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The prospect of Agritech in MENA

Despite its bold impact on the region, Agritech faces persistent obstacles.

Agriculture is a vital driver of economic transformation, poverty alleviation, and economic growth across the Middle East. However, the region is increasingly reliant on international markets for its essential food supplies. In the GCC, over 90% of food is imported as arable land and water resources become scarcer. Food security is a global concern, and technology is emerging as a solution.

Agritech in the Middle East is catching the eye of investors. Between 2014 and 2020, there were 33 investment deals in agritech startups, amounting to $250 million in disclosed investments. The MENA region witnessed a compound annual growth rate of 122% in agritech investments from 2018 to 2021, with rapid funding growth since 2020. Funding in the sector has jumped from $97 million in 2021 to $250 million in 2022. While agritech venture capital in the MENA region is smaller than in other regions, its share of global agritech investments increase.

Saudi Arabia and the UAE have made improving food security a central focus of their national strategies, leading agritech development in the region. Qatar, with its investments in technology, digitalization, farming technology, Geographic Information Systems (GIS), and next-generation AI, is on the forefront.

Qatar aims for 70% self-sufficiency in 2023 and secured the top spot among all GCC nations on the 2021 Global Food Security Index, which assesses food security across four key pillars: affordability, availability, quality and safety, and sustainability and adaptation.

Agritech harnesses technologies such as the Internet of Things (IoT), artificial intelligence (AI), and data analytics to enhance the quality of fresh produce and increase crop yields. Despite growing interest, agritech in the Middle East and North Africa remains a small sector, with startups facing significant challenges.

What’s holding agritech back?

Agritech’s progress is hindered by a few key factors. The industry relies on data, particularly information generated throughout supply chains, to develop data-driven strategies for efficient crop growth.

To succeed, agritech startups need governments to invest in data collection and sharing and establish policies that balance data privacy and security with commercial use.

Agricultural data is often unavailable in the MENA region due to inconsistent collection or regulatory restrictions.

Another concern is cost. Currently, agritech production costs exceed those of traditional farming, discouraging widespread adoption. To make agritech financially viable, Middle Eastern countries must invest to lower costs on a scale that attracts adoption.

Governments should consider offering financial incentives, regulatory flexibility, and commercialization support for agritech. For example, governments could facilitate partnerships between agritech firms and food distributors to support the sale and distribution of agritech-produced goods.

Recent Developments

In September 2022, Flat6labs, Egypt’s leading seed and early-stage venture capital firm, in partnership with SANAD Entrepreneurship Academy, introduced an agritech accelerator program to support 10 to 12 startups.

In January 2022, Saudi Arabia-based agritech company Red Sea Farms expanded to the US, backed by investments from US investors, Saudi Aramco’s entrepreneurship arm Wa’ed, and other institutions.

In late 2022 and early 2023, Moroccan agritech Sand to Green raised $1 million in a Seed round, while Tunisia’s Beekeeper Tech secured $640,000 in funding. Additionally, US-based agriculture company Fresh Del Monte Produce acquired a 39% stake in Jordanian agritech Decapolis.

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