Agro-tech has become something of a buzz word in Nigeria with many new start-ups emerging.
The world as we know it has now been infiltrated and reinvented by technology. It has redefined what we know as communication, how we invest, the kind of businesses that exist, and so much more cutting across virtually all industries. Even as many sectors reach new heights with the technological advancements that emerge, the Agricultural industry is one whose steady move to technology we must all be grateful for.
Simply known as Agro-tech, Agricultural Technology refers to the use of technology in farming and other agricultural processes. With an ever-growing population and the increasing need for food, technology is being used today to massively increase farm output, to make predictions, to access funding, and so much more.
According to the Food and Agriculture Organization of the United Nations (FAO), “The world population will reach 9.1 billion by 2050 and to feed that number of people, global food production will need to grow by 70%. For Africa, which is projected to be home to about 2 billion people by then, farm productivity must accelerate at a faster rate than the global average to avoid continued mass hunger.” A report on Agtech Trends In 2020 by PlugAndPlay, noted that “In the last 10 years, agriculture technology has seen a huge growth in investment, with $6.7 billion invested in the last 5 years and $1.9 billion in the last year alone.”
Agro-tech has become something of a buzz word in Nigeria with many new start-ups emerging. However, these businesses cut across an array of Agricultural technologies including indoor vertical farming, precision agriculture, drone technology, livestock technology, modern greenhouse practices, artificial intelligence, and blockchain. Needless to say, to become a part of it, there are different routes to take.
One of the most common forms of Agro-tech in Nigeria is crowdfunding. Using fintech apps, small businesses come up with investment options and packages where everyday individuals can invest a portion of their funds at specific interest rates and fixed tenures. These companies then use invested funds, leveraging economies of scale to carry out their agricultural processes and ultimately split the gains with the investors – and many of them are not nearly complex.
Clive Blacker, director of Precision Decisions in an interview, explained that “I have seen simple text messaging services being successfully used to raise yields and target inputs in Africa. It does not have to be the most complex of technology or sensors that help.” In other words, Agrotech here could quite simply stop at the fintech apps used by the companies to source funds while the rest of the production process remains largely mechanized.
With the recent SEC regulations passed earlier this year in March stating that “total fees payable to parties to a crowdfunding issue shall not exceed 2% of the total funds raised” amongst others, there are no limits to how much funding these platforms can receive from investors. Examples of companies you can invest in using this platform include Farmcrowdy, Farmkart, PorkMoney, and E-Farms Nigeria.
Large-scale investment in farm automation and precision agriculture
FAO estimates that 20–40% of global crop yields are lost every year to pests and diseases, even with the application of around 2 million tonnes of pesticide! With the use of smart devices, however, farmers can spot crop enemies earlier to allow precise chemical application. This is what systems like farm automation and precision agriculture seek to achieve. It involves making the farming process more efficient (also known as smart farming) like using drones to deploy fertilizers, autonomous tractors, robotic harvesters, automatic watering, and even seeding robots.
Precision technology uses modern technology like soil testing to increase the yield of smallholder farmers. Companies that employ this form of tech in Nigeria include Thrive Agric, Verdant, and BabanGona. These companies, as a result of their large scale, are typically funded by institutional investors or financial institutions. They also rely heavily on external funding.
Of course, there is also the option of creating your own Agrotech business at any level of the value chain from funding, to tech-based production, or even tech in terms of logistics. However, investing in existing platforms either as an individual or an institutional investor will do well to position you passively in the growing Agro market.