Abu Dhabi is committed to growing agriculture technology (AgTech) in the region and its investment office is putting its money where its mouth is.
Abu Dhabi Investment Office (ADIO) has announced individual partnerships worth AED152 million ($41 million) with three agricultural companies.
The goal of these partnerships is expanding existing capabilities in Abu Dhabi’s AgTech ecosystem and promoting innovation in the sector to address global food security challenges.
The partnerships follow ADIO’s AED367 million investment earlier this year to bring four AgTech pioneers to the emirate to develop next-generation agriculture solutions in arid and desert climates.
Speaking to Arabian Business, ADIO’s director general Tariq Bin Hendi, discusses the importance of AgTech for the UAE’s food security and efficiency and ADIO’s role in facilitating this.
AB: Why is it important for Abu Dhabi to be more food sufficient and food efficient instead of relying on the global food supply chains?
TBH: We are not saying that we are not going to be reliant on the international food market, especially since over 90 percent of our food today is imported. If I can move that number down to 70 percent, I would have done a tremendous job in looking at local food sources, making this a more attractive location to invest in agriculture in and making what is already on the ground more effective. We at ADIO are trying to drive this change.
AB: How far or close is Abu Dhabi from turning the desert green, as you mentioned in a press release statement?
TBH: If I look at the growth of farming in Abu Dhabi, and the UAE in general, it has been quite rapid. But we have reached an inflexion point where we need to become more efficient.
Technology is going to help us continue that rapid growth, and allow us to become more efficient, so we can then utilise more of our land to be able to deliver on our food security requirements.
Today, we are not close to where we would like to be but we are getting there very quickly because of these partnerships with the private sector and technology players and because of the government’s absolute need and willingness to change policy and regulation to adapt to what is required.
AB: Which elements of the agriculture value chain are you investing in the most nowadays?
TBH: The way we as ADIO approach this is that we want to make sure we are linking innovation and technology to either what is already on the ground in Abu Dhabi, to make it better, or to areas that we believe we can grow in Abu Dhabi that don’t exist in the manner we want them to so far, AgTech being one of those things.
I am not banking on one particular technology to be more successful than the other but what I am doing is de-risking all of those technology players through their exercises and experiences in Abu Dhabi.
AB: What criteria do you consider when investing in an AgTech business?
TBH: The first thing we do is we really focus on what their business plan is. Forget the technology for a moment, we look at the business plan to make sure they are approaching the UAE in the right way.
A lot of times there are discussions with institutions where they believe the country is very underdeveloped: when they actually come and see what we have created on the ground, they realise they need to tweak their approach.
We then look at what issue they are trying to address. We look at it from a human resource perspective, from a technology perspective and an equipment one.
Basically, we take the capital expenditure component and the operating expenses component and we look at how we can map this out across what they’re trying to accomplish and what the ecosystem today allows for.
Technology is driving policy changes as much as it is driving efficiency and disruption so we have to make sure those two things are working hand in hand. I can attract the best technology players in AgTech to Abu Dhabi, but if I don’t have the right policy and regulation in place, they will not succeed.
AB: Can you give me a concrete example to illustrate?
TBH: Let us look at the long-term Musataha agreements or land leases knowing that land is one thing that we have plenty of in Abu Dhabi and we want to use.
Historically, the process of getting land allocated for a particular agricultural exercise was quite fragmented. What we did, through the Abu Dhabi government and the Executive committee initiative, was streamline that through ADIO.
So today we changed policy guidelines and made it very simple for an investor or a company to come in and access land for a particular activity.
AB: What is your perception regarding the growth opportunity for agriculture in the UAE?
TBH: Even if you take one of the largest facilities today, it still only shelves one supermarket.
So when you start looking at it in terms of the requirements we have as a country, considering you are feeding close to 10 million people, the opportunity for private sectors and investors to come in is massive.
Through streamlining the Musataha agreements and offering these financial incentives to technology and large agricultural players that are embracing technology, we can drive that continued growth.
The message is clear: we want everyone to come here, we want to test the technology here and we will fund it where that option is available and we will also provide a simple mechanism to get things done.
AB: What are the main challenges you’ve faced?
TBH: Historically agriculture has not been viewed as a commercial activity by many investors in the region. This is starting to change now as they see what the demand is and what the possibilities are.
The challenge is understanding what all the issues are from the investors and from those who are looking to expand into AgTech. That is a bigger struggle for us than looking at a regulation and changing it.
I need to understand from the private sector what they require to continue to grow and to look at Abu Dhabi and the UAE as the place to be to develop the technology or to expand out of their native country and into the region.
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