Food in Southeast Asia - An Agricultural Perspective

If there is something Southeast Asia is famous for, the majority would undoubtedly agree that it is the food. Food is woven into the cultural fabric of Southeast Asia – similar to what you’d see in the likes of Italy. Not only is food sustenance to the people of Southeast Asia, but it is also our way of life. In terms of labour force participation, on average, over 30% of the people in Southeast Asia are employed within the agricultural sector – with the outliers being Brunei and Singapore. Given the sheer volume of agricultural goods that the region produces, Southeast Asia is a global player in the food supply chain, with Thailand and Vietnam being the world’s second and third largest exporter of rice, making up around 35% of the global rice export.

With all of that said, the region’s food and agricultural production is plagued with inefficiencies and is currently facing two main headwinds: low agricultural yield and long supply chains. There is a natural production ceiling to the potential agricultural output due to Southeast Asia’s geography: limited arable land and inadequate water resources. Trying to increase agricultural yield, farmers employ the usage of chemical fertilisers and pesticides which have instead led to increasing soil degradation and pollution which further exacerbates the problem of low yield.

Although various factors can be attributed to the low agricultural yield in Southeast Asia and Asia Pacific as a whole, one of the biggest factors is the small and fragmented land holding size - with the region having the smallest landholdings in the world (an average holding of 1 hectare). Without land reform that supports farm land consolidation, Southeast Asian farms will continually be unable to achieve economies of scale, which in turn would discourage higher levels of mechanization and technology adoption. Therefore, a lot of work still has to be done to increase the inherent potential of Southeast Asian agriculture – from both a regulation and farming practice standpoint.

As incomes in the region increase, consumers will demand more from the current food supply chain: seeking for fresh and nutritious produce that can conveniently be delivered on demand. The problem that arises when perishable goods end up traveling longer distances or its processing steps are incrementally increased is that more and more food is wasted. The statistics of food waste is a harrowing figure – approximately 30% of food produced globally is wasted each year, estimated to be worth $1 trillion, with Asia Pacific contributing to half of that amount.

The majority of food waste we produce usually ends up in landfills and in some cases, the incinerator. In the case of landfills, the anaerobic conditions allow bacteria to decompose the waste and produce methane as a byproduct. Methane as we know is a greenhouse gas and the main culprit behind global warming - its warming effect is 80 times greater than carbon dioxide over the first 20 years it reaches the atmosphere. The trend of food waste will only continue to rise as the level of urbanization increases in Southeast Asia, further perpetuating global warming which in turn, decreases agricultural yield.

It is not all bad news, however, as there has been a recent uptick in start-ups actively trying to solve the food security issue, from increasing agricultural yield to reducing food waste throughout various steps of the value chain. We at Plug and Play have recently launched our inaugural Food and AgTech Batch 1 accelerator program, which covers tech focus areas addressing the issues above: with smart farming and zero waste production being an essential category within our first batch.

One of our Food & AgTech Batch 1 startups: MimosaTek, is addressing the problem of low agricultural yield by providing smallholder farmers in Vietnam with an internet-of-things platform that can analyze and automate most of the farming process. Their service begins by providing farmers with soil nutrient analysis, in order to come up with a custom irrigation schedule and fertilizer program before planting. Additional data is collected in the form of smart soil sensors and a weather station that is then aggregated onto an app. The farmers can then either choose to manually control the drip irrigation & fertilizer schedule, or to let it run automatically based on sensor threshold (temperature, humidity, light etc). The outcome of adopting their technology leads to a lower cost in water, fertilizer, and most importantly labor - with their farmers experiencing on average a 15-30% increase in yield.

Another startup worth mentioning from our batch is Eden Agritech from Thailand. The team at Eden Agritech has created an edible layer of chemical-free coating that slows down fresh produce’s respiration rate and microbial growth, thereby extending shelf life of fresh fruits and vegetables by up to 5 times. On average, approximately 20-50% of fruits and vegetables are wasted in the supply chain, with the total amounting to $1.2 billion annually in Thailand alone. In one of their use cases, a customer that exports fresh mangoes from Thailand to South Korea was able to reduce the mango loss down to 5% from the usual 50%. Food waste in the global supply chains are not limited to only fresh fruits and vegetables, which is why Eden is also looking to develop new formulas that can also extend the shelf life of meat, poultry, and seafood.

All in all, innovation and support from the private sector alone is not enough to drive meaningful changes to the agricultural sector, as the problem the region faces is inherently structural. For example, with the availability of smart farming solutions throughout the region and beyond, due to the highly fragmented nature of smallholder farming in Southeast Asia, farmers simply do not have capital to invest in such solutions. Therefore, it is crucial that governments also play a role in enacting policies to support smallholder farmers, as well as investing in infrastructure that can support the increasingly complex supply chains.

The key to solving the aforementioned issues is to adopt the right technologies, however, this path requires investments and equal responsibility from every stakeholder be it consumers, corporates, local governments, investors, and academia. This is where Plug and Play comes in; as an open innovation platform that works with corporations, governments, and VCs around the world, we can enable cross platform collaboration resulting in the successful fostering of innovation. And together, we aim to solve the [Southeast] Asian food challenge, among other pressing things, to ensure a sustainable future for the next generation.



Jade Chenarak is a Venture Analyst for Plug and Play Thailand.

To know more about our Food & AgTech program in Thailand, click here

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