The rapid development of revolutionary Industry 4.0 technologies is transforming the global economy and impacting the lives of everyone on the planet. Investors are already familiar with the highly profitable high tech sector that is emerging as a vanguard of the 21st century economy. Interestingly, there is a vitally important parallel sector that draws on the same technologies and is driven by the same spirit of innovation and disruption.
The AgTech - agricultural technology - sector is harnessing technology to overturn obsolete farming practices and provide data-based solutions to pressing global challenges such as food security, sustainable farming, and resource management. This article explores the key challenges facing our fragile food supply chains (and the environment) and focuses on how AgTech leaders like John Deere, ICL Group, and Agmatix are transforming the food industries with advanced technologies and new products.
AgTech is a major growth industry and is overturning traditional ideas about the profitability of the farming and agricultural sectors. The US smart agriculture market is expected to grow exponentially over the next 5 years with a predicted CAGR of 10.4%.
Source: Markets and Markets
Understanding AgTech - A Quick Overview
The AgTech sector encompasses a range of disciplines and technologies - primarily biotechnology, data science, and engineering - that can be applied to the key requirements of increasing crop yields and quality, reducing reliance on potentially harmful chemical inputs and improving the sustainability of agricultural ecosystems. AgTech is creating a unique opportunity to provide an abundance of healthy and affordable food products while protecting the environment and strengthening farming communities.
The Challenges Driving AgTech Research and Development
There are three main challenges to the global food supply chain that are driving AgTech and attracting some of the best and most idealistic scientists and researchers to the field.
The United Nations predicts that the global population will increase to 8.5 billion by 2030 and 11.2 billion by 2100. In conjunction with population growth, we are experiencing urban drift (rural populations abandoning the land and moving to cities). Even as there are more mouths to feed, there are fewer agricultural workers.
Source: United Nations
Climate change and global warming are placing increasing strain on the global farming system. AgTech is providing viable solutions for water management, the reclamation of marginal lands, and resistance to desertification. New AgTech solutions are also allowing growers to counter pests and predation and adapt crop choices and planting to changing weather patterns.
Advances in sustainable fertilizers, energy management, and the optimization of farming enterprises with electric vehicles and robotics are insulating growers against unpredictable commodity markets and supply chain disruption. Farmers' traditional vulnerability to geopolitical and economic events is decreasing through the adoption of AgTech.
Transformative AgTech Technologies and Innovations
John Deere (NYSE: DE) is a US based multinational that most investors associate with the manufacture of agricultural and forestry vehicles. John Deere is still a global leader in the field, but is also an AgTech pioneer through its development of next-generation precision farming machinery. The company is a leader in the integration of advanced GPS and IoT technologies into vehicles, as well as the development of autonomous electric vehicles. The precision farming technologies represent a major leap forward in seed planting and the application of crop nutrients, the optimization of processes, and even the implementation of remote 24 hour agriculture.
The integration of robotics into agriculture puts agricultural growing units on par with the world's most sophisticated smart factories. Automated harvesting systems are already sophisticated enough to select ripe fruits from individual plants and ignore unripe ones. Robotics and drones are reducing labor requirements and performing precise operations that previously required large or specialist workforces. Drones, working in conjunction with smart sensors, are used for crop monitoring and spraying, and can even plant seeds.
ICL Group (NYSE: ICL) (TASE: ICL) is a leading global specialty minerals company and one of the largest fertilizer manufacturers in the world. It is developing a spectrum of advanced AgTech solutions for growers and agronomists. Agmatix is an agro informatics company that is part of ICL's AgTech digital solutions and is at the forefront of creating solutions to leverage big data analytics to provide agronomists with vital actionable insights into soil health and plant needs.
Agmatix solutions take the guesswork out of crop planning and extrapolate tailored solutions from a mass of agricultural data. Farmers can optimize crop nutrition, reducing waste and environmental damage. Another trailblazing ICL subsidiary is GROWERS whose digital service platform is empowering farmers, agricultural professionals, and retailers with enhanced decision making through data-driven recommendations. GROWERS is using the digital agriculture space to create an interconnected food supply chain and transform the entire 'field to fork' process on a sustainable basis.
Innovative AgTech at Field Level: FruitMag™ and eqo.x:
It's easy to think of AgTech purely in terms of digital platforms and apps or advanced robotics and drones, but the wider technologies are creating amazing crop nutritional solutions, biostimulants, environmentally-friendly pesticides and fungicides, and safe ingredients for food production. FruitMag™ and eqo.x are two examples of how AgTech innovation is making a practical difference at different stages of the food production process.
ICL Group drew on its traditional expertise in mineral production - and its vast Dead Sea mineral reserves - to design FruitMag™, a safe magnesium solution that replaces traditional fungicides in the post-harvest treatment of citrus fruits. FruitMag™ is not only environmentally-friendly, but is cost effective and requires no special training to use. A single application substantially reduces rot in harvested fruits.
Another breakthrough ICL Group innovation is eqo.x, a fully biodegradable controlled release technology for fertilizer granules. eqo.x is designed for open field use and increases nutrient use efficiency (NUE) by up to 80%. Effective use of controlled release fertilizers can substantially reduce the number of fertilizer applications during the lifecycle of a crop, making farming more cost effective and reducing the negative environmental impacts traditionally associated with fertilizer use.
AgTech: Redefining the Future of Agriculture
Agriculture is the world's most vital industry. Farming is essential for human existence and is the foundation that everything else is built on. After approximately 11,000 years of organized agriculture, we are at a threshold moment in history. AgTech innovation is creating the technologies and tools to guarantee global food security and overcome the three fundamental challenges of a fluctuating climate, population growth, and geopolitical pressures. The next decade will see the development of sustainable technologies and farming practices that can finally eliminate food insecurity, hunger, and malnutrition.
AgTech is not just feeding the world's population, it is protecting the environment that we live in. Not only can new sustainable technologies reduce environmental damage - they can systematically reverse it. AgTech is a holistic suite of technologies that will go beyond farming, to define the future of the planet.
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Jacobo Weizenblut
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