Technology for Agriculture 4.0.
Technology for Agriculture 4.0.
Business Model Description
Implement agricultural technology such as management systems, digital platforms, crop monitoring with hyperspectral cameras, fertilisation with drones, among others.
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
Sector Classification
Food and Beverage
Development need
Investing in agriculture is one of the most effective ways to produce food, contribute to growth in the food value chain, promote agricultural productivity and improve environmental sustainability. San Juan has a long tradition of agricultural production despite the fact that only 2.4 % of its territory is suitable for agricultural development. (2)
Policy priority
The Government of San Juan has a set of policies and programmes to promote investment in agriculture and its entire value chain, comprising a wide range of small and large-scale activities including agricultural inputs, processing, storage, distribution, wholesale and retail sales and export of agricultural products.(2)
Gender inequalities and marginalisation
In San Juan Province only 21% of agricultural holdings are run by women. Women's participation is concentrated in smaller farms, with 52% of these farms being up to 5 hectares in size (3).
Investment opportunities
In the agricultural sector there is a great possibility of developing initiatives that help the environment through the use of new technologies. However, there are not many cases of application due to lack of knowledge and because many rural producers maintain the same procedures by tradition and are resistant to change.
Bottlenecks
The environmental challenge has a clear impact on companies; the agri-food sector is responsible for 34% of total greenhouse gas emissions worldwide. The commitment to renewable energies, energy efficiency and ecological production are key to reducing these negative consequences on the environment (4).
Food and Agriculture
Development need
Increasing agricultural productivity is crucial for food security, rural development and the conservation of natural resources. Agriculture will need to double food production, despite the steady decline in crop yields and the impacts of climate change. (1)
Policy priority
The Government of San Juan has a set of policies and programmes to promote investment in agriculture and its entire value chain, covering a wide range of small and large-scale activities including agricultural inputs, processing, storage, distribution, wholesale, retail and export of agricultural products (2).
Gender inequalities and marginalisation problems
In San Juan Province only 21% of agricultural holdings are run by women. Women's participation is concentrated in smaller farms, with 52% of these farms being up to 5 hectares in size (3).
Investment opportunities
In the agricultural sector there is a great possibility of developing initiatives that help the environment through the use of new technologies. However, there are not many cases of application due to lack of knowledge and because many rural producers maintain the same procedures by tradition and are resistant to change.
Bottlenecks
The environmental challenge has a clear impact on companies; the agri-food sector is responsible for 34% of total greenhouse gas emissions worldwide. The commitment to renewable energies, energy efficiency and ecological production are key to reducing these negative consequences on the environment (4).
Agricultural Products
Pipeline Opportunity
Technology for Agriculture 4.0.
Implement agricultural technology such as management systems, digital platforms, crop monitoring with hyperspectral cameras, fertilisation with drones, among others.
Business Case
Market Size and Environment
USD 100 million - USD 1 billion
The total cultivated area in the Province of San Juan is 75,898 hectares (5), considering that the average value of drone mapping and fertilisation services is around USD 19 per hectare on average. Nationally, the total area of the main crops is 36 million hectares (12), the service price in this case is around USD 24 average per hectare.
Indicative Return
> 25%
According to investors who are developing projects of the proposed business model and taking into account current variables of our country in relation to inflation, exchange rate and productivity.
Investment Timeframe
Short Term (0–5 years)
As it is related to the agricultural sector, which has short cultivation times in relation to other types of investment.
Ticket Size
< USD 500,000
Market Risks & Scale Obstacles
Business - Supply Chain Constraints
Market - Volatile
Impact Case
Sustainable Development Need
The agri-food sector is responsible for 34% of total global greenhouse gas emissions (4).
San Juan is considered a major agricultural producer, but has not yet implemented sufficient sustainable practices to reduce its environmental impact.
Gender & Marginalisation
In emerging economies and rural areas there is a poor technology structure, high technology costs leading to low levels of e-literacy and digital skills.
