On solid ground: AgTech is driving sustainable farming and is expected to harvest US$18 billion in 2024 revenues

Deloitte predicts the installed base of Internet of Things end points for precision crop farming, livestock management, and agricultural equipment tracking will near 300 million by the end of 2024—a 50% growth over the 200 million installed base in 2022 (figure 1). Further, the overall agricultural technology (AgTech) revenue opportunity—including these IoT end points and connectivity devices—will be US$18 billion globally in 2024, representing a 19% CAGR between 2020 and 2024.1 ?Climate issues, geopolitical tensions, water and energy shortages, rising fertilizer costs, and inefficient production methods exert pressure on agricultural production. AgTech solutions can help improve crop yields, use equipment and livestock efficiently, plan harvests better, and adopt sustainable agrifood-production methods.

Agriculture technology is designed to let the producers and farmers grow more food using less pesticides, energy, water, and resources, enhancing farm yields.

The use of these technologies has the potential to reduce emissions and save input costs for farmers. As a case in point, a 2022 Deloitte study (in collaboration with the Environmental Defense Fund) projected that precision agriculture tech solutions alone have the potential to abate 9.8 gigatons of carbon dioxide–equivalent (CO2e) emissions between 2020 and 2050 and can save an estimated US$40 billion to US$100 billion in costs to farmers by 2030.2

Rising prices and supply-side issues escalate food-security concerns

Agriculture feeds billions of people, but it also feeds on natural resources and contributes to climate change. Today’s global agriculture and food industry is responsible for more than 20% of global CO2e emissions.3 Irrigation represents 40% of freshwater withdrawals. Meanwhile, the number of people facing food insecurity in 2023 is projected to be 345 million, up from 135 million pre pandemic.4 With global population expected to near 10 billion in 2050—2 billion higher than today5 —the pressure on food demand is growing and inevitable. At the same time, the average age of farmers is rising while those taking up agriculture as a primary occupation is plummeting.6

There’s an urgent need to address the looming food crisis,7 but scaling food production using current farming methods may be resource-intensive and inefficient. Commodity prices have gone up due to the increase in costs of labor, fertilizers, and equipment.8 The Russia-Ukraine war, trade sanctions, the pandemic’s aftereffects, and other geopolitical issues have disrupted logistics and food supplies.9 Food security is a growing concern even in developed countries today.10

Nonetheless, AgTech could help solve many of these issues.

Technology unlocks value from farmlands and livestock to help augment food production

New AgTech solutions have the potential to scale agricultural production efficiently and in a cost-effective manner (figure 2). For example, hydroponics allows cultivating crops in nutrient-rich water instead of using soil and promise higher yields.11

Moreover, at least 10 major technology and telecom companies are powering the agriculture industry through innovative solutions such as AI-based cultivation methods; farm and livestock data management platforms; and satellite, broadband, and IoT-enabled smart farming and vertical farming.12 Besides, venture capitalists (VCs) continue to invest in AgTech startups despite the macroeconomic headwinds, and perhaps driven in part by the Russia-Ukraine war, given Ukraine’s importance for global food supplies. They invested US$10.6 billion in 2022,13 and in Q1 2023, VCs pumped in US$1.9 billion into 172 AgTech startup deals.14

AgTech solutions are helping to revolutionize agriculture production, especially in the areas of preparing the field, growing and protecting crops, harvesting, and managing livestock (figure 2). Here’s how:

Preparing the field

IoT devices and satellite connectivity pull critical farm data from multiple sources. For instance, farmers and agricultural advisers can gather data on soil type, moisture, and weather conditions and use handheld devices to record and upload their observations on digital farm management platforms. Further analytics can help estimate the quantity of water and fertilizer the plants require and determine crop protection needs, making precision agriculture a reality.15 Predictive planting solutions even analyze microclimate data such as soil moisture and expected rainfall to help discover plant-worthy and harvest-worthy areas in fields.16

Sensors attached to water sprinkler’s arms or heads help regulate water flow and improve the precision level, sprinkling the exact quantity of water that is needed and analyzing the type of farmland and the crops planned for cultivation.17 Precision mobile irrigation systems can save 30% to 50% of water use compared to traditional irrigation methods.18 Moreover, drip and microsprinkler irrigation systems have proven to enhance water efficiency by up to 70% compared to less efficient irrigation methods.19

