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The Growing Link Between Tech and Agriculture

Updated: May 30, 2019

If you think about it, farming and technology have always been joined at the hip.

In a bygone era, agriculture advanced on the back of inventions like the cotton gin, the reaper, and the thresher.

Today, farming involves the use of wireless technologies, GPS positioning, and lasers to be more efficient. But, tomorrow’s farmers will be taking agriculture technology a bit further by using Big Data, robots, drones, and numerous other technological wonders.

Silicon Valley is moving into agricultural technology in a big way. In 2014, venture capital investment into agriculture and food startups soared to $976 million, according to Cleantech Group.

And the tech sector’s involvement in the agriculture industry is only going to expand from here…

The Farmer Next Door: Google

Silicon Valley’s investments into agriculture roughly doubled between 2013 and 2014.

One prime example is the Farmers Business Network. This social network collects data on seeds and soil that farmers can use to review crop yields and seed performance. It has data from seven million acres of farmland in 17 U.S. states – and is growing its membership by 30% per month.

The venture capital arm of Google (GOOG) just participated in a $15-million funding round for the Farmers Business Network. Other venture capital firms, like Kleiner Perkins and DBL Investors, have also jumped onboard.

There are a number of other startups in this field, too, including FarmLink, Agralogics, and Farmers Edge.

Publicly traded companies see the importance of Big Data in agriculture, as well.

Ag giant Monsanto (MON) acquired the weather data startup Climate Corp a few years ago for $1 billion. In December, after the takeover, Climate Corp purchased 640 Labs, a smaller farming data company.

And DuPont (DD) says it will generate $500 million in revenue from data-related farming services over the next decade.

But there’s more to this coming technological revolution than just data. There’s also the practical matter of collecting the data.

That’s where drones come in.

Drones Set to Invade American Farms

When it comes to the agriculture industry, this may be the year of the drone.

A number of other interesting startups, including Blue River Technology, Vine Rangers, and Precision Hark, are focused on using robotics and drones to increase farmers’ productivity.

The increase in drone use is partially due to the Federal Aviation Administration’s (FAA) section 333 exemption allowing commercial drones on a case-by-case basis.

That means, for the first time, drones can gather data on America’s farmland over an entire growing season. Down the road, this type of data collection should help farmers with better crop rotation, water management, and use of pesticides.

A widely-cited study by the Association for Unmanned Vehicle Systems International forecasts that legalizing commercial drones will generate over $80 billion in economic impact over the next decade, with agricultural drones providing the most impetus.

The FAA’s relaxed rules may also open the door for companies likeAeroVironment, Inc. (AVAV) and Trimble Navigation(TRMB) that already have agriculture drones. These firms have just been waiting for regulations to catch up with the technology.

It’s lucky for us that these companies are able to hit the ground running, too. Because going forward, our farmers will need all the help they can get…

A Bountiful Future

By 2050, our planet will have nine billion people who will be consuming an ever-increasing quantity of food.

Thus, agricultural technology looks like a solid place to invest – especially if you’re an accredited investor.

Crowdfunding sites like AgFunder offer a plethora of investments into agricultural tech startups.

To be considered an accredited investor by the U.S. Securities and Exchange Commission, one must invest $1 million in net worth (excluding residence) or make $200,000 ($300,000 if married) annually for the past two years.

Either way, the sector is certainly worth keeping an eye on.

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