The agriculture industry is shifting as more agricultural technologies are being integrated into farming systems. Typically, the success of such new technologies depends on the investments agritech companies receive to push their technology to market. A rising population and demand for increased food production in the coming years calls for a paradigm shift within the industry, so more technologies will be adopted. AgFunder reports that investments were down by 44% between 2021 and 2022. While this may seem discouraging, some experts explain this drop as a shift in priorities to the right products and technologies that will make a measurable difference in the problems facing the industry. There are a number of categories where investments were made. Let’s discuss some of the key categories.
Farm Management Software
According to AgFunder, Farm Management Software had one of the largest category increases from 2021-2022 jumping 35 percent to $1.69 billion. Farm Management Software includes programs, applications, and websites that assist in planning, assessing, implementing, and optimizing farm operations. This data is crucial to farmers because it helps them make data driven decisions, which in turn improve efficiency, productivity and profitability. Experts project that the Farm Management Software will reach $6.78 billion by 2029, which shows this category will continue to be a top interest for investors.
Agbiotech is another category that experienced an increase in funding and rose 8.5 percent to $2.73 billion in 2022. One of the top investment areas in this category include technologies that develop traits in row crops to increase yield, extend growing seasons, and make them more resistant to climate change. Biologicals are included under Agbiotech and will continue to be a focus for investors. The benefits of biologicals include controlling pests and improving crop and soil health in an environmentally friendly way. A report by Canaccord Genuity Global Capital Markets & Investment Banking predicts that the market for biologicals will be 2 times greater than traditional crop protection markets with the potential to cover 20-25 percent of the crop protection market share by 2025.
Farm Robotics, Mechanization and Equipment
Investments in this category dropped from 2021-2022 by 11.5 percent, but robotic farming equipment and mechanization on modern farms will continue to be vital. Labor shortages are a huge challenge farmers are facing, which makes mechanization a necessity. From automatic seeding, harvesting and pest monitoring, this machinery helps improve overall crop yield thus increasing the return on investment for farmers. Specialty crop growers especially have their eye on farm robots with around 70 percent of growers surveyed investing in automation in 2022.
Agritech investments focus on improving farm operations worldwide and increasing productivity. Although investments were down overall in 2022, Farm Management Software, Farm Robotics and Biotech are three important categories for the future of agriculture. Agriculture experts work with companies to capitalize on trends within the market and help bring new technologies to farmers, growers and ranchers. As these technologies improve operations within the agriculture industry, investors will continue to see the benefit of placing their bets on agribusinesses.