Rampant inflation, aggressive rate hikes, a war in Europe, and extreme weather events have put enormous pressure on food security around the world.
The El Niño phenomenon, which re-emerged in April this year, has been warming ocean waters, giving rise to a dryer and warmer climate all year round. Many crops have failed to acclimatize. "Heatflation" in Europe has slashed 20% of maize production, according to market research firm Stratégie Grains. In China and India, Asia’s two largest food exporters, thousands of acres of croplands were ruined by drought and floods this summer. The Indian government had to curb wheat exports after precipitation levels plunged to the lowest since 1988.
These challenges highlight the critical importance of sustainability and climate adaptation in the agriculture sector, and in this respect, agriculture technology (agritech) offers a sustainable way to help farmers improve food production and distribution.
Although Asia has the largest share of the world’s agricultural land, 36% of the population in the region is facing food insecurity, according to a World Food Programme study. This is where smart farming solutions come in, enabling crops to be more resilient in the face of extreme weather conditions while reducing the environmental impacts of carbon-intensive farming practices.
“Practices that sequester carbon and reduce biodiversity loss can create benefits such as soil preservation for farmers and can also create new revenue streams, such as carbon credits, for landowners, farmers, and investors,” McKinsey and Co asserts in a recent article.
Since ploughing releases the carbon stored in the soil, CityFarm Malaysia has come up with a soil-free agricultural solution that helps lower emissions during food growing. This also expands food production to urban areas, enabling households in tiny apartments to engage in farming and contribute to food self-sufficiency.
Irrigation plays a major role in food production. To address the issue of water scarcity, the International Rice Research Institute has teamed up with the Asian Development Bank to invest in water-saving rice species that enhance yields by 10% to 30%.
As populations grow, the demand for food increases, providing more opportunities for agritech. According to US venture capital firm AgFunder, investment in food technology grew 10 times over the past decade to reach US$29.6 billion in 2022. Asia accounted for 29.4% of the total investment, the most significant share among non-US regions.
Investment in the sector is gradually shifting from downstream businesses such as food delivery and restaurants to upstream innovations in food production.
"As the world's largest region in both geography and population, with a vast network of smallholder farmers combined with dense urban settings and food sovereignty concerns, Asia-Pacific is a hotbed of opportunity for food and agriculture technology start-ups," AgFunder says.
However, structural problems in the agricultural industry may halt the integration of technology. What is needed are different solutions that take into account the diverse agricultural landscape across Asia.
Farmers in the region are open to new farming methods and machineries, but agritech firms must adopt their strategies to the peculiar circumstances and conditions of their clients, considering such factors as farm size, input, output, and labour movements, according to a study by the International Fund for Agricultural Development.
This may present a predicament to agritech start-ups that focus on a single crop or a specific farming technique, given the diversity of farming cultures and practices in the region.
Lack of support
Governments play a crucial role in boosting the application of technology in agriculture, but despite the paramount importance of food security in the economy and people’s welfare, their support for agritech development leaves much to be desired.
In Southeast Asia, Singapore is one of the most ardent in incorporating technology and innovation into its business processes. With a relatively small land area and despite the less than 1.7% share of agriculture in the country’s GDP, Singapore is taking steps to promote agritech. It has allocated S$309 million (US$303.67 million) for agri-food research through the Singapore Food Story R&D Programme launched in 2019. In 2021, it established the Agri-Food Cluster Transformation Fund, with an initial allocation of S$60 million.
In the case of Vietnam, agriculture accounts for 11.9% of its GDP, but its support for agritech start-ups still has much room for improvement. For example, it launched a pilot programme that funded three agritech companies with just US$15,000.
Thailand, where agriculture accounts for 8.4% of the GDP, is providing tax incentives for agritech-related companies and venture capital. Other commitments to the sector remain in the doldrums.
Given the lack of support for agritech development, the issue of food security is likely to be more pronounced in Asia in the years to come.
Meanwhile, international institutions are calling for a tightening of environmental standards in the agricultural sector. Science Based Targets Initiatives (SBTi), for example, launched the Forest, Land and Agriculture Guidance last year to guide land-intensive companies towards net zero.
More time and effort are needed for the region to enhance agricultural practices and make them more responsive to the call for sustainability.
“Investing now in capacity to develop and apply key technologies may take a decade or longer to bear fruit, hence the urgency to act now. There is also a need to apply similar analyses for broad sets of climate-smart practices, especially now as countries are seeking to implement their Nationally Determined Contributions (NDCs). This kind of information can help them to identify policy mixes that will provide the highest return on investment,” The Consortium of International Agricultural Research Centers says in a report.