What are agritechs and why should you keep an eye out for them?

Swimming against the tide of the economic crisis, agribusiness remains on the rise and represents ¼ of Brazilian GDP — with higher earnings every year. It is in this context that startups have invaded the agricultural system, improving old services and making life easier for farmers.

Startups, a new trend in Brazil’s entrepreneurial system, see technology as an opportunity to improve agricultural production, not only in terms of product quality, but also aiming at providing a more practical daily life for rural farmers.

The term Agritech arises from this combination of concepts linking agricultural work, which has existed for centuries, with the most modern technologies and market trends for the coming years.

In this post you will read details about the origin of Agritechs and learn more about how Brazil and the world are dealing with this new reality.

Agritechs and rural traditionalism

The farmer of the past is no longer likely to survive and produce on a large scale if he does not modernize. He could easily be swallowed up by the competition if he does not adapt to new production models.

We can analyze, for example, a farmer who hasn’t yet adopted new techniques. The time he spends scanning the territory, identifying problems in the plants visually, irrigating at the appropriate times, among other tasks, is huge, besides demanding a lot of manpower.

While an initial investment is required, new techniques mitigate cost over time. As a result, production is accelerated and, consequently, profits are increased.

The emergence of startups

The birth of most companies in this segment is directly linked to universities and cooperatives. These innovative ideas come from the classroom environment, so it maintains a strong connection with academic life.

A survey carried out by Censo Agritech Startups Brasil, in December 2016, showed that 53% of companies in this segment have among their members some connection with postgraduate courses.

The knowledge of young people, often linked to living in rural areas, contact with family and friends who lived in the countryside or even the desire to revolutionize the agricultural business, has generated surprising results.

Changes brought up by Agritechs

These companies spread all over the country developing solutions in precision agriculture — a practice that uses information technology based on studies regarding soil and climate variability, crop monitoring and equipment modernization (sensors, drones, GPS, among others).

Agritechs have been standing out for their functionality, not only for reducing costs, but mainly for optimizing resources through studies and analysis.

We can cite as an example the use of pesticides that is rooted in the routine of the farmer. However, that alone is not enough. Without knowing the type of pest that plagues the plantation and the correct product to be used in the treatment, pesticides will not obtain the expected result, and may even cause some inconvenience.

A pesticide used in the wrong place at the wrong time can, in addition to not resolving the problem, damage the soil and compromise future crops. Knowing what the problem and the solution are avoids a lot of waste. Agritechs have a strong presence in such situations because through in-depth studies, combined with technologies, these problems are more easily identified.

For these and other reasons, the startup environment must be directly related to the farmer’s life, knowing his demands and problems, and providing faster solutions to possible setbacks.

The investment of large companies

In continuous growth, the Agritechs market has aroused the interest of large companies that have started to invest in the field.

Embrapa (Brazilian Agricultural Research Corporation) has been highly sought after to make this fusion. In addition, consolidated businesses are investing their capital in agro companies.

The automaker John Deere opened spaces dedicated to innovation proposals in the countryside of the state of São Paulo. Among its functions, it promotes exchanges and conducts in-depth research in the field.

StartAgro, a platform that publishes agricultural news, promotes events and carries out campaigns in social media. Not to mention large companies that want to expand their market and bet on new niches, as it is the case with Samsung — which, by noticing the success of agribusiness, has been investing in the field for three years in partnership with Embrapa. The company’s main objective is to create markets and new opportunities to collaborate with innovative businesses.

In fact, some companies already present viable solutions for cultivation in urban areas, decentralizing the production. In the Netherlands — a country with a large part of its extension in agricultural area — the plantation of basalt fiber and chalk is already a reality that brings rapid growth and close to the cities where the final consumer lives.

Agritechs in Brazil

Brazil continues to be as one of the most solid and largest rural producers in the world. Much of this is due to the extension of the territory and the extremely favorable climate. The farms are bigger, and consequently, more challenging — which makes them a kind of laboratory for the world.

Several techniques used by Brazilian farmers are effectively reproduced elsewhere on the planet.

Despite this, even with the immensity of the market and countless possibilities, Brazil still has a small number of startups focused on agriculture. However, in terms of innovation and structure, Brazilian agribusiness companies are comparable to American ones.

Brazil already has it’s own ‘Silicon Valley’ Agritech, which is located in Piracicaba (São Paulo) and has 38% of the agro companies in Brazil.

In the last two years, the number of startups linked to agriculture has almost quadrupled, according to the Brazilian Startup Association (ABStartups).

The future of the agricultural sector

Everything indicates that investments in technology will increase significantly in the coming years, especially considering the niche of possibilities that the technology sector offers — from modern machinery to more complex research projects.

One of the highlights in applications has been the investment in IoT, popularly known as the ‘internet of things‘. IoT is the technology that enables cloud data communication between objects, a reality seen in smart watches, sneakers and thousands of other items.

Although initially it doesn’t seem to have a connection with agriculture, many believe that the future of the agricultural enterprise lies in IoT’s solutions.

The biggest concern is the distance that residents of large urban centers are from sustainable sources. With limited resources and a gradual increase in population, there is an urgent need to shorten the path between the field and the final consumer.

There are those who believe that only IoT will be able to solve this issue, making a comparative analysis between supplies that are missing in the cities and shelves with the charts of future purchases.

Along these lines, the demand will be established based on a real need that has not yet been delimited. Thus, Agritechs balance the market and transform agriculture into a healthier and more competitive business.

Now that you know everything about the Agritechs market, share this post with your friends and let everyone know about news on the trade!