Smart Agricultural Technologies
Smart Agricultural Technologies
Business Model Description
Develop and deliver high-tech solutions to help farmers increase yields, reduce costs, and manage their operations more effectively. Such smart agricultural technologies that are used to improve the efficiency and productivity of farming operations include precision farming (using data and analytics to optimize farming operations), vertical farming (growing crops in vertically stacked layers using controlled environmental conditions, such as temperature, light, and nutrients, to optimize yields and minimize resource usage), livestock monitoring (using sensors and data analytics to monitor the health and wellbeing of livestock), and crop genetics (using genetic engineering to develop crops that are more resilient to pests and diseases, have improved yields, and can grow in challenging environmental conditions). The service can be marketed both in the domestic and export markets.
Expected Impact
Improve crop yields and sustainability, create jobs, enhance resource efficiency and inclusive access to technology.
How is this information gathered?
Investment opportunities with potential to contribute to sustainable development are based on country-level SDG Investor Maps.
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Country & Regions
- Serbia: Belgrade Region
- Serbia: Vojvodina Autonomous Province
- Serbia: Šumadija and Western Serbia
Sector Classification
Technology and Communications
Development need
Serbia generates 10% of its GDP from the ICT sector, which is among the top four export sectors, along with steel, cars, and agriculture. However, there's a need to adjust the regulatory framework and improve digital skills (1).
Policy priority
High-level policy documents, such as the Strategy of Scientific and Technological Development from 2021 to 2025, "Power of Knowledge," and the Electronic Communications Development Strategy from 2020 to 2024 prioritize improving the quality of life of the citizens of the Republic of Serbia through science and technological development (2, 6).
Gender inequalities and marginalization issues
There are only 20% of women in the technology sector, although there is great potential for employment in this area (5). Only 69% of rural households are connected to fixed broadband, compared with 85% in urban areas. This gap significantly hampers access to economic opportunities for a large share of the population (7).
Investment opportunities introduction
Serbia’s technology industry had more than 2,000 firms in 2017, a significant increase from 700 in 2006. The industry revenue nearly doubled during that period. Serbia’s technology industry has the potential to address the country’s economic stagnation and lift people out of poverty (8).
Key bottlenecks introduction
Although Serbia’s tech sector is expected to continue to grow by more than 20% a year, expansion is hampered by a lack of skilled people - primarily with foreign firms hiring as quickly as the educational system can produce them. Universities are graduating new engineers, but it is estimated that the country needs at least 15,000 more to meet rising demand (1).
Technology
Development need
The current technological structure of the industry in Serbia could be more favorable - the most significant part of production takes place in the least technologically demanding industrial branches. Without specialization, productivity growth, and climbing the technological ladder, there will be no much-needed economic growth and, thus, no higher wages (10).
Policy priority
The development of the technology subsector is prioritized by high-level policy documents, such as the Action Plan for the period from 2021 to 2022, for the implementation of the smart specialization strategy in the Republic of Serbia for the period from 2020 to 2025 (11) and the Smart Specialization Strategy in the Republic of
Serbia for the period from 2020 to 2027 (12).
Gender inequalities and marginalization issues
According to a report by the World Bank, Roma communities in Serbia often face discrimination and lack of access to land and other resources, making it difficult for them to benefit from new technologies (4). Additionally, an uneven generational presence in the digital society contributes to age discrimination and a lower quality of life (9).
Investment opportunities introduction
In 2021,135 million USD were invested in domestic startups. In addition, the Serbian technology sector exceeded 1.7 billion USD in export revenue in 2021. The Digital Serbia initiative recognized the potential, so it founded Business Angel Groups, which provide expert advice and investments of up to 219,000 USD and supports domestic startups (13).
Key bottlenecks introduction
The government buys modern technology, but there needs to be adequate training of employees and education sufficiently dedicated to the technological literacy of students, who are faced with computer work only when employed. Also, the elderly and the poor are neglected (11).
Software and IT Services
Pipeline Opportunity
Smart Agricultural Technologies
Develop and deliver high-tech solutions to help farmers increase yields, reduce costs, and manage their operations more effectively. Such smart agricultural technologies that are used to improve the efficiency and productivity of farming operations include precision farming (using data and analytics to optimize farming operations), vertical farming (growing crops in vertically stacked layers using controlled environmental conditions, such as temperature, light, and nutrients, to optimize yields and minimize resource usage), livestock monitoring (using sensors and data analytics to monitor the health and wellbeing of livestock), and crop genetics (using genetic engineering to develop crops that are more resilient to pests and diseases, have improved yields, and can grow in challenging environmental conditions). The service can be marketed both in the domestic and export markets.
