Delivering a licence to a farm

“Ag-tech has really only come into the common vernacular in the last five or six years,” says Padraig. “Even my own business, Terra Nutritech, which started out over 10 years ago, wouldn’t have been described as an ag-tech business back then. Ag-tech is still a fledgling industry that people are trying to find their way through. But there are loads of good ideas out there,” he says.  Many of these good ideas have made their way from the backs of napkins to bricks-and-mortar businesses that are thriving. So much so, it spurred on the establishment of AgTech Ireland in 2021 as a member-funded, industry-led organisation to promote and enhance the sector. Padraig explains that AgTech Ireland is not the gatekeeper of what ag-tech is or isn’t, it is an all-encompassing organisation where companies that have already 'been there and done that' can share the t-shirt with the new start-ups that need some direction.

Value for money

Enterprise Ireland carried out some information gathering in 2020 among 80 ag-tech client companies – 84 per cent of which were established, and 16 per cent of which were start-ups. Enterprise Ireland found, at the time, that Irish ag-tech sales amounted to around €1.1bn, of which 60 per cent were generated through exports. Around 3,000 people were employed in the sector and 87 per cent of companies were located outside of Dublin. A more up-to-date global value for 2024, based on information from Zion Market Research, estimates the value of the ag-tech sector at between USD$25-30bn with an expectation for that to jump to north of USD$70bn by the early 2030s.
Commenting, Padraig says: “Every farmer is spending money on something every year to help them on the farm. The size of the market defines the value of it, and that is certainly growing.”

Environmental, economic and social pressures are all feeding into its growth, Padraig comments: “Times have changed from when people were happy to work 70 hours a week to people wanting a balance, wanting to bring their kids to football every Tuesday night and watch them play a match on Saturday. People are looking at ways to do jobs more easily on the farm and to have them done automatically where they can. That is a huge driver of ag-tech.
“Getting skilled labour that you can rely on every day is next to impossible, especially when you can’t guarantee you’re going to have good margins next year due to price volatility. This is another huge driver of ag-tech.”
But one of the most prominent drivers of ag-tech now, is the environmental one, explains Padraig. “I always say farmers can’t work harder, but they’re going to have to work smarter. Farmers are coming under huge pressure from all sides. So, working smarter means utilising technology to help with all the various issues on farm that will help cut emissions because, ultimately, that’s going to be the licence to farm.” But the costs associated with this undertaking cannot fall on the farmer alone, Padraig says. They need to be borne by the processors and, ultimately, the end consumer.

Lovers or loathers?

Are farmers lovers or loathers of new-technology adoption? The answer to this question is not a simple one, Padraig explains.
“With our production system in Ireland, and I am mainly talking about the dairy side here, and because we’re low cost, farmers think longer and harder about adopting technology compared to farmers with larger units on the continent. There, their cost bases are higher, they’re putting through more litres, and they can spread capital investment in technology over more litres, I suppose.
“The top 25 per cent of farmers [here] are adopting technology and they are adopting it quickly because they’re seeing the return on investment when they adopt it correctly.”
But there is a cohort of Irish farmers over a certain age, explains Padraig, who are less inclined to adopt. According to the 2020 farm census, almost one third of all farm holders were aged 65 or over compared to just above one fifth in 1991. This has an impact.
“It is very difficult, mindset wise, for a certain cohort to adopt these new technologies. Being honest, they are sometimes scared of new technologies, and that is not easy for them. So, when you are dealing with that constraint on size of the potential market, effectively it slows down uptake of new technologies.”
This can be problematic when so much is being demanded of farmers in a climate context. Padraig agrees that a combination of retirement and a change in farming practices will see technology adoption increase soon. This is already happening. “Some farmers are just reaching retirement age and, especially, if there’s no succession plan in place, they are wondering, what’s the point?" says Padraig.

"They are not willing to put up with the stress anymore and with feeling so vilified. It certainly looks like there are more dispersal sales happening through marts now. The younger cohort is more au fait with technology and happy to adopt it. But I think there needs to be a huge educational drive – probably led by Teagasc – to help farmers to understand what technology is, and I don’t mean advocating for individual ag-tech solutions on the farm, I just mean in general, about technology. That could be as simple as a 60- or 70-year-old learning how to take a picture of a machine and send it to a mechanic. Those of us who can’t leave down our smartphones for 10 minutes take that for granted. We need to educate farmers on where tech is at, what it can do for them, and where it will go in the future, but that is a step-by-step process.
“I’ve seen some dashboards on systems that are taking information on farms and, to be honest, you would need to be a data engineer to figure it out. While we need to be able to give farmers actionable insights they need to be accessible and not reams and reams of data.”

Joined-up thinking

Padraig raises the issue of the need for greater connectivity between on-farm technologies. “There is a lot of information being generated in various forms but it’s being generated from four or five different areas and all of that information is being kept separate. We need to start looking at how we can we pull all of that information together to give those farmers much better actionable insights.”
This requires cooperation and buy-in from all companies, and that will involve some groundwork. Padraig comments: “There needs to be, in my opinion, some sort of not-for-profit organisation, that can house this information and protect the intellectual property (IP) of the various companies, obviously, but also allow for information to be analysed at individual farmer level.