Growing and protecting crops

Farmers can also use AgTech to make real-time crop-placement decisions and monitor crop health. One such example is the use of agronomic intelligence in India.20 A case in point is infrared mapping and surveying of farmlands: With a combination of spectral sensors and chips, cameras mounted on unmanned aerial vehicles (UAVs) or drones gather large volumes of data (e.g., soil moisture, plant health, etc.) that AI models analyze to share insights that assist farmers with targeted spraying operations.21 Early systems (developed in 2020-21) to fallow weeds showed the potential to save 97.5% chemical use. Aerial images captured by drones help locate weeds and upload images into a processing platform. Farmers can use those insights to then spray in places exactly where the weeds are.22 Recently, the use of AI has helped identify weeds with a 96% accuracy and spray the intended target with precision.23

Autonomous weeders have the potential to eliminate 100,000 weeds every hour and cover more than 15 acres of onions in a day, versus a laborer who could weed one acre in the same duration.24 Deloitte estimates agriculture-drone shipments to be in the range of 7–8 million globally in 2023.25 At an average price of US$500 to US$700 per equipment, the drone market could be worth at least US$4–5 billion.26 Advanced and large-size drones cost upward of US$20,000.27 Assuming the drone market grows at 10% every year, we predict drone-driven revenue opportunity for semiconductor chips, sensors, and connectivity modules to be roughly US$500 million (or 10% of the agriculture drone market) in 2024.

Harvesting

As growers in the United States and the United Kingdom deal with labor shortages for picking fruits and vegetables during the busy season,28 agribots could address this issue. Soft fruits like fresh tomatoes and strawberries require a feather touch and have previously not been suitable for robotic picking. To address this unique need, AgTech startups are piloting agribots that biomimic human arms, use complex motion planning, and figure out the quality and degree of a fruit’s ripeness.29

A warehouse in Queensland (Australia) trialed using robots—equipped with computer vision, machine learning, and robotic grasping—to pack avocados, working alongside regular staff.30 Similarly, harvesting robots use computer vision, AI-enabled ripeness detection, and robotic agility to pluck fruits softly from the vine. Sensors triangulate data to ensure the agribot distinguishes fruits from other objects (e.g., leaves, stems, etc.) during the harvesting process.31

Productivity and efficiency benefits coupled with mitigating labor shortage issues will drive demand for harvesting agribots. From an estimated value of US$700 million in 2022, we anticipate the global harvesting robot revenue to reach US$1 billion by 2025, growing 15% to 20% annually.32

Managing livestock

Australia, the United States, and Latin America are experimenting with virtual fences, instead of traditional physical fences, to manage livestock.33 With the help of GPS tracking, audio stimuli, and benign electric signals, cattle grazing can be contained within desired limits while farmers can manage grazing time and location, monitor cattle health, and improve their productivity too. For instance, farmers in Australia have used the motion sensor technology to analyze cattle movement and used that data to increase cattle productivity by about 20%.34 Moreover, ranchers could change boundaries dynamically to, for example, keep the cattle away from less desired areas such as recently burned or affected grasslands.35 Data from GPS and accelerometers could provide rich insights into animal health and social interactions among cattle.36

At US$50 per cattle collar device plus US$12,500 per base station,37 setting up a full-fledged, one-mile virtual fence for 100 cows could cost close to US$20,000—compared with a traditional physical fence that ranges from US$10,000 to US$100,000 depending on type of fence and physical materials used.38

The road to change

Despite the array of solutions and investment flows, the road to transforming agriculture through technology is not without bottlenecks.

Small-holder farmers produce much of the food output that the world consumes, but they face funding challenges to meet basic agribusiness needs.39 Farmers may resist adopting technologies as they could view them as a risky and costly proposition, and in general, they may not be fully aware of IoT device connectivity options available for agricultural uses.

