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By Beatrice Riingen, Intern, PS-engage | 31 December 2022
With agriculture contributing to over 10-12% of Southeast Asia’s economy, sustainable farming is set to grow into a $30B industry by 2030. Climate change has threatened traditional agricultural practices across the continent. Over 40% of third-world Asia, for example, is set to experience severe water shortages within the same period. Technology will also play a large role in agriculture’s transformation. Agriculture 4.0 has been regarded as the sector’s next big trend: it focuses on driving resource efficiency through the digitalization of agriculture with the help of the Internet of Things (IoT), precision agriculture, and big data. Smart agriculture remains a target area regionally, listed as one of ASEAN’s priorities under its 4IR Strategy – to which they state, “There is a need to have focused policies on smart farming and technology-led innovation […] It is critical to introduce incentives to alleviate the high cost of technologies and mitigate low affordability, thus ensuring that a vast majority of farmers can access technologies.”
But how are we doing today? In a joint report by Bain & Company, Temasek, and Microsoft on Southeast Asia’s Green Economy, the potential for digital agriculture remains high with the ‘regulatory support’, ‘adoption readiness’, and a ‘big addressable market’ already existing: especially so in Malaysia, Thailand, and Vietnam. While the report didn’t go into the specifics per country, we’ve identified some public-private initiatives that reflect the current state of digital farming.
Malaysia
Malaysia’s National Agriculture Policy 2.0 (2021-2030) places IoT-based smart agriculture at the forefront of the development of the industry. The Malaysia Digital Economy Corporation (MDEC) of the Ministry of Communications and Multimedia (KKMM) is the Malaysian government’s main agency dedicated to digital investments in the agritech space. As part of the country’s National Recovery Plan (specifically its Pakej Perlindungan Rakyat Dan Pemulihan Economi (PEMULIH)), the MDEC had piloted eLadang/Digital Agtech: an initiative dedicated to the integration of 4IR tech to precision agriculture. The MDEC has worked with different ecosystem partners to provide digital training, adoption projects, technology solutions, and engagements among farmers and associations. The overarching goal is to increase productivity and income by 20% and decrease operational costs by 30%. Outside of Digital Agtech, Datuk Dr Rais Hussin Mohamed Ariff, Chairman of MDEC, has also expressed interest in a blockchain-based P2P market for small farmers to directly connect with consumers.
Thailand
Thailand’s transition to smart agriculture dates back to 2014 with the Department of Agricultural Extension (DOAE)’s Young Smart Farmer Program – whereby the initiative aims to not only encourage the youth to engage in agriculture, but also integrate new technologies to areas such as improving yield and expanding farm marketing. The government had also released the 20-year Agriculture and Cooperatives Strategies (2017-2036), which prioritizes the expansion of smart farming across the region. The Ministry of Agriculture and Cooperatives (MOAC) was also formed to oversee the development of smart farming. Amidst the pandemic, Thailand has continued its pursuit for digital agriculture: in 2021, the Asian Development Bank approved of a $2 million technical sovereign assistance grant to introduce climate-smart agriculture to farmers of northern Thailand.
Vietnam
In accordance with Decision No. 2588/2021/QD-BNN-TCCB, the Ministry of Agriculture formally established the Steering Committee for Digital Transformation in the agricultural sector; whereas digitalization is promoted through research, policymaking, and the implementation of programs and schemes. The Steering Committee has plans, according to its Deputy Leader Dang Duy Hien, to “issue the Project on Digital Transformation of the Agriculture and Rural Development Sector in the 2021-2025 period, with a vision to 2030 as a basis for the entire sector to implement digital transformation”. There are also partnerships in place to promote “agricultural digital data platforms, feed tracing platforms, and planting area codes.” Separately, Vietnam has collaborated with the Republic of Korea in establishing a smart farm at the Vietnam Academy of Agriculture. This was inaugurated in December of 2021.
Progress in Agriculture 4.0 is not limited to these three countries. Just this year in the Philippines, for example, the Department of Agriculture opened the National Center for Precision and Digital Agriculture in Nueva Ecija. In spite of the digital farming initiatives already in place in Southeast Asia, however, more needs to be done: the joint report also noted the general lack of existing digital infrastructure to support the shift to sustainable farming. Another report by the Asian Development Bank highlighted farmers’ access to cost-efficient training and machinery as the general main obstacle across Southeast Asia. Improving farmer connectivity and stronger financing are some of the ways this could be addressed, especially amidst the pressing need for the region to adapt to this new normal.
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