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.
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:
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- _c_heck 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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