How Farmers Will Shape the New AgTech
Big Ag has dominated the AgTech pipeline. Crowdfunding offers a breath of fresh innovation, and helps farmers make their voices heard.
Agriculture technology has historically been controlled by a few big corporations that own an overwhelming portion of the world’s patents on seeds, fertilizers and other essential farming inputs. Together, big corporations like these have spent over $14 billion on research & development in 2015, giving them enormous control over the AgTech pipeline.
These companies have provided a wealth of technology and resources to the agriculture industry. Massive research and development budgets ultimately drive the technology frontier forward, but with billions of dollars in cash on their balance sheets, these companies are increasingly gobbling up emerging AgTech rather than nurturing new innovation.
The result is that the top technologies that farmers need to be globally competitive are incredibly expensive, in some cases to the point of wiping out any added profits.
For that to change, farmers must create their own AgTech fundraising community so that farmers, not corporations, control the ownership and direction of tomorrow’s technologies.
By crowdfunding capital (raising small amounts of money from many investors), new companies have started to obtain the financing necessary to bring disruptive agriculture technologies to market. As opposed to corporate research and development, which is driven by top-down mandates, crowdfunding supports community-based innovation that often begins on the farm.
One of the major platforms supporting crowdfunded entrepreneurs is AgFunder. Since 2013, AgFunder has helped 16 AgTech companies obtain capital for research and growth. However, AgFunder requires that their investors be “accredited” (i.e. meet income or net worth requirements) to participate in fund-raises. In addition, the minimum investment amount in a company is $5,000, which is more than what many farmers would want to put into any single venture. While AgFunder is a step in the right direction, the platform falls short of offering a comprehensive platform for agriculturally-focused, community-based innovation.
Indiegogo, an equity crowdfunding site with less stringent investor requirements, offers an alternative model. Indiegogo allows any individual 18 years and older to invest as little as $100 in a company. In the words of Indiegogo CEO Slava Rubin, this democratization allows anyone to “support businesses they believe in.” The crowdfunding AgTech platform of the future will do the same for farmers, helping them to regain control of the technology pipeline that supports their business.
And who can pick winning AgTech better than farmers? An agricultural investing community composed of a diverse group of farmers from multiple regions and numerous crops would have a tremendous advantage over agribusiness executives, many of whom have never farmed a day in their lives. Imagine if California grape growers, Iowa corn farmers, and Florida citrus orchardists joined forces in a “tech co-op” to identify and scale promising AgTech. Farmers could support businesses of fellow farmers and create an innovation network that truly addresses their biggest challenges.
With increasing consolidation in agribusiness, many farmers rightfully fear that they will be at the mercy of global corporations that can dictate prices for inputs and control the technology of tomorrow. Crowdfunded AgTech offers a way for innovation to work for farmers again. For a path forward that returns technological gains to rural communities, however, a new platform is needed that encourages even the small farmer to participate. It’s time for farmers to reap the benefits of their large numbers and help craft the future of farming that makes sense for them.The author holds no ownership interest in or business relationship with any of the companies herein discussed. These views are solely the author's own and do not represent those of any organization with which the author is affiliated, including Farmer's Business Network, Inc., their members or affiliates.