Development and industry growth initiatives

Even if you are not familiar with the term “agritech”, you may have unknowingly seen examples of it in restaurants, farms and more. Take for example, if you dined at restaurants from farm to fork Foodcraft Farm in Bangsar South, you’ve actually already encountered agritech in the form of hydroponics.

While this unique inclusion in the meal concept is unique, more needs to be added to agritech than hydroponics. Here is what you would find on the Malaysian agritech scene today with a little digging (sorry).

What is Agritech?

Simply put, it is an abbreviation of agricultural technology, which is a collection of scientific techniques used to improve plants, animals and microorganisms, offering benefits to farmers, the environment and consumers, according to Australian Biotechnology Organization.

These techniques are used in plant and animal biotechnology and biofertilizers to protect crops from pests and diseases, reduce the need for pesticides, reduce food production costs, and provide alternative fuel sources.

Here are a few use cases by agritech:

Smart agriculture (automated irrigation, vertical agriculture, hydroponics, etc.);
Drones and satellites (scanning and monitoring of crops and fields);
IoT-based sensors (Internet of Things) (provide accurate information on weather, quality and current soil condition);
Blockchain and big data (for consumers to get to know the origin of their products);
Biotech (creating crops that can adapt to the environment better than ordinary, develop synthetic fertilizers, etc.);
Farm maintenance technology (optimization of water consumption, proper selection of mature products, etc.);
Production technology and innovation (removing intermediaries and enabling farms to be closer to urban areas).

Agritech is not only applied to agriculture, but also to horticulture (gardening, basically) and aquaculture (aquatic animal breeding or aquatic plant breeding for food).

An example of agritech role e In agricultural simplification, a soil sensor is used to detect moisture content and moisture flow, which can return data to the farmer on request, hourly or daily. This saves the farmer time from going out into the field to check the land from time to time every now and then.

When technologies such as IoT and AI are involved, agriculture becomes more efficient and less labor intensive, helping the farmer to produce higher yields when compared traditional breeding. This also puts less burden on the farmer to meet the needs of our growing population worldwide.

How important it is Agricultural sector in Malaysia?

Agriculture remains one of the most important sectors in the country, and since the latest report in 2019, it has been the agricultural sector the third largest contributor to GDP (7.1%, which is 101.5 billion RM) in the country, which stands next to the mining and quarrying sector.

Exports increased from RM 114.5 billion in 2018 to RM 115.5 billion (increase of 0.9%), and imports increased from RM 93.3 billion in 2018 to RM 93.5 billion in 2019 (growth of 0.2%). The trade balance of this sector increased by 4.1% from 21.1 billion RM in 2018 to 22.0 billion RM in 2019.

Dictionary of dictionaries: The trade balance is the net sum of exports and imports of goods of a country, not taking into account all financial transfers, investments and other financial components. A country’s trade balance is positive (meaning it records a surplus) if the value of exports exceeds the value of imports.

Focus-economy

Since agriculture is one of our most important economic sectors, it is all the more important that ways to improve the process are constantly developed and applied. But one big question still stands in our way.

Those who need Agritech the most in Malaysia cannot afford it

The group of farmers who need agritech the most are small farmers, who make up the majority of farmers who do to dominate local agricultural sector.

They are the ones facing low productivity and crop yields, in addition to the lack of labor on their farms. In addition, there are and problems lack of capacity to manage natural disasters and waste from inadequate agricultural practices.

When it comes to the workforce we have just touched on, employment in the agricultural sector actually exists fell slightly from 1,570,300 in 2018 to 1,541,100 people in 2019. It is therefore important that agritech enters the picture to mitigate the decline before it reaches the lowest level for farmers.

However, agritech like smart sensors and drones is not cheap. For instance, drones that provide images of field conditions can cost about $ 1,000 (approximately RM4,145), without taking into account the salary of the hired talent to operate it. Currently, this is an unrealistic price for many small farmers if they are expected to take money out of their own pockets.

