Editor’s Note: Craig Herron is VP at iSelect Fund, a venture capital management group focused on a variety of sectors including agriculture that recently organized an event called Davos on the Delta for entrepreneurs, investors, farmers and agrifood corporates. Here he offers his five key takeaways from the event in Memphis, Tennessee.
The food and agriculture industry is changing, and it’s happening faster than many realize. At our event two weeks ago, we covered several topics including agricultural exports, the convergence of food and health, the rise of alternative proteins, and the potential of indoor farming. These are my five key takeaways from the discussions of the week.
The supply chain is hungry for innovation information: From field optimization to AI and automation, to the supply chain, and more, startups and other disruptors are working in every corner of ag right now, developing exciting new technologies, but too many farmers, executives and others don’t know about it yet. That disconnect needs to be solved if ag innovation is to thrive.
New business models can be as disruptive as new technology: The tech industry has a bad habit of falling back on business models that it already knows will work, usually inspired by the typical Silicon Valley software as a service (SaaS) model. But agriculture is different, and it’s time to come up with business models that actually help the industry solve some of the problems it is facing. “Agriculture has seen a number of really interesting technology companies over the last 10 years that have been constrained by the ecosystem,” said David Perry, CEO of Indigo Agriculture. “But it’s not enough to be a great technology company. You have to solve the business model problem too so that you can maximize the value of that technology.”
Collaboration is needed: At the same time, disruptors need to be working more closely with their end customers. Innovation cannot happen in a vacuum. We can’t lose sight of the farmer on one side and the consumer on the other.
Inputs are at risk: The size and concentration of the inputs markets — which include improved seeds, fertilizers, chemicals, irrigation systems and more — make them ripe for disruption. These are tools that almost the entire industry uses and relies on. “Most agriculture is a commodity and if you’re producing a commodity you get paid for volume; you don’t typically get paid for sustainability or quality. Reducing chemical use or reducing fertilizer use is certainly worthwhile, as it has some immediate benefit to the farmer because it decreases their input costs, but what if by doing that the farmer could also garner a premium for the crop they’re producing? If they got paid more for using less fertilizer or fewer chemicals, that could really help drive adoption”, said Indigo Agriculture’s Perry.
The future farmer is an industry-wide concern: The human side of agriculture is changing as well, from the manual laborer that works in the fields to the next generation that is going to run the farm. How will the farm of the future address these HR concerns in the face of automation and changing markets? What new doors will this open?
And this is all just getting started.
We are still in our infancy of truly understanding the role of food and agriculture in human and animal health, and there is much more work to be done in that area. Steps are being taken, but we still don’t know what we don’t know, and there is a lot of growth to come over the next few decades that was only hinted at during Davos on the Delta. What happens next is up to the industry — the entire industry, including farmers, startups, business leaders, investors and more — but whatever it is, it will lay the groundwork for the next 50 years of food and agriculture.