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More Technological Innovation Needed to Meet Labor Challenges in Californian Agriculture

July 14, 2016

Labor is the biggest challenge facing farmers on the West Coast of the US and they are looking for technologies to address this issue, speakers at today’s Forbes AgTech Summit told the audience.

“Labor will be the deciding factor for us and whether we can continue to farm,” said Harold McClarty, president of HMC Farms, the stone fruit farming operation in California.

Labor supply is not just decreasing as workers from Mexico find more work at home, on the farm and elsewhere, but it’s becoming more expensive. The minimum wage in California increased to $11 this year and is set to increase to $15 by 2022 after the ‘Fight for 15’ campaign succeeded in signing that into law in California and New York.

An increase to the federal minimum wage is also likely and was a central theme of Bernie Sanders’ recent campaign to become the Democratic presidential nominee. He campaigned for a $15 minimum wage while Hillary Clinton’s target was a bit more modest at around $12.

While it’s only a few dollars, these increases are having a big impact on growers, particularly in the stone fruit segment where labor represents 60% of the cost of the box of fruit, according to McClarty. HMC Farms has suffered some big losses from the labor shortage as fruit is a time sensitive industry, with quality impacted if it’s picked too early or too late.

This issue has even pushed some farming businesses to give up growing certain crops.

“We purposefully moved away from crops that require a lot of labor,” said Stuart Woolf, president and CEO of Woolf Farming & Processing, a Central Valley family farming group. “We now focus on tomatoes, almonds and other crops that can be mechanically harvested.”

Pushing up the price of his fruit to pay for the increased labor costs is not an option for McClarty.

“I don’t want my commodity to become a luxury item that only people in this room can afford to eat,” he said. “The labor issue will not get better, and we’re at a tipping point now, so we need to combine technology and labor to enable us to stay competitive; we can’t keep raising prices, it won’t work in the marketplace.”

HMC Farms is exploring how technology can help and has started to implement technologies throughout its operations. But McClarty is unsure whether it can help on the farm.

“We won’t find a technology that picks fruit the way we do,” he said adding that he hadn’t found a robot with an effective, dexterous arm. “Instead we are developing certain things that we can use in the packing houses. There are lots of modifications that can be made in the packing houses; they’re a much better and easier place to innovate.”

Soft Robotics, a startup presenting at the event, has developed a robot that can help with processing, and maybe one day picking. The machine has a mechanical arm with grippers — “octopus fingers” — that can manage delicate products like fruits.

“It all started with researchers looking into mimicking the natural process of an octopus three years ago,” said Dan Harburg, director of business development at the company.

The Boston-based startup counts Taylor Farms, the $3 billion fresh produce company, as an investor and beta tester of its automation solutions.

“It’s the most exciting project we’ve worked on,” said Bruce Taylor, founder of Taylor Farms.

Another startup showcased at the event that’s using automation as well as computer vision and machine learning to help West Coast farmers is Blue River Technologies. The startup, which is based in Sunnyvale, California, manufactures lettuce-thinning attachments for tractors, and will soon launch a weeding robot that can identify weeds from lettuce, and act on them, as it moves along a row.

On the planting side, a Spanish startup has built an automated transplanting system, where tape containing seedlings is passed through a tractor, planting the crops at pre-determined dimensions. (You can watch a video of Plant Tape’s demo at the Forbes AgTech conference here.)

Drones could also help to reduce the pressure on labor, however one wine producer at the event said the cost of drones and their management was prohibitive.

Compared to other agtech sectors, such as decision support software and big data plays more generally, automation and robotics — excluding drones — has been left largely unfunded during the recent wave of agtech investment. Blue River Technologies’ $17 million Series B was one of just five deals in 2015, according to AgFunder’s report, and 2016 is not looking any more exciting from that standpoint. The huge costs involved in developing intelligent hardware like this can be off-putting to venture capitalists, who are typically more keen to fund software businesses.

What do you think? What technologies do you want to see alleviating labor pressures? Email [email protected].

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