such as detailed field data from drones, accurate weather forecasts, and a wider variety of crop seeds online. As the global population continues to grow, AgTech offers a promising solution to increase crop yields, optimize resource use, and potentially transform the agricultural landscape.

AgTech investments context

AgTech is a rapidly expanding industry that provides various technologically enhanced solutions for farming. These solutions range from precision farming, which uses technology to measure and optimize the use of resources, to agriculture financing, which helps farmers manage their financial resources more effectively. Additionally, AgTech businesses assist farmers in identifying the most profitable markets for their products. Despite the global disruption caused by the COVID-19 pandemic, the AgTech sector demonstrated resilience, with the agriculture sector setting records for harvest and planting in 2020.

The use of technology in agriculture has opened up new avenues of information that were previously inaccessible to farmers. For instance, farmers can now use satellites or drones to survey their crop fields. These devices provide detailed data about the specific needs of their fields, such as the amount of irrigation required or the areas where pesticides should be applied. This technology allows farmers to manage their resources more efficiently, reducing waste and increasing crop yields. Furthermore, farmers can now access accurate weather and rainfall forecasts, which can help them plan their planting and harvesting schedules more effectively.

The AgTech sector is not just about providing information; it also offers practical solutions that can transform the way farming is done. Farmers can now search for crop seeds online and have them delivered directly to their farms through various AgTech platforms. This service gives farmers access to a wider variety of seeds than they might find in their local area. Moreover, the industry is experimenting with autonomous field tractors that can be operated remotely, reducing the need for manual labor and increasing efficiency. As a result of these promising developments, the AgTech sector is attracting interest from various investors, including traditional venture capital funds.

Disruptive impact

The escalating global population, which the UN estimates to be growing by one billion every thirteen years, presents a significant challenge to our current farming methods. However, the emerging AgTech sector offers a beacon of hope. It is possible to optimize farming practices, increasing crop yields and helping to bridge the gap between food production and consumption.

By using specialized software, farmers can more effectively manage their resources, reducing waste and increasing efficiency. Additionally, the development of genetically modified seeds that are resistant to the effects of climate change can help ensure consistent crop yields, even in less than ideal weather conditions. The use of satellites or drones for round-the-clock field monitoring can provide farmers with real-time data, enabling them to respond quickly to any issues, such as pest infestations or disease outbreaks.

The potential benefits of these technological advancements are not lost on leading agriculture corporations. Recognizing the potential for increased yields and profits, these corporations are likely to invest in AgTech solutions, which could lead to wider adoption of these technologies among farmers. As more farmers embrace technology, we could see a shift in the agricultural landscape, with farms producing more abundant outputs at a faster rate. 

Implications of AgTech investments

Wider implications of AgTech investments may include:

• Improved crop yields for farmers, helping to increase the market supply of food and contributing towards solving world hunger.
• Increased investment by major food corporations in continuing the innovative research of AgTech, allowing for the creation of more agriculture jobs for software engineers and engineers.
• Reducing farmers’ reliance on local markets with a lower variety of options, and allowing them to more effectively farm according to market demands and maximize their profits.
• The integration of AgTech leading to urban farming becoming more prevalent as technology makes it easier to grow food in smaller spaces.
• The increased efficiency leading to lower food prices, making healthy, fresh produce more accessible to a wider range of income groups.
• New policies to regulate the use of technologies, such as drones and autonomous tractors, ensuring safety while not stifling progress.
• A reversal of rural-to-urban migration trends as technology makes farming more profitable and less physically demanding.
• Advancements in related fields, such as renewable energy, as farms seek to power their tech-enabled operations in a sustainable way.
• Initiatives for retraining and upskilling farm workers for new roles.
• A reduction in water and pesticide use, contributing to the preservation of natural resources and biodiversity.

Questions to consider

• How will traditional farmers be able to finance new AgTech solutions? 
• Will smaller-scale farmers benefit from AgTech investments or are AgTech’s benefits likely going to be reserved for agriculture’s mega-corporations?