Agriculture is currently at a crossroad between meeting the demand of an ever growing population, and reducing environmental impact. This has resulted in the need for a sustainable means of food production driven by renewable energy investment.
Did you know that globally, 30 percent of the food produced every year never reaches the consumer’s table due to inefficient storage and transport systems? That’s over 1.3 billion metric tons of food, enough to feed 800 million people.
Shocking, isn’t it? But that’s not the end of the challenges that beset the global food system as climate change wields its weapons on another front. To effectively tackle these problems without further accelerating the climate crisis, there’s an urgent need to promote and drive significant investment in renewable energy.
In this article, we’ll discuss in detail the prospects of investing in renewable energy in agriculture.
What is Renewable Energy and How Does It Relate To Agriculture?
Renewable energy is the kind of energy derived from natural sources and processes, replenished at a much faster rate than consumed. Renewable energy is green energy and aside from being an eco-friendly alternative, it provides more reliable off-grid energy sources that are not affected by unstable fuel prices. Since much of the farming population in developing countries are in rural areas, investing in renewable energy will help bridge the energy access gap and increase agricultural productivity.
Examples of agritech startups driving renewable energy innovations in agriculture include Farmless, a company that aims to build a fermentation system that makes liquid feedstock with renewable electricity. Another good example is the New Zealand company Cetogenix that converts organic agricultural waste to renewable energy.
Download the Ebook now
Challenges of Renewable Energy Investment In Agriculture
There are several challenges militating against renewable energy investment in Agriculture. The most pressing ones include:
Insufficient Policy Frameworks For Promoting Renewable Energy Investments
The International Fund for Agricultural Development, IFAD, in a report, identified high fossil fuel subsidies as one of the problems that discourage renewable energy technology companies from entering the rural markets.
Even though the need for renewable energy sources in agriculture is urgent and important, there exists a gap in policy frameworks that incentivize startups and farming communities interested in embracing renewable energy investments.
High Cost of Technologies and Limited Purchasing Power of Farmers
Renewable energy sources like solar are expensive to purchase and install, especially for individual farmers. A farmer from Sabon Gari local government in Kaduna, Nigeria, interviewed prior to writing this article, gave his opinion on renewable energy investment.
In his words, “I’m not ignorant of the importance of solar power, but the cost of installation will mean I’ll have to sell some of my farms to be able to afford it” – Farmer Ibrahim.
Limited Knowledge on Renewable Energy Technology and Their Contribution to Reducing Energy Expenditures
I believe if farmers like Farmer Ibrahim can be well oriented on the long-term benefits of investing in renewable energy, including increased yield and higher quality of produce, he’ll be more inclined to collaborate with other farmers to embrace the power of renewable energy.
With support from relevant stakeholders like the government and financial institutions and proper education about the returns of renewable energy investments like agrivoltaic farming, we can break the barriers of renewable energy adoption.
Strategies to Increase Renewable Energy Investment in Agriculture
We often talk about how renewable energy holds the power to transform our food production system, from solar-powered irrigation systems to post-harvest storage technologies and precision agriculture. However, without well-tailored strategies to bring these ideas to light, they end up as mere ink on paper. Below are some strategies to increase renewable energy investments in agriculture:
Establish Functional Linkages, Partnerships, and Networks to Enable Scaling Up of Renewable Energy Technologies
What we lack is not the absence of innovations in renewable energy, but rather the absence of the right partnerships and linkages to enable these technologies to scale. An example demonstrating the power of strategic partnerships for renewable energy technologies is the Flexibiogas developed by a Kenyan innovator, Dominic Wanjihia.
After the project was piloted in Kenya and Rwanda with the help of IFAD, over 450 units were deployed in Kirehe district in Kenya alone and many more in farming communities across Rwanda. Many more innovations need to be identified and scaled to achieve real impact.
Provide Fiscal Incentives for Existing Renewable Technology Suppliers
Fiscal incentives like waivers on import duties for renewable technologies will encourage more investments in renewable energy in agriculture. As noted earlier, cost is a major roadblock to the adoption of renewable technologies.
If technology suppliers are allowed to enjoy special fiscal privileges, it will reduce their selling price, making it more affordable for farmers or agricultural startups that need to utilize the products.
Increase Productive and Business Capacity of Rural Youth
Youths are known to be more technologically savvy and more open to embracing and adapting to new technologies. By increasing the productive capacity of youth and educating them on the importance of investing in renewable energy in agriculture, we have a better chance of driving sustainable change now and in the future.
It is also important to facilitate training sessions in agritech across rural and urban communities and create a system that encourages collaboration and the development of innovative solutions in the area of renewable energy in agriculture. These training sessions can be facilitated through digital agricultural extension services.
Safeguard The Intellectual Property of Pioneer Firms
Pioneer renewable energy firms usually face the challenge of idea theft and duplications without proper credibility and consultations. By establishing frameworks that encourage agritech innovations and the protection of these innovations under appropriate laws, we can further boost investment in renewable energy in the agricultural sector.
Renewable Energy Investment: The Key to Climate-Resilient Agriculture
Renewable energy undoubtedly has unlimited prospects in agriculture. However, conscious efforts and proactive steps need to be taken to ensure these prospects birth transformative innovations across the entire agritech value chain.
Frequently Asked Questions (FAQs)
What are the main benefits of investing in renewable energy in agriculture?
There are numerous benefits to gain from investing in renewable energy as a farmer or agro-startup founder, such as reduced energy costs, improved productivity, reduced cost of production, better quality of produce and enhanced water management.
What is the future outlook for renewable energy in agriculture?
The future of renewable energy in agriculture appears promising. As technology advances, costs decline, and supportive policies are implemented, we can expect a significant increase in the adoption of these solutions.
