Is ASEAN doing enough to harness agritech’s potential?

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Where is Southeast Asia in the global agritech landscape and what opportunities do ASEAN’s farmers have to capitalise on the benefits of new technologies?

By John Pennington

At first glance, the agricultural industry in ASEAN seems well placed to capitalise on the development and expansion of agritech, the adoption of modern technology in agriculture, horticulture or aquaculture to boost efficiency, profitability and yield.

In Southeast Asia, where extreme weather is common and climates variable, farmers should welcome any advantage they can. The Asian continent as a whole produces 60% of the world’s food from around 23% of the world’s agricultural land. In Southeast Asia, 16% of land is used for agricultural purposes.

Several agritech start-ups have already launched in the region. At last year’s ASEAN Agriculture Summit in the Philippines, agritech was described as a “game-changer”. Throughout the region, including in Singapore, where very few crops grow, agritech is having an impact. However, are there opportunities being missed?

Agritech and ASEAN – a perfect combination?

Agritech is entering the agricultural and horticultural sector in a number of ways.  Apps are available which give farmers information such as crop price data and weather forecasts. Start-ups in Myanmar created apps that helped with equipment rental, information sharing, and offering a platform for farmers to communicate directly with agricultural experts that can assist with problem-solving.

The impact of this technology could go far beyond the immediate profitability of farming. These are the sorts of innovations that might entice youngsters back into the farming industry. Young people might not be tempted to move out of the country and into the city if technology can make farming more accessible and profitable, securing ASEAN’s agricultural future and reversing the impacts of urbanisation.

Drones have the potential to be an agritech success story

Drones can make farming easier and more profitable, for example by helping farmers map and monitor their crops precisely and quickly. They also ensure a higher level of safety when spraying crops with pesticides.

“Drones make precision farming a reality,” stated an Asian Development Bank (ADB) report. “They can carry out surveys like infrared mapping to gather crucial information like crop condition, costing farmers as little as US$5 per acre. With the data, they may be able to boost crop yields by 20%.”

However, despite these opportunities, there has not been a large-scale drone adoption in Southeast Asia. Although some farmers are using them in Malaysia, the Philippines and Vietnam, their use is far from widespread.

Regulatory hurdles are discouraging and preventing more farmers using drones. Once they are flown out of the line of sight of the pilot, drones are viewed as a threat to aircraft and other people.

Used responsibly, drones are enormously helpful. The governments of countries including Laos and Malaysia, where such restrictions apply, would benefit from amending regulations. They could modify them to enable farmers – especially those well away from airports – to benefit while still keeping people safe.

There are precedents elsewhere. In the UK, for example, farmers with the correct licence are allowed to fly drones within 150 metres of urban settlements. In Israel, laws on drones have been relaxed for the purposes of field mapping and remote sensing.

Blockchain’s entry into agriculture is set to make waves

One area of agritech that is rapidly expanding is the use of blockchain. In its simplest terms, blockchain technology creates a secure database. It allows farmers to securely record transactions, details, and their inventory.

It should open up markets for developing nations as farmers now have a way of proving the origin and life cycle of their produce. Everything can be quickly and easily traced back to them. Increasing trust and transparency across the ASEAN market will facilitate cross-border agricultural cooperation and trade.

There is already plenty of blockchain uptake within the region. Indonesian start-up iGrow allows investors to finance agricultural projects in the country. In Cambodia, Oxfam launched BlocRice, a project which connects farmers with buyers and ensures they receive fair recompense.

Singapore’s bid to become an agritech hub could benefit the region

Enterprise Singapore recently invested S$90 million (US$66.3 million) into Singapore-based agritech start-ups. Other companies have also moved into the space.

As the region’s fintech hub with access to a pool of leading financers and developers, Singapore’s interest in agritech could lead to the development of fintech products developed specifically for the agricultural sector.

However, the Singaporean innovators face challenges. There is a lack of agricultural experience in Singapore. They must form partnerships or travel abroad to learn established agricultural practices. Only then can they build technology. “Agriculture needs to come first; it shouldn’t be the technology coming first,” said Howard Tang, CEO of Smart Animal Husbandry Care.

The agritech picture in ASEAN is complex

The world would benefit from deeper cooperation among ASEAN nations to fully explore the opportunities agritech offers. In some areas, notably Malaysia and Indonesia in blockchain-based data exchange, huge advances are being made. Elsewhere, this is not the case.

Companies investing in agritech solutions also need get farmers on board. Financial inclusion remains a challenge across Southeast Asia, particularly in rural agricultural communities. This leads to farmers missing out on potential opportunities.

“Here, financial inclusion is the key concept, in that we must find ways of organising agricultural production such that they benefit the smallholder farmer as much as possible,” concluded an ADB report into financial technology in agriculture.

Agritech can break down those barriers but to do so, more collaboration between governments and farmers is vital. Governments must establish frameworks, revise regulations and promote cross-region projects to ensure Southeast Asia does not miss out on the wealth of opportunities that agritech brings.