Today’s producer is innovative, highly skilled, and data driven. This is according to the August 2019 RBC report Farmer 4.0: How the coming skills revolution can transform agriculture, which positions Canadian producers amidst an agricultural revolution fuelled by advancing technologies. But is Canada a top contender when it comes to harnessing the superpower potential of our producers?
As a nation, Canada is lagging when it comes to agtech funding. In 2018, global investment in agtech reached $16.9 billion USD, with Canada’s contribution totalling 3.4 per cent. This placed our country behind emerging economies such as Brazil and India. Private investment in Canadian agricultural research and development is a fraction of what the US invests, with Canada’s totaling 11 per cent versus 73 per cent in the United States.
Sean O’Connor is the Managing Director of Conexus Venture Capital and Emmertech, a Canadian agtech venture capital fund with a focus on the intersection of technology and the farmer. He is optimistic about the changing landscape of Canadian investment in agtech, and positions Saskatchewan as the key ecosystem for agtech innovation in the country.
“In five or 10 years, Canada’s going to be seen as an agtech innovation leader. It’ll be a place where people are creating new and innovative technologies in the agricultural space, and not just ones to solve the Canadian prairie farming problem, or the wine-growing opportunities in Niagara or Okanagan, but really to solve problems all around the world,”
Emmertech has $35 million capital committed today, and O’Connor notes that this will provide a significant launch pad for the “world-class agtech entrepreneurs who understand both how to build technology companies as well as the interworkings of how agriculture and food supply chain work.”
More than 40 per cent of our country’s cultivated farmland is located right here in Saskatchewan. We have a reputation worldwide for producing top-quality crops and led the nation in agricultural exports in 2020: $16.9 billion, a record year for our humble, hardworking province. A 2020 study by Innovation Saskatchewan showed that the province’s tech sector consists of more than 5,000 companies and accounts for 5.6 per cent of the GDP and more than $10 billion in revenue a year.
Kari Harvey, CEO of Innovation Saskatchewan, echoes O’Connor’s prediction that our province will emerge as an agtech leader in the next five years. In the summer of 2020 Innovation Saskatchewan announced its Agtech Growth Fund in response to an increase in agtech related applications (approximately 30 per cent total) received through the Saskatchewan Advantage Innovation Fund (SAIF). “The goal is to accelerate the development and commercialization of cutting-edge agtech,” Harvey notes.
Innovation Saskatchewan has dedicated $15 million towards the fund with the hopes that the province will establish a vibrant agtech ecosystem. “When you look at what we as a province have to offer, with Saskatchewan being a leader in our nation in the agriculture space and with the fact that we have a growing tech sector in the province, we feel Saskatchewan is positioned to be a leader in Canada – and, frankly, in the world.”
RBC suggests that with accelerated agtech investment today, $11 billion will be added to the GDP by 2030.
Of the $13 million Innovation Saskatchewan has invested through SAIF, Harvey notes there has been a tremendous return of investment: attracting more than $47 million in private investment to accelerate commercialization of technologies. It is expected that the Agtech Growth Fund will see similar returns.
Evelyn Cerda, president of the Saskatchewan Chapter of Valhalla Angels, is also optimistic about Saskatchewan’s future and the agtech industry. She points to the challenge many investors have with the long commercialization phase in agtech companies as one hurdle to overcome, but says it’s the early stage investing that’s key for these companies to gain traction and growth. “Because technology is accelerating innovation, we’re in a good time for these early-stage companies to pop up. It’s about being competitive and doing the deals a bit differently.”
Cerda is on the lookout for innovators who are building better agricultural practices, such as labour automation tasks to reduce the need for constant recruitment of foreign workers. She also pinpoints sustainability issues as an area with great opportunity.
O’Connor says Emmertech has already spoken to more than 70 companies in anticipation for when the fund goes live within the next couple of months. He’s anticipating growth in a few areas, such as agtech intersecting with cleantech, noting consumers will increase the demand for food traceability.
Harvey says through SAIF, they’ve seen opportunity with precision agriculture and using data analytics and machine learning to optimize input decisions from producers and expects this to continue with the Agtech Growth Fund applications.
With investors ready to fund agtech innovation and the power of the province’s existing technology industry, Saskatchewan is entering a promising new agtech frontier. “We’re at an inflection point,” says Cerda. “Now is a great time to be investing in the agtech sector.”