The agriculture input market is estimated to grow at an average of 3% over the next decade. This is being driven by the global population growing exponentially. It's projected that the demand for food, feed, and fuel will continue to increase over time. This brings the question of mechanisms that can be implemented to ensure access to a sufficient supply of healthy, diverse, and safe food for a growing global population while considering climate change and reducing the environmental impact. This is the critical challenge of this century, and innovation in global agriculture is a central part of the solution.
As in other industries that have prioritized environmental and social governance, better known as ESG, in agriculture, it has gained popularity with many agribusiness companies investing significantly in ensuring that they're sustainable. New technologies are being integrated to foster sustainable agriculture. Plug and Play has identified some prominent trends that have affected the industry and startups contributing towards ESG in the agtech ecosystem.
Rerouting value chains through ESG consulting
Agribusiness companies are implementing new technologies to optimize the movement of products from the field to the consumer or to improve their internal supply chains. Multiple players aim to bridge or skip value chain steps by direct-to-consumer delivery, meal kits, food e-commerce, etc., to reduce supply chain inefficiencies and waste. Innovations around value chains also include startups enabling farmers to monitor the quality of crops and trace them along supply chains. That allows the businesses to prove their sustainability by making products traceable from seed to shelf. Banks, lenders, and carbon trading markets can also use data generated to offer financial solutions tied to specific assets.
Startups like Seedtrace provide digital platforms to manage and communicate value chain information, enabling businesses and conscious consumers to understand their impact. The digital platforms trace products back to their roots while irreversibly storing critical data points on an open blockchain. All the information is quickly and interactively accessible through the platform for B2B clients and consumers. Mothive, for instance, a subsidiary of Terra Prima Group, provides an affordable and simple-to-use farm solution that reduces crop waste, predicts right-time-to-pick and related supply chain logistics, improving food production by 21%.
Business intelligence and automation in agriculture technology companies
Agriculture technology has seen investment growth, with at least $6.7 bn. invested in the last five years. $1.9 bn. was funded in 2021 alone. This proves that the traditional approach to farming is being replaced by automated systems empowered by business intelligence (BI), enhancing speed, efficiency, consistency, and sustainability while collecting valuable data. Startups and cross-industry innovators offer solutions like satellite images, big data analytics, farm management platforms, and crop technologies to increase effective and sustainable yields. Traditional banking and insurance organizations use the obtained business intelligence data to assess the agri-feasibility scoring for loans and insurance purposes objectively.
"In agriculture, sustainability is not a preference — it is a sign of vitality. Food manufacturers, farmers, and land investors across the globe who understand that have already begun to reap the benefits."
—Robert Rushford, CEO of BioIQ
Agcurate provides accurate and rich rural intelligence for agribusiness via satellite imagery and machine learning. It also helps banks and insurers better asses farmers' credibility based on data acquired via the platform. eAgronom develops farm management software, AI, and remote sensing technologies that allow farmers to monitor their crops and inventory, collaborate with agronomists, and get paid for creating carbon credits and access lower interest rates. Agrocares offers cloud-based tools for instant monitoring and analyzing nutrients in the soil, feed, and leaves to ensure precision farming. Reliable data and customizable farm management recommendations are provided through the different applications.
Several European startups are supporting businesses in their journey towards more sustainable operations, providing digital tools for tracking, measuring, and reporting their negative environmental impact on the planet. As the farming and agri-food sector contributes significantly to global CO2 and greenhouse gas emissions, it's crucial to support farmers in their better understanding and transition towards more sustainable operations.
Some initial practices to achieve the goal include optimizing soils, maximizing vegetation growth, and enhancing the management of productive areas. Besides that, external parties should provide farmers with technologies supporting carbon footprint tracking, measuring, and reporting. The data aggregated that was collected can be leveraged in the carbon credits market. Other companies, such as investment funds and banks, can benefit from the data generated on agribusiness sustainability development. Evercity provides a platform that automates sustainable finance management, issuance, and monitoring, making it easier, cheaper, and more transparent for banks, funds, corporates, and small and medium-sized enterprises (SMEs). MyEasyFarm is the first monitoring reporting verification tool that complies with the low-carbon label for field crops. The solution aggregates agricultural data to precisely monitor and reports GHG emissions generated on the farm.
Carbon credits infrastructure
Reducing emissions and decarbonizing economies are urgently required; however, time is running out, and the technology is only sometimes available. That's where carbon credits come in. Carbon credits, also known as carbon offsets, permit the owner to emit a certain amount of carbon dioxide or other greenhouse gases. These have been used to reduce the gases emitted into the atmosphere by making businesses and individuals account for their unavoidable emissions by buying carbon credits from certified activities. Those usually support community development, protect ecosystems, or install efficient technologies to reduce or remove emissions from the atmosphere. In recent years voluntary carbon credit markets have emerged, empowering companies to become more proactive in their sustainable actions. And that applies to the agriculture industry as well.
Farmers willing to participate in the carbon credits market need to prove they are cultivating regenerative agriculture, which in the past required physical proof. New technologies can now facilitate this, digitalizing the process of measuring carbon footprint, buying/selling carbon credits, and incentivizing farmers to switch to sustainable farming methods. Agreena is a startup that verifies and sells carbon credits generated by farmers to provide an economic incentive to switch from traditional arable farming to regenerative agricultural techniques. Soil Capital offers a certified carbon payment program for farmers in Belgium, France, and the UK, supporting farmers in the transition toward more profitable and regenerative agriculture. Rizeag is leveraging science and technology to improve the traceability and transparency needed to build robust financing systems for sustainable agriculture. Its carbon credits simplify access to the agroecological transition for farmers.
Regenerative agriculture technologies
Regenerative agriculture aims not only to ensure that no harm is done to the land but also to improve it through technologies that revitalize the soil and the environment. Farmers use multiple regenerative methods, such as cover crops, hedgerows, and diverse crop rotations, to achieve this. Companies facilitating farmers by introducing regenerative farming help them to understand the process better and reward them for their efforts. The leading solutions cover knowledge exchange platforms, communities around regenerative farming transition, carbon removal credits solutions, and financing solutions.
Financial institutions can tap into the space by providing best practices and financing to the farmers (clients) looking to transition into regenerative farming. reNature helps farmers to change the production method into a sustainable agroforestry system. Startups active in regenerative agriculture include ReNature, Soil Heroes, and Klim. ReNature provides information, guidance, and support to local authorities, cooperatives, and farmers in transitioning into sustainable agriculture. Soil Heroes regenerates supply chains by connecting businesses that want to offset or inset their emissions with farmers who can capture carbon in the soil through regenerative agriculture.
Klim platforms aim at spreading regenerative agriculture as quickly as possible to maximize agriculture's contribution to climate goals enabling transformation to area-wide regenerative agriculture.
#IndustryInsights #FoodandAgtech #Sustainability
Written by Tinotenda Muradzikwa
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