Expected Development Outcome
Decrease greenhouse gas emissions by increasing the use of advanced technology in agriculture using less polluting fuels and helping to make water use more efficient.
Increase the area cultivated with sustainable practices to reduce environmental impact.
Gender & Marginalisation
Increase the use of advanced technology in agriculture so that rural producers improve their digital skills and can use the benefits of these for more sustainable agriculture.
Primary SDGs addressed
2.4.1 Proportion of agricultural area under productive and sustainable agriculture
According to estimates by companies in the sector, less than 20% of the productive farms apply methods that achieve more sustainable agriculture.
It is expected that by 2030 more than 50% of farms will apply methods that achieve more sustainable agriculture.
6.4.1 Change in water-use efficiency over time
According to estimates by companies in the sector, less than 15% of agricultural producers use methods that help to make water use more efficient for plant protection and fertilisation.
It is expected that by 2030 more than 50% of farms will use methods that help to make water use more efficient for crop protection and fertilisation.
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
Corporates
Corporates
Outcome Risks
The digitisation of the agri-food system carries the risk that the benefits will be unevenly distributed between rural and urban areas and across populations according to gender, age and digital skills. (11)
Impact Risks
External risk: Difficulties in accessing technological goods for agriculture because they must often be imported at changing prices.
Risk of stakeholder participation: There may be difficulty in investing in new technologies applied to agriculture due to lack of knowledge and fear of landowners.
Impact Classification
What
Positive impact that will be generated by incorporating advanced technology in agricultural processes and decreasing pollution while increasing productivity and efficiency.
Risk
Soils affected with more degradation, water reserves will be compromised and the environment more polluted, while the amount of food produced will not be sufficient.
Enabling Environment
Policy Environment
Competitiveness Plan for the agricultural sectors, with its Programme for the Strengthening, reconversion, modernisation and diversification of the agro-industrial sectors in a competitive and sustainable manner and its Project for the Promotion of the provision of agricultural mechanisation services (8).
Financial Environment
Different government departments offer lines of credit for investment projects that achieve productive improvements in line with sustainability.
Non-reimbursable contributions from the San Juan Investment Development Agency to finance projects aligned with sustainability.
Credit lines with very competitive rates for micro, small and medium enterprises granted by Fiduciaria San Juan, by the Federal Investment Council, San Juan Quality Agency, in addition to the traditional credit lines of each financial institution.
Regulatory Environment
Resolution 336/2022 of the National Civil Aviation Administration establishing procedures for processing certificates, re-registrations and authorisations in the Register of unmanned aerial vehicles.
Res. 880 - E of the year 2019 issued by the National Civil Aviation Administration approving the Regulation of unmanned aerial vehicles (UAVs).
Marketplace Participants
Private Sector
Companies with sufficient funds to invest in the agricultural technology market.
Government
With its different departments that will support the sector with policies and technical and financial aid.
Multilaterals
Financial institutions and other organisations that will support the sector with different lines of credit.
Target Locations
References
- (1) "Closing the Gap" Programme for Gender Equality in Agriculture and Social Development. 2009 - FAO (Food and Agriculture Organisation of the United Nations)
- (2) Investor's Guide "Doing Business in San Juan" - Government of the Province of San Juan - 2021.
- (3) Statistical Dossier "Argentinean agricultural women" INDEC (National Institute of Statistics and Census) based on information obtained from the National Agricultural Census 2018.
- (4) The Agri-Food Sector: Contributing to the 2030 Agenda - Global Compact Spanish Network.
- (5) San Juan Province Strategic Plan
- (6) National Economic Census
- (7) https://www.smartom.es
- (8) Forbes Argentina magazine, publication and interview of 14/02/2022.
- (9) Forbes Argentina magazine, publication and interview of 20/05/2022.
- (10) Personal interview with owner Pablo Plana.
- (11) Guidance document Digital technologies in agriculture and rural areas" - FAO - 2019. "
- (12) Agricultural Situation Report 2020 - Production Studies Centre - Ministry of Productive Development of Argentina.