Editor’s Note: Barclay Rogers is head of business development at Ceres Imaging, a remote sensing startup using multi-spectral imaging from airplanes to provide farmers with insights about their crops including disease prediction, and irrigation and pesticide recommendations. Find Rogers’ previous articles for AFN here.
Anyone paying passing attention to the agricultural sector understands that it is in the middle of an “agtech” revolution.
Innovations are coming fast and furious. AgFunder reported a total of $16.9 billion in agtech funding in 2018 compared to $2.36 billion in 2014 — equal to 63.5% average annual growth in agtech funding over this 5-year window. Innovations range from microbial seed treatments to on-farm robots, from reimagined agricultural marketplaces to data-driven farm management systems, from indoor farms to protein burgers.
It was initially a few intrepid agtech entrepreneurs looking to apply new technologies and business models to the $6.4 trillion global ag industry. Following the acquisition of Climate Corp by Monsanto in 2013, the game started to change with more VCs entering the space and the major ag players building out M&A strategies. Now, everywhere you look the agricultural system is undergoing massive changes, and more and more participants in the ag ecosystem — from coops to soybean associations — are getting involved. I knew we weren’t on the fringes anymore when I saw a feel-good ad from Corteva playing during the 2019 NCAA basketball tournament that ended with the “Seeds. Crop Protection. Data.”
All that said, I’ve never seen a USDA representative at an agtech conference. Is the USDA aware of what’s happening in agtech? USDA’s stated vision is “to provide economic opportunity through innovation … to promote agriculture production … to preserve our Nation’s natural resources.” Could they help drive agtech innovation?
AgFunder Co-Investment Fund III is now open for investment. Closing June 15, Spots are limited.
Agtech generates benefits on-farm, but the adoption dynamics are difficult. Entrepreneurs are seeking product-market fit — not to mention revenue — and are eager to get their products in the field even if they may not be quite market-ready. Farmers want to see a concrete return on investment (ROI) before investing in new technology — especially during tight economic times — and desire more say in product development. Early-adopter farmers may be turned off if they have to pay for a beta product; we may lose them forever if they make a meaningful decision only to realize that the technology steered them in the wrong direction.
Agriculture will undoubtedly benefit from technological innovation, but we run the risk of spoiling the whole dynamic unless we get a handle on how these technologies are introduced on-farm. Could anything be done to facilitate on-farm adoption? Fortunately, we’ve been down this road before — albeit from a slightly different direction.
The Farm Bill has incorporated a variety of programs over the last 15-to-20 years that aim to improve on-farm adoption of environmentally beneficial practices, including:
- Environmental Quality Incentives Program (EQIP)
- Conservation Stewardship Program (CSP)
- Conservation Innovation Grants (CIG)
These programs remain in place, with some modifications, following the passage of the 2018 Farm Bill.
The scope of these conservation programs is quite broad. For example, as outlined in the Farm Bill, the purposes of the EQIP program are to:
Promote agricultural production, forest management, and environmental quality as compatible goals, and to optimize environmental benefits, by—
(1) assisting producers in complying with local, State, and national regulatory requirements concerning—
- soil, water, and air quality;
- wildlife habitat; and
- surface and groundwater conservation;
(2) avoiding, to the maximum extent practicable, the need for resource and regulatory programs by assisting producers in protecting soil, water, air, and related natural resources and meeting environmental quality criteria established by Federal, State, tribal, and local agencies;
(3) providing flexible assistance to producers to install and maintain conservation practices that sustain food and fiber production while—
- enhancing soil, water, and related natural resources, including grazing land, forestland, wetland, and wildlife;
- developing and improving wildlife habitat; and
- conserving energy; and
(4) assisting producers to make beneficial, cost-effective changes to production systems, including addressing identified, new, or expected resource concerns related to organic production, grazing management, fuels management, forest management, nutrient management associated with crops and livestock, pest management, irrigation management, adapting to, and mitigating against, increasing weather volatility, drought resiliency measures, or other practices on agricultural and forested land.
Similarly, under the Conservation Stewardship Program, the USDA
Shall carry out a conservation stewardship program to encourage producers to address priority resource concerns and improve and conserve the quality and condition of natural resources in a comprehensive manner—
(1) by undertaking additional conservation activities; and
(2) by improving, maintaining, and managing existing conservation activities.
Finally, under the Conservation Innovation Grant program, the USDA may provide grants to carry out projects that, among other things:
- Facilitate pilot testing of new technologies or innovative conservation practices;
- Promote environmental enhancement and protection in conjunction with agricultural production;
- Ensure efficient and effective transfer of innovative technologies … such as … market systems for pollution reduction and practices for storage of carbon in the soil; or
- Provide environmental and resource conservation benefits through increased participation by producers of specialty crops.
These funding programs have significant influence over agricultural practices in the United States. According to the National Sustainable Agriculture Coalition:
- Between 2009 and 2015, the Natural Resources Conservation Service (NRCS) obligated:
Farm Bill conservation programs have been used primarily to assist in financing (e.g., cost-share up to 75%) on-farm initiatives such as cover crops, buffer strips, grassed waterways, rotational grazing, and similar practices. But given the broad mandate for these programs in the Farm Bill, there is no reason that they couldn’t be used to:
- Reduce nutrient runoff — which remains one of the biggest environmental issues in agriculture — by funding technologies that increase the nutrient uptake efficiency of corn or that identify in-season crop nitrogen needs
- Enable technologies that trace food products from the farm gate to the fork — reminding consumers that their food comes from a farm while also establishing important mechanisms to identify possible sources of food-borne illnesses.
Just think if $10 billion in governmental subsidies flowed into growers’ pockets over the next 5 years to help pay for agtech adoption. We wouldn’t be:
- Asking growers to “take a chance” on an emerging technology when the benefits are not-yet-proven
- Building out sales teams to pester farmers to try the “next new thing”
- Continuing to push older practices — while undoubtedly beneficial — that may be more expensive and less effective than their modern digital equivalents.
We can do this. We can help drive US agricultural productivity in a difficult time for the sector, fuel continued innovation in the agtech arena, and facilitate the transition of novel technologies to the farm.
The law is wide open; it’s only a question of USDA leadership.
Where are you Sonny Perdue?