Opinion by FFN Board Member and AgThentic founder Sarah Nolet
Aussie farmers, supported by the research and extension system in which they operate, have been driving the creation of new technologies and farming systems since well before “agtech” was a word.
Examples range from GPS-guided tractors and new varieties, to raised beds and controlled traffic.
But “agtech” is a new phenomenon, characterized by the entrance of new players (e.g., startups and venture capital investors), new business models (e.g., software-as-a-service), and new technologies (e.g., robotics and machine learning).
If we can avoid the hype, agtech holds huge potential for Australian agriculture.
There are three big trends driving the growth of agtech.
First, technology has dropped in cost and increased in performance, meaning that even very complex technologies are accessible.
You no longer need billions of dollars or many years to bring products to market, so big companies are no longer the only source of innovation.
Second, shifting consumers preferences are putting new pressures on our food and fibre system.
In addition to healthy, safe, affordable food, consumers now also want convenience, premium eating experiences, and to feel confident that products are good for their families and the planet.
The traditional big players in food and agriculture are now scrambling to partner with agtech startups to create additional pathways to their traditional R&D activities.
And finally, agriculture is a massive and growing industry – it contributes over $40B annually to Australia’s economy and is the fastest growing industry.
Investors love big markets, and entrepreneurs are drawn to the opportunity to build companies that can do good (for the environment, for people) and do well.
But despite all the agtech activity, and potential, the industry can be frustrating for farmers. Products often seem (or in the worst cases, are) half-baked, and as startups race to be the winner that takes all in any given area, the spread of similar products is confusing.
This frustration with the “hype” is not to be understated or ignored.
Farmers are working incredibly hard, facing levels of uncertainty and constraint that most non-farmers would find overwhelming.
Adopting technologies that are failing to solve problems and add value is not what agtech is about.
Agtech is about new ways of solving industry problems. Here are three examples where agtech has potential to deliver.
- Rapid business model evolution. Agtech startups are bringing solutions to market that break down existing barriers, challenge old mental models and processes, and ultimately deliver lasting value to producers.
- Rejuvenated regional communities. As farming continues to use more digital technology, new skills and new jobs will be required to support farming systems. And new technologies can help rural and regional communities to stay connected.
- Producers as more than agtech customers. Agtech presents new ways for producers to get involved in innovation. Producers can be innovators, advisors and even investors, helping to shape agtech solutions.
Last year the National Farmer’s Federation set to grow agriculture to a $100B industry by 2030. Technology and innovation are critical to achieving this.
But embracing the agtech revolution may mean we can aim even higher.
If we are able to export our knowledge, innovations, and know-how in the form of agtech solutions that avoid the hype and deliver real value, maybe we can leave $100B in the dust.