Special Report: How Farming Is Gaining Ground in UAE

Photo Supplied by VeggiTech

8/24/2020 11:00:45 PM

(MENAFN - Khaleej Times) The UAE has implemented a range of policies, measures and strategies to ensure constant food supplies from abroad and scaled up agricultural production at home - and this is evident as businesses come forward and share their roles in aligning their strategies to boost food and water security.

On Sunday, His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, said: "Food and water security are among the priorities of the UAE government for the post-coronavirus period, and the objective is to launch specialist initiatives that will ensure our readiness to confront all types of crises."

The farming sector is aggressively working towards boosting local production of agro produce. Agrotech company VeggiTech, for instance, is addressing the key challenges of traditional farming through its design of protected hydroponics and grow lights-assisted hydroponics.

"We have chosen the challenging conditions of UAE to demonstrate the positive use of agro technology to create sustainable farms aligned to the UAE's vision of food security," said Hemant Julka, co-founder and COO of VeggiTech.

In the last 18 months, the company has built and is operating over 30 hectares of farms with protected hydroponics and is also in the process of going live with 4,500 sqm of indoor vertical farms that employ grow light-assisted hydroponics.

"We produced over 1.6 million kg of produce last year and this year [including the summer months] and we will produce more than 1.9 million kg with over 500 tonnes of organic produce from our farms between August 2020 and July 2021," added Julka.

Similarly, Dake Rechsand's primary focus is enabling desert regions to expand their agriculture and long-term water storage capacities and create food and water security.

"Our strength is being able to achieve this using simple, ordinary and abundantly available sand as a raw material. We are ramping up production and expect our technologies to enable farming and greenery for at least 10,000 acres across the UAE or for half-a-million trees by the first half of 2021," said Chandra Dake, executive chairman and group CEO of Dake Group.

"Within the same period we also expect to be ready with a comprehensive strategy for harvesting and usage of rainwater, which will allow us to enable 10 cubic metres [two million gallons] of water storage from harvested rainwater. In fact, we are ready to take on pilot projects during the upcoming monsoons next month and work with the government bodies to showcase how our products and technology can help harness rainfall and deliver immediate and tangible results for the UAE."

Tech disruption
VeggiTech produce utilises less than 10 percent of the water used in traditional farms and is pesticide-free. In addition, they have deployed technology for complete food transparency through QR codes that give complete visibility of the growing process of the vegetable produce from farms. The firm is in the business of offering "farming as a service", where the firm builds and operates digital smart farms that are sustainable and environmentally friendly.

In the first half of 2020, despite the Covid-19 circumstances, VeggiTech signed contracts for 13,000 sqft of grow area for indoor vertical farms and building protected hydroponic farms of 80,000 sqft.

"We are upbeat on the current pipeline of projects [over 10 million sqft of farms - protected hydroponics; more than 200,000 sqft of indoor vertical farms] to be signed in the third and fourth quarters of 2020 and these would start producing over 25 million kg of produce every year from 2021-22. The optimal use of land assets combined with the reduction in water resources and pesticide free crops are an ideal example of using technology to align with the UAE's food security goals," added Julka.

Desert farming
The Middle East, including the UAE and GCC, is enriched with desert sand. However, most of these desert regions import a bulk of their food commodities. Dake Rechsand has what it calls 'magic sand', a technology enables the sustainable production of organic food in the desert using up to 70 percent less water than conventional methods. At 65 percent of total use, the agriculture sector is the largest consumer of water in the UAE.

"On average, about 11 to 12 litres of water is being used to irrigate one sqm of land per day in the UAE. If we reduce that requirement by 70 percent, we could conserve about 45 percent of the total water consumed in the UAE. More importantly, this can be achieved while increasing the UAE's agricultural production significantly," said Dake.

Dake Rechsand creates breathable surfaces for roads, kerbstones and pavements, etc, which can absorb water, and harvest it.

"Coupled with our decentralised mini-reservoirs made from the same material, we can help harvest rainwater and keep it fresh for up to seven years, without any energy inputs. This can not only result in creating a new, reliable and cost effective water source, adding to the UAE's water reserves, but also one that is much cleaner since rainwater is a better source than desalination," added Dake.

"Our approach towards maximising water retention in sand is what propels desert farming and is both economically as well as organically efficient. That means one can get organic products grown from these regions very easily. Our products are designed scientifically, and they contribute to environmental sustainability."

