Irrigation Technology on the Rise…but where’s the adoption?
The agtech revolution is permeating throughout all corners of agriculture. Looking across the challenges that farmers and the supply chain face, from labor shortages to environmental pressures to increased regulation, there are new technologies and companies coming to the market across the globe.
Zooming in on one space in particular, irrigation technology, we see activities and interest heating up. And it makes sense, as these technologies are unlocking significant opportunities for impact and, hopefully, returns.
Examples include automated pivots, soil moisture probes to gain a higher resolution understanding of water levels, and even plant sensors to identify water use needs. All of these technologies are on the market today, enabling farmers to irrigate more efficiently, streamline their operations, and achieve higher yields. This leads to higher economic output, and less detrimental environmental repercussions, such as salinity and phosphate in water bodies — a win-win for everyone in the food value chain and beyond.
The technology capabilities, combined with heightened awareness around water use and sustainability globally, are compounding the interest in this space.
In the last 24 months alone we have seen irrigation technology companies like Hortau raise $10M, CropX raise $10M and acquire CropMetrics and Regen, and GroGuru raise $2.9M.
And it’s not just startups. Lindsay Irrigation, one of the largest irrigation companies in the world, sees their technology division doubling in sales in the next 3 years! Valley Irrigation, another incumbent, has invested in partnerships with digital companies like Prospera. And we’re also seeing acquisitions from these players, with Lindsay Irrigation acquiring Net Irrigate and Valley Irrigation acquiring Precision King, both in 2020.
We don’t expect things to slow down. In fact, the aggregate growth expected in the precision irrigation market is forecasted to grow at a CAGR of 12.7%, meaning it will make its way to $8.4B by 2027 in the agriculture space alone.
The appetite for this technology has been insatiable from irrigation investors and industry players. And yet…we still haven’t seen the adoption meet the large expectations.
Why is this?
Here are a few commonly cited arguments for the lack of adoption of precision irrigation tech:
- The market isn’t big enough to attract the capital, talent, and tech;
- Only incumbents (rather than startups) have the scale, balance sheet, and trust to win;
- Today’s irrigation leaders are more focused on selling metal and plastic than tech; or
- The technology just isn’t good enough yet, so there’s no value proposition for growers.
These are tempting explanations, but not, unfortunately, the unlock code for adoption.
Instead, we believe the answer lies in the realm of human psychology. The irrigation tech solutions to date have failed to solve for the decision making dynamics and considerations of growers. Deeply understanding what drives farmers, and how they and their staff think and act making irrigation decisions, is key in designing tech-based solutions that will be widely adopted. But thus far, we haven’t done this, so adoption remains low. This has been frustrating for all, and yet, solving this challenge is a massive opportunity for business model innovation and incentive design.
As climate variability increases, environmental concerns and pressures accelerate, and ecosystem services markets explode, effectively managing water has never been a more critical area for high-impact solutions.
Yet if we don’t solve for farmer psychology, we’ll continue to struggle with adoption.
We teamed up with Shane Thomas from Upstream Ag Insights to dive deeper on this topic and share our insights on farmer psychology in irrigation- check out the agtech adoption dilemma: irrigation. Or, in other words, why everything you think you know about irrigation technology is wrong, and what to do about it!
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McGee Crop Management, LLC - Rocking Mc Ranch, LLC - Flatland Seed Company, LLC
3 年I was once told by my grandfarther "pioneers get the arrows and settlers get the land" this thought process applies to all new ag tech. I am in the southern Ogallala and am very aware of irrigation tech and water availability. We are using or have tried many of the companies/services you listed in the article. Some had success but most did not. It seems a little like you are blaming growers for not adopting the latest and greatest. In my experience almost all new ag tech is not field ready when released - we have spent lots of time and money being a pioneer to only have repeated problems and failures. You state that these technologies "hopefully provide returns" that simply is not good enough. Would the major manufactures bring a herbicide that "hopefully kills weeds" probably not. There is major fragmentation in ag tech and it needs to eventually merge into a few who can provide products that are simple, user friendly and provide a consistent ROI - then and only then will they be widely adopted. Sorry to be so cynical but from my perspective we are tired of being used as the R&D department for venture capital ag tech startups that have few if any qualified personnel in my geography. I have hundreds of soil moisture probes in the field - it has taken them 10 yrs to get things useable and some still don't work. We have tried multiple VRI systems - none were acceptable or scalable. It will eventually get there and we will use them on every irrigation system but you just can't force tech that is not ready. After 30 years of being in the field daily I have learned that the latest and greatest is usually neither. Just be patient and the winner will emerge. I was once excited to try almost anything new but after repeated failures (by your predecessors) my response when growers ask is to be patient and save yourself time, money and headache. We will get there when everything is ready. If you have something ready today I am more than willing to look at it but be prepared I am skeptical. Now you know my psychology.
Helping Launch Innovative Products and Services in AgTech, GovTech, IoT, AI, Privacy and CyberSecurity
3 年I was smiling when I read your report, since our CEO is a behavior modification specialist and I know he's solidly behind the idea that psychology plays a part. However I also agree with a number of the comments below. Many regions have been water rich for years and have ignored the future (we were told directly many times, that water conservation wasn't a problem. Until now it is). Also the issue with less than stellar "new" tech that breaks as one commenter pointed out, or needed to be sent back for a new battery. Many of our competitors fell down or outright failed due to tech issues in the field and that put many farmers off trying sensors again. I would also say standardization is something to list - how is moisture measured? Common language and approaches will help interoperability. We've spent much time educating the research community about that. But in the end, farmers want less risk and less hassle.
Strategies Sales | Driving Growth Revenue in Digital Agriculture | Expert in Farming Technology&CRM
3 年Excellent view about the subject, nowaday at Brazil, its possible see the beginning of movement to adoption tools for a better and racional water use We have a long journe to a better irrigation system.? water abundance by many decades here, discouraged action to efficent water use.