Business Case
Market Size and Environment
10% - 15%
Global market analyses estimate that the smart agriculture market will reach USD 13.5 billion by 2023, growing at an annual rate of 12.4 percent. The fastest growth is predicted in the needs of the USA and Europe (37).
In 2021, the share of crop production in the total value of agricultural production equalled 68.4%, and that of livestock production equalled 31.6% in Serbia. When compared to 2020, the net index of physical volume of agricultural production decreased by 5.6%. Agricultural output at producers’ prices was worth USD 66 billion and the total agricultural land in Serbia was 5.3 million hectares (42).
While conventional agricultural production is still prevalent in Serbia, there is a growing interest in adopting modern technologies and improving efficiency and productivity in the agriculture sector (41).
Indicative Return
10% - 15%
Based on semi-structured interviews with relevant stakeholders, agritech solutions are expected to generate ROIs of above 10% (41).
Investment Timeframe
Medium Term (5–10 years)
The investment timeframe for high-tech solutions in agriculture can vary depending on several factors, including the type of technology, the stage of development, and the expected ROI (41).
Some high-tech solutions in agriculture, such as precision agriculture technologies or automated systems, may have a relatively short investment timeframe of a few years. These technologies often aim to improve efficiency and reduce costs, and the ROI can be seen relatively quickly (41).
Ticket Size
USD 500,000 - USD 1 million
Market Risks & Scale Obstacles
Market - Volatile
Business - Supply Chain Constraints
Impact Case
Sustainable Development Need
Extremely high temperatures, which are increasing year by year, have a very stressful effect on plants, which is often reflected in a reduced yield or poorer fruit quality in Serbia (26).
By the food security index, the Republic of Serbia is in 61st place out of 113 countries (22).
Gender & Marginalisation
For farmers who cultivate a smaller area or have a smaller number of cattle, without the support of some financial institution, it is challenging to maintain their business or increase their capacities (38).
Taking on labor-intensive processes in the fields, women in the agricultural sector contribute over 15% of the national economy. Therefore, it is essential to have gender-appropriate equipment and machinery for different farm operations since most are difficult for women to operate (21).
Women in rural areas and those working in agriculture face more challenges in gaining access to new knowledge and information, as well as digital technologies and services. These factors contribute to the fact that women's farms have a lower adaptive capacity, while also limiting the opportunities for rural women (particularly the female agricultural workforce, which makes up the majority of the family workforce on farms) to implement innovative practices.
Expected Development Outcome
New technologies in the agricultural sector could lead to increased crop yields and productivity, which can help improve the country's food security. New technologies and sustainable practices can also reduce costs and increase efficiency (25).
Developing and implementing technologies and practices that can help farmers use water and manage soil more efficiently can help to preserve resources and improve the sustainability of agriculture (41).
Gender & Marginalisation
Smart agriculture technologies can provide farmers with access to knowledge and expertise that can help them improve their practices and increase their yields. This can be particularly valuable for smaller-scale farmers needing access to traditional extension services (41).
By providing gender-appropriate agritech solutions, women will obtain opportunities to secure their livelihood through farming (21).
Primary SDGs addressed
2.1.2 Prevalence of moderate or severe food insecurity in the population, based on the Food Insecurity Experience Scale (FIES)
14.1% for adult population (2020) (22).
N/A
15.3.1 Proportion of land that is degraded over total land area
6% (2015) (23).
N/A
9.b.1 Proportion of medium and high-tech industry value added in total value added
21.8% (2014) (24).
N/A
Secondary SDGs addressed
Directly impacted stakeholders
People
Gender inequality and/or marginalization
Planet
Corporates
Public sector
Indirectly impacted stakeholders
People
Gender inequality and/or marginalization
Planet
Corporates
Public sector
Outcome Risks
If new technologies and practices are not used responsibly, they can negatively affect biodiversity, soil, and water resources, harming the environment (41).
The use of new technologies such as Internet of Things (IoT) may raise concerns about data privacy and security, as the collection and use of data can raise potential risks (41).
The introduction of new technologies and practices may have unintended consequences that were not anticipated, such as new pests, diseases, or negative impacts on biodiversity (41).
Impact Risks
Lack of adoption of new technologies can lead to a lack of improvement in crop yields and productivity and make it difficult for this area to grow (41).
If new technologies are not accessible or affordable for small farmers, it can widen the income gap between them and more established, larger farmers (41).
If farmers do not have access to technical assistance and training can make it difficult for them to use and maintain new technologies effectively (41).
Women farmers often have limited access to inputs, which can limit their ability to adopt smart agricultural tech (41).