ICBA committed to boost food and water security
The International Center for Biosaline Agriculture (ICBA) completely supports every effort towards the food and water security of the UAE's vision.

Dr Ismahane Elouafi, director-general of the ICBA, said: "Like national security, food and water security must be a priority for all countries. Thanks to the UAE's wise and visionary leadership, the country has always been at the forefront of ensuring food and water security in the country. During the recent disruption to global food systems, due to the Covid-19 pandemic, the UAE set an excellent example of its efforts towards food security. It was one of the few countries where the food supply remained uninterrupted. Even though the UAE is short of arable land and freshwater resources, and has harsh climatic conditions, the country harness the benefits of innovation to make agriculture possible and profitable in the country."

The UAE's National Food Security Strategy 2051, which was launched in 2018 with a vision to become a world-leading hub for innovation-driven food security, also prioritizes agricultural research and development. The country rose from 33rd place in 2017 to 21st in 2019 in the Global Food Security Index, compiled by the Economist Intelligence Unit. The ICBA has been working on several technologies and innovations to boost agricultural productivity and improve farmers' livelihood, in non-arable lands and harsh ecosystems.

All of the ICBA's research and development programmes are directly beneficial to the region, particularly to the UAE.

"We have introduced what we call climate-smart and resource-efficient crops such as quinoa, pearl millet, sorghum, and Salicornia, among others, in countries in Central Asia, the Middle East, and North Africa. These crops are nutritious and resilient to heat, drought, and salinity, therefore fit for ecosystems such as UAE. Furthermore, our crop development and research trials have been mostly conducted in our experimental farm in Dubai. Hence, all data and results are very relevant to the UAE," added Dr Elouafi.

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Agtech Sector Blooms As More Dollars And Startups Rush In

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Christine Hall | August 20, 2020.

Twitter: ChristineMHall

Farming has been around for thousands of years, but investments and startup activity in agricultural technology, commonly known as “agtech” or “agritech,” have only exploded over the past five years.

In fact, in each of the last two years, venture capitalists invested $4 billion in startups in the agtech space, according to Crunchbase data. Based on the $2.6 billion already given out as of Aug. 14 of this year, 2020 is poised to repeat or even exceed the previous years.

Better Food Ventures Partner Seana Day began tracking agtech startups more than five years ago. She said that farming is an area that isn’t typically tech-enabled. In fact, COVID-19 reminded the world about the food supply chain, she added.

“There was a disconnect between demand signals and supply, which is why you saw empty grocery shelves,” she said. “At the same time, the dairy farmers were dumping milk because they didn’t have a process in place to massively produce small consumer packaging.”

Day estimates that global food and agriculture fund managers have about $130 billion in assets under management, which is driving a surge in investments as well as a shift in thinking.

Farmers have historically been resistant to change, Day said, but at the end of the day, they are rational business people. That means that if a startup can show a farmer a product or service that will boost the return on investment—increasing revenue or decreasing costs—the company will have a better chance of making the sale.

The challenge comes in for tech companies that offer apps meant to save time and increase job productivity, areas that aren’t necessarily needed for farmers, she added.

There is also a shift in legacy food companies thinking digitally. Day points to Tyson Foods as an example. The meat producer earlier this month promoted Dean Banks to CEO. He joined Tyson as president last December from Alphabet’s high-tech incubator X.

“That is a huge signal from a company making bold moves, saying ‘we want to be a leader in this space,’” Day added.

New investments

This year has been particularly busy for the agtech innovation sector, as startups secured both big and small investments.

One of the largest went to Farmers Business Network, which raised $250 million in Series F funding earlier this month. Day said the San Carlos, California-based company was one of the pioneers in e-commerce models, helping farmers optimize their financial performances by finding demand for supply.

Meanwhile, Berkeley-based Pivot Bio announced a $100 million funding round in April, led by Breakthrough Energy Ventures and Temasek, to scale its microbial nitrogen technology. The company said the technology increases crop yields, and in turn, farmers’ revenues. Biodesign startup Geltor brought in $91.3 million in a Series B round in July, led by CPT Capital, to make proteins, such as collagen and elastin, but without animals. The startup’s products are used in beauty, and food and beverage products.

