Meet the New Future Farmers
Technology is disrupting argiculture, too. With agtech on the rise, the UAE is positioned to lead a new crop of food pioneers.
By Xische Editorial, July 14, 2019
Beyond Meat shocked everyone with their recent IPO. Since going public earlier this year, the plant-based meat company has seen its stock price surge. But the American company’s success is indicative of a larger trend on Wall Street that represents a major shift in the agricultural sector. Technology has evolved to a point where sustainability issues can finally be solved and there is a big financial opportunity in this market. From plant-based meat products that taste like the real thing to vertical farming, the agricultural sector is in the midst of a grand disruption. There is significant room for the Gulf in this historic shift.
In the food insecure region of the Arabian Gulf, technology solutions are having a big impact. While countries like the UAE and Saudi Arabia are accustomed to purchasing agricultural land in neighboring East Africa and Central Asia to ensure a secure food supply, agricultural technology (agtech) is enabling solutions at home.
As a recent report by the Rand corporation laid out, these types of technology solutions are critical to the Gulf’s overall food security. Rand notes that “natural conditions have made domestic food production an ongoing challenge for the countries of the Gulf Cooperation Council (GCC). Over the past few decades, these countries have been able to leverage their substantial economic resources to address these challenges, largely through food imports. Given their fiscal strength, the GCC countries’ main food security challenge will not likely be due to an increase in the price of food, but rather a natural or man-made disruption that blocks one or more of the countries’ access to food imports.”
The Abu Dhabi Investment Office recently announced a three-year program with up to $270mn in financial incentives for innovators working on select agricultural technology sectors with the aim of expanding the knowledge base of operations in Abu Dhabi. The three sub-sectors the program are focused on algae-based biofuel development, precision agriculture and ag-robotics, and indoor farming.
The latter area is one of the hot spots in global agtech. AeroFarms, an American indoor farming company, just raised $100m to expand its warehouses of stacked growing trays and explore new produce areas. For nearly two decades the company has specialised in growing vegetables without pesticides under artificial light indoors. Positioning their warehouses close to consumer areas, they have been able to reduce friction in the supply chain.
There is dual benefit in growing the Gulf’s agtech industry. First, advancements will help countries become food secure in a cost-effective manner. The second benefit is more interesting and promising. Given the Gulf’s position at the nexus between East and West, local companies have first-hand experience in other food insecure regions of the emerging world. Just as Wall Street is betting big on Beyond Meat transforming the plant-based meat industry, the UAE, as the leading country in the region, can invest in local agtech to stay competitive in what will be an enormous market in the emerging world.
As food becomes ever more insecure and global population numbers continue to go up, food supply is going to be one of the critical issues facing the international community. With its unstable climate and harsh agricultural conditions, the Gulf can train the next generation of agtech companies and prepare them for future challenges.
With the budding knowledge economies in Abu Dhabi and Dubai, the conditions are fertile for revolutionary products to come out of these spaces. Bear in mind that advances in vertical farming are driven by leaps in artificial intelligence (AI) and data analysis. That is the most promising aspect of investing in agtech.
With the world’s only AI Ministry, the UAE Government has made AI into a national priority. Finding new ways to incorporate AI into food production is a perfect challenge for the home-grown tech sector. Innovation develops in environments where there are concrete challenges that need solutions. Food security is a major challenge for the Gulf and the rest of the world. Any leap in agtech in the Gulf will have a profound effect on the entire emerging market region.