Impact Classification
What
Smart agricultural technologies can have a significant impact on the food security, income, and livelihoods of farmers. There will be more demand for skilled workers and professionals.
Risk
Limited uptake due to inaccessibility or unaffordability, and the absence of technical assistance and input provision, may limit the impact of smart agricultural technologies.
Impact Thesis
Improve crop yields and sustainability, create jobs, enhance resource efficiency and inclusive access to technology.
Enabling Environment
Policy Environment
Strategy for the Development of Artificial Intelligence (AI) (2019) indicates that the current connection between local firms applying AI is insufficient to enable multidisciplinary in developing innovative solutions. The advantage of AI is the ability to improve agriculture (27).
In the Smart specialization Strategy of the Republic of Serbia (2020), one of the vertical priority areas is food for the future, which includes high-tech agriculture, food with added value, and sustainable agriculture and food production (28).
The aim of establishing the GovTech program in the Republic of Serbia is reflected in the improvement of cooperation between the state and innovative companies to open up the possibility of regional and international cooperation in many areas, including agriculture (26).
The Strategy of Agricultural and Rural Development notes that the response of the agricultural sector to the described trends on the global market should be sought in innovation, knowledge, and technological progress (29).
Financial Environment
Financial incentives: Rulebook on Incentives (2021) for improving the creation and transfer of knowledge through developing technical-technological, applied developmental and innovative projects in agriculture and rural development (30).
Fiscal incentives: Smart agricultural technologies benefit from tax incentives and tax reliefs and exemptions from paying duties (40).
Other incentives: The BioSens accelerator is the first in this area exclusively aimed at domestic technologically innovative companies, which link their further development to the agriculture and food sector (34).
Regulatory Environment
"Law on Agriculture And Rural Development regulates the objectives of agricultural policy and rural policy development, as well as the way of their realization, registration of farming holdings, recording and reporting, and supervising over the implementation of this of the law (31)."
Law on Innovative Activity regulates the goals and organization of the application of scientific knowledge, technical and technological knowledge, and inventions in improving products, processes, and services as drivers of the development of Serbia (32).
Marketplace Participants
Private Sector
Companies such as Agrivi, AgriTech Serbia, AgroSense, and Agremo d.o.o.
Government
Ministry of Agriculture, Forestry and Water Management, Ministry of Environmental Protection, AI Council, Ministry of Economy, Ministry of Education, Science and Technological Development, Ministry of Trade, Tourism and Telecommunications.
Multilaterals
Serbia Investment and Export Promotion Agency SIEPA, Food and Agriculture Organization (FAO), World Bank, United Nations Development Programme (UNDP).
Non-Profit
Center for Development of Vojvodina (CDV), Network for Rural Development of Serbia, Network for Rural Development of Serbia, Center for Ecology and Sustainable Development (CEKOR).
Target Locations
Serbia: Belgrade Region
Serbia: Vojvodina Autonomous Province
Serbia: Šumadija and Western Serbia
References
- (1) International Trade Administration | Trade.gov, Serbia - information and communications technology market, 2022. https://www.trade.gov/country-commercial-guides/serbia-information-and-communications-technology-market
- (2) Official Gazette of RS, Strategy of scientific and technological development of the Republic of Serbia for the period from 2021 to 2025 "Power of Knowledge", 2021. http://www.pravno-informacioni-sistem.rs/SlGlasnikPortal/eli/rep/sgrs/vlada/strategija/2021/10/1/reg
- (3) International Bank for Reconstruction and Development, Project Appraisal Document on a Proposed Loan, 2019. https://admin.scap.rs/storage/documents/BafLhM7p5PrgErf0r1acyWafi9hCp03FDfHZ2MxQ.pdf
- (4) The World Bank, Breaking the blackout cycle of Roma Exclusion in the Western Balkans, 2019. https://documents1.worldbank.org/curated/en/758911554459613139/pdf/Executive-Summary.pdf
- (5) Business.eu, More women should be included in the ICT sector in Serbia, 2020. https://serbia-business.eu/more-women-should-be-included-in-the-ict-sector-in-serbia/