However, in 2023, agribusinesses are facing more pressure to decarbonize their operations as regulations tighten. And as farmers are dealing with margin pressures and high costs of resources, AgTech has become important to help accelerate the shift toward data-driven decision-making. Farmers, research labs, and agricultural advisers have started to work together to address the various roadblocks that they are dealing with, for instance, by building integrated data platforms to connect siloed data sets and solve interoperability issues.40

The bottom line

AgTech solution providers may want to consider several actions when looking to move toward a more sustainable production and to enhance efficiencies:

Educate farmers on AgTech options: Farmers should be educated about the various types of network connectivity and IoT backhaul connection options. There’s likely room for improvement if they work closely with the agriculture ecosystem players to help them discover connectivity needs based on specific use cases, such as using Wi-Fi or 2G/3G for crop-watering systems instead of the more advanced 4G/5G or satellite networks.41

Assist with tech implementations: Tech companies can support developing cost-benefit assessment tools to help farmers evaluate and identify trade-offs for non-AgTech versus AgTech-enabled farming methods. Besides, they can assist the agriculture ecosystem players to figure out what connectivity technology is needed for a specific issue, for example, using edge computing and 2G/3G cellular links to implement satellite-connected cattle collars in a livestock ranch to build virtual fencing.42 This might require assessing the nature, provenance, timing, and volume of data that would flow across the supply chain; and implementing a permissioned and trusted exchange of data from farm to plate.43 Importantly, AgTech companies can be discerning in collecting the right amount of data and establishing data governance processes to address farmers’ concerns about privacy and data usage.

Create an integrated view of data across the agriculture ecosystem: Blending granular data related to land, soil, climate, and water on a shared digital platform could help farmers and extended ecosystem participants glean insights about the most prominent levers to enhance productivity and quality. This would likely require integrating data from cloud, satellites, mobile devices, sensor networks, and agribots, and using AI to run analytics and deliver insights over a common data-sharing platform that farmers, scientists, researchers, and agriculture consultants and advisors can consume.44

Enable sustainability and measure effectiveness: From a social accountability standpoint, farmers will likely be required to furnish impact data for nature, climate, and animal welfare. Novel options such as using low-methane producing supplements to contain livestock emissions when cattle belch,45 and installing solar photovoltaic panels on farmlands to generate solar power (aka agrivoltaics)46 are already being explored. Further, AgTech providers can develop technology to measure, report, and verify relevant metrics to help farmers demonstrate the efficacy of their sustainable farming practices. With emerging ESG regulations, technology that captures data to help comply with sustainability frameworks such as SBTi (science-based targets initiative) and TNFD (Taskforce on Nature-related Financial Disclosures) and tracks emissions information will become critical. For water usage, technology that monitors and optimizes water used for irrigation is expected to gain prominence, for instance, low-rank adaptation of large language models (LoRA) based analytics, coupled with satellite direct-to-device (D2D)47 or mobile (4G/5G) or Wi-Fi–based sensor networks to track, schedule, and allocate precise amount of water for plants.48

AgTech can play a much larger role to not only help address persistent challenges that have plagued the agricultural sector for decades, but even deliver tangible benefits to farmers and consumers alike—lowering costs and improving return on investment, driving sustainable growth by reducing the strain on resources, and making food more plentiful and affordable.

This article is co-authored in collaboration by Karthik Ramachandran (India), Gillian Crossan (US), Ben van Delden (Australia), Duncan Stewart (Canada) and Ariane Bucaille (France), and is part of the Deloitte TMT Predictions 2024 series .

Find out about Deloitte AgriFood Transformation services by visiting AgriFood Transformation & Circularity | Deloitte Australia | Our services and solutions

Acknowledgements

The authors would like to thank Dr Daniel Terrill , Piers Hogarth-Scott , Panos Kalogiorgas, MBA, PMP , Pete Edmunds, Negina Rood, Gautham Dutt, and Ankit Dhameja for their contributions to this article.