One of the newest is iFarm, a Finland-based startup providing indoor farming technology for growing fresh greens, berries and vegetables. On Thursday, it announced that Gagarin Capital led its $4 million investment with other investors including Matrix Capital, Impulse VC, IMI.VC and several angel investors.

iFarm, founded in 2017, has more than 50 ongoing projects with clients in Europe and the Middle East for 2020, Max Chizhov, co-founder and CEO, told Crunchbase News. The company will use the funding to develop its iFarm Growtune tech platform; expand into new regions in Eastern and Northern Europe and the Middle East; and will experiment with growing strawberries, cherry tomatoes, sweet peppers, radishes and other crops.

“We think this is an interesting time to be in agtech, and we think we are in the right time and right place, especially as there is more attention on food and agtech and a pipeline of investments,” Chizhov said. “We are focusing on how to change the supply chain, and we believe we are one of the solutions to solve this problem.”

Last week, we also reported on a new company, Unfold, which is focused on vertical farming. Bayer’s investment arm, Leaps by Bayer, and Singapore-based investment firm Temasek infused $30 million into the new company.

Unfold’s President and CEO John Purcell said he is bullish on the farming sector, seeing a need for genetics in vertical farming. The company has an agreement for certain rights to germplasm from Bayer’s vegetable portfolio that includes lettuce, spinach, tomatoes, peppers, and cucumbers.

“Technology has to catch up with the promise,” he said. “There has been an overall trend in produce moving toward vertical farming and greenhouse, but the hard part is you have to have the tech to make it feasible.”

The “tech” in question is lighting, mechanics and a system in place. Then it has to be competitive with the other forms of production so potential customers will see its value, Purcell added.

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New areas of agtech

Purcell sees three promising areas for the agtech industry:

• Major urban areas, where there is a desire for local, fresh food;

• Self-sufficiency, or helping places where there is limited arable land; and

• Produce supply chains, or getting food from the farm to fulfillment centers.

Ashley Tyrner, founder and CEO of Farmbox Direct, thinks there should be one more area: food as medicine. She is in the process of raising $10 million for her East Coast-based organic and natural produce delivery service.

Tyrner said she saw her business grow more than 2,000 percent during COVID-19. In that time, Farmbox also began working with Medicare to provide box services to patients identified as those who need to eat healthier to manage chronic disease.

“The climate has changed in Silicon Valley, and VCs are welcoming because we are doing food as medicine,” she added. “We were the first to find an insurance company to work with us to help patients change their eating patterns. We are creating a new space here.”

In the area of crop protection is Canada-based MustGrow Biologics, an agricultural biotechnology company taking natural compounds from mustard seeds and turning them into pesticides that fortify the soil.

The pesticide industry is valued at $65 billion, but most are synthetics, Corey Giasson, president and CEO of MustGrow, told Crunchbase News in an interview. The biologics side of the pesticide industry is growing, but is still worth only about one-sixth that amount, he said.

The slower growth is due to biologics in the past not being as effective as synthetic fertilizers, so MustGrow has been doing a lot of studies to show that its product works.

“Farmers want to use products that are healthy and safe, but need something effective to grow a crop that will suppress pests,” he said. “We also have a growing population globally, and we need to feed people, doing it in a safe, environmentally sustainable way.”

New opportunities

Crunchbase data shows that is the most active agtech venture investor, having made 20 venture investments in the agtech space since it was founded 10 years ago. It was most recently involved in India-based Intello Labs’ $5.9 million Series A round. The company uses image matching and machine learning to measure the quality of crops.

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A new player is FTW Ventures, led by Brian Frank, who on Thursday announced he is raising his first “problem-focused fund” aimed at early-stage food and agricultural startups.

Frank already raised the $4 million fund, in which he will invest in 15 to 20 deals at about $200,000 to $250,000. He has already made five investments, the most recent in April as a part of Plantible Foods’ $4.6 million seed round. He was also an investor in Plantible’s pre-seed round. The San Marcos, California-based B2B food technology company is developing plant-based protein.

Frank predicts some of the hotter areas will include hardware and automation, software and SaaS, novel products–such as Plantible–and personalized nutrition. He also said that consumers are driving the way food makes its way from the farm to the fork.

“I came into this sector from mobile technology, artificial intelligence, and machine learning, with a deep-seated passion for food,” he said in an interview. “There is a major shift in consumer trends as they look for more resilient and sustainable food. Climate change is both an effect of food and it impacts food. Plants can’t just move to a new climate, so we need to help them.”

Illustration: Dom Guzman

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