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Agriculture is ripe for disruption
Unlike downstream segments such as e-commerce, food delivery, or other consumer-facing platforms, there is unfortunately no unicorn company or clear example of how an ideal agritech company could be a sustainable business and profitable.
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A farmer tends to hydroponic crops in Semarang, Central Java. (Antara/Aditya Pradana Putra)
I
n the 18th century, economist Thomas Malthus expounded a theory known as the “Malthusian Catastrophe”. His hypothesis stated that population growth will outpace growth in food supply until natural forces and starvation correct the imbalance.
Contrary to his theory, 200 years later the world’s population has become much larger and some parts of the world enjoy a higher standard of living than they had two centuries ago. What Malthus failed to foresee were technical advances, vaccinations and pesticides that would make it possible to feed the enormous rise in human population.
For most of the 20th century, we managed to stay ahead in the Malthusian race between food supply and growth.
A recent report by PricewaterhouseCooper, Temasek and Rabobank highlighted that Asia currently struggles to feed itself, investing in technological innovations that are critical for meeting the shifting demands.
As supply chains are stretched, there is poor quality and high wastage across the agriculture chains. Environmentalists have warned that the world’s food supply is already jeopardized by climate change.
The ultimate solution will thus inevitably lie in introducing further new technologies that will increase food quality, streamline supply chains and improve access to goods between nations. The advancement of the Fourth Industrial Revolution will answer the evolving challenges and needs around the industry.
The good news is we are embracing the world of agritech, which is the use of technology and digital innovation in agriculture and food to increase yields and efficiency across the value chains. Globally, agritech is a small but growing industry of startups.
