'Innovations play a crucial role, we support that'

Entrepreneurship is innovation. Not all challenges facing the agricultural sector can be 'innovated away', but innovations do play a crucial role. That is why the winner of the Agribusiness Award receives support from ABN Amro as needed.

As a farmer or horticulturist, you could use some help in innovating. A wide and diverse range of institutions, companies and individuals are trying every day to improve existing systems or even discover the egg of Columbus. It has brought a lot to society in recent decades. That deserves attention and encouragement. Certainly in a phase in which – in addition to efficiency and productivity – the reduction of the environmental footprint is gaining in dominance.

ABN Amro is therefore happy to commit itself to the Agribusiness Award. Tribute and attention to those who work on innovations that help farmers and horticulturists to do their work better, more carefully or more easily. We look forward to the entries with interest and support the winner of the Award as needed, for example with knowledge or our network. Want to win this great prize? You can register until September 12 via boerenbusiness.nl/Award.

Dutch agritech market is growing
ABN Amro has conducted research into the developments in the market for robots, drones and autonomous agricultural vehicles. The results have been brought together in the agritech report 'Battle for agricultural robots breaks loose'† This shows that innovations are extremely diverse and that they take place in all kinds of areas. ABN Amro estimates the current worldwide turnover in the agritech market at more than €6 billion. The Dutch market has a share of 11,5%, mainly thanks to milking and feeding robots. The bank expects the Dutch agritech market to triple in ten years from €715 million to €2,5 billion in 2030. That means 13% growth per year.

Scarce labor important driver
A prominent driver of growth in the agritech market is the very high dependence on personnel in the agricultural sector. The corona crisis makes it clear that a shortage of seasonal workers can quickly cause problems. The availability of foreign labor is expected to continue to decline. This increases the cost of labor. Between 2010 and 2019, the costs of paid labor in agriculture and horticulture rose on average from 8% to 10% of turnover. The costs have increased in, among other things, conventional dairy farming, glasshouse horticulture and arable farming, as can be seen in the figure below.

Reduction of environmental impact
Reducing the environmental impact also ensures growth of the agritech market. The use of crop protection agents and soil pollution are reduced by using robots and precision farming. Due to the climate agreement and the European Fit for 55, the subject is increasingly higher on the agenda of companies and governments. This means, among other things, that scarce agricultural land is no longer only used for growing food, but also, for example, to obtain 'biobuilding materials'. At the same time, the number of mouths that need to be fed is increasing. This requires a higher production on the available agricultural area.

Regulations and access to data and capital
In order to utilize the growth potential, it is important for companies, governments and knowledge institutions to deal with a number of bottlenecks. One of these is Dutch and European legislation, which still restricts the use of robots. Also, the knowledge that is gained in the Netherlands in the still young agritech market is still too little used in the field. Interesting collaborations exist between researchers, companies and users, but there is still insufficient exchange of knowledge and technology. And fragmentation of knowledge also means fragmentation of data. A final bottleneck for Dutch parties is access to capital and subsidies that are necessary to be able to scale up the development of robots.

When parties in the agritech market jointly succeed in tackling the bottlenecks, it will be cheaper to develop robots. And for agricultural companies, which usually have low profit margins, it will automatically become more attractive to invest in this.

Also view the interview with Jan de Ruyter, Sector Banker Plant Sectors at ABN Amro, on this subject.
 

The above article contains the highlights of the report published by ABN Amro in 2020 'Battle for agricultural robots erupts† ABN Amro is a partner of the Agribusiness Award. You can register innovations for this prestigious prize until 12 September via boerenbusiness.nl/Award.