Endnotes

1. Data and analysis based on information gathered form publicly available sources. Third-party sources pegged revenues from AgTech (including crop management solutions, GPS field mapping, supply chain management solutions, and software and analytics) at US$9–10 billion in 2020. Based on conversations with AgTech experts and from our analysis of this market, we expect revenues to grow at 19% CAGR between 2020 and 25, based on which, we predict AgTech revenue to reach US$18 billion in 2024 and cross US$21 billion by 2025.View in Article
2. Environmental Defense Fund and Deloitte, Pathways to net zero: Innovation imperative , accessed November 21, 2023.View in Article
3. In 2019, 31% of global anthropogenic emissions measured in carbon-dioxide equivalent (CO2e) were generated by agrifood systems. To read further, see: FAOSTAT Analytical Brief 31, The share of agri-food systems in total greenhouse gas emissions: Global, regional and country trends, 1990–2019 , accessed November 21, 2023.?View in Article
4. Based on data published in: World Food Programme, “A global food crisis,” accessed November 21, 2023; moreover, with rising food prices and supply-side issues, essential food items remained inaccessible to millions globally. In 2020, one in three people or approximately 2.4 billion—which was 320 million more than 2019—did not have access to nutritious food. To see further: United Nations Statistics Division, “End hunger, achieve food security and improved nutrition and promote sustainable agriculture ,” accessed November 21, 2023.View in Article
5. United Nations, “World population projected to reach 9.8 billion in 2050, and 11.2 billion in 2100 ,” accessed November 21, 2023. ?View in Article
6. Based on the World Bank data on employment in agriculture , agricultural employment fell from 43% in 1991 to 26% in 2021. Also, the ratio of agricultural employment fell from 180,000 per million population in 2000 to 120,000 per million in 2019 globally; based on data from: Max Roser, “Employment in agriculture ,” Our World In Data, accessed November 21, 2023.View in Article
7. WHO data on malnutrition (June 9, 2021) validates it’s a global challenge, and more so, for the developing world.View in Article
8. Talking about the labor issue in particular, immigration restrictions—several of which came into effect during the COVID-19 pandemic—have affected labor mobility in regions like Australia where there is a greater need for skilled labor in agriculture and rely on workforce migrating from other countries.View in Article
9. For example, 18 countries (as of June 30, 2022) had trade-related policy measures in place—affecting 5.5% calories traded in global market. To read further, see IMF, Tackling the global food crisis: Impact, policy response, and the role of the IMF , accessed November 21, 2023.?View in Article
10. As a case in point: In the United States, 12.8% households were food-insecure at some point of time in 2022 (up from 10.2% in 2021). Of which, 5.1% (or 6.8 million households) experienced very low level of food security (up from 3.8% in 2021). To read further, see: Matthew Rabbitt, Laura Hales, Michael Burke, and Alisha Coleman-Jensen, Household food security in the United States in 2022 , US Department of Agriculture, accessed November 21, 2023.View in Article
11. I. Habeeba, G. Vinothini, G. Rajasekar, “Hydroponics—The future farming ,” Just Agriculture 3, no. 7 (2023).?View in Article
12. Based on Deloitte’s research and analysis of select major global technology and telecom companies’ efforts and initiatives related to developing and launching AgTech solutions and offerings.View in Article
13. PitchBook, 2022 Agtech overview , March 16, 2023.?View in Article
14. PitchBook, Q1 2023 Agtech report , May 4, 2023.?View in Article
15. As an example, agricultural researchers in the United States have already used a combination of drones, specialized cameras, and sensors to get a deeper understanding of crops, soil, and weather—to help farmers precisely know when and how much to irrigate. To read further, see: Dan Elliott, “Farmers are using drones to help save an endangered US river ,” USA Today, August 14, 2019.?View in Article
16. Based on insights from an expert interview. Also see: Leilei He et al., “Fruit yield prediction and estimation in orchards: A state-of-the-art comprehensive review for both direct and indirect methods ,” Computers and Electronics in Agriculture 195 (2022).View in Article
17. Drashti Bhavsar et al., “A comprehensive and systematic study in smart drip and sprinkler irrigation systems ,” Smart Agricultural Technology 5 (2023).View in Article
18. GeoPard Agriculture, “Role of precision irrigation methods in modern farming ,” accessed November 21, 2023.View in Article
19. AGRIVI, “Water sustainability: How to grow your farm and take care of the environment ,” Agronomy Blog, accessed November 21, 2023.View in Article
20. In India, agronomic intelligence tech empowers farmers to make better decisions about crop selection and disease management depending on underlying ground conditions. There’s great scope to increase agricultural productivity by using technology in crop selection, package of practices and pest and disease management. Startups use agronomic intelligence to provide farmers with information that allows them to better tailor what they do to crops to conditions on the ground. To read further, see: B. K. Jha, “Revolutionizing farming through agronomic intelligence ,” altLIPI, accessed November 21, 2023; Suparna Dutt D’Cunha, “For India's farmers it's Agtech startups, not government, that is key, ” Forbes, January 8, 2018.?View in Article
