How is COVID-19 affecting the growth of agtech?
How is COVID-19 affecting the growth of agtech? These 5 stories from around the world paint a varied picture.
Amid floods of reports on the collapse of firms and whole industries in the wake of coronavirus, so far the agriculture industry is holding firm. In fact, it’s times like these when people are appreciating – possibly for the first time – where their food comes from and the efforts made to get it from field to plate.
As part of this, the burgeoning agtech sector is being affected in unforeseen ways. The following stories from around the world show how producers & innovators are adapting, how the crisis is exacerbating existing water and resource issues, and how traditional agriculture is actually turning to agtech faster than ever before.
The Story: Strict lockdowns in China, the initial epicenter of the pandemic, meant food producers there have been investing in technological solutions earlier than they might otherwise have done. CNBC’s Wendy Ye reported that robot and drone agtech startups have seen huge increases in demand. “In the first two months of 2020, we delivered 4,000 units of our newly released agricultural drones,” said Justin Gong, co-founder of XAG, a major agricultural drone maker based in Guangzhou.
Agtech startups have been further strengthened as China seeks to increase domestic production and limit imports. “With this kind of support, agriculture might be the least impacted industry by this outbreak,” said a precision ag CEO.
Full article here (CNBC)
Takeaway message: The COVID-19 crisis may be speeding up the shift from more traditional agriculture to agtech and Ag 4.0.
The Story: Greg Nichols at ZDnet notes that with food supplies being stretched around the world, this is the perfect moment for agtech to hit its stride. Producing more with less has never been more important and agtech innovations can rise to the challenge. Nichols also comments that significant venture capital investments were made into agtech in 2019, which will help mitigate possible disruptions. Accordingly, this crisis will “hasten the adoption of many agtech tools and spur development of new solutions”.
Full article here (ZDnet)
Takeaway message: With food supply chains stretched, the need to “do more with less” has never been greater, while recent investments in agtech should be one of the factors which soften the financial impact of the crisis on the industry.
The Story: In the US, President Trump ordered General Motors to redirect their efforts into making medical ventilators, a story repeated in the UK with Dyson and others. In Switzerland there’s a huge wave of voluntary solidarity, including agtech manufacturers redeploying their technologies. Valais-based Aqua4D was one of those to swiftly respond in early April, reprogramming its 3D printers to make Personal Protective Equipment (PPE) components. “These are extraordinary times, and we wanted to help any way we can,” said engineer Julian Froidevaux. “We quickly got to work, and delivered the first batch of components on the very same day.”
Full article here (Aqua4D)
Takeaway message: The crisis means startups and big firms alike are showing their agility to redeploy their technologies to help pandemic efforts.
The Story: Clarissa Phaar at Quartz highlights how the crisis is exacerbating resource shortages in already stretched regions. While the advice for avoiding further spread of the virus is the same worldwide, the practicalities differ according to vastly different water access realities in different countries: “The most common directions are the same: Avoid unnecessary contact with others, and wash your hands often with soap and water, for at least 20 seconds. But often, following these simple directives is simply not an option for the 780 million people around the world who don’t have access to an ‘improved water source.’”
Full article here (Quartz)
Takeaway message: Water shortages in developing countries (and the US) are impacting not only agriculture and irrigation but the basic sanitary requirements of many millions of people.
The Story: KPMG has analyzed the financial effects of the developing crisis, with a specific look at the Australian agriculture industry. “Most agricultural markets have been strong in the lead up to the coronavirus pandemic and the wide-spread summer rain has lifted farm business confidence,” they write. While the supply chain has been placed under strain, overall “the ongoing domestic demand for food will remain and our food and agribusiness sector is capable and well-positioned to respond”.
Full article here (KPMG)
Takeaway message: Agribusiness and agtech should come out of the crisis relatively unscathed, but should build resilience into supply chains to weather the storm.