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With another drought gripping the Western U.S., water costs are rising for the California agricultural industry, which produces over $40B of economic output per year. Water costs for farmers and the ‘ag’ community in California are typically measured in acres per foot. And, these costs have risen from around $500 per acre-foot to over $2,000 per acre-foot for water in some cases. How can farmers offset this significant cost increase when their margins are razor-thin?
Startups have been selling solutions to farmers in California to help them reduce their inputs including water and fertilizers while maintaining or even improving crop yields. Startups in this space are often referred to as precision ag ventures. Also, carbon management plays have started to garner attention as several countries around the world now pay for carbon to be sequestered, typically in the ground. "Startups have been selling solutions to farmers in California to help them reduce their inputs including water and fertilizers while maintaining or even improving crop yield" Can precision ag and carbon management startups help California farmers continue to provide food to our markets while maintaining viable business models? If droughts in the Western U.S. continue increasing the cost of water for ag, they may have to. Here are some recent ag-tech startups I’ve come across with precision ag or carbon management plays: Precision agricultural startups: Reservoir, based in Georgia, helps farmers automate their legacy irrigation practices to minimize water use while maintaining crop yields by deploying wireless sensors with exceptional range. Perhaps Reservoir would be a good licensing or merger-and-acquisition candidate for a larger competitor. Kairospace Technologies, based in Argentina and California, provides irrigation equipment for crops and livestock including pre-treatment of water in washing food products, supplemental aeration for wastewater treatment, advanced oxidation processes in mining and other highly polluting industries. If Kairospace successfully integrates proven technologies, they could help not only agriculture manage water, but mining operations, too. RHST Industries, based in Canada, has developed a Water Pearl product that includes inert, organic, and hydrophobic beads placed over the root zone of plants to reduce water evaporation. RHST used similar technology involving surface energetics to treat wastewater from oil pollution. If it can pivot to ‘extending the life of water’ for farmers, it may have something. Carbon management startups: Lucent BioSciences, also based in Canada, has developed a product called Soileos, a micronutrient fertilizer that increases soil carbon levels and improves soil health by upcycling ag and food processing byproducts. Fertilizer advancements have helped us feed a growing world in recent decades. Can ventures such as Lucent BioSciences help us get fertilizer right? Lemna, based in Arizona, uses a duckweed plant to remediate livestock wastewater which reduces nutrient concentrations from getting into groundwater and surface water. If Lemna proves the benefits of using duckweed to treat water at dairies and hog farms, we’ll have quite a bit more water to go around. Boomitra, based in California, deploys software to help farmers and ranchers measure soil moisture, nutrients, and soil carbon so they can minimize inputs, maximize outputs, and sell carbon credits. Boomitra’s recent $4M investment round from Yara International and Chevron Technology Ventures suggests they are onto something in terms of helping farmers earn carbon sequestration credits. Outlook: Climate tech startups have always had to navigate multiple ‘valleys of death’ to create successful business models. With all the attention and momentum there currently is around the world to manage carbon as well as water, these startups, and those similar to them should find it a lot easier to get the funding, talent, customers, and partners they will need. Necessity, perhaps.