In the face of grim predictions for global climate change, delegates at last week’s Agri Investor Forum in Chicago were particularly interested in the role of new technologies in overcoming roadblocks to scaling up global food production in the next four decades.
Advances in biotech, stronger links between growers and innovators, and market-driven allocation of resources all have a role to play in boosting agricultural production, according to experts at the Forum.
A disconnect between tech innovators and growers steeped in generations of tradition represents one major inefficiency in the market today, according to Aaron Magenheim of Ag Tech Insight. According to Magenheim, growers have long been inundated with products that make intuitive sense to Silicon Valley programmers but fail the simplicity test for farmers with little patience for technology fads that may fade before producing any gains.
One challenge, said Magenheim, is “getting growers to understand that new technologies are different, and it’s not going to end up being another $200,000 of junk that’s in their barn, that they’ve been through in the past”.
Magenheim is working to solve this disconnect by raising funds for innovative products from the growers that use them. This investment model, he said, ensures that money goes to products with real functionality for growers, while providing tech start-ups with a steady stream of feedback on what features translate to the field and the farm office.
Meanwhile, Arash Amini, whose indoor salad growing and packaging company, Farmbox, promises to bring organic farming closer to urban spaces says that the next major leap in productivity will come as genetic modification goes beyond the labs of behemoth companies like Monsanto and into the basements and garages of 21st century versions of Steve Jobs and Steve Wozniak.
“[Genetical modified organism]-ing is being rebranded by the youth of the world as bio-hacking, and they’re doing that with cloud computing and DIY systems,” said Amini.
Possibly the most disruptive innovation in the global agriculture market may not come from programmers or tillers of the soil. Fresh water is being increasingly exposed to market forces in Australia via water rights allocations doled out through competitive bids. Some see this as a model for drought-stricken regions of the world from Africa to the south-western US.
“We think market technology comes first,” said Marc Robert of Water Asset Management, of the need to find ways to stretch the world’s limited supply of fresh water. “If we could get rid of one thing, it would probably be the use it or lose it notion, allowing people to carry water over from one year to the next.”
Blue Sky Real Assets group is already making water management a cornerstone of its investment strategy in Australia. Blue Sky investment director, Michael Blakeney, says that given the chance, market forces will steer water into the right hands.
“As soon as you put a value on a resource,” Blakeney told Agri Investor, “The market will move it to its highest [value] use.”
According to Magenheim, seismic changes to the market will come from unexpected directions, and many of the established agtech players won’t keep up.
“Any technology company that’s been around for 5 years or longer is going to be out of business in five years or less, ” said Magenheim.