The rise and rise of Agtech: the most underrated tech revolution of the 21st century
September 10, 2021
3.5 min read; 839 words
Author: Preet Shah
Fifty years ago, the Green Revolution and the invention of industry-grade nitrogen fertilizers completely revolutionized agriculture as we know it today. However, in the years since, we have yet to see many advancements of the same scale. In our approach to land management, allocation of resources, transportation, and more, we’ve hit a tech gap. Agriculture, with its outdated industrial model, emphasizes large-scale farms with massive outputs while ignoring externalities from environmental impact, financial repercussions, and its human toll.
Agricultural technology, or Agtech, is the new frontier for growth in this highly underrated and innovatively dormant industry. Unlike most of today’s tech disruptions, Agtech is about something far more urgent than consumer convenience or entertainment: it’s about our collective survival.
Unsurprisingly, the driving factor for agricultural innovation is population growth. With a predicted world population of 8.6 billion by 2030, we need to grow twice the food we do today solely to avoid food security issues. Concurrently, climate change is making it harder to feed the world through conventional means; with our current rate of crop yields, we’ll have enough food for only half of the projected population by 2050.
We have to quickly and efficiently bring farming from the industrial age into a digital one - and this is where Agtech has a critical role to play. Agtech is not about developing new synthetic chemicals or building ever-larger corporate farms. At its core, Agtech is about using advanced monitoring and data analysis to do more with less—to find ways to increase yields without burdening already overtaxed resources, such as water and land.
This development is unique specifically because it’s necessary. Unlike the technological industries’ need to grow via planned obsolescence, the Agtech market will grow naturally and exponentially, with an ever-increasing consumer base.
Currently, a diverse group of disciplines and technologies–from smart monitoring, artificial intelligence, and Plant IoTs to biotech and robotics–are being used by startups to boost global food supplies. But that’s not all. Agtech fulfills another critical purpose: keeping agriculture viable for the future.
The US pays around $25 billion to farmers each year, but even this cash infusion isn’t enough to sustain today’s farmers. Agriculture has very tight margins and is oftentimes a losing proposition. It’s no surprise that young people aren’t jumping at the prospect of joining the industry anymore.
It’s clear that our current farming practices got us to where we are, yet they can drive us no farther. The way we farm isn’t sustainable (or profitable) for the planet, individuals, or societies anymore. Here’s where Agtech is playing a crucial role in reducing loss and overhead charges while adding more sustainability, predictability, and profit to the job.
There are not only these pull factors that are driving Agtech forward but also a critical push factor behind the Agtech boom: consumer demand for cleaner food. A growing percentage of shoppers are insisting on organic or clean food, and this isn’t just millennials being picky.
Amazon’s acquisition of Whole Foods is an even more clear sign that big businesses are responding to consumer interests in organic food, with Walmart now being one of the biggest organic grocers in North America. In fact, demand for organic food is growing so fast that it is outstripping our domestic supplies: less than 1% of US farmland is currently certified organic, and Americans are spending $1.7 billion to import organic foods annually.
This has incentivized a lot of businesses to seek safe and sustainable yet profitable strategies by harnessing technology that makes the most of available resources. Plus, with the rising cost of labor, this strategy is beginning to make more sense from a profitability standpoint.
The technologies that once took years to catch on in the agricultural market are now crashing down the floodgates. Agtech has become the new home for such advancements, and the global players have already begun to take notice: in 2020, total investment in Agtech was over $12 billion–a new record that’s setting the stage for explosive growth with multitudinal VC funds zeroing in on the sector’s potential.
Not only is this good news for startups with world-changing ideas to get off the ground, but also for the venture capitalists to quickly realize their money back and invest furthermore.
In this respect, booming investor interest in Agtech should hardly come as a surprise. There are plentiful opportunities for Agtech investors in an era of rapid technological and environmental change. According to a study, AI in the agriculture market is on track to grow at a 20% compound annual growth rate from 2019 to 2026 to a whopping $2.4 billion.
However, one thing differentiates the Agtech revolution from the many technological breakthroughs that precede it: many of us won’t even notice it.
As agricultural digitization is essential simply to maintain our societal structure, advancements in Agtech may not make ‘everyday headlines.’ Whatever may be the case, one thing is clear: we need to fundamentally rethink how we work with agriculture—and Agtech has the most important role to play in this development.