5 AgriTech problems worth £50B+

Hello,

Welcome to the first edition of What's The Problem.

This week, we turn our attention to the agricultural technology (AgriTech) sector.

While often perceived as traditional, farming is a high-stakes industry grappling with systemic challenges that technology has yet to solve effectively. The result is a landscape filled with significant, quantifiable problems.

For the discerning founder, these problems represent clear opportunities to build valuable products and services.

Based on our research, we have identified five high-impact problems where a new solution has a strong likelihood of success.

1. The Prohibitive Cost of Precision Technology

The Problem

The tools of modern precision agriculture—GPS-guided tractors, mapping drones, and IoT soil sensors—promise significant yield improvements (15-25%). However, with basic systems costing upwards of £40,000, they remain financially out of reach for the vast majority of small and medium-sized farms.

Why It's Urgent

Farmers are caught in a squeeze. Net farm income is falling while input costs are rising. Many are stuck with legacy equipment that is incompatible with modern IoT tools, forcing them to consider a complete and prohibitively expensive overhaul.

The Scale of the Problem

• 80% of small-to-midsize farms cannot afford precision technology.

• £9.4 billion is the estimated annual economic loss in a single major US agricultural state (Kansas) from suboptimal yields.

• 40% of small farmers report delaying essential technology upgrades for over three years due to cost.

Current (Flawed) Solutions

• Equipment Leasing: Reduces the upfront cash burden but adds high interest rates (18-22%) to already thin margins.

• Government Subsidies: Often bureaucratic, with approval cycles stretching over 18 months, making them impractical for addressing immediate needs.

• Open-Source Tools: Low-cost software for tasks like drone mapping exists, but it typically lacks integration with critical hardware like soil sensors.

The Opportunity

There is a clear gap in the market for a "Precision-Farming-as-a-Service" (PFaaS) model. Farmers need solutions that decouple technology access from huge capital expenditure. A subscription or pay-per-use service for a bundle of hardware, software, and support would be transformative. Think of the "cloud kitchen" model, but for farm tech, providing access to top-tier equipment without the burden of ownership.

2. Post-Harvest Losses from Poor Preservation

The Problem

A staggering amount of produce is lost after it has been successfully grown and harvested. Globally, 20-30% of grains perish due to inadequate drying and storage methods. This not only represents a massive loss of food and revenue but also leads to secondary issues like mycotoxin contamination, which can render entire shipments worthless.

Why It's Urgent

Climate change is leading to more extreme weather, with higher humidity and temperatures increasing spoilage rates. At the same time, major retailers are demanding longer shelf lives for produce to streamline their own supply chains, putting further pressure on farmers' preservation methods.

The Scale of the Problem

• £48 billion is the estimated annual value of global grain losses from spoilage.

• £4 billion per year is lost in rejected shipments due to contamination from mould.

• 12% price penalties are common for farmers using traditional open-air drying methods versus modern controlled systems.

Current (Flawed) Solutions

• Hermetic Storage Bags: Effective at cutting oxygen and reducing spoilage, but the required electronic readers to verify the seal cost thousands of pounds, making them unscalable.

• Solar Dryers: A low-cost, green alternative, but they are often too slow, putting crops at risk during rainy seasons.

• Cold Storage Units: Highly effective but consume vast amounts of energy, making them economically and environmentally costly.

The Opportunity

The key unmet need is for low-cost, scalable preservation technology. This could take the form of modular preservation systems that use desiccants instead of energy, or real-time spoilage prediction tools using affordable volatile organic compound (VOC) sensors. A solution that can monitor and predict spoilage inside a grain silo before it spreads could save a farmer's entire harvest.

3. Crippling Labour Shortages and a Widening Skills Gap

The Problem

The agricultural workforce is shrinking and ageing. In the US, farm labour availability has dropped over 40% in two decades, and the median age of a farmer is now over 57. Compounding this, modern farm equipment is incredibly complex, yet only a small fraction (12%) of farmworkers are trained to operate and maintain it.

Why It's Urgent

There is no new generation of workers entering the field to replace those who are retiring. The increasing technical complexity of farm machinery, which can require coding skills for optimisation, creates a high barrier to entry for an already limited labour pool.

The Scale of the Problem

• £48 billion in annual losses are attributed to unpicked crops and planting delays caused by labour shortages.