21. Cameras mounted on a tractor can analyze real-time field conditions using sensors, based on which, the devices can apply or spray the specific product that the crops need and in optimal quantity—be it nitrogen, plant-growth regulators, defoliants, fungicides, or herbicides. To read further, see: Dan Miller, “Raven, Augmenta launch Sense and Act tech ,” DTN Progressive Farmer, April 30, 2023; Heather Hall, “The smart future of agriculture ,” Design World, July 11, 2023.View in Article
22. Solar Impulse Foundation, “Fallow weed detection ,” January 15, 2021.?View in Article
23. Coco Liu, “AI weed-jilling drones are coming for the mega farms ,” Bloomberg, April 19, 2023.View in Article
24. Kristin Houser, “Farming robot kills 200,000 weeds per hour with lasers ,” Freethink, October 19, 2022.??View in Article
25. Deloitte analysis based on data gathered from publicly available sources including Future farming (2023) and Counterpoint Research (2023).View in Article
26. JOUAV, “How much does a drone cost in 2023? Here’s a price breakdown ,” September 15, 2023.View in Article
27. UAV Training Australia (UAV & Drone blog), “Drones in Agriculture: Weighing up the costs involved ,” March 15, 2022.View in Article
28. Stephen Gossett, “How Root AI’s agricultural robots are powering the farmtech revolution ,” Built In, May 19, 2020.View in Article
29. Ibid.View in Article
30. Australian Tree Crop, “Trials underway for new packing and sorting technology at avocado packhouse ,” October 22, 2020.View in Article
31. Gossett, “How Root AI’s agricultural robots are powering the farmtech revolution .”View in Article
32. Astute Analytica report on Harvesting robot market , February 21, 2023 (summary news release, accessed November 21, 2023).View in Article
33. WIPO, “Chipsafer—The cattle tracking system that locates livestock ,” accessed November 21, 2023.View in Article
34. Telstra, “IoT in focus: Transforming the agriculture industry ,” October 4, 2018.View in Article
35. USDA Northwest Climate Hub, “Virtual fencing: A climate adaptation strategy ,” accessed November 21, 2023.View in Article
36. Future Learn, “Automated farming: Virtual fencing,” accessed November 21, 2023.? View in Article
37. Association for Computing Machinery, “Virtual fences for cattle find a home on the range ,” Wall Street Journal, May 22, 2023.View in Article
38. Audrey Bruno, “How much does farm fencing cost? [2023 data],” Angi, May 27, 2021.?View in Article
39. Based on interviews with Deloitte’s agribusiness experts in Australia and Europe, we note that most farmers are not only small-scale holders, but their agribusiness is family-owned, for instance, as seen in Australia and South Asia. And that presents challenges in raising funds and accessing credit.View in Article
40. For example, Data Farming launched cloud-based platform (Digital Agronomist ), a crop-monitoring tool that provides integrated access to 10 million satellite maps, allowing users to map millions of hectares from across the world—designed for farmers and agronomists.View in Article
41. National Broadband Network and National Farmers Federation (Australia), Connecting Australian Agriculture , November 2021.View in Article
42. A controlled experiment demonstrated how cows in virtual-fencing treatment pastures grazed only 4% of their time in burned areas vis-à-vis cows that didn’t receive triggers from their virtual collars, and hence ended-up spending 40% time in burned areas. To read further, see: USDA Northwest Climate Hub, “Virtual fencing excludes cattle from burned areas in sagebrush steppe ,” accessed November 21, 2023.?View in Article
43. Integrity Systems, “Australian AgriFood Data Exchange ,” accessed November 21, 2023.View in Article
44. For example, the gaiasense system combines diverse technologies including big data, cloud, IoT, AI/ML, and semantic web with interdisciplinary fields such as soil science, agricultural engineering, meteorology, agronomic and biological sciences, and environmental sciences. See: gaiasense smart farming system .View in Article
45. Rod Nickel, “Canadian dairy cows among first in world bred to belch less methane ,” CBC, August 8, 2023.?View in Article
46. PV Magazine, “TSE and the agrivoltaic development in France ,” June 8, 2023.View in Article
47. To read more on benefits and value of D2D technology, see our related 2024 TMT Predictions chapter on “direct-to-handset satellite .”View in Article
48. With 85% freshwater resources used for irrigation worldwide, current irrigation methods need a major upgrade and need to consider using AgTech-based methods. For instance, compared with traditional watering methods, LoRA (low-rank adaptation of large language models) based ML solution consumes less water and enables a 46% reduction in water usage, even as plants looked better than they would have with conventional watering. To read further, see: G. S. Prasanna Lakshmi et al., “An intelligent IOT sensor coupled precision irrigation model for agriculture ,” Measurement: Sensors 25 (2023).View in Article