Are Investors Driving An Agtech Boom? Creating Jobs And Pushing The Agriculture Industry Into The Future

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Agtech is a young but rapidly growing industry that has looked to pioneer creative and innovative solutions to solve some of the most urgent issues in the agricultural industry. 

Between 2010 and 2015, global investments in agtech grew from $400 million to $4.6 billion. That trend has continued in the years since. In 2021, investments in agtech hit $24 billion in the first half of the year. 

Is The World Overdue For An Agricultural Revolution?

The World Bank estimates that the food system as it exists today is responsible for $12 trillion in hidden costs as a result of its negative impact on the environment and inefficiencies in meeting food requirements worldwide. 

According to the Organization for Economic Cooperation and Development (OECD), about 40% of the earth’s surface is taken up by agriculture, and it accounts for 70% of global water usage. The current food system also contributes between 21% and 37% of global greenhouse gas emissions.

To make the problem worse, the industry is rife with waste. According to a Deloitte report, 35% of production is lost throughout the supply chain. In the United States alone, 40% of food grown and produced is never eaten.

Those issues have only been exacerbated amid the pandemic when an industry already faced with a chronic and severe labor shortage has had an even harder time filling jobs. 

A lot of agricultural jobs tend to be less attractive because they are  physically demanding, have low pay, and are often intermittent and seasonal. With inefficiencies in the existing agricultural supply chain, farms can struggle to offer the higher wages and other incentives that could make these jobs more attractive.

Emerging Agtech Industry Might Offer Better Jobs, More Efficient Supply Chains

The challenges have put pressure on both the public and private sector to look for more sustainable approaches to meeting a growing population’s increasing demand for food. Investors looking to turn those challenges into opportunities have become a major source of the capital that’s funding the innovations and transformations that could reshape the agriculture industry into a more efficient and sustainable system.

ICL Group Ltd. ICL, for example, launched Planet Startup Hub to empower early-stage AgTech companies developing smart tech for farming, engineering alternative proteins, and other groundbreaking ideas meant to revolutionize agriculture.

With these advances in tech, the Deloitte report estimates that as much as 22% of production loss could be eliminated with a more efficient supply chain, especially in urban areas. 

On the labor side, automation and smart tech that make agricultural work easier could help close the labor gap. Reducing production losses and automating some of the least desirable jobs might increase revenue, allowing companies to offer more competitive wages for jobs that are less physically demanding. 

On the environmental side, synergistic solutions that solve multiple problems may not only reduce the agricultural carbon footprint but could also help other industries become cleaner.

Pond Technologies Holdings Inc POND, for example, provides an algae-based carbon capture system that also produces food-grade algae for use in supplements, medicine, cosmetics, human and animal feed. Because algae grows rapidly and naturally soaks up carbon from the air, the company has developed a proprietary algae-growing platform that creates the optimal growing conditions for the plant.

That platform can be installed in factories or other sites that produce carbon emissions and essentially act as a filter that captures pollution before it hits the air. The algae that grow can then be harvested and used in a wide range of products, including the health and wellness supplements the company produces through its Pond Naturals division.

Last year, the Canadian company partnered with Livalta, a subsidiary of Associated British Foods PLC ASBFY to build the world’s first scalable algae plant that captures carbon emissions and produces a protein-rich, algae-based animal feed that can be used on farms around the world. Construction on the plant is expected to begin in the second quarter of this year.

This post contains sponsored advertising content. This content is for informational purposes only and is not intended to be investing advice.