Smart Irrigation: Growing Opportunities
Contents
Introduction
A demand-driven market
Market forces
Facts and Figures
Investment Opportunities and Market Segments
Market movers
Leaders & fast followers
Investors
VC / PE / Funds
Sustainable Sowing
Healthier and Cleaner Crop Management
Just like humans, plants get thirsty too — and predictive irrigation models that take into account such factors as plant physiology, real-time soil conditions, and weather forecasts can save 40% in water consumption compared with traditional irrigation methods. Farmers can grow crops on a consistent schedule to support a more reliable food supply when using smart irrigation methods. According to estimates, approximately 70% of the world’s freshwater withdrawals are for irrigation practices. Large-scale farming would therefore be unable to sustain the needs of the world were it not for irrigation. Nonetheless, current practices are unsustainable, as the threat of water scarcity becomes more pervasive.
The mutually reinforcing climate and nature crises are undeniable threats to human economies and survival. Moreover, by 2030, the available water supply is predicted to decrease by 40%. A quarter of arable land is already degraded and requires significant restoration to sustain crop production. Additionally, the world's population growth shows no sign of slowing, and by 2050, will require a corresponding 70% increase in available food calories for consumption. That means more crop production — and more water use. While there is still time to avoid worst-case scenarios, immediate action must be taken to meet the growing needs.
This realization has led to a green transition within the agriculture industry, including smart irrigation (SI) systems that offer a potential solution to the water scarcity issue, using local weather, landscape, and crop data to appropriately distribute water to a given crop — as precise readings of plant needs in addition to expected weather can allow for more precise water release. The goal of SI is to maximize efficiency by reducing water waste while maintaining plant health and quality. There are opportunities for governments and the private sector to drive investment toward improving SI efforts.
Market Trends: Facts, Figures, Forces
Market Facts
Rising demand for systems such as sprinklers, drip irrigation systems, and smart detection devices to enhance the overall water efficiency are anticipated to fuel the growth of the SI market. Broad adoption of these innovations throughout the agricultural value chain are a driving force behind softening the economic blow of COVID-19.
These tools will impact the movement restrictions on farming productivity and advance the UN’s Sustainable Development Goals (SDGs).
Digital tools and technologies in the agriculture sector are set to increase farmer productivity and incomes, strengthening food security, and enhancing the resilience of food systems
Around 14% of the world’s food is lost between harvest and delivery, sensors offer a solution to the monitoring issue faced during transit.
Currently, SI technology is expensive, which makes it unaffordable for smaller farmers in developed regions and most farmers in emerging economies.
market Figures
The SI market size was valued at $900 million in 2020 and is projected to reach $2.8 billion by 2028. Experts expect the market to grow at a compound annual growth rate (CAGR) of 14.02% between 2021 and 2028.
The levelized cost of water (LCOW) in the US is $0.40/m3. With potential water savings of approximately 50%, SI systems are expected to lower long-term expenses for farmers.
One case study estimates that the cost to implement an SI system in a 100,000 square foot space could be $4,500 to $8,500 cheaper on average than alternatives.
market forces
A growing world population, the revamping of the agricultural system, and the need for freshwater conservation are driving the development of SI practices throughout the world.
47% of the world population lives in an area that suffers from water scarcity at least once a month annually.
Water consumption regulations in the agricultural industry have incentivized more efficient water consumption.
Certain agricultural regions, such as central California, restrict water use for agricultural purposes.
Irresponsible irrigation practices can also lead to soil erosion, making it more difficult for certain crops to establish roots in the soil.
Investment Opportunities and Market Segments
Targeted investments in sustainable agriculture can provide positive economic benefits for farmers, improve environmental health, and build a more resilient global food supply. The transition to smart agriculture can be induced by policies that subsidize SI practices, encourage private sector investment, and facilitate technological development. Investments into sensors, flow meters, smart detection networks, and water distribution systems will support farmers and value-chain players alike.
Weather Stations
Weather-based control systems use live local weather data and information collected in weather stations to calculate evapotranspiration. Farms far away from national weather stations choose to implement their own stations for exact local weather data; however, these weather stations often have lower quality equipment. In order to use data from these smaller weather stations, support from investors and governments is necessary.
Software
Improving the software for SI — used mostly for tracking and optimizing crop protection products and fertilizer usage — is critical in order to enhance the ability to incorporate local weather data into longer-term forecasts and weather data.
