This week’s edition will look at how “sometimes developing markets leapfrog developed markets with specific capabilities, technology, or infrastructure.” and its implication for food and agriculture.
Happenings
- Most enterprise GenAI projects get stuck in proof-of-concept land. SFTW released a white paper on Wednesday, which provides a practical guide on how to break through the POC wall with case studies from four different organizations. You can get the free white paper here: “POC to OMG! The Realities of Deploying GenAI at the Farm Gate.” There have been 632 downloads of the paper so far. Don’t miss out by getting your free copy today!
- The inaugural AgTech Alchemy Summit had a great turnout with close to 150 people or more showing up for the event. The most common feedback has been the quality of the beer provided by Gilbert Guerrero, and the quality of the attendees. We are taking the show on the road with an event in Seattle in May, and Fargo in June. Keep an eye out for more details.
Leapfrog opportunities in agriculture
In the latest edition (#244) of Prime Future (Janette Barnard’s newsletter) titled “Too Big to Ignore: China’s livestock industry” Janette presents three key takeaways, as it pertains to the livestock industry in China. Her second takeaway in the context of the cold chain infrastructure in China is as follow:
Takeaway #2: Sometimes developing markets leapfrog developed markets with specific capabilities, technology, or infrastructure.
It makes sense that this cold chain example is representative of a broader leapfrogging phenomenon since going from virtually zero to 100 in a short amount of time, with mature technology like refrigeration, makes it easy to build everything with the latest technology from the outset.
A far fewer people (no surprises) attended World Agritech this year in San Francisco. Some of them have posted their key takeaways and impressions about the event. For example, Leo Carvalho of Solinftec posted 5 takeaways and talked about the increasing importance of robotics startups to provide automation solutions.
Labor is a key challenge in the US and Canada, and so automation robotics is a hot topic. Most robotics solutions today are highly tailored to their narrow specific use case, and they do not apply beyond a few use cases.
This makes growth challenging and expensive, which prevents disruptive innovation from taking roots. Disruptive innovation, by its very nature, has to be broadly applicable and if you go by Clayton Christensen’s theory it starts on the lower end.
The commodity row crop agriculture in the US and Canada is already highly optimized and efficient. Most of the innovation is only working on the margins.
It is like being on iPhone 13 and every subsequent version of the iPhone is just marginally better than the previous one.
We have to look to the other side of the world, to see the possibilities of disruptive innovation.
Digital Mobile Payments and Mobile / Smart Phones
Let us take the example of digital mobile payments. The chart below shows the growth rate in India. The number of transactions using a mobile phone went from almost nothing to 16 billion transactions in less than 10 years! (UPI is the protocol used to enable bank to bank transactions.) Depending on which stats you look at, more than 3 out of 4 Indians use their phone to make a payment on a regular basis.
Bought a single egg at the local store? (Yes, you can buy a single egg) Pay with your mobile phone and QR code.
Bought 2 cigarettes at the local corner stand? (Yes, you can buy a single or just two cigarettes) Pay with your mobile phone and QR code.
Bought an expensive book at the local bookstore? Pay with your mobile phone and QR code.
Raw Data from National Payments Corporation of India
The rise in mobile payments has been supported by a rise in cheap mobile internet (India has one of the cheapest mobile internet based on per unit of data), which also fueled a rise in mobile and smart phone ownership.
In less than 10 years, the mobile phone penetration went from marginal to major in very short order.
Can something like this happen with agriculture technology?
There are a couple of promising candidates.
Drone based operations like scouting and spraying
When my sister’s side of the family wanted to get a land survey done in India for their agricultural property, they would typically hire a team of 4-5 people, who would walk the farm and take a few days to come back with their report. Now with a drone, for a lower cost, and within a few hours, they can get a detailed report on farm boundaries, crop conditions, and any flooding issues for their 60 acre farm.
Drones have had challenges with adoption in the US and Brazil. Some of them are related to regulation, and some reasons are around the applicability of drone spraying for large operations.
For example, on a 500 acre farm.
For larger operations, issues like battery life, weight limitations, regulation on line of sight from the operator, safety issues etc. have been challenging.
In India, when the average size of a farm or a field is less than 2 hectares, it becomes economically feasible to do drone spraying, as issues around battery life, size of drone, line of sight are not as challenging.
Companies like Syngenta have subsidized drone spraying for a few years, and as the technology and the ecosystem has matured over the last few years, it has become economically feasible for an entrepreneur to start their own drone spraying and support a set of local farmers in their area.
Advisory services
Advisory services are very challenging to get access to in a place like India. According to some data, a given extension agent supports between 1,000 to 10,000 farmers. The data says that farmers practically do not have access to any extension services.
Of course there are local and federal agencies, non-profits like Digital Green, other startups and agribusinesses do try to fill the gap, if they can figure out a way to monetize it or make it breakeven for them to do so. (especially in the case of government agencies).
Given the existing infrastructure of cheap internet, and ubiquitous access to mobile phones and smart phones, tools like LLMs (actually SLMs - small language models) can really work well to provide tailored advisory services to millions of farmers, in their local language, within their local context, and at a cost which is a factor of magnitude less than current approaches.
Non-profit organizations like Digital Green, startups like Kissan AI and others are working on leap frogging advisory services from a traditional model to one driven by technology. The power of the technology is allowing them to provide a personalized, and context rich valuable experience to farmers, extension agents, advisors, and sales agents.
For millions of people, their first computer was their mobile phone.
For millions of people, their first non-cash transaction was a digital payment using a mobile phone.
For millions of farmers, their first non-human or animal applied chemical could be through using a drone.
For millions of farmers, their first high quality advisory service could be delivered by an LLM through their phone.
What other leapfrog opportunities exist in these markets?
Are there any leapfrog or orthogonal solutions defining opportunities in the US and Canada, where someone comes with a solution which asks a completely different question to solve, than what everyone else has been thinking about?