By Krishna Kumar, Co-Founder & CEO, Cropin
The agriculture sector, crucial for human survival and our planet’s sustenance, is undergoing significant change by embracing advanced technologies to boost productivity, sustainability, and resilience. The ever-increasing demand for Agtech solutions is influenced by the increased need to manage the impact of climate change, regulatory changes, rising hunger, and consumer demands for healthier food. In this context, I’m sharing Cropin’s outlook for what we can anticipate in 2024.
Agri Innovations: A Breakthrough in Climate Action
The world recognises that achieving environmental and climate goals relies on addressing fundamental issues within the food systems. With agriculture contributing over one-third of global greenhouse gas emissions, utilising 70% of freshwater resources, and employing a quarter of the world’s population, the next few years will witness a surge in agricultural innovations as climate solutions. In 2024, a significant shift is anticipated, marked by multi-billion investments in agri-food transformation from international organisations, development agencies, and governments, followed by a proliferation of agritech investments by PE/VC firms to harness the sector’s growth momentum.
Increased demand for sustainable food systems
In 2024, we’re poised for a significant shift toward sustainable food systems. The catalysts for change are diverse, ranging from the disruptive weather events of 2023, affecting regions globally, to the UN chief’s stark declaration of the onset of a “global boiling” era. These events served as wake-up calls for farmers and agribusinesses worldwide, prompting a reevaluation of their operations. For instance, recognising agriculture’s role in greenhouse gas emissions, the industry is now motivated to curb its environmental impact, fostering a collective commitment to building a more sustainable agri-food ecosystem. Agriculture is uniquely positioned to transition into a zero-emission industry, potentially evolving into a carbon sink.
Robust regulatory environment
We will witness a shift away from greenwashing in the agricultural ecosystem as players embrace more responsible and transparent practices, largely driven by stringent regulations. The EU Deforestation-free Regulation (EUDR) is firmly against deforestation, compelling growers and agribusinesses globally to adopt sustainable production methods. I expect more countries and regions to introduce similar regulations in 2024, emphasising the agri-food sector’s commitment to achieving Net Zero. These regulations will necessitate technology investments, requiring tangible evidence of reforestation, proper fertilizer applications, mandatory carbon sequestration, and active biodiversity preservation. These advancements will present substantial business growth opportunities for Agtech players providing solutions in these domains.
Integration of human health and agricultural advancements
In 2024, we’ll see a critical development—the convergence of health demands and Agtech innovations, acting as a significant driver for the industry. The increasing consumer preference for healthy foods pushes agri-food companies to shift towards whole/healthy food offerings, supported by favorable global policy environments. However, meeting the demand for whole foods in a world with over 8 billion people poses a challenge. Inefficient global food supply, often perishable, necessitates a robust food supply chain driven by technology. Imagine an open dashboard offering real-time visibility for policymakers globally. The U.S. could leverage grain availability in Asia, Europe could track the availability of vegetables in other regions, and African nations could swiftly address food shortages from time to time. Tech-enabled transparency transforms global food systems.
On the other hand, Agtech has the potential to offer transparency to both food manufacturers and consumers, providing insights into the origin and production processes of food. Are consumers aware of the cocoa origin in their chocolate, the fertilizer usage on potatoes for chips, or whether they can measure coffee powder adulteration by tracking the product life cycle of the sourced coffee beans? This will also aid governments in ensuring citizen health, reducing healthcare costs, and empowering healthcare workers to recommend the right products. The merging of healthcare and Agtech is a powerful and positive industry convergence unfolding in the years to come.
Rise of Controlled Environment Agriculture (CEA) and other emerging practices
Innovations in controlled environment agriculture (CEA) practices, including vertical farming, polyhouse farming, hydroponics, and other emerging methods like regenerative agriculture, are gaining traction. While these practices may take time to become mainstream, especially in smallholder markets, they offer solutions to numerous issues. These solutions encompass addressing challenges such as the aging farming community in markets like Japan, achieving food self-reliability in regions like the Middle East, mitigating climate risks globally, and preserving biodiversity. I anticipate agribusinesses, non-profits, and development agencies to lead the charge in driving these transformative initiatives in agriculture globally.