new York Russia has temporarily halted grain exports. Wheat, barley and rye, among other things, will no longer be delivered until the end of June. This was announced by the responsible Deputy Prime Minister Viktoria Abramchenko on Monday in Moscow. There are exceptions within the framework of individual licenses. The export of sugar and sugar raw material should even be stopped by the end of August.
The Ukraine war is changing global agriculture massively. Because Russia is the largest wheat exporter in the world, and the attacked Ukraine is also one of the most important wheat producers. It is not for nothing that the country is often referred to as the “granary of Europe”. Together with Russia, it supplies around 30 percent of the world’s wheat, as well as vegetable oils, corn and other plants and fertilizers.
The OECD already fears a humanitarian catastrophe after the export ban. Stopping wheat exports from Russia and Ukraine will lead to bottlenecks in many emerging and developing countries. Due to the interruption in fertilizer production, there is also a risk that the interruptions will last longer, since cultivation will also come under pressure in the coming years. UN Secretary-General António Guterres also warns: “We must do everything we can to avert a hurricane of hunger and a collapse of the global food system.”
In order to eliminate the shortage, new ideas are also required. A lot is currently happening in the field of agricultural technology, says futurist Amy Webb, founder of the Future Today Institute in New York. In so-called precision agriculture, start-ups collect and use agricultural data. “This allows you to get more yield from the plants,” explains Webb at the SXSW tech show in Austin, Texas. “For example, if you could manipulate corn so that it lasts maybe 20 years with less water instead of 3 years and is more resilient to climate change, that would be very good. That is exactly what we will need.”
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Some farmers are already using artificial intelligence, robotics and other technologies to help them manage their fields and ensure each harvest is more productive than the previous one.
Technological solutions bring efficiency
In the face of war, Europe must rethink now, says Alex Frederick, senior analyst emerging technologies at Pitchbook. “Many agricultural technology solutions could be deployed to increase agricultural productivity in Europe. Such as robot machines, farm management software and solutions for analyzing satellite images.” The Berlin start-up Infarm, the Danish company Blue Ocean Robotics and Performarmer from France are currently among the most important providers.
Autonomous tractors, which farmers can control with an app, are already driving on some farms. The US industrial company John Deere builds self-driving tractors that collect data themselves and send it to the cloud. “The farmer uses this information in the form of large data sets to help other farmers make better decisions for their farm. Not just this growing season, but well into the future,” said Jahmy Hindman, John Deere Chief Technology Officer.
Most recently, the company introduced a fertilizer arm that is mounted on the tractor and automatically recognizes which plants are weeds and which are the desired crops. The arm, which is more than 30 meters long, has 36 cameras that scan the grain in real time, and an AI analyzes this data.
“Software is a big, important trend in how we manage inputs and outputs to increase operational efficiency,” said Paul Condra, Pitchbook’s head of emerging technology research. “John Deere is a large tractor manufacturer that is increasingly turning to AI and robotics to manage its operations. So the company has indeed gone down the Big Tech route.”
The first Case IH connected farm in Brazil.
In Água Boa, Brazil, Case IH, a spin-off of the listed Dutch-British industrial group CNH Industrial, has just built its first connected farm. A 4G internet connection installed on the farm makes it possible to monitor all operations on the farm and collect data. The networked farm should show how connectivity increases productivity in the field, say the makers. And this despite the fact that the region was already known for its high production rate. We now want to increase this even further.
It’s not easy for everyone, explains Eduardo Penha, director of marketing at CNH Industrial South America. “Imagine that you are a farmer and have worked the same way for the past decade,” he says. “Now your boss buys a new machine and brings a bunch of different networked servers. We show the farmers that they can earn more money this way.”
Investments in agro-tech broke records in 2021
Agribusiness financings rose to a record high in the third quarter of 2021: $3.2 billion in 201 deals worldwide – doubling compared to the same quarter last year. According to a report by the analyst firm Pitchbook. The annual transaction volume for 2021 as of September 2021 was $7.8 billion. More money also meant bigger deals. The average values per deal roughly doubled compared to the previous year.
The main reason for the records was the pandemic, in which Agrar-Tech was considered a safe bet, explains analyst Condra. “The market will probably stay big. But given everything that’s happening in the world right now, fund inflows are likely to slow down because company valuations are falling as well.”
The first effects are already visible in Ukraine, says tech expert Alex Frederick, Senior Emerging Technology Analyst at Pitchbook. “Initial indicators point to a slowdown in venture capital activity in Ukraine,” he explains. Agricultural start-ups headquartered in Ukraine raised a record $17.8 million in the third quarter of 2020, but activity has declined steadily since then.
In the first quarter of 2022, he did not record any more deals with Ukrainian start-ups with a focus on agriculture. The war has immensely increased risk and disrupts investment opportunities. Yet precisely the technologies financed with it are needed more urgently than ever.
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