“But this information can never be used for any other purpose, or to ‘penalise’ farmers, or to impact payments. There are various GDPR issues, but I think they can be overcome. Farmers, if they were going to get value from it, and if it would affect their bottom line, would easily opt into that.”

This, Padraig says, is crucial for farmers to be able to hit the environmental targets set for the sector. Ag-tech has already been successful in helping to achieve some of the easier environmental wins such as using less chemical fertiliser, soil sampling, and so on. But some big hitters are still to come. “We have some more difficult targets to hit over the next three to four years,” says Padraig. “One of the big ones relates to methane. All around the world there are methane-abatement projects being worked on. I believe there will be multiple solutions to that, and we [in Ireland] may even surpass the 25 per cent sectoral target that was set for the agriculture sector.” Farmers must be in a position to avail of those solutions but costs around training, education and implementation, Padraig says, cannot fall to farmers alone. It is an industry-wide problem that needs to be borne by the industry, he adds.

What are we good at?

So, what are ag-tech innovators good at here in Ireland, and are start-ups being overly influenced by the climate crisis? “I think it is varied in terms of the solutions that companies are looking at,” says Padraig. “Obviously, there is a bit more focus on anything that makes farming more sustainable because people see the potential market in that. Historically, we’ve been really good at what I will refer to as the metal ag-tech – the likes of Keenan’s and Abbey Machinery, for example. We have always been excellent in these areas. This is probably extending now to what I will call hardware or software ag-tech – sensors, for example.”
The ag-tech sector is proving that you certainly don’t have to be a farmer to solve farming problems: “Some of the best innovators in the world would never have worked in some of the industries they have ended up in,” says Padraig. “They would have come in from another industry, reimagined it, and brought in other best practices. I am a big believer that you don’t box yourself in with the idea that 'things have always been done this way'. There is always a better way to do things.
“But there is still a huge love for the land [in Ireland] and virtually everybody knows a farmer or has a family member or cousin or neighbour or friend in farming. We’re still very close to it as a nation, so a lot of people are starting to use the training and education that they’ve gotten for other industries, and are bringing it back into the agricultural fold.”

Setting up and scaling up

Each year at the National Ploughing Championships, the high standard of agri-innovation and ag-tech is displayed through Enterprise Ireland’s Innovation Arena and associated awards. Here, all those good ideas are given a chance to shine bright. Recently, AgTechUCD announced that its Agcelerator programme was accepting applications from  early-stage start-ups in the ag-tech space to help them along their business journeys. So, ideas are plentiful, supports are there but there are challenges to setting up and scaling up. Padraig comments: “There are various funding mechanisms there if you come up with a great idea, ranging from feasibility grants from local enterprise offices to various R&D grants also. There is a level of funding there but people new to it all are a little scared of it, of how to access it, of how to get business plans together. Engaging with State bodies can be daunting.
“From a research side, to work with a third-level institution, there can be a misalignment between the objectives of some research work and the objectives of companies. That is, companies need to get commercial and revenue-generating as quickly as possible, whereas at a lot of the research institutions, it is about the research only. So there is an educational piece required there for both sides to understand where the other is coming from. There are two agendas or priorities, so that can be frustrating."

Crowdfunding option

From a funding perspective, banks are slow to respond at the moment, says Padraig, but there is another way: “What I think has not been used correctly in Ireland is crowdfunding. I think if there are good enough agri-solutions you will have various farmers willing to put in small amounts of money and wanting to be part of some of those journeys. I think there’s a there’s huge goodwill for the right products in Ireland. Crowdfunding is one mechanism that I haven’t seen any company use to their advantage yet.”
This, Padraig, attributes to the Irish psyche of not wanting to put yourself out there in case you will be put down, or accused of having ‘too much ambition' or 'a big head’. But he advises against this way of thinking: “Any start-ups I’m ever talking to, it is about being proud of what you are doing and just get it out there. If you fail, then you fail, but at least you tried.” This, Padraig says, is part of the ‘university of life’ where valuable lessons are learned. And that is what aids success.

Global appeal

Ireland is a very small market, and entrepreneurs must have an eye on the international market-scape when developing a product. But a good idea and global appeal are not enough to make a mark globally. “It is very, very difficult,” says Padraig. “The way I describe it is, if I invented a machine in the morning that turned water into wine, you still must have a sales mechanism to get that out there. Customers will never come banging on your door to buy your product.
“So if you are going international, you need to put a lot of money into it, and feet on the ground, or you need to work with partners in the individual countries. You need to consider logistics, training, legal entities, and, potentially, stock levels. All of it takes a lot of money. You need a war chest to do that."
Padraig notes: “Some companies, including ourselves, are doing it slowly and looking at one or two markets at a time and generating revenue from there to get to the next market. Unless you are taking in tens of millions [of euros] you can’t go global overnight. It can be quite daunting for companies at the start. You need really good advice. Enterprise Ireland are hugely helpful but you still have to take some big leaps yourself.”
It is in this area that membership of AgTech Ireland can be really beneficial for peer support and knowledge sharing. Other companies have paved the way and are more than happy to lend a hand to the new ones coming up, Padraig says. “It is a very small industry here and everyone knows each other and there is a huge amount of goodwill there. A lot of companies are selling into the same markets but are not in competition with each other.
“I got help from people in different industries on the way up and I’m really keen to help other people, and I know that there are other people in the industry who are happy to pay it forward.”