# ASEAN Agritech: A Primary Beneficiary of the AI Revolution

- Link: https://www.thailand-business-news.com/set/149252-asean-agritech-a-primary-beneficiary-of-the-ai-revolution
- Published: 2024-07-03T09:19:00+07:00
- Author: SET News

**Agriculture accounts for 11% of Southeast Asia’s GDP and provides a third of the
employment. AI holds the potential to revolutionize agritech, bolstering climate
resilience and food security, even amidst challenges that require investment and
government backing.**

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Agriculture is the economic mainstay of Southeast Asia, accounting for [about 11% of ASEAN’s GDP in 2022](https://data.worldbank.org/indicator/NV.AGR.TOTL.ZS?locations=VN-MM-ID-KH-TH-MY-SG-LA-PH-BN-TL&name_desc=false)
and roughly [a third of all jobs](https://asean.org/wp-content/uploads/2023/12/ASEAN-Statistical-Yearbook-2023.pdf)
in the region. The sector’s importance is especially significant in agriculture-
centric countries like Myanmar and Cambodia where it contributes more than 20% of
GDP and about 35% of total employment. In Laos, the numbers are even starker, with
agriculture jobs comprising [70% of total employment](https://data.worldbank.org/indicator/SL.AGR.EMPL.ZS?locations=VN-MM-ID-KH-TH-MY-SG-LA-PH-BN-TL&name_desc=false).

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Agriculture’s vital role in ensuring ASEAN’s economic stability is coupled with 
its centrality to the region’s food security. With Southeast Asia expected to add
[more than 780 million](https://www.population-trends-asiapacific.org/data/sea) 
more people to its populations by 2050, the region’s food supply chains will come
under significant stress, especially as the impacts of climate change loom.

Source: [United Nations Department of Economic and Social Affairs Population Division](https://population.un.org/wpp/Graphs/Probabilistic/POP/TOT/920)

Compared with other regions of the world, Southeast Asia is especially vulnerable
to the adverse impacts of climate change, which has precipitated a surge in extreme
weather events that have resulted in huge losses for the agriculture sector. According
to a 2021 research report by the Asian Development Bank, climate-related disasters
led to as much as [US$21 billion](https://www.adb.org/sites/default/files/publication/726556/ado2021-update.pdf)
in crop and livestock production losses between 2008-2018 in Southeast Asia. Surging
temperatures are also impacting yields, with regional cereal production for crops
such as rice, wheat and other staples projected to [decrease by between 7% and 9% by 2050](https://cgspace.cgiar.org/server/api/core/bitstreams/51ff90e7-349f-4a67-9bf2-3549f039a292/content).

Left unaddressed, a lack of food security could limit Southeast Asia’s long-term
economic potential, but new solutions are emerging to tackle these challenges.

## The transformational impacts of AI

Artificial intelligence (AI), for one, has recently emerged as a powerful tool that
could contribute as much as [US$1 trillion to the regional economy by 2030](https://cmp.smu.edu.sg/ami/article/20240326/maximising-ai-revolution-southeast-asia),
despite the technology’s nascency. Capable of quickly processing large amounts of
data and injecting automation into everyday processes, AI could play a transformative
role in agriculture and agritech to enhance the region’s climate resilience and 
food security.

There are already many examples of how AI is being used to revolutionise various
aspects of the agriculture sector, such as farming and livestock management. In 
Indonesia, for example, AI-powered application [Dokter Tania](https://www.neurafarm.com/dokter-tania)
helps farmers identify and manage plant diseases, while also offering expert guidance
on crop cultivation and fertiliser use. A similar AI app has been [developed in Vietnam](https://blog.plantwise.org/2021/02/18/ai-plant-doctor-app-launched-to-help-diagnose-pests-and-diseases-on-dragon-fruit-crops-in-vietnam/)
to help local smallholder farmers identify and treat the problem of pests and diseases
devastating dragon fruit crops, which account for 32% of the country’s agriculture
exports.

AI is also driving efficiency and productivity in livestock management through data-
driven insights. Consider [Indonesian startup Pitik](https://www.channelnewsasia.com/asia/indonesia-farmers-technology-startups-entrepreneurs-innovation-3185051),
which uses AI to make recommendations to broiler farms to improve feed efficiency,
monitor animal health, and streamline overall farm management.

Similar capabilities can also be extended to crop monitoring and disease prediction
as well with [AI-enabled drones](https://vietnamnet.vn/en/ai-based-drones-help-analyze-health-of-crops-684794.html)
being used to conduct aerial reconnaissance. These drones are able to not only identify
insect-infected areas but also spray pesticides in a more efficient way that minimises
crop damage and saves 99% of pesticides.

