Robots have been deployed in the deepest oceans and on distant planets, but they continue to be a rare sight in everyday life. Where they are used, it’s easy to dismiss them as little more than novelties – gimmicks catering to a gadget-obsessed society.
In the world of agriculture, however, robotics is poised to transition from futuristic toy to practical necessity. Juniper Research predicts the agtech market to be worth $22.5 billion by 2025, with growth forecast to average 150 percent annually.
Still, the implementation of new technologies like robotics, automation and artificial intelligence are not purely concerns for the farmers of the future. While agriculture may still conjure images of quaint, rural farmsteads for many, the reality is of an industry that has faced rapid evolution in recent decades and agtech has had a defining role.
“Agriculture is undergoing a period of systemic change – largely as a result of technology,” says Rob Appleby, founder and chief investment officer of The Cibus Funds. “Robotics is really the latest stage in the mechanization of a system that has done us extraordinarily proud for hundreds of years.”
As the sector continues to evolve, robotics and automation could help meet many of the challenges faced by farmers and other stakeholders within the food supply chain. The benefits could even be felt much farther afield.
Current use cases
If the agricultural sector has been slow to adopt robotics and automation, such reticence is understandable. The relatively low levels of profitability in the industry have prevented many farmers from implementing new technologies, leaving higher-margin sectors like engineering and mining to race ahead.
Nevertheless, there are a number of examples where robotics is already having a measurable impact on agriculture. One of the most notable is Burro, a collaborative robot that leverages artificial intelligence to autonomously follow farm workers while carrying various payloads.
Predicted worth of the agtech market by 2025
Proportion of human-caused greenhouse gas emissions that originate from agri-food systems
Record amount of agtech deals funded by investors in 2021
When deployed in its most optimal scenario, the device has been shown to improve productivity levels to such an extent that it has a return on investment of just 28 days. Devices like Vision Robotics’ Lettuce Thinner, Ecorobotix’s solar-powered drone, and Energid’s citrus harvesting system represent just a few of the other examples of robotics that are already delivering practical benefits.
Whether in terms of optimizing production cycles, reducing input costs, or mitigating labor shortages, robotics is delivering the kinds of advantages that are impossible for investors to ignore. But the agtech revolution encompasses more than just robots. Automation in this field is already taking on a multitude of forms, from smart livestock collars to autonomous data sensors.
In fact, recent research from McKinsey estimates that data collection and processing in agriculture could be 90 percent automated just by adapting technology that is currently available, while predictable tasks, such as tilling and harvesting, could be
80 percent automated.
“The adoption of robotics in the farming process is increasing significantly,” Kanira Shah, investment principal at Astanor Ventures, comments. “Traditional farming techniques are not as attractive to younger generations as they were to their older counterparts.
“The younger generation of farmers is more invested in sustainability and new solutions that make their jobs more efficient and simpler. Investments in solutions to suit their needs are more vital than ever to shape the future of farming. There is certainly a demand for robotics; now we just need products to suit this demand.”
Recently, the covid-19 pandemic has also brought one of the other potential benefits of robotics and automation into sharper relief. It is hoped that the technology could help ameliorate the industry’s severe labor shortages, with Brexit and persistent skills gaps exacerbating crises across Europe.
“Last year, we were a thousand fruit pickers down on our usual intake of workers,” Appleby explains. “We used a combination of manual pickers and robots to manage this shortage but, in many cases, manual workers are still more efficient than robots. We remain very much in the prototype phase.”
“Agriculture is still a labor-intensive business (especially around the growth of fruit and vegetables) and, in the western world, there is a clear shortage with regard to this labor force,” Johan Van der Biest, senior fund manager at Candriam, acknowledges. “The only solution is to automate further. And as there is currently a lot of innovative technology available (such as advanced vision sensors that can be taught to differentiate between fruit, vegetable, or weed), many new applications are coming to the market.”
Despite common fears that these new applications will lead to job losses, the increasing uptake of robotics in agriculture is unlikely to create widespread disruption in the job market. When farming experienced extensive mechanization in the 1900s, many laborers faced temporary unemployment – but this was mitigated by the creation of new jobs in industry. Although some re-skilling may be required should robotics gain a greater foothold within the agricultural sector, Appleby believes the transition will provide “long-term advantages for the farmer, laborer and consumer.”
