Opinion: Looking for the next California tech boom? You’ll find it in our farmlands
The world may see California largely as home to Silicon Valley and Hollywood, but it’s agriculture technology where we can most clearly outshine our competitors. In a new study, “Nurturing California Industries,” we identified it as among the six industries most critical to the state’s economic future.
In many ways, advances in agricultural technology will have as much to do for California’s future as AI, streaming movies and electric vehicles. Agriculture is, by far, California’s strongest sector in terms of employment. In the latest 2022 Census of Wages and Employment, agriculture employs 419,582 people in this state, more than four times the number in the next-largest state, Washington.
While tech businesses and corporate headquarters head elsewhere, California’s agricultural supremacy remains unchallenged. The agricultural industry provides more than a third of the country’s vegetables and three-quarters of the country’s fruits and nuts. In 2021, the state’s farms and ranches earned $51.1 billion in revenues for their products. That year agricultural exports totaled $22.5 billion in 2021, an increase of 7% from 2020.
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California agriculture nevertheless faces significant challenges from the changing climate and state policies responding to that change. Some environmental groups, in places as diverse as Massachusetts’ Berkshires and the Mojave Desert, are concerned about the expansion of wind and solar facilities in rural areas and open space. In California, the Nature Conservancy estimates that to fulfill the state’s “net zero” targets would require 1.6 million to 3.1 million acres — up to 10% of current farming acreage — converted to clean energy use in coming decades.
Regulatory changes will likely alter California’s agriculture industry. The respite from the drought in the last year won’t change the dynamic. The cost of regulatory compliance has grown steadily in the last decade. State methane regulations already have led to an exodus of dairies, once one of the largest food producing sectors in California. Cropland has declined steadily, falling by half a million acres in the last two years, with at least another 500,000 more expected to be lost by 2040 due to persistent water shortages.
Addressing the needs in the country’s richest agricultural economy lies in building stronger cooperation between state government and farmers, and a focus on researching and implementing new technologies.
Producing food for a population of hundreds of millions, as California does, requires a focus on efficiency and methods that are as advanced as any semiconductor or automobile manufacturing operation.
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It is important to understand that ag tech is not one single technology but rather a panoply of them that are redefining both the nature of how we grow our food and the nature of what we even consider to be food. California is already a leader in several of these areas.
Automation of planting, fertilizing and harvesting of crops and animal food products.
Technology advancements in these areas — robotic harvesters, moisture sensors monitored by drones and robotic delivery of hormones essential to cows’ milk production — reduce the number of people needed to produce food and to improve yields.
Modifying plants to make them more adaptable to a changing environment.
These ag tech efforts include finding ways to make crops more resistant to drought or heat. Methods can include cross-breeding of existing strains of crops or using gene editing techniques, such as CRISPR/Cas9. One research project led by a group of scientists at UC Davis is using gene editing to create disease-resistant rice, which could have global impacts.
Growing food products directly from cells in a laboratory.
Rather than using traditional methods of raising animals, lab-grown meat is becoming closer to reality. Chicken grown directly from cells was approved recently by the Food and Drug Administration. This marks the first time meat grown in a lab has been approved for human consumption.
Greenhouse emission reduction.
To address global warming, agricultural technologies are focusing on how to reduce methane, CO2 and other greenhouse gases. In California, scientists are trying to capture gases on farms and experimenting with ways to reduce how animals produce methane in their bodies.
UC Davis scientists are feeding cows small amounts of seaweed, which could lower the amount of methane the animals produce by as much as 82%. Another longer-term project run by UC Davis found that farmland could sequester carbon effectively through changes in cover crops and how soil is tilled.
Reducing water usage.
Water recycling technologies have shown positive results. Other techniques, such as dry farming, cover crops and new crop rotation techniques, are also showing promise in California. Fruits and vegetables of all kinds are using recycled water where it is available. In the Southland, strawberries, for example, are being grown with recycled water, as are an ever greater variety of crops.
All these efforts are gaining investor interest. Ag tech startups in this state saw $5.6 billion in venture capital in 2020, 20% of the worldwide total. In the last year, the top ag tech investments have been in lab-cultivated meat and fish, vertical farming and biotech startups.
Howard-Yana Shapiro, a research fellow at UC Davis and former head of plant science at Mars Inc., says this state is the ideal place to marry the laboratory innovations of ag tech with its implementation at scale.
“The advancements developed in California,” he says, “for things like fruit trees that use significantly less water, or dairy farms that produce less polluting effluent, can then be extended to the rest of the world to build a more sustainable planet.”
The aim should be to keep farmers and dairies sustainable in this state. Shapiro notes that when these operations leave, they tend to move to states or countries where environmental controls, and the pressure to innovate, tend to be weaker. They also tend to move to less temperate states where water and power requirements are higher.
With agriculture innovation a critical factor in the industry’s sustainability, the state government will need to be more intentional in nurturing ag tech.
Today, ag tech research is through funding for the public universities and through private companies providing research grant money. California does not have a direct research grant program outside of the university system. (Over the last decade, the U.S. Department of Agriculture, the main public R&D funder for agriculture, has reduced its funding by one-third nationally.)
Given the crucial role that public-private collaboration plays in innovation, the state needs to develop focused incentives to help ag tech startups accelerate their efforts. The state has an R&D tax credit that is largely utilized by electronics and semiconductor research, which has helped that industry thrive. Now it needs to adopt similar approaches to enable ag tech to flourish.
Joel Kotkin is the presidential fellow in urban futures at Chapman University. Marshall Toplansky is a clinical assistant professor of management science at the Argyros School of Business and Economics at Chapman University.
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