Agriculture these days is ‘agri-tech’. Technology has an impact on the primary sector par excellence, and agricultural enterprises today are increasingly called on to deal with the testing of new products (such as bio-agro chemicals or bio-stimulants); precision farming, new generation cultivation systems, intelligent crop management systems or monitoring safety in the agri-food supply chain.
The challenge and risks are considered to be high by the parties concerned, and industry innovation can also turn the tide in this perspective. The US startup Crop Pro Insurance has identified a new type of insurance requirement in this very area. The company, which recently obtained a federal license to operate in the agricultural sector – and not with the typical coverage for risks related to weather, pests and diseases that can affect crops – but against risks associated with innovation. This is an issue that has taken on unique characteristics in the United States in relation to urgent consumer demand for non-GMO products, which until now were largely produced in the US due to being highly profitable. New technologies are improving yields of non-GMO crops, but this type of production is still not widely practiced by farmers because of the perceived risk of losses. “Eighty percent of non-GMO products consumed in the United States are imported from other parts of the world, despite the fact that new biological crop protection products can replace the use of products used in the past,” said Billy Rose, the President of Crop Pro. “In order to position the United States as a leader in non-GMO, sustainable markets, we must provide support to farmers, and guarantee the income that they need to confidently embrace new technologies more quickly”.
To accelerate its market penetration, last August the company received a substantial investment from venture capitalists specialised in supporting agritech startups, Finistere Ventures and Seed 2 Growth Ventures (S2G). GuideOne Insurance Company also participated in the round, with a total of 8 million dollars.
Billy Rose continues: “We want to help farmers minimise their risks by providing both traditional insurance policies, and new risk management tools,” “Agriculture continues to evolve and we want to enable farmers to use the current wave of advanced technologies to solve the problems of long-term productivity, helping them to manage financial risk”.
What allows this young company to take charge of these new risks?
Essentially, big data. Data supplied by the farmers themselves, research centres, and universities with respect to certain agritech products.
The company develops sophisticated risk management systems that make it possible to analyse and offer predictive estimates of effectiveness, in terms of harvesting and performance, of new products to improve farming methods used by agricultural holdings. In this way, if the improvement expectations were not achieved, the insurance would compensate the agricultural enterprise.
Agritech product data will increase progressively, and technology will continue to improve and become a real comparison tool for these type of products. The next step will be offering the products together with the insurance cover.
“Data analysis will transform agricultural insurance, as agriculture itself has been transformed,” said the President. “In the future, we also hope to give farmers a tool for using their data in a more efficient way, to compare the effectiveness of new technologies, from sees to digital agronomy”.
In the meantime, he has hired a data scientist to take on the role of Director.