If you were asked to pick an industry that defined modern-day Ireland, agritech would surely be high on the list. It’s the perfect synergy of Ireland’s economic past, present, and future, a proud agricultural heritage married to its current status as one of the world’s major tech hubs, renowned for huge inward technological investment, world-class skills, and dynamic innovation.
In 2023, Ireland’s agritech sector generated €1.6 billion in sales, including in excess of €1 billion in exports. There’s widespread expectation that the sector could grow rapidly in the coming years as agricultural producers grapple with the challenge of increasing yields while lowering input costs, all while making farming more sustainable and reducing its environmental impact.
Almost counterintuitively, technology is seen as key to returning food production to a more ‘natural’ and certainly less ecologically intrusive state, without impacting (and even improving) production levels. Agritech replaces intensive farming methods such as heavy use of chemical fertilizers and pesticides with smarter, more data-led and precise techniques, as well as offering the benefits of automation.
With a global market expected to more than double in value by the end of the decade, agritech represents a highly lucrative opportunity going forward. However, despite Ireland being seemingly well placed to capitalise on any boom, the domestic sector finds itself at a critical juncture. While its performance in export markets is a major strength, a volatile geopolitical outlook and the threat of a looming trade war as the US pivots towards protectionist tariffs could easy nip burgeoning growth in the bud.
Unlocking agritech’s domestic value
Ireland’s agritech sector does have a sizeable domestic market to fall back on. Farming, agriculture and food production contribute 6.7% of the country’s modified gross national income, with a gross value added of €18.3bn. Yet a lot of agri-businesses are operating on tight margins and there can often be a reluctance to take a chance on investing in new, as-yet unproven technology, even if the benefits it promises are considerable.
That’s where support for investment in agritech becomes so important. The mechanisms for delivering that investment are already deeply entrenched in the economics of agriculture in the form of the CAP. The policy framework for agriculural funding and subsidies has already shifted significantly away from product-based quotas to now focus on sustainable land management. Opportunities to fund capital investments in technologies that support those goals are tied up within that.
The Irish government has embraced this by launching funding channels under the CAP such as the Targeted Agricultural Modernisation Scheme (TAMS). Now into its third round, TAMS offers grants to support a wide range of equipment acquisition and construction projects. These grants can be used to invest in the latest technologies where they meet the eligibility criteria.
Funding opportunities are available on the supply side, too. The recent budget contained details of a €21.6m fund to back investments in research and development in rural and agri-businessses. This follows agritech being picked out as one of four sectors to receive €7m in funding each under Ireland’s Innovators’ Initiative to fund training and skills development in the sector.
Investment on both sides will be important to help Ireland’s agritech sector build on its strong foundations and blossom into a potentially strategically vital industry. Domestic strength in agri-focused innovation and tech development will give the country’s farming sector a competitive edge globally, while strong demand at home will help agritech businesses grow and develop to be a genuine force in world markets whatever the wider economic conditions throw up.
To find out more about investment opportunities in farming and agriculture, get in touch with our agricultural finance team.