“We would like to get hold of automated hardware, such as a robotic combine, which would reduce our operating costs, or a meteorological station device that can tell us the best time for planting, fertilizing and irrigating based on historical data. But all this is too expensive now, “said local farmer Markus Chin of Shinnou Farm Al Jazeera in 2019

Cultivation of the Agritech sector in Malaysia

Over the years, several initiatives have been taken by the public and private sectors in Malaysia to drive agritech growth through financing startups with agritech solutions, providing microfinance schemes for farmers to adopt agritech and more.

In 2018 Malaysian Corporation for the Digital Economy (MDEC) has launched a pilot project to boost crop yields and quality using the latest technologies, through a public-private partnership with Pertubuhan Peladang Kawasan Kuala Langat (PPKKL).

It has seen farmers adopt the Internet of Things (IoT) fertility system (combining fertilization and irrigation) which has helped them reduce monthly fertilizer use by 20%, reduce monthly labor needs by 25% and increase overall yield quality (Chile score). ) up to 90%.

In 2019 Malaysian Global Center for Innovation and Creativity (MaGIC) conducted a camp to launch agritech startups with a demo day at the end of a ten-day event during the AgriTech Global Summit.

The 3 agritech startups that emerged as bootcamp winners are:

Sayur.Farm: Development of a FitBit-like device that serves as an agricultural assistant that can update the current state of the crop and its environment, collecting information through artificial intelligence and data visualization to provide yield forecasts, plant health, recommended recipes, data sharing, insights , profit analysis and yield analysis;
The origin of life: Production of black military fly larvae using organic waste and conversion into feed for livestock, animals and pets;
FarmExchange: A closed market where farmers can directly obtain loans for the necessary equipment. Farmers can also get a credit score, and lenders can get a transparent view of farmers ’requirements, proposed ROI and timetable.

However, not everyone except Life Origin seems to be active recently. Several other local agritech startups that are currently active include:

Braintree Technologies Sdn Bhd: Uses drones to count and spray trees, map plantations, map infections, etc .;
TanaLink EARS: Uses technology to provide real-time data and monitor their farm for theft, harvest, fertilization, wildlife, soil sensors, etc .;
plantOS: Uses a fertilization system that can detect diseases in advance, acts as a soil sensor and can automatically fertilize your crops accordingly, reducing nutrient loss;
Fefifo: Enables small farmers and young unemployed agro-graduates finished agricultural areas and technologies for starting a modern agricultural activity with a guaranteed income;
Nutribah: Uses and has an IoT-based smart farming system own fleet to cut intermediaries and deliver their products directly to consumers.

Although there are not yet too many established local agritech startups in the country, Dzuleira Abu Bakar, CEO of MaGIC, noted that agriculture is changing at the rate of accelerating change. Although this has been underfunded in the past and has not been as popular in the industry, it is turning around quickly. With this technological advancement in agriculture as well, the industry is starting to become more inclusive and attractive to the younger generation.

Even Petronas invaded the agritech ecosystem becomes a WC for Braintree Technologies last year, within Petronas Ventures and in line with Petronas Sustainability Agenda and the United Nations, the Sustainable Development Goals, which further signals the potential of agritech in Malaysia.

Last week, MDEC and CIMB Islamic signed a Memorandum of Understanding to expand a comprehensive microfinance program with RM 10 million as an initial funding package to catalyze Digital Agtech technology in Malaysia. As the program progresses, this allocation may increase to RM 25 million.

MDEC’s ongoing eLadang program has also benefited from 548 participants since December 2019, with 78 farmers using digital farming technology, leading to a 20% increase in productivity and a 30% increase in revenue, as well as
reduction of operating costs by 30%.

Given that the MoU is contributing to the growing use of technology in agriculture, it is estimated that by 2025, there will be a 30% increase in job opportunities in this sector. At the same time, more young people will be forced to participate, which will be needed to manage and manage innovative technologies.