Innovation: a look through the value chain of food production

By Alexander Roose, Head of International and Sustainable Equity at DPAM


Between sustainable irrigation, biological treatments, demographic growth and new eating styles, the agri-food sector seems to have entered a phase of great change. The ever-increasing concerns related to climate-change, biodiversity and sustainability have incited the agro-tech industry to come up with a range of exciting applications throughout their entire value-chain.

Upstream in the value chain, new techniques like drip irrigation and fertigation have the potential to substantially improve fruit and vegetable production. The former optimises water usage by allowing water to slowly drip to the roots of crops. The latter injects water-soluble fertilisers into an irrigation system to enhance yield.

Farmers are also increasingly relying on precision agriculture – or satellite farming-. This approach to large-scale agriculture relies on GPS technology, satellite imagery and big data platforms to obtain a very detailed overview of soil composition and variability among crops. This information subsequently allows farmers to preserve resources and optimise yield.

Another interesting development is the reliance on fermentation to develop new agricultural technologies. Companies like Incotec (subsidiary of Croda) and Chr.Hansen in partnership with FMC Corp increasingly use this process to create so-called biologicals. These naturally derived products – such as bio-fertilisers and bio-stimulants – can significantly improve crop quality. Biologicals are generally made up of microorganisms, plant extracts or other organic matter and offer a green alternative to conventional pesticides.

There has also been significant progress further down the value chain: The UK-based company Genus uses CRISPR technology (a powerful tool for editing genomes) to create new pork species which are resistant against Porcine Reproductive and Respiratory Syndrome. This disease complicates procreation in pigs and causes over EUR 3bn in damages in the industry every year.

Finally, on the customer end of the value chain, the agri-food sector is increasingly moving away from conventional meat-production in favour of more eco-friendly alternatives. Generally, there are three major trends: a more limited meat consumption, a move towards meat-replacements using plant-based substitutes, and eventually cell-based meat alternatives.

These new developments can significantly alter the face of the agri-food sector and improve its sustainability credentials. However, it is very important to make a clear distinction between theoretical developments and practical success of new agricultural products. Unfortunately, several promising ideas never manage to get implemented on a large scale. If, for example, a new technology requires a full overhaul of a farmer’s current equipment, he can be somewhat reluctant to implement the innovation in question. To encourage wide-scale implementation of costly innovations, it is important that agro-tech companies convince farmers not only of their products’ sustainable benefits, but also of their commercial advantages. For instance, DSM has developed a feed additive for cows that lowers the enteric methane emissions by 30%. However, in order to facilitate adoption among dairy farmers, DSM will also have to demonstrate its additive’s tangible yield benefits (higher milk production). Still, it is not only the farmers which need to be convinced. Consumers can offer a lot of pushback, too: Most Western customers are still fairly averse to the idea of insect-derived products or lab-grown meat for example.

Though the agro-tech industry has undoubtedly come a long way in the past century, it definitely does not rest on its laurels. The sector currently offers a whole range of ambitious alternatives and solutions to challenge the on-going climate crisis. However, it remains to be seen to what extent global markets are ready to embrace the benefits of these innovations.


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