A Primer on Investing in Agriculture-Technology Across Asia

April 8, 2025

Corey Abrams, Tijana Bzenic, Pauline Cho, Ashley Kim

It’s a pertinent time to study the agriculture industry in Asia. Macroeconomic and demographic changes within the continent are directly impacting the ways that food is grown, processed, and consumed on the continent. The impact that these trends will have on Asia’s farmers looks bleak.

On one hand, positive economic drivers are contributing to increasing wealth. The regional comprehensive economic partnership (RCEP) has improved trade within the region. Numerous countries are in “sweet spots” for economic expansion as both their population and consumption grow; 68% of southeast Asia’s population is working age. Finally, countries that do business with China continue to benefit from its growth as companies sprout up to enable new Chinese industries. Wealth increases from these trends are expected push Asia toward a 65% share of the world’s middle class by 2030.

While this wealth should translate to improvements for the citizens of east and southeast Asia, other factors may dampen the impact. As you’ll read below, climate change is dramatically impacting the ability to grow food. More frequent severe weather events partially or fully wipe out crop yields. At a time when additional hands are needed, seemingly fewer young people are staying to help and take over family farms. Finally, a lack of investment in education could make it challenging to bring new innovations to the agricultural space. Pair all of this with the adversity that smallholder farmers face; in many Asian countries, which already struggle with access to services (44% unbanked and the fewest hospital beds) farmers are most often in the poorest class with the least access to these necessities. Critical innovations in technology and business models are needed to help farmers survive this rapidly changing environment.

Challenges in Agrifood

Asia plays a crucial role in global food security, being the largest producer of agricultural and fishery products. The region dominates the production of staple crops such as rice, maize, and wheat while also contributing nearly 40% of global fish output. South and Southeast Asia, in particular, account for 44% of global vegetable oil and 88% of global palm oil production.

Despite its scale, Asia’s food system faces significant vulnerabilities. The region is warming faster than the global average, and the consequences are already observed. In 2023, Japan experienced its hottest summer on record, while India had ~110 deaths due to heatstroke. 2022 floods in Bangladesh that destroyed crops enough to feed 10 million people for a month is just one example of more frequent and extreme weather events. A 2°C rise in temperature could result in agricultural losses of $300 billion in East and Northeast Asia, while Southeast Asia faces projected GDP losses of 7%.

Asia’s high dependence on climate-sensitive crops like rice and wheat, along with dependence on monsoons, makes its agriculture particularly susceptible to heat stress, heavy rainfalls and erratic changes in weather cycle. Low-lying agricultural regions, including Bangladesh, Vietnam’s Mekong Delta, and India’s Sundarbans, are directly exposed to threat of rising sea levels and saltwater intrusion.

High reliance on smallholder farmers further compound risks. ~70% of the region’s food is produced by smallholder farmers with less than 2 hectares of farmland. However, they face multiple challenges that hinder agricultural productivity and threaten their livelihoods. They often lack access to quality inputs such as seeds, fertilizers and irrigation systems and lag in learning new farming technologies. Underlying societal and structural barriers such as limited digital literacy and financial barriers exacerbate these issues. They are also exposed to long and fragmented supply chains, where multiple layers of intermediaries make it difficult for them to find the market and earn a fair return.

As climate change accelerates along with rapid urbanization and socioeconomic changes, addressing these systemic vulnerabilities will be essential to ensuring food security for Asia’s growing population.

High level overview of proposed solutions

The challenges in Asia’s AgriTech sector can be addressed through both high-tech and low-tech solutions, each offering unique benefits depending on the needs of farmers, available infrastructure, and investment feasibility.

High-tech solutions leverage advanced technology such as AI, blockchain, IoT, and precision agriculture to optimize farming efficiency. Precision agriculture, powered by drones, satellite imagery, and AI driven analytics, enables farmers to monitor crop health, optimize irrigation, and reduce input costs. These technologies significantly increase yields and resource efficiency but require high upfront investment and technical expertise, making them less accessible for smallholder farmers. Similarly, blockchain enabled supply chains enhance transparency and food safety by tracking produce from farm to consumer. IoT devices further support logistics and monitoring by automating climate control and reducing waste. However, widespread adoption is constrained by digital infrastructure gaps and cybersecurity concerns.

Low tech solutions focus on business model innovations and accessible financial tools that do not require cutting edge technology but still improve agricultural outcomes. Market access improvements, such as cooperative farming, e-commerce platforms, and contract farming, enable smallholders to sell directly to consumers, reducing dependency on intermediaries and ensuring better pricing. Additionally, microfinance initiatives, including small loans, crop insurance, and alternative lending models, empower farmers to invest in better inputs and expand production without needing sophisticated technology. These approaches require minimal technological infrastructure and can be scaled more easily, though they often rely on government and private sector support for funding and implementations.

By integrating both high tech solutions for long term transformation and low-tech approaches for immediate impact, stakeholders can create a balance strategy to support Asia’s agriculture ecosystem. High tech innovations drive efficiency and scalability, while low tech solutions ensure inclusivity and accessibility, particularly for smallholder farmers in underserved regions.

Sources:

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