Another major driving force behind the adoption of robotics in agriculture centers on sustainability. New data from the United Nations’ Food and Agriculture Organisation finds that 31 percent of all human-caused greenhouse gas emissions originate from agri-food systems.
It is hoped that advances in agtech could bring this figure down significantly.
Autonomous robots could be equipped with advanced sensors and climate-monitoring tools to reduce waste, optimize inputs, and decrease time to market. For investors, particularly those already convinced by the value of ESG-focused funds, the hype surrounding the businesses at the forefront of this agtech revolution presents obvious appeal.
“Traditional farming techniques are not as attractive to younger generations as they were to their older counterparts”
Kanira Shah, Astanor Ventures
Aigen, a solar-powered robotics platform with a focus on automated terraforming, announced a $4 million seed round led by NEA earlier this year, with participation from AgFunder, Global Founders Capital and ReGen Ventures. Another start-up, Iron Ox, secured $53 million from investors to help fund its ambition of making the global agriculture sector carbon negative.
An emphasis on sustainability has also led to the emergence of new innovations in the agricultural market. Companies like AeroFarms are part of the high growth vertical farming sector where aeroponic systems allow crops to be produced indoors. At AeroFarms, leafy greens, herbs and soft fruits are grown using 95 percent less water and 80 percent fewer nutrients compared with conventional outdoor farming.
“At The Cibus Fund, our main aim is really around channeling institutional capital towards sustainable food and farming,” Appleby adds. “Indoor farming holds huge potential here – it comes with fewer negative externalities, uses less water, and can greatly increase productivity. Plus, it brings the point of production closer to the point of consumption.”
The Cibus Fund happens to be in good company. While not long ago, industrial agriculture would have been viewed as anathema to sustainable causes, robotics and automation are changing the industry significantly. Last year, the Forum for Sustainable and Responsible Investment, a leading voice advancing sustainable investing across all asset classes, listed sustainable agriculture among its top five specific criteria for money managers to be aware of for the first time, with institutional investors already committing $2.18 trillion to this theme.
Reading the market
Given the potential benefits that robotics could deliver, combined with the size and importance of the agricultural sector, you could be forgiven for assuming that fields across the globe would be populated by automatons planting, pruning and harvesting. The fact that they are not speaks to a level of inertia in the industry that is proving difficult to shake off.
“Many farms are set in their ways,” Appleby says. “People are, on the whole, open to new ideas, but things move slowly in the industry. The challenge is two-fold. Finance is an issue – particularly whether agtech developers have the patience and capital needed to transition from the idea stage to commercial developments. The other relates to the pace of adoption. Robotics and automation are moving through the food and farming value chains systematically – but it takes time.”
Thankfully, the industry’s inertia is dissipating – and it can’t happen quickly enough. The global population is set to reach 9.7 billion by 2050, an increase of around 2 billion compared with today’s figure. Our current numbers already create significant pressures around food production, with just under 700 million people experiencing undernourishment. Given the damage that agriculture can cause in terms of biodiversity loss, carbon emissions and soil degradation, more farming is not the answer – but better farming could be.
“Robotics and automation are moving through the food and farming value chains systematically – but it takes time”
Rob Appleby, The Cibus Funds
“There is increasing pressure on farmers to produce more crops to keep up with growing populations and their demands,” Shah says. “Robotics and automation are leading to the advancement of precision farming, vertical farming and smart greenhouses, as well as autonomous and larger-scale farms, all of which help grow crops more efficiently whilst easing labor pressure.”
Investors funded a record $7.8 billion of agtech deals in 2021 as they sought to support a market that is shifting to meet growing demands around sustainability, food security and productivity pressures. From start-ups like Iron Ox to the work of more established players such as Microsoft’s Azure FarmBeats, it’s important that any advances rapidly transition from funding pitches to farmyard applications.
“I would say that farmers are absolutely open to robotics,” Van der Biest agrees. “A growing number are conscious of their greenhouse gas emissions, they live with the consequences of climate change and are confronted with the challenges of maintaining a labor force on a daily basis. That said, robotization and automation in agriculture can necessitate sizable investment, which can be a drag on the proliferation of agtech solutions.”
Agriculture has already changed markedly in the past few decades, but its evolution is not complete. As Appleby says, “it now faces a stark choice between continuing with the old ways of working or embracing the new.” Whichever route the industry takes will have ramifications for investors, farmers, and the health of the entire planet.