Weather and Soil Sensors
Sensors measuring variables ranging from soil moisture content to wind speed are essential for SI systems to tailor the water supply to a crop. Therefore, improving weather data specific to the ground helps improve the efficiency of the irrigation system. Sensors also enable farmers to track crop and soil health, make planting decisions and precisely guide fertilizer and water use to improve the efficiency, reduce farm expenses, water pollution and emissions. There are a range of sensors to invest in, each with their own unique abilities to promote efficient water distribution:
Pyranometers that measure incoming solar radiation on a crop field
Psychrometers that measure relative humidity
Thermocouples that are used for surface and below-ground temperature sensing
Atmospheric temperature sensors, anemometers, and soil moisture sensors that provide commonly used data for soil moisture detection
Flow Meters
A flow meter detects the amount of water flowing through a pipe and transmits signals to indicating devices that use that information to detect unscheduled, low-, or high-flow events.
Connecting the Internet of Things (IoT) to flow meters to detect malfunctions can identify where there is a leak.
Flow sensors work in conjunction with an irrigation controller to take corrective action, such as stopping the flow of water, sounding an alarm, or sending alert messages.
Flow Meters
Devices which detect and communicate flow rates and are useful for unexpected events, such as flooding.
Courtesy: Flomec Meters
Smart Detection Network
Evapotranspiration systems utilize data from local weather systems to adjust their irrigation settings. Air temperature, relative humidity, wind speed, solar insolation, and depth of stored water in the soil are used to calculate evapotranspiration.
Soil moisture sensors, as their name suggests, detect the moisture content of the soil to determine whether a crop requires watering, and can be adjusted according to the crop’s water needs.
Water Distribution
The primary irrigation methods used today are micro drip and subsurface irrigation. Beyond moisture detection and flow meters, these water distribution methods help minimize water waste and agricultural runoff.
Microdrip systems provide a slow stream of water, often directly to the roots using a hose with small holes throughout.
Subsurface irrigation systems are placed below the soil surface to directly target the roots.
Impact
While the most-significant component of SI is its water-saving aspect, there are other environmental and economic impacts that arise from the technique.
The chances of a crop dying due to over- or under-watering is far lower than with traditional irrigation systems, thus reducing costs through a higher crop yield.
Efficient irrigation reduces waste and the amount of fertilizer needed per plant, and lowers the amount of labor input needed.
Efficient irrigation reduces energy use, as less water is needed for a comparable area of irrigation, which in turn requires less energy to pump.
Market Movers: Current and Future Heavy Hitters
Market Leaders
Galcon designs and sells IoT sensors for SI systems ranging from smaller home gardens to larger-scale farms.
Rachio designs smaller-scale SI systems that can be controlled at a distance from a smartphone. The company’s smart controllers have already saved approximately 35 billion gallons of water.
Libelium sells a wide range of weather and soil sensors tailored toward optimizing SI systems.
Saturas specializes in determining when trees need to be watered. Its main product, StemSenseTM, attaches to the trunk of a tree to detect the Stem Water Potential (SWP).
SWP is a highly accurate parameter for determining water status in crops. Specifically, it accurately indicates the stress level of trees and provides data to respective sensors.
Hortau specializes in soil moisture detection technology.
Greyter sells a circular irrigation system that minimizes water waste.
Spherag models watering programs and tailors them to the needs of certain crops/farms with farm data and SI IoT systems.
Hortau
A company which measures soil tension as information to properly distribute water.
Venture Capital/PE and Other Fund Investors
Farmers Business Network is an investment firm that helps growing agricultural businesses and technologies by providing them with equipment and land loans, in addition to offering financing services.
Germin8 Ventures has invested in several data analytics technologies specializing in providing farmers with the data they need to optimize their yields.
Granot Ventures recently invested $20 million in N-Drip and has a history of investing in emerging technologies, including many clean-tech companies.
Innovation Endeavors is a venture capital fund with a history of investing in emerging technology in order to improve society and the planet.
Final Thoughts
One downside of SI is its lack of suitability to smaller farms, which often find the systems too complex to be practical. Additionally, their initial implementation can be cost prohibitive for small farms, not to mention SI’s relatively high maintenance costs from malfunctions and calibration issues. Finding a way to systematically reduce the cost of SI will prove beneficial in the long run, as SI will help mitigate the emissions in the agricultural industry.