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AI is also being used in other parts of the food supply chain, such as quality grading
and food waste management. [Easyrice](https://easyrice.ai/), a Thai deep tech startup,
uses an AI-based solution to [inspect the quality](https://www.bangkokpost.com/business/general/2632183/easyrice-uses-artificial-intelligence-for-food-revolution)
of 25 different types of locally-grown rice. Ten times faster than traditional methods,
the tool has reportedly helped cut costs and time spent on rice inspections by 30%,
and has a 95% accuracy rating.

## Southeast Asia: A hotbed for Agritech innovation driven by AI

The positive impacts of AI on ASEAN’s agriculture sector are manifold, yet challenges
remain. Low digital literacy among farmers, small farm holdings, and limited access
to finance pose significant hurdles to adoption.

To this end, various ASEAN governments have launched national strategies to encourage
AI adoption across sectors, including agriculture. Indonesia’s [Stratnas AI plan](https://govinsider.asia/intl-en/article/how-indonesias-new-national-strategy-aims-to-accelerate-the-growth-southeast-asias-largest-ai-ecosystem),
for example, prioritises food security as a focus area for developing the technology.
In Vietnam, the Ministry of Agriculture and Rural Development aims to [standardise the use and share of open agricultural data sets](https://en.baochinhphu.vn/national-strategy-on-rd-and-application-of-artificial-intelligence-11140663.htm)
that are needed to enable the use of AI applications in hi-tech agricultural production
to ensure transparent and clean food supply systems.

These initiatives are just some of the ways ASEAN is exploring AI’s potential to
strengthen local food security in support of future economic development, but they
exemplify the region’s long-term commitment to embedding cutting-edge technologies
into economic policies.

To harness the full potential of AI in agritech, there needs to be more investment
in promising agritech startups as well as funding to support adoption by smallholder
farmers, whether through subsidies or innovative financing mechanisms.

Agritech startups are the bedrock upon which new innovations will emerge that can
speak directly to the unique needs of ASEAN’s agriculture sector. In 2022, investment
in Southeast Asian agrifoodtech startups reached US$1.7 billion across 192 deals,
a significant achievement, but more will be needed to spur new solutions for this
large and complex sector.

### Exhibit : Agrifoodtech startup investments in Southeast Asia in 2022

![ASEAN Agritech: Key beneficiary of the AI revolution](https://b2thbz.siamnews.
network/2024/07/Aex-AI-2.png)

Source: [Asia-Pacific AgriFoodTech Investment Report 2023](https://research.agfunder.com/asia-pacific-agrifoodtech-investment-report-2023-c43e75a8b5104cffab2b81759579d1c6.pdf)

Simultaneously, smallholder farmers will need financial support to access these 
costly innovations, especially in countries like Laos and Cambodia where there are
large under- and unbanked communities. In these markets, a 6-year study by national
universities (supported by the Australian government) are exploring the [potential impact of mobile financial services](https://www.aciar.gov.au/project/sss-2020-160)
to support farming households’ financial needs.

Venture capital (VC) could be the right solution for innovative agritech startups,
especially emerging firms specialising in niche tech sectors. One example is [AgFunder](https://agfunder.com/portfolio/),
a global venture capital firm that provides essential capital to innovative agrifood
tech startups that develop sustainable, efficient and safe food production technologies,
among other things.

In recognition of startups’ need for funding, there has also been a growing movement
in ASEAN to open the doors to capital markets as potential venues for fundraising
in the region. Thailand’s Securities and Exchange Commission (SEC), for example,
launched [LiVE Exchange](https://kpmg.com/th/en/home/insights/2022/04/legal-news-flash-issue-12.html)(
LiVEx), a secondary market through which startups can fundraise through private 
placements or crowdfunding. Similar efforts are also being explored in [Malaysia](https://theedgemalaysia.com/node/712576).

The importance of AI in agritech will only deepen as the climate crisis progresses,
which is why it’s crucial to devise new solutions that can help communities adapt
to changing weather patterns, maintain crop productivity levels, and enhance overall
food security. Providing the right funding will be fundamental to this, but fully
realising this potential requires concerted efforts to address digital literacy,
build partnerships, and establish supportive policy frameworks. With strategic investments
and supportive government policies, ASEAN can position itself as a global leader
in agritech innovation, ensuring food security and sustainable growth for the region
over the years to come.

Samantha Cheh is an editor and writer with over 7 years of experience. She specialises
in research and writing about technology, digitalisation, sustainability, energy
transitions and supply chain resistance. With a background in reporting on Southeast
Asia’s tech scene, she has published widely in outlets such as South China Morning
Post (SCMP), New Naratif, VICE Indonesia, and Salaam Gateway (Reuters). Since 2021,
she has worked with StoneBench on thought leadership content with major brands throughout
Asia Pacific.

**Source** : [ASEAN Agritech: Key beneficiary of the AI revolution](https://www.aseanexchanges.org/content/asean-agritech-key-beneficiary-of-the-ai-revolution/?rand=138677)