As an agronomist, what are the most significant barriers for agritech start-ups within the industry?
This month we posed the question to NIAB TAG regional agronomists Steve Cook and Patrick Stephenson.
For this month's ask an agronomist slot, we had an interesting question posed to us by a Barn4 member asking "what are the most significant barriers for agritech startups within the agricultural industry?".
Like any industry being a startup offers its challenges. "There are many barriers to any new technology being introduced and widely accepted in the agricultural sector", explained Steve Cook. Initial costs can be a barrier for agritech due to the inputs being high and the return being low, making the expenses high, but "sponsorship can help overcome this.". Steve pointed out that "the industry is generally sceptical of change, so proof of benefits needs to be shown; whether this is a saving of inputs, improving input efficiency [or] increasing yield. Trials and innovative farmers using the technology will help, but it may still need three years of data. Very often, theories are good, but the realities in the field do not follow. A couple of good results are often scuppered by the next year as the weather and nature conspire against you.
Farmers and agronomists need to be able to see and understand the technology and its benefits". Steve went on to add that "technology that assesses risk from pests or disease needs to be well proven as the saving of input cost is always much smaller than the cost of yield loss from that pest or disease. Hence, there can be a risk if the technology is not 100% reliable and must be compatible with existing technology available on the farm. If technology requires GPS or variable rate, it will not be widely accepted unless it is compatible with existing equipment already in the tractor cab, and many different systems are in use. Any new technology that requires expensive equipment to be purchased to make it work will be only slowly accepted at best. Technology that reduces inputs will be more acceptable to the independent agronomists but would be seen as a threat by those selling inputs, which might be an obstacle. Any new technology that threatens the way farmers or agronomists work might be difficult to get accepted."
Patrick Stephenson highlighted that the central question businesses looking to tap into the agritech sector must ask is: "how does this add value to my business?". From a farmer's point of view, will the new technology "improve the farm profitability by producing more product or reducing fixed costs yet maintaining margin"? He added a potential barrier to usability and practicality. "Will, my workers, understand it and apply it correctly? Can the machine operate in isolation? Do we have to train staff to use and understand it? If so, who will do this? If not, how will it work?".
Patrick also believes that the ability to measure an outcome could also be a barrier. Can "the return on investment be seen by an increase in production, or will it be seen in time/labour savings?". He then explained an example of a successful agritech, GPS autosteer, where a tractor can move from points A and B with high accuracy, "saving the farmer time, fuel and decrease staff fatigue", allowing farmers to plant crops more efficiently. Patrick further explained the positive effect that agritech could have on the farm, including how it can increase accuracy and assist workers; this has been seen in "auto boom shut off allowing for no double application areas".
Thank you to Steve and Patrick for their insights into the industry's most significant barriers for agritech startups.
Takeaway #1: Initially, Agritech startups can cause a period of high costs for growers from their high input and low return.
Takeaway #2: Agritech startups must understand the industry and their customers. The product or service they produce must be reliable and have tangible benefits, such as cost savings.
Takeaway #3: Compatibility technologies will be more widely accepted and quickly adopted on a farm.
If you have any thoughts about this topic, drop Barn4 an email. Or read more of our Ask an Agronomist slot here.