Agritech Startup Challenges to Support Indonesian Food Security

The government is preparing IDR 99 trillion for a food security program in 2021, in line with the increasing threat of the world food crisis due to the corona pandemic. This is both an opportunity and a challenge for agricultural (agritech) and fishery (aquaculture) startups.

On average, startups that penetrate this sector are included in the financial technology (fintech lending) category such as TaniFund and Crowde and e-commerce such as TaniHub and Aruna. Meanwhile, those developing the technology are eFishery, Jala Tech and Hara.

Co-Founder and Managing Partner at Ideosource and Gayo Capital, Edward Ismawan Chamdani, said one of the difficulties of agritech startups is providing technology-based solutions for farmers, namely the polyculture planting system or planting various plants on one land.

This makes it difficult for the device or tool to remotely control. To invest in a startup that provides technology-based tools, investors usually examine three things, namely the quality, consistency and scalability of services. “Investors will look for technology that supports these three,” said Edward, Tuesday (15/12).

“If not, (the device) is difficult to sell to the end consumer.” Another challenge is that farmers in Indonesia work independently. “It is necessary to form a cooperative. “There must be a leader (farmer) who understands about infrastructure, the production process to packaging the product,” said Edward.

“Need to unify the ecosystem.” According to him, this concept has succeeded in several countries. Meanwhile, Jefry Pratama, Investment and Venture Partner at UMG Idealab, assessed that the e-commerce business model is the easiest way for agritech startups to make money. The number of startup companies that fall into this category in the agricultural sector is quite a lot.

Lack of Digital Talent Hinders the Development of Indonesian Agritech Startups

However, few Indonesian agritech startups rely on artificial intelligence (AI), data analysis, robotics, or deep technology (deeptech) such as genetic engineering. Jefry assessed that one of the causes was the lack of digital talent.

“The lack of advanced technology in Indonesia’s agritech startups represents a greater growth opportunity in logistics, supply chain, and infrastructure,” said Jefry, quoted from the CompassList report entitled ‘Indonesia Agritech Report 2020’ which was released last March (31/3).

In addition, he is not sure that farmers want to buy technology-based agricultural solutions. “The potential is large, but currently it may not be easily accepted by the market,” he said as quoted from the official website of UMG Idealab, September last year.

He gave an example of one of the UMG Idealab portfolios, namely FROGS, which developed drones to collect data on agricultural land. Buyers of this service are few. In addition, “it is necessary to educate the market about the potential of this product,” he said.

The government is indeed a potential user for these products. However, “if you’re looking for income, you have to sell the product,” says Jefry. In Indonesia, eFishery experienced a similar problem.

eFishery’s Challenges since Its Founding in 2013

The startup provides an automatic feeding device (autofeeder) for fish and shrimp. This allows farmers to schedule feeding using a smartphone (smartphone). The tool has Internet of Things (IoT) -based sensors to find out when a fish or shrimp is full, so it stops issuing feed.

eFishery noted that around 70-90% of the cost of fish or shrimp cultivation is for feed. Gibran Huzaifah, co-founder and CEO of eFishery, said that business development when it was first established in 2013 encountered a number of challenges.

“We built it when there were not many hardware components,” he said during an interview via podcast with Indo Tekno journalist Alan Hellawell, last March (9/3). In addition, farmers are not used to using smartphones based on technology such as IoT.

“So we educate the farmers about the use of services and processes for quite a long time,” he said. While educating, eFishery continues to develop technology solutions for feeding fish and shrimp. Today, the company supports tens of thousands of fish ponds in more than 180 cities.