As featured in Arable Farming Magazine
Investors take a stake in future farming
by Arable Farming Nov/Dec 2020 issue
The need for more efficient production and processing of food is attracting billions of dollars of investment. Cedric Porter reports.
Covid-19 may have changed a lot of things, but it does not seem to have dampened the appetite for investments in agritech systems.
In the first half of 2020, £3.6 billion was invested in farmbased technology globally, according to Agfunder, a US-based tracker of investments.
The total is a little behind its original projections but compares to £6.6bn for the whole of last year and is similar to the total investment in 2017.
The biggest single agritech deal of the first half of the year was worth half a billion dollars (£396 million) for an investment in Impossible Foods, a specialist in plant-based meat alternatives.
When people think agritech, they often think of robots, but global investment in that sector was only £32m in the first half of the year and was dwarfed by other sectors, most notably more efficient production and processing of food, which attracted £1.3bn.
Next came innovative food products at £900m and agricultural biotech at £684m.
Grocery According to Agfunder, the UK was fourth on the list in terms of agri-food tech investments, including investment in grocery technology, at £296m.
Way out in front was the US at £3.9billion, followed by China (£1bn) and India (£491m).
“Broadly speaking, agri-food tech start-ups are aiming to solve the following challenges: food waste, CO2 emissions, chemical residues and run-off, drought, labour shortages, health and sugar consumption, opaque supply chains, distribution inefficiencies, food safety and traceability, farm efficiency and profitability, and unsustainable meat production,” says Agfunder.
The continuing appetite for investment in agritech was demonstrated in October when calls by Pontifax AgTech for investment in a US$300m (£238m) fund were oversubscribed, resulting in US$465m (£369m) of commitments when added to a previous funding round.
Productivity Phil Erlanger, founder of the Pontifax fund says: “The current pandemic has only highlighted issues of food security and makes improving agricultural productivity, nutrition, and supply chain efficiency of paramount importance for global health and sustainability.
“We are focused on pursuing disruptive technologies that result in healthier food while providing attractive returns for our investors.
One system which brings together a number of functions operating on a variety of machines is My Data Plant, developed by German data specialists Kleffmann Digital.
It consists of four elements: biomass maps that track crop development, seed and soil zone maps, fertiliser management maps and crop protection management maps.
Roger Pratchett of IBR, which distributes the system in the UK, says: “The system can be used regardless of the size of farm and technology you may already have.
“My Data Plant is an independent system with the aim of improving the way you farm and the efficiency of your inputs.
“Users have the ability to define a mean rate which is then modelled against variable crop growth in the field to create variable rate prescription maps.
“These may not necessarily reduce inputs, rather they might redistribute them according to the needs of the crop, thereby creating a more targeted precise application with no detrimental effects on yield.
“Where crop vitality is below a user defined level, applications can be missed, with the effect of reducing ineffective application and acknowledging environmental stewardship.”
Start with your needs, not the tech
Identifying which crop management issues you want to address should be the first step when considering an agritech investment on-farm, says Oliver Wood, precision technology manager at Hutchinsons, which has its own precision farming system called Omnia.
“There may be a fundamental problem which needs sorting out before any gains can be made in new technology, such as the need for drainage or addressing a pH issue.
By understanding your farm’s agronomy needs, you can then devise a system which helps you improve performance.” Increasingly, Mr Wood works with machinery dealers, technology providers and farmers to ensure any investment will deliver gains in production or improvements in soil health.
“It is important for the farmer to know what is possible and available and the technology providers to understand the needs of the farmer,” he says.
“Working with the local dealer is vital as they will be the main suppliers of tractors, harvesters and other equipment that can be linked to provide as much useful and usable data as possible.
Compatibility of systems is vital if you are to get the most out of your investment in agritech or precision technology.
It is also important to remember excellent agronomy knowledge is essential if you are to best interpret the data you generate or use precision technology effectively.
For many, that will involve the use of a tech-savvy agronomist.” Variable seed rates have delivered some of the most impressive agritech gains, according to Mr Wood, and are a good entry point for investment in precision systems.
During summer 2020 Government announced £24 million of agritech funding for projects that would help the UK meet its net zero carbon from food production targets.
Projects rewarded included work to improve irrigation and climate control in greenhouses and £2.5m to Robot Highways, which is developing autonomous picking, packing and spraying systems.
Saga Robotics, which is part of the Robot Highways consortium, reported 40 UK orders this year for its Thorvald robot which, as well as weeding and harvesting strawberries, kills mildew with ultraviolet light.
Elsewhere, almost £2m was awarded to Tuberscan Demo, a system which can measure unharvested potato sizes and yields, which developers say could increase potato marketability by up to 10%.
Other UK Government investments include £10m to help establish the UK’s first industrial-scale insect farm.
The Entocycle project has the backing of supermarket Tesco and will produce insects for animal feed from fruit, vegetable and other food waste.
Tesco is to encourage its fish suppliers to use the feed the project produces.
There is a trend of established machinery companies investing in established or start-up agritech businesses.
One of the latest examples is tractor company Kubota.
It has established an Innovation Centre which has, in the last year, invested in FarmX, a US company with an all-in-one platform designed to automate irrigation, minimise crop stress and maximise yields.
It has also invested in strawberry and apple harvesting systems.
Soil improvement is a key agritech area.
French company Greenback has introduced the first global rating agency for soils.
Using sample data and global databases, the system can measure the ecological health of soil and its agricultural potential.
Soil Carbon Co is an Australian company which has developed microbial technology to capture atmospheric carbon on a large scale and return it to the soil.
This not only improves soil health and crop performance but helps farmers sink carbon, potentially providing them with a new income stream.