Despite the investment of billions in the global food and AgTech sector each year, slow adoption rates have been recorded among farmers for a number of reasons, a new report from McKinsey and Company has shown.
The report surveyed more than 5,500 farmers across Asia, Europe, North America and South America and stated that the potential of AgTech in sustainable agriculture, can only be possible if start-ups “make a concerted effort” to address farmers’ concerns.
These include concerns over returns on investment (ROI), ease of use, high set up costs and fears around data sharing.
Despite this, analysis found that Europe leads in the adoption of AgTech, with 62% of farmers currently using or planning to use at least one technology in the next two years.
However, of those who do not have plans to introduce AgTech to their farming practice, half said their hesitancy is due to high costs, while 48% said that they are deterred by “complexities in set up”.
North America has the second highest adoption rate at 61%, while South America and Asia follow at 50% and 9% respectively.
“Over the past decade, the number of AgTech start-ups has ballooned as external capital has poured into the industry,” said Vasanth Ganesan, partner at McKinsey.
“This has brought a plethora of technological solutions to agriculture, helping farmers to increase operational efficiency, drive yield, and lower their environmental footprint.
“Yet AgTech start-ups are struggling to scale, not least because of the barriers and challenges observed by farmers themselves,” he added.
He said that greater agtech adoption can “lead to more sustainable growth for farmers and benefit conscious consumers and investors beyond the farm gate”, but stated that this won’t be possible unless companies focus on farmer concerns.
Regulation and government messaging was identified to have a significant impact on this in McKinsey’s report.
It found that “government-sponsored programmes are the main drivers of sustainability programme adoption, with about 40% of farmers reporting that they participate in these initiatives”.
The report suggested a number of ways to boost confidence in AgTech among farmers including improving awareness of their different needs.
Based on this, the various pain points experienced can then be addressed through a more personalised interface, which feels more user-friendly for farmers.
Another critical move should be to renew trust in data sharing, according to McKinsey, as farmers are skeptical about sharing their information and data, often because they don’t understand what it is used for.
“Considering the hesitancy that farmers express about sharing data, AgTech start-ups can build trust by honing their data strategy, streamlining data collection and gathering only the information that is essential to deliver better solutions to farmers,” concluded the report.