- (6) Official Gazette of rs, Strategy for the development of electronic communications in RS from 2010 to 2020, 2009. https://www.ratel.rs/uploads/documents/pdf_documents/documents/Regulativa/Strategije/Strategija_razvoja_elektronskih_komunikacija_2010-2020.pdf
- (7) FAO, EBRD and WBIF support Serbia to expand broadband to rural areas, 2021. https://www.fao.org/in-action/territorios-inteligentes/noticias/detalle/en/c/1373515/
- (8) The Borgen Project, What Serbia's technology industry can do for its economic situation, 2021. https://borgenproject.org/serbias-technology-industry/
- (9) N1 Serbia, Serbia will continue to invest in the development of technologies for a better future, 2022. https://n1info.rs/scitech/matic-srbija-ce-nastaviti-da-ulaze-u-razvoj-tehnologija-zarad-bolje-buducnosti/
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- (11) PC Press, Technology ignores the elderly and the poor, 2021. https://pcpress.rs/tehnologija-zanemaruje-starije-i-siromasne-osobe/
- (12) MESTD of RS, Smart specialization strategy in the Republic of Serbia for the period 2020-2027, 2020. https://prosveta.gov.rs/wp-content/uploads/2020/03/strategija_pametne_specijalizacije.pdf
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- (21) Agromedia, International Women’s Day-The role of women in agriculture, 2022. https://www.agromedia.rs/blog/agrokutak/medjunarodni-dan-zena-uloga-u-poljoprivredi/
- (22) The Economist Newspaper. (2023). Global Food Security Index 2022. The economist. https://impact.economist.com/sustainability/project/food-security-index/explore-countries/serbia
- (23) Land Portal, Proportion of land that is degraded over total land area (%), 2015. https://landportal.org/taxonomy/term/8744
- (24) Data Visualization for Community Indicators and the Sustainable Development Goals, Tracking Progress, 2020. https://sdg.tracking-progress.org/indicator/9-b-1-proportion-of-medium-and-high-tech-industry-value-added-in-total-value-added/?tab=map
- (25) AGRIVI, Increasing farm yield through AgTech Solutions, 2022. https://www.agrivi.com/blog/improvements-in-agricultural-technology-increase-farm-yields/
- (26) Klima 101. How do climate changes affect agriculture in Serbia? 2020. https://klima101.rs/klimatske-promene-poljoprivreda-srbija/
- (27) Official Gazette of RS, Strategy of development of artificial intelligence in the Republic of Serbia for the period 2020-2025, 2019. https://www.pravno-informacioni-sistem.rs/SlGlasnikPortal/eli/rep/sgrs/vlada/strategija/2019/96/1/reg
- (28) MESTD of RS, Smart specialization strategy in the Republic of Serbia for the period 2020-2027, 2020. https://prosveta.gov.rs/wp-content/uploads/2021/11/Strategija-pametne-specijalizacije_SR_WEB.pdf
- (29) The Ministry of Agriculture, Forestry and Water Economy of RS, Strategy of agricultural and rural development in the Republic of Serbia for the period 2014-2025, 2014. http://www.minpolj.gov.rs/download/strategija-poljoprivrede-i-ruralnog-razvoja-republike-srbije-za-period-2014-2024-godine/?script=lat
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- (31) Official Gazette of RS, Law on Agriculture And Rural Development, 2021. http://uap.gov.rs/wp-content/uploads/2021/12/zakon-o-poljoprivredi.pdf
- (32) Official Gazette of RS, Law on Innovation Activity, 2021. http://www.parlament.gov.rs/upload/archive/files/cir/pdf/zakoni/2021/2069-21.pdf
- (33) Official Gazette of RS, Law on Innovation Activity, 129/2021.https://www.paragraf.rs/propisi/zakon_o_inovacionoj_delatnosti.html
- (34) Biznis.rs, Open call for participation in the third edition of BioSens Accelerator, 2022. https://biznis.rs/vesti/srbija/raspisan-poziv-za-ucesce-u-trecem-izdanju-biosens-akceleratora/
- (35) AGIVI, Case Study Nestle, 2021. https://www.agrivi.com/sr/studije-slucaja/nestle/
- (36) BioSens Institute, Economy, n.d. https://biosens.rs/collaborate/za-privredu?id=1825
- (37) PC Press, Digitization of agriculture in our country, 2019. https://pcpress.rs/digitalizacija-poljoprivrede-u-nasem-ataru/
- (38) Bonitet.com, Lending to Serbian farmers: What do farmers need?, 2022. https://bonitet.com/poljoprivrednici-u-srbiji-kreditiranje-srpskog-agrara/
- (39) Agency for Business Registers, n.d. https://www.apr.gov.rs/%d0%bf%d0%be%d1%87%d0%b5%d1%82%d0%bd%d0%b0.3.html
- (40) Law on investments. 2023. https://www.paragraf.rs/propisi/law-on-investments-republic-serbia.html
- (41) Peterhof Consulting consultations with the President's Office, 1 February 2023.
- (42) Statistical Oce of the Republic of Serbia. Statistical yearbook, 2022. https://publikacije.stat.gov.rs/G2022/Pdf/G20222055.pdf