The farmers of Salinas Valley recently gathered on Main Street by the hundreds to talk business and chow down on some local produce. It was not the sort of setting where one would expect to find many of Silicon Valley’s leading investors. But at a time when farmers are turning to drones, self-driving tractors and iPads, gatherings like July’s Salinas Valley AgTech Summit are certain to become the norm. The payoff could be massive: with some three and a half billion acres of arable land across the globe, cutting production costs by just $1 per acre could result in more than $3 billion in savings.
With water shortages, finite land resources and climate change squeezing farmers around the world like never before, agriculture is ready for the technological innovations that have already revolutionized a wide swath of industries. From data sensors and software to mesh networks and drones, technology offers solutions that can help farmers produce more food using fewer resources.
While we rightly think of the developed world’s farming as a highly mechanized industry, American farmers lag woefully behind the information revolution of the past two decades. Growers still make key decisions on when to plant, water, fertilize and spray pesticides based on long-standing habits and local know-how. As a result, they often err on the side of too-much or too-little coverage across the fields, which leads to waste and economic losses. Much has been learned about precision agriculture in recent decades, and yet many farmers still do not fully gather or apply data that can help them cut costs and maximize yields.
The entire farming cycle is ripe for change. New technology and communications now allow farmers to monitor the status of each individual plant and act precisely to irrigate or apply fertilizer to achieve the best results across huge economies of scale. Ground-based sensors measure soil and air humidity, temperature, wind and light. This data is uploaded via wireless networks to the cloud, where specialized algorithms analyze inputs and create a set of recommended actions for each plant, eliminating the uncertainty that prevents farmers from maximizing their crops’ potential.
The next challenge will be to tie all these steps into a simple yet comprehensive system that ideally enables farmers to act on these recommendations with a single click that relays instructions to autonomous field machines that can carry out specific actions. Ultimately, the massive amounts of data now available to growers will be useless unless they have a complete solution to simplify their ability to review and act upon the recommendations generated by the data.
That day is not far off. Big VCs like Sequoia, Andreessen Horowitz and Khosla Ventures, along with strategic corporate investors like Verizon Ventures and Google, are just a few of the leading groups researching and/or investing billions of dollars into startups like Granular, CropX and Farmers Business Network to develop the ecosystem. AgTech focused incubators like Thrive Accelerator and The Yield Lab are starting to churn out new companies such as FarmX, which has developed a smart monitoring system for crops with an innovative business model to charge a percentage of the amount farmers save using its product. A couple of other entrants in the field include irrigation management systems provider Hortau and unmanned aerial vehicle survey platform maker PrecisionHawk. In one of the biggest recent deals, Monsanto bought data science group Climate Corp. in 2013 for $900 million. According to AgFunder’s 2015 Midyear and 2014 AgTech Investing Reports, investors are on track to exceed $4 billion of investment for 2015 compared to $2.36 billion for all of 2014 and $860 million in 2013.
The field of opportunity remains wide open, with competing approaches and technologies all vying to come out on top. The only certainty is that more and more data will become available to farmers and the key to success going forward will be to simplify the collection and analysis of data while giving farmers the capability to act on recommendations quickly and easily.