Agriculture and agri-food accounts for 2.6 percent of Canada’s total GDP. Globally, it’s a $5 trillion-dollar industry. By 2050, demand for food for human and animal consumption will increase by 100 percent. More farming isn’t a satisfactory answer, since the world is already struggling to keep up. By 2030, the world will be unable to meet 30 percent of water demand, and it’s already degraded over 20 percent of arable land. There are significant opportunities for innovative companies to use technology to improve farming practices, introduce efficiency, and streamline processes through data-driven decision making.
- Artificial intelligence will become a critical part of the agricultural industry. The global market for artificial intelligence in agriculture was $0.65 billion in 2018. It will hit $4.43 billion by 2027, growing at a CAGR of 23.7 percent. AI, fuelled by data generated by Internet of Things (IoT) devices, can help farmers with everything from monitoring soil conditions to making data-driven decisions about which crops to grow and in which fields.
- Blockchain and RFID will deliver enhanced track-and-trace capabilities. Blockchain in agriculture will become an industry worth $948 million by 2025. Tech-enhanced supply chains will allow farmers and other players along the agricultural value chain to minimize the risk associated with the food chain by identifying the exact source of bad food during product recalls instead of tossing a large batch.
- Focus on ways to address existing efficiencies in the agricultural industry. Farmers face pressure to produce greater amounts of food with less land under challenging climate conditions and increasing regulations. In addition, they have to use outdated channels for gaining access to credit, a serious pain point considering the cash-flow intensive nature of agriculture. Entrepreneurs who design tech-enabled ways to streamline processes in the agricultural industry can enjoy significant traction.
- Consider farming’s intersection with other industries. There are several exciting opportunities for “deep technology” innovation in the agricultural industry. That said, the best step for companies may be investing in specific processes of the value chain and seeing where agriculture intersects with other industries. For example, fintech has a significant role to play in the agricultural industry such as helping farmers access credit or their investment in sustainable farming practices and equipment.
Watch out for
Today’s farmers are managing massive financial transactions for crop inputs using pen, paper, and checks. The companies running the campaigns are making decisions based on spreadsheets. There’s a need for companies that can bring the user-friendliness and data-driven decision making of B2C e-commerce to B2B agricultural purchases. Agro.Club, a Winnipeg-based agtech company, is building a digital-first, user-friendly experience for crop input purchases, connecting farmers, retailers, and manufacturers through one seamless marketplace.