Nothing ventured, nothing gained – but what can you afford to lose? The role of public money in de-risking the development and adoption of new technologies was recognised recently with the announcement of £90M investment into agri-tech via the Industrial Strategy Challenge Fund.
The funding is designed to bring together business, farmers and academics to help explore the commercial potential of new tech ideas, demonstrate innovative agri-tech projects (and how they will work in practice), as well as building a new bilateral research programme for international collaborations.
So how is this approach different to the public support that has already been provided for agri-tech, such as the £160m linked to the Agri-Tech Strategy launched in 2013?
It’s very different, according to the funding agencies. At a recent session at Rothamsted Research, the message was very clear that this investment is not “Business As Usual’, but rather it will take a challenge-led approach focussed on real-world problems. Business Secretary Greg Clark said: “As part of the Industrial Strategy, we announced a Transforming Food Production Challenge and I’m delighted to announce the government will invest £90 million to make this challenge a reality.”
Agriculture is a sector used to manage risk – from adverse weather events, to variable market prices, attack from pests and diseases to uncertain political times.
Farmers have a finely tuned risk appetite and understandably seek ways to minimise the many risks to which they are exposed. Building resilience within the value chain is one way of achieving this. So, better prediction and smart procurement are among the benefits offered by technologies such as AI, robotics and earth observation that are in the government’s tech investment portfolio.
Disruptive technology is by its nature high risk. So to make a step change requires public money to stimulate innovation.
There appears to be widespread agreement that this will be recognised by the funding bodies as a justification for public investment. Mitigation of some of the risk incurred by companies, is, therefore, the price paid by society for the potential returns to the economy as a whole.
Assessing risk and reward
We’ve also been thinking about risk from both an insurance and investment perspective. We are often challenged by our members who want to understand the risk and liabilities involved in on-farm adoption of new innovations, and to hear about creative ways in which this can be offset and mitigated.
Through our partnerships with investors, we’re also helping those new to agriculture to understand better the risk-reward ratio around investing in early and mid-stage agri-tech businesses.
Having appropriate business models, funding schemes and investor appetites all have a part to play in helping accelerate new innovations into the field, but they also need a strong evidence-base and the proof of the pudding is in the eating.