• 9 months is the average time required to upskill a legacy farmworker to operate new agricultural robots (agbots).

• H-2A visa costs (a key source of labour in the US) have soared, making migrant labour increasingly expensive.

Current (Flawed) Solutions

• Robotics: Automated solutions like harvesting assistants are emerging, but they can only handle a small percentage of specialised tasks and are extremely expensive.

• VR Training: Virtual reality modules can cut onboarding time, but they lack the haptic feedback needed to simulate real-world mechanical work.

• Migration Programmes: These provide essential workers but are often complex, costly, and cannot scale to meet the full demand.

The Opportunity

The gap lies in creating accessible and rapid upskilling solutions. A turnkey platform that combines basic language training with tech literacy and hands-on equipment simulation could be invaluable. Another angle is a "just-in-time" labour marketplace that intelligently matches workers' certified skills with specific farm technology needs, similar to how Uber vets and dispatches drivers.

4. Soil Degradation Undermining Yields

The Problem

Decades of intensive monocropping (growing a single crop year after year) have severely degraded soil health. In the US Midwest, topsoil has lost over 60% of its organic matter, forcing farmers to use 40% more fertiliser just to achieve the same yields as in the past. It's a cycle of diminishing returns.

Why It's Urgent

The rising cost of inputs like fertiliser makes soil degradation an immediate economic problem. Simultaneously, new carbon markets are emerging, offering farmers a potential new revenue stream for regenerative practices that restore soil health. However, this requires accurate measurement and verification.

The Scale of the Problem

• £400 million is the extra amount US corn farmers spend each year on fertiliser simply to compensate for degraded soil.

• 17% is the typical yield drag in soils affected by salinisation (a common form of degradation), even when mitigation systems are used.

• 5 acres of farmland are lost to salinisation every minute across the globe.

Current (Flawed) Solutions

• Cover Crops: This regenerative practice reduces erosion but costs farmers around £120 per hectare in planting costs for biomass that cannot be sold.

• Biochar: Adding this carbon-rich material can boost yields, but the upfront cost of £240 per tonne and a 3-year wait for results deters many.

• Precision Liming: Variable-rate applicators reduce over-application of lime (used to balance soil pH), but they don't address the core issue of lost organic matter.

The Opportunity

The two biggest opportunities are low-cost biological inputs and better measurement tools. A startup that develops microbial inoculants capable of replacing a significant portion of synthetic fertiliser would have a massive addressable market. Secondly, there is a pressing need for a low-cost, real-time soil carbon sensor. Such a tool would unlock access to lucrative carbon credit markets for millions of farmers by providing the data needed for verification.

5. Data Silos Crippling Farm Analytics

The Problem

The modern farm runs on data, but that data is a mess. The average farm uses multiple, disconnected digital tools—from weather apps and soil databases to equipment telemetry and drone imagery. Each platform uses its own proprietary data format, making it nearly impossible to get a single, unified view of the entire farm operation.

Why It's Urgent

The next wave of AgriTech innovation, particularly AI and machine learning, depends on large, unified datasets. Without a way to merge information from different sources, these powerful technologies cannot be effectively deployed. Furthermore, new regulations (like the EU's "Farm to Fork" strategy) mandate data traceability across the supply chain, a task that is currently a manual nightmare.

The Scale of the Problem

• 23% is the average yield gap resulting from suboptimal decisions made with incomplete, siloed data.

• 12 hours per month are wasted by farm managers manually trying to reconcile data from different platforms.

• 87% of farms use two or more digital tools that do not speak to each other.

Current (Flawed) Solutions

• API Hubs: Industry groups have attempted to create data standards, but they cover less than 15% of the IoT devices currently used on farms.

• Blockchain: Platforms can track crop provenance from farm to consumer but fail to integrate the real-time operational data needed for decision-making.

• All-in-One Farm Management Suites: Large players like Climate FieldView offer comprehensive platforms, but they often operate as "walled gardens," making it difficult to export data or integrate with outside tools.

The Opportunity

There is a classic tech opportunity to build a neutral, third-party interoperability layer. A tool that can ingest data from any source (John Deere tractors, independent soil sensors, public weather APIs), normalise it, and present it through a single, unified dashboard or API would be immensely valuable. This is a data-plumbing problem at its core, perfect for a tech-focused founder to solve.