“Software is Feeding the World” is a weekly newsletter for Food/AgTech leaders about technology trends.

Greetings from 39000 ft in the air, somewhere between New Delhi and San Francisco! I made a quick trip to the Indian subcontinent. Unplanned, I was present for the 75th Independence Day of India (15th August). So to many of the readers from the Indian subcontinent and the Indian diaspora, I want to wish you a Happy Independence Day.

Tractors everywhere

Monarch scales (not the butterflies unfortunately)

I have often grappled with the question of whose contribution is bigger to agriculture, and humanity - Haber or Bosch. Haber famously invented the nitrogen fixation process from air, while Bosch successfully scaled it so that fertilizer is available to millions of farmers across millions of acres of farmland.

Haber and Bosch played a different role in the innovation process, and the innovation was scaled. On a per unit weight basis, the few drops of fertilizer produced by Haber were probably as expensive as gold by weight. Bosch created many process and manufacturing innovations, to scale the process. Haber created a prototype, while Bosch scaled it.

You see a similar process in chip manufacturing, electronic manufacturing etc. Setting a fab unit to manufacture chips is an extremely capital intensive operation, including specialized skills and processes to manufacture at scale. There is a reason why TSMC (Taiwan Semiconductor Manufacturing Company) exists. Apple famously designs its iPhones, but the manufacturing is done by a variety of suppliers, with Hon hai (Foxconn) being one of largest assemblers.

Hon Hai (or Hon Hai Precision Industry Co. or Foxconn) is the world’s largest contract electronics maker. In May, Hon Hai completed the acquisition of an EV factory located in Ohio from American pick-up brand Lordstown. The Ohio factory and an information communication technology complex in Wisconsin will become Hon Hai's two production hubs in North America.

How is this relevant to agriculture?

US-based Monarch Tractor, which designs fully electric tractors, has signed an agreement with Hon Hai to roll out the next generation electric agricultural equipment and battery packs for Monarch.

Monarch tractor displayed at World Agritech in San Francisco (March 2022). Photo by Rhishi Pethe

Hon Hai believes there are similarities in electric vehicles for the consumer market and electric vehicles for the agriculture market, though the volumes will be quite different. Hon Hai wants to secure a 5% share of the global electric vehicle market by 2025.

With this agreement, Monarch is signaling that they are ready to move to the next stage of scaling their business, by partnering with Hon Hai. They want to drive down the cost of Monarch tractor through Hon Hai’s experience in contract manufacturing at scale. In hardware, scale is very important to drive down the cost of your hardware. In theory, at infinite scale, the hardware cost will be driven down to the bill of material cost. (Price is a different question altogether!) (You can listen to Elon Musk discuss this process with Lex Friedman on Lex’s podcast.)

Without knowing all the details, the agreement is a welcome development, as it indicates confidence in moving higher volumes of low-mid horsepower electric tractors to customers. There are still significant challenges to adoption of autonomous and/or electric tractors related to run times, power requirements, charging times, charging infrastructure etc.

Monarch’s offices are less than 30 minutes from I live in California. I would love to visit and see their operations.

If anyone from Monarch is reading, please feel free to reach out to me :-) My DMs are open!

Sabanto accelerates

I have been following Sabanto for quite some time. Sabanto is led by Craig Rupp, who created what is now known as the FieldView Drive. The Drive is a puck type device, which plugs into the Canbus port of most precision agriculture equipment, and can capture many operational details of different management practices, and outcomes (for example, yield maps).

Sabanto has recently raised $ 17 million in Series A funding, from a variety of investors. Sabanto accelerates autonomy in agricultural machinery to solve two primary problems:

1. The increasingly acute scarcity of labor in rural areas
2. Ever-increasing capital expenses for modern ag machinery.

Sabanto uses a fleet of smaller 60 and 90 HP tractors (similar to Monarch) to provide autonomy for row crop operations like tillage, planting, seeding, weeding, application, and mowing. The investor list includes the venture arm of Trimble, Trimble Ventures. Trimble is good with after-market attachments, which add capabilities to existing equipment.

Can Sabanto build an autonomy kit, which can be retrofitted on existing equipment, and give it some level of autonomy?

The business model innovation possible through Sabanto is quite intriguing. Sabanto can bring autonomy, and deliver it through a farming-as-a-service model. It was echoed by Phil Sawarynski, managing director and co-head, Trimble Ventures.

