AgTech innovations can help to reduce or even eliminate the negative global environmental impact of agriculture by reducing the fossil fuel, fertilizer, water, and land requirements for food production. Increasing resource efficiency can help to ensure a more sustainable and more productive food system.
In 2021, the agricultural technology (Agtech) market value in North America stood at approximately 6.2 billion U.S. dollars, the largest market value when compared to other regions throughout the world.
Farming has been around for thousands of years, but investments and startup activity in agricultural technology, commonly known as “agtech” or “agritech,” have only exploded over the past five years.
In fact, in each of the last two years, venture capitalists invested $4 billion in startups in the agtech space, according to Crunchbase data
A Deloitte Reports on Agtech Highlights the following :
The agricultural industry is about to be disrupted and will transform into a high-tech industry.
From Agriculture to AgTech: an unseen boom in agricultural venture capital investment leads to a major disruption and foreshadows the millennial shift from family farms to smart “food factories”.
Today’s agricultural industry is on the verge of turning into a high-tech industry, as the growing number of agricultural startups and investors shows.
Disruption driver No. 1
Ten global megatrends that impact agriculture clearly intensify the transformation:
1. A growing population
2. Societal and demographic changes
3. Increasing urbanization
4. Climate change
5. Smart agricultural technologies
7. Servicization around core products
8. Increasing value chain integration
9. Globalized trade
10. Changing international regulations
Disruption driver No. 2
Partly complementary, partly concurrent, industry-specific change accelerators in three categories are amplifying the speed of disruption in agriculture:
1. New consumer preferences: the demand for personalized, on-demand products and increasing awareness for health and sustainability.
2. Emerging technologies: developing biological tissues, advanced manufacturing technologies, autonomous vehicles, and connected devices.
3. Changing value chain and firm configurations: growing trend towards horizontally and/or vertically integrating adjacent offerings.
Three high-impact growth opportunities
As a consequence of the identified disruption drivers, the agricultural ecosystem faces new challenges, from which three significant growth opportunities for current and future players can be derived:
1. Improving yield efficiency
The world population, of which 10% remain undernourished, is rapidly growing,
thereby creating severe urgency to increase yields.
2. Increasing supply chain efficiency
Reducing the average value chain loss of 33% of initial production is a substantially stronger lever in increasing effective output than upfront yield improvement.
3. Decreasing complexity along farmers’ value chain
Since today’s farmer already faces high complexity and tomorrow’s farmer will deal with even more players and technologies after the disruption, farmers are willing to pay for integrated solutions and ecosystems.
The Need & The Solution
Estimates of how much food is lost or wasted, especially in developed countries, run as high as 30% of total production, and most of that occurs after farmers bring their products to market or to distribution facilities. Add to this 10% waste at the Agricultural Phase.
With increased Agtech, Technology, alternative food and meat sources, and Blockchain, there is the potential eliminate in-efficiencies in the excess of 50% and improve the welfare of people around the world and driving down food prices and eliminating starving and poverty.
This impact goes beyond the Environmental Impact, but also has a very powerful the Social and Economic effect.
This represents the new Frontier in Carbon Reduction.