In the wake of a series of global crises, it has been a huge year for agtech in 2020. From pandemics, to natural disasters, and a changing climate, the food production and supply chain has been affected like never before. From crises emerges opportunity and agtech has been building momentum over the last few years to create more efficient and effective global food production and supply chains while forging solutions to sustaining an ever-increasing global population.
A new report from Juniper Research, Agtech: Market Outlook, Emerging Opportunities & Forecasts 2020-2025, found the total value of the agtech market will reach $22.5 billion by 2025, rising from $9 billion in 2020, an average annual growth rate of 150 percent over the next five years.
The study identified agricultural sensors and supply chain management as key services over the next five years. They could account for 67 percent of market value by 2025, underpinned by emerging solutions that enable the low-cost collection of agricultural data and associated analysis.
According to the report COVID-19 Impact on Digital Agriculture Market by Smart Farming Systems and Region – Global Forecast to 2021, the Asia-Pacific is projected to be the fastest-growing in the digital agriculture market during 2021.
The Asia Pacific accounts for the most populated countries such as China and India which are seeing a booming demand for agricultural products. These countries have also been hard hit by COVID-19. The pandemic along with supportive government policies for the digitisation of farm processes, an urgent need for efficient use of natural resources and a decreasing availability of migrant workers, has led to a ‘perfect storm’ of increase in the adoption of agtech in the region.
Moving forward and addressing the challenges for agtech start-ups
There are still many challenges within the agtech landscape beyond 2020. These will differ across countries, but from an Australian perspective, four specific challenges were identified in the AgriFutures report, Accelerating the development of agtech solutions worth adopting (Sarah Nolet and Cass Mao, 2018) as startups in agtech bring new products and services to market:
Lack of domain expertise
Lack of industry networks
Producers are being asked to engage with, or buy, products with limited functionality
Iterative product development processes take time, and time is money
The report also notes that: ”All too often, products and services that lack strong value propositions are being developed and marketed to producers. If agtech cannot provide clear benefits, solve meaningful problems, and meet the requirements of interoperability, robustness, support, and data governance, then adoption will remain low. For agtech to achieve its goal of elevating and enhancing Australian agriculture, the products and services developed must have strong value propositions that are well communicated, and well understood by, producers and the broader food and fibre industry.”
Bringing farmers and producers on the agtech journey seems a no-brainer, but if we are not getting it right then it begs the question are agtech providers and start-ups more focused on the tech than on the user of the tech? Something to consider as we move into 2021.
2021 Insights - Andrew Coppin, Founding Director of AusAgritech and Managing Director of Farmbot Monitoring Solutions
Agritech has undoubtedly been one of the silver lining sectors in the COVID-19 cloud of 2020. As many businesses were left reeling around the globe, the importance of food supply chains and the pressing demand to improve global productivity and sustainability in the Agri-Food sector came into sharp focus. Faced with significantly reduced labour, constraints on staff movements, supply chain disruptions and border closures, many in Australian Agriculture have turned to technology to help solve these challenges. Whether that be in better grazing management, robotics, IoT and connected devices or using satellite imagery to better inform decision making for everything from cropping to carbon reduction - Agritech has come into its own. The formation of The Australian Agritech Association (AusAgritech) to help lead an industry discussion with stakeholders and government was a defining moment of the year! With a renewed focus on the benefits Agritech can bring from the paddock to the plate, helped by some forced adoption as a result of the global pandemic, we head into 2021 with some wind in our sails. AusAgritech has been conversing with all major stakeholders to consider the creation of a National strategic plan for the Agritech sector. If this is successfully delivered in 2021 not only will it support domestic opportunities but will also build a thriving sector here targeting some $20bn a year in new revenue opportunities. Watch this space!