The farming as a service model is quite attractive due to the following reasons.

• Growers can treat equipment as OpEx instead of CapEx.
• Farming-as-a-service with coordinated swarming small tractors, will lead to higher efficiency.
• Big impact in developing countries like India (Bain 2018 study on F-a-a-S in India). Access to capital is a challenge for a large proportion of smallholder farmers.

For large agribusinesses, their innovation strategy is a combination of in-house R&D, strategic investments and JV/M&A activities. But none of the big OEMs show up as investors on the cap table for Sabanto. (other than Trimble).

Is Sabanto a potential threat or an opportunity for existing OEMs? I would say yes to both.

—

This quote from Alex Rampell of Andreessen Horowitz is relevant:

It is extremely hard to get distribution in agriculture, especially for physical products. You need an incumbent to help you get to large scale distribution (e.g. FieldView Drive). So what are the potential paths for a company like Sabanto?

• Get acquired by one of the existing OEMs. It gives the OEM access to new technology, while the OEM can leverage their dealer, distribution and service networks.
• Get acquired by a large retailer. The retailer can leverage their existing network.
• Continue to grow and scale, though it is difficult to get access to a distribution and service network.
• License the technology to existing OEMs and act as an autonomy platform for agriculture.

What would a tractor which combines electrification with autonomy look like? Would it be called,

MONBANTO (apologies for a corny joke, but in my defense I am super jet lagged!)

It would definitely check 2 out of the 3 boxes to create a beautiful convergence as articulated by Jehiel Oliver, CEO of Hello Tractor in my conversation with him last year.

Deere says Hello

Agriculture machinery leader Deere announced an investment in Hello Tractor, a Nigerian based marketplace and fleet management technology for Africa farmers. I had covered Hello Tractor extensively in my “Conversation with Rhishi” episode with Jehiel Oliver.

Hello Tractor started out with the hypothesis that if they could provide peace of mind to tractor owners around the security, proper usage of their tractor, tractor owners would be willing to rent their tractors.

To do this, Hello Tractor has created a device which can be attached to a tractor.

The device is connected to the cloud and provides operating details like location of the tractor, operational hours, fuel levels to the tractor owner in real time.

It protects the tractor asset and reduces fraud. With complete visibility to their tractor status, tractor owners are able to rent their tractor to other farmers for a price. Hello Tractor helps connect tractor owners, who want to rent out their tractor, with farmers who want to rent a tractor for their farm. You can think of it as Uber for tractors, though that is not a perfect description for what Hello Tractor provides.

According to Hello Tractor, more than 55% of farmers have never used a tractor before they work with Hello Tractor. The access to mechanization helps farmers cut labor costs, and produce higher crop yields to increase their income. Access to agricultural machinery is an acute challenge in Africa, even compared to a low to medium income country with a large farming population like India.

In the News

Can improving photosynthesis efficiency in soybeans using genetic modification yield more?

This company wins “interesting company name of the week” award, and partners with a global giant!

​Prince Charles supports regenerative farming! Now the adoption of regenerative farming will go through the roof of Buckingham Palace!!!

​Is precision agriculture deflationary in nature? You can get most grower facing precision agriculture solutions for free (or almost free)!

​Organic > conventional?

​Efficiency is not equal to sustainability​

​Bayer is ForGround, a program to improve soil health, increase water availability, fewer inputs, increase weather resilience, and less soil erosion, with incremental revenue.

Greeneye precision spraying system reduces non-residual herbicide by 87%​

​Photo source: PRNewswire from Greeneye​

The test results show,

• 94% reduction in burndown herbicide use during pre-emergence spraying compared to broadcast application – representing a cost saving of $24.7/acre
• 87% reduction in non-residual herbicide use during post-emergence spraying compared to broadcast application – representing a cost saving of $40.5/acre
• Greeneye achieved the same weed control efficacy for broadleaf as broadcast application – 96.3%
• Weed control on grasses was slightly better with broadcast method – 93% accuracy rate compared to 89.6% with Greeneye
• When comparing identical herbicide programs, total (residual and non-residual) herbicide costs were $40.6/acre with Greeneye vs. $105.8/acre with broadcast treatment – representing a cost saving to farmers of $65.1/acre

What do you think?

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About me

My name is Rhishi Pethe. I lead the product management team at Project Mineral (focused on sustainable agriculture). The views expressed in this newsletter are my personal opinions.