What’s New on the Farm? Technology and Sustainability

Delwin Graham - Jun 24, 2019
It looks like it’s agriculture’s turn to be revolutionized by artificial intelligence (AI) and blockchain.

It looks like it’s agriculture’s turn to be revolutionized by artificial intelligence (AI) and blockchain. Historically, farmers have not been shy about embracing new technologies. Mechanical tractors in the 1920s and the Post-WWII Green Revolution embraced the wide use of fertilizers, pesticides and high-yield crop varieties to significantly increase farm productivity. Most recently, agtech is being used to apply modern computer technology to farming. Not about developing new synthetic chemicals to apply to fields or building even larger corporate farms, agtech at its core is about using digital technology, that is, advanced monitoring and data analysis to do more with less – to find ways to increase yield without burdening already over-taxed resources such as land and water. For example, John Deere acquired Blue River Technologies in September 2017. The company uses cameras and AI to dole out herbicide in a much more measured way. According to the press release, “Blue River has designed and integrated computer vision and machine learning technology that will enable growers to reduce the use of herbicides by spraying only where weeds are present, optimizing the use of inputs in farming – a key objective of precision agriculture.” (Cf., Barclay Rogers, “What’s Next for Agtech?”, www.agfundernews.com, September 4, 2018).

Perhaps the model of modern agriculture is changing. In the past, farming has developed according to the industrial model, that is, emphasizing large-scale farms and massive outputs to achieve economies of scale. All of this, while ignoring the environmental impact of intensive mono-culture agriculture and the human cost of cut‑throat commodity pricing that drives the small specialty operator, that is, the family farm, out of business (Cf., Karn Manhas, “Why the Agtech Boom isn’t your Typical Tech Disruption”, www.weforum.org, February 25, 2019). The “digitization” of agriculture through the use of sensors, artificial intelligence and big data allow the farmer to focus her inputs (e.g., crop varieties, fertilizer rates) for the specific requirements of her farm and the market that it is meant to serve. This is “precision agriculture”. For example, Hortau Systems is increasing watering efficiency through smart monitoring, which in turn increases plant yield. Phytech is optimizing crop production with its “Plant Internet of Things” - smart devices in fields that send simple colour-coded alerts to smartphones with recommendations and warnings. Meanwhile, the Israeli-based CropX uses hardware and software to measure soil moisture, conductivity and temperature, allowing farmers to save water (Cf., Manhas, “Agtech Boom”).

Erik Kobayashi-Solomon divides agtech innovations into three classes: Tech-Assisted Farming, New Farming, and Revolutionary Farming. He distinguishes these different areas of agtech because they have specific drivers and risks associated with them; the dynamics behind the production of cultured meat, for instance, is very different from the dynamics behind drone-based crop inspection. Tech-Assisted Farming is the application of current technology to aid current farming methods. Examples might be systems designed to maximize plant yield through efficient watering or drones that monitor and spray crops. In this case, the easier a technology is to use (e.g., auto‑steering on a tractor), the more likely it is to be adopted on the farm (Cf., Erik Kobayashi-Solomon, “AgTech: A Great Investment for the Future”, www.forbes.com, October 31, 2018).

New Farming is the application of current technology to develop new agricultural techniques. For instance, Mirai is developing indoor and vertical farming by using LED lighting and automation to stack farming plots indoors, maximizing every square metre for output and minimizing hands-on labour. Revolutionary Farming is the development of new technologies to develop new agricultural products. A good example is Sustainable Protein, which cultures meat products in a laboratory using stem cells. Memphis Meats, a private company owned in part by Bill Gates and Sir Richard Branson, is currently working on the scale-up of the biotechnology to grow “clean meat”.

From vertical farming to data science to farm drones, agricultural technology is the new hot thing in investor circles. The Investment Corporation of Dubai recently invested US$203 million into agtech investments; another US$200 million was put up by the huge Japanese holding company - Softbank; and other Venture Capital (VC) funds are focusing on the sector’s potential. Total investment in agtech in 2018 is estimated to be over $2.0 billion. Please contact me (dgraham@cgf.com; 780-408-1518) for more details and a few actionable ideas.