Growing pains: Southeast Asian farmers need cheaper agritech

At Shinnou Farms, a vegetable grower located an hour’s drive from the Malaysian capital Kuala Lumpur, rows of eggplants, long beans and cucumbers dot the hilly countryside.

Business appears to be booming as trucks are loaded with produce for distribution but the farm’s founder, Markus Chin, is not entirely satisfied.

“We would love to get our hands on automated hardware such as a robotic harvester, which would cut down our labour costs, or a weather station device that can tell us the best time for planting, fertilising and irrigation based on historical data,” he told Al Jazeera.

Topping his wish-list is a precision spraying machine that uses artificial intelligence, which promises to decrease pesticide use through more efficient allocation and prevent herbicide resistance.

“But all this is just too expensive right now,” Chin said.

Across Southeast Asia, farmers like Chin are waiting for agriculture technology – or agritech – to become more affordable. They also need help raising funds to buy such solutions.

And startups are listening. A small but growing number of Asian tech firms – specialising in both hardware and financial technology – are now rolling out innovative products tailored to the specific needs of farmers in the region.

Disruptive solutions – such as smart sensors that collect data on soil and crop growth, or drones that provide imagery of field conditions – are believed to increase farm productivity. But they all carry hefty price tags, with some drones costing more than $1,000 each.

That price is unrealistic for many average-sized farms in the region, which are not as big as their Western counterparts and have significantly smaller budgets.

Grow Asia, a partnership platform established by the World Economic Forum and the Association of Southeast Asian Nations Secretariat, found that its 60 proposed digital technology solutions are used by just 2.5 percent of Southeast Asia’s 71 million smallholder farmers.

Experts, however, say there is an urgent need for the region to adopt agritech.

Asia is urbanising faster than any other region and, by 2030, it will house 65 percent of the world’s middle-class population, according to a report by PwC, Rabobank and Singaporean state investment firm Temasek released in November.

But the agriculture industry may be unable to keep up, it warned.

Climate change and environmental degradation will exacerbate current food production challenges by reducing available arable land, crop yields and farm output, the report said.

New technologies must be deployed “to increase yields, reduce the environmental impact of farming, improve the safety, traceability and nutritional value of food, reduce waste, shorten the supply chain and bring food to consumers in their increasingly urban settings”, it recommended.

In-demand solutions
Entrepreneurs are paying close attention to the issue of food security. A wave of Southeast Asian agritech start-ups have launched products and solutions in recent years, with nearly half of existing players founded in the last three years, according to Grow Asia.

Businesses range from hardware-focused models such as Myanmar’s Tun Yat, an app that allows farmers to rent equipment from machinery suppliers, to service-oriented solutions such as Brunei’s AgromeIQ, whose software provides farms with business intelligence.

Agriculture-focused e-commerce is another growing sub-industry in the region. Indonesia’s TaniGroup runs a platform called TaniHub that enables farmers to connect directly to businesses and consumers.

“A lot of the opportunities for digitisation in Southeast Asia are in the downstream sector, where there are more inefficiencies than upstream,” Paul Voutier, director of knowledge and innovation at Grow Asia, told Al Jazeera. Downstream activities include the production and distribution of crops, while inputs such as seeds and fertilisers constitute upstream activities.

Voutier views agrifinance as the most valuable area for startups. “Farmers don’t have access to a variety of loan products. They typically pay high rates of annualised interest, around 40 percent, when they get credit for items such as fertilizer because their only source of capital is the retailer selling them the product or the trader who will buy their crops.”