By ADEBAYO OBAJEMU
In today’s world, there is an important nexus between agriculture and technology. Modern agriculture in whatever form it takes has benefited hugely from the application of technology.
Agro-tech is something relatively new but is gradually coming into its own. It is gradually registering its presence with many new start-ups emerging on the scene.
Technology is now being felt in the way agriculture is being practised in today’s world. The world has been redefined and reinvented by technology. How technology has impacted agriculture has given rise to what we know as agro-tech – which implies the application of technology in farming and other agricultural processes.
The population explosion in the country as elsewhere in the world has necessitated the increasing need for food, technology is being used today to mass-produce food products.
In its latest publication, the Food and Agriculture Organization of the United Nations (FAO), says “The world population will reach 9.1 billion by 2050 and to feed that number of people, global food production will need to grow by 70%. For Africa, which is projected to be home to about 2 billion people by then, farm productivity must accelerate at a faster rate than the global average to avoid continued mass hunger.”
A report on Agtech Trends In 2020 by PlugAndPlay, noted that “In the last 10 years, agriculture technology has seen a huge growth in investment, with $6.7 billion invested in the last 5 years and $1.9 billion in the last year alone.”
Agro-tech has become an important part of modern farming, this much is attested to by Professor Temitope Aduloju, an expert, who told this newspaper that going forward, there is no way we can do without agrotech, it has become a revolution in the agric business.
However, these businesses cut across an array of Agricultural technologies including indoor vertical farming, precision agriculture, drone technology, livestock technology, modern greenhouse practices, artificial intelligence, and block-chain. Needless to say, to become a part of it, there are different routes to take.”
One of the most common forms of Agro-tech in Nigeria is crowd-funding. Using fintech apps, small businesses come up with investment options and packages where everyday individuals can invest a portion of their funds at specific interest rates and fixed tenures. These companies then use invested funds, leveraging economies of scale to carry out their agricultural processes and ultimately split the gains with the investors – and many of them are not nearly complex.
Clive Blacker, director of Precision Decisions in a recent interview, said that “I have seen simple text messaging services being successfully used to raise yields and target inputs in Africa. It does not have to be the most complex of technology or sensors that help.”
In other words, Agrotech here could quite simply stop at the fintech apps used by the companies to source funds while the rest of the production process remains largely mechanized. What with the recent SEC regulations rolled out earlier this year in March stating that “total fees payable to parties to a crowd-funding issue shall not exceed 2% of the total funds raised” amongst others.
Recall there are no limits to how much funding these platforms can receive from investors. Examples of companies one can invest in using this platform abound. This includes Farmcrowdy, Farmkart, PorkMoney, and E-Farms Nigeria.
BusinessHallmark’s findings revealed that large-scale investment in farm automation and precision agriculture is becoming popular in today’s modern agriculture.
FAO approximates that 20–40% of global crop yields are lost every year to pests and diseases, even with the application of around 2 million tonnes of pesticide! The good news for farmers according to Professor Aduloju is that with the use of smart devices, however, farmers can stop crop enemies earlier to allow precise chemical application.
Precisely, this is what systems like farm automation and precision agriculture seek to achieve. It involves making the farming process more efficient (also known as smart farming) like using drones to deploy fertilizers, autonomous tractors, robotic harvesters, automatic watering, and even seeding robots.
Aduloju informed this newspaper that precision technology uses modern technology like soil testing to increase the yield of smallholder farmers.
Nigeria has also benefited from latest advance in the application of technology to farming. In Nigeria companies that employ this form of tech include Thrive Agric, Verdant, and BabanGona. “These companies, as a result of their large scale, are typically funded by institutional investors or financial institutions”, said Professor Aduloju .They also rely heavily on external funding, he concluded.
There is also the option of creating one own agrotech business at any level of the value chain from funding, to tech-based production, or even technology in terms of logistics. However, there are some agritech investments to consider, as COVID-19 causes uncertainty in stock market and the economy in general.
Because of uncertainties around us occasioned by the pandemic and the restrictions, agritech startups may have become safer options for investors. In the country there are many agritech startups that have made farming more profitable, by eliminating risk exposure and delivering ROI to investors who do not have to buy land, place workers on salaries, or even burn cash on pest control and management.
“As we noted earlier”, said Aduloju, “agritech startups have actually changed the way agriculture is practised and the farm business is conducted.
More investors in the country , especially blue-collar workers are weighing their investment options and are considering becoming digital farmers. A lot of these agritech startups are said to offer high yield investment opportunities through internet/mobile app-farming.
Founded by Niyi Oguntade, this agrictech startup was an initiative of Timesellers Limited. Groupfarma concentrates on tubers, small ruminate, vegetables, poultry, and rice farms. The investment options offered by Groupfarma have various returns on investment, falling between 20% and 28%, with farming cycles from 6 months and above.
The capital needed for investment is put at N50,000 per unit and the farm is covered by Leadway Assurance.
Co-founded by Bill Kenneths and Akpa Chike, it is said to leverage on technology to bridge the chasm between interested investors and the farmers. It mainly focuses on poultry farming and offers investors assurance of 15% on 12-week cycles.
Farmsponsor allows new investors who are willing to invest from N100,000 to as much as N1 million. The investment firm also offers investors the opportunity to save their cash with vestwallet for upcoming cycles. Farmsponsor is also insured by Leadway Assurance and the Nigerian Agricultural Insurance Corporation.
Requid is founded by Felix Imafidon which won the maiden edition of the Nigerian Stock Exchange X-Kathon competition. The agric investment offers investors the option of liquidating (selling) at any time if an investor cannot wait till the end of their cycles. The cycles are usually between 3 to 12 months.
The good thing is that the company has the lowest capital investment among the selected agric-tech startups. Interested investors can invest as low as N5000 in investment opportunities aggregated by Requid, which include rice, goat, pig, cowper, cashew nuts, fish, yam, and poultry farms. Surprisingly, Requid offers as high as 60% cumulative return on investments annually.
The agritech was set up by Ayodeji Arikawe and Uka Eje in 2016. Thrive Agric has farms in Oyo and Kano. Investors are allowed to invest from as low as N10,000 to as much as N85,000, depending on the investor’s preferred crop. Returns on investment fall between 12% and 20%, depending on the level of investment.
Thrive Agric manages both poultry and rice farms, which are insured by Leadway Assurance.
Farmcrowdy is a household name in the agric investment space. It was co-founded by Onyeka Akumah, Akindele Phillips, Tope Omotolani, Christopher Abiodun, and Ifeanyi Anazodo four years ago to empower farmers and help investors earn profits without having to lift a shovel.
Farm-crowdy offers a variety of investment options to investors, ranging from maize farms to rice, potatoes, fish, cassava, poultry, cattle, and more farms, most of which are located in Kaduna, Oyo, Ogun, Niger State, and Lagos states. These farms are insured by Leadway Assurance.