The global population is increasing at an exponential rate. According to the United Nations, the world's population would grow from 7.6 billion in 2018 to 9.8 billion in 2050. With an anticipated 80 million people expanding the world's population each year, the need for essential commodities that meet their daily requirements, such as food, is likely to witness a significant surge.
As a result, the expanding urban population's level of life has resulted in elevated demand for fresh crop production and animal protein throughout the world.
The strain to provide a constant supply of high-quality agricultural products, along with rising global food demand, has produced a worrisome scenario for producers throughout the world, who are trying to raise productivity per hectare.
Moreover, the shortage of natural resources and dwindling agricultural fields are further adding to the urgency of resolving the issue of increasing global population.
Farmers are encouraged to increase farm profitability despite declining yield patterns across numerous main crops due to worries and pressures on the agriculture business brought on by rising global food demand.
Agrotechnology, also known as agricultural technology, is the application of technology in agriculture, horticulture, and aquaculture to increase output, efficiency, and profitability. Agricultural technology refers to farm commodities, services, or applications that improve different input/output procedures.
Agricultural technology has evolved because of advances in agricultural science, agronomy, and agricultural engineering.
Importance of Agricultural Technology
Farmers are now not obliged to spray entire fields with water, fertilizer, or pesticides on a routine basis. Alternatively, they may use the fewest pesticides possible and concentrate on extremely specific places, or even spray individual plants. The following are some of the advantages:
• Increased agricultural productivity
• Less water, fertilizer, and pesticides use, resulting in lower food prices
• Less of a negative influence on natural ecosystems
• Reduced chemical discharge into rivers and other water sources
• Enhanced worker protection
Technical Advancements in Agriculture
As technological improvements in end-user sectors lead to a more efficient environment, the agricultural business is gradually implementing smart technologies on farms to increase profitability. The agriculture business has transformed because of the introduction and progress of information and communication technology (ICT) in the last decade.
Professionals and industry experts all over the world are comparing this transformation to the one that occurred in the previous century, when new agricultural equipment and technology, pesticides, fertilizers, and high-yield crop varieties led to a rapid increase in crop output throughout the world.
Experts with new-age skill sets, corporations, and investing organizations are being lured in at a rapid rate as agriculture is becoming a lucrative high-technology industry.
Smart agricultural technology breakthroughs have resulted in not just improvements in farmers' output capacity but have also resulted in the introduction of industry-changing business models.
As agriculture absorbs and experiences the integration of various agriculture technologies into the agricultural cycle, it also faces the obstacles that come with their acceptance. The unavailability of substantial financial inputs necessary for the purchase and operation of various agricultural technologies is one of the biggest stumbling blocks to their adoption.
Most farming communities around the world lack the financial resources to make big capital investments. There is a big gap between the availability of agriculture technological equipment and their acceptance since costs for technologically sophisticated farm gear are considerably greater than those for conventional farm equipment.
Furthermore, due to the reliance on favorable seasons, a farmer is hesitant to invest in agriculture technology equipment with high upfront expenditures.
Agriculture Technology-as-a-Service (ATaaS)
The rise of a revolutionary business model in the agriculture sector, known as agriculture technology-as-a-service (ATaaS), has resulted from the unfavorable circumstances in the market.
ATaaS is a business model that allows clients to rent their chosen agriculture technology (equipment or software) rather than purchasing going for a one-time purchase. Pay-per-use (PPU) and subscription pricing models are two of the most prevalent ATaaS pricing strategies.
While the PPU model gives consumers entire control and accountability over adopting farm technology as they see fit, the subscription model requires customers to utilize the technology for the period of the service provider's package, such as monthly or yearly.
Besides low prices, the ATaaS business model provides farmers with features such as simple scalability and upgradeability, easy accessibility, rapid implementation, and dependable data backups.
As the service model relieves clients of ownership of agriculture technology, the full burden of asset ownership falls on the service providers, resulting in a greater cost of operations for them.
Despite the greater expenses, service providers could expect higher client retention and recurrent income because of the extensive implementation of the ATaaS model.
A service model enables providers to be in continuous and direct touch with their consumers and get regular inputs to improve their services and retain clients for extended periods.
Even though the ATaaS business model has sparked enthusiasm throughout the industry, comprehending the industry's driving and restraining factors is critical for players in agriculture technology to swiftly embrace the model and thrive in the sector.