Press Release

Precision Agriculture Alliance Aims at Global High-end Market

CH Biotech (TWSE: 6534) today launched the Precision Agriculture Alliance jointly with the Industrial Technology Research Institute (ITRI) Central Region Campus, Taiwan Fertilizer, Known-You Seed, and Tien Heng Machinery. This cross-sector collaboration aims to upgrade Taiwan’s agriculture with advanced technology and tap into the strong demand from the world’s lucrative high-end produce market.
 
The launch ceremony was attended by Chen-pang Wu, chairman of CH Biotech, the originator of the alliance; Xing-gian Huang, director of ITRI Central Region Campus; Hsieh-cheng Lin, R&D director of Taiwan Fertilizer; Lung-Mu Chen, chairman of Known-You Seed; and Zhao-feng Chiu, General manager of Tien Heng Machinery. Also in attendance were the Deputy Minister Cheng-mount Cheng, Director General,  Jong-I Hu of Agriculture and Food Agency, and Direct general of Central Taiwan Science Park Maw-Shin Hsu.
 
By forming the alliance, the members are taking action in response to the government’s promotion of new agriculture in its 5+2 Industrial Innovation Plan.
 
With the collective efforts of the five alliance members, Taiwan aims to make an unprecedented difference at the top end of the global agricultural market.
 
There are success stories from which the Precision Agriculture Alliance can learn. The Netherlands has been effective in integrating agricultural biotechnology and high tech. This strength has propelled it to become the world’s second-largest crop exporter, railing only behind the US, which is 270-times its landmass
 
Another example is Japan, which shares with Taiwan some difficulties that affect agriculture, such as an aging population. To address this, farms have turned from family management to professional management and adopted sophisticated techniques for open-field cultivation. The result is some of the most premium agricultural products, including Densuke black watermelons (NT$190k apiece), Ruby Roman grapes (NT$10k), Yubari King honeydew melons (NT$720k), Dekopon oranges (NT$2,470), and Aomori World’s No.1 apples (NT$1,140).
 
In our digital age, consumers are no longer defined by average quantity and price. Instead, individuality is celebrated, creating what famous German sociologist Dr. Christoph Kucklick calls “the granular society” ‒ individualistic and diverse. Business is therefore becoming increasingly precise about consumer needs. This overall trend, coupled with the use of sensing components, farm machinery, data banks and other maturing technologies, has paved the way for precision agriculture.
 
The transformation goes beyond consumers; it extends to suppliers. The biggest change taking place in agriculture is the advent of big data. Whoever takes advantage of this new “production element” in a timely and effective manner will be able to overcome environmental constraints on agriculture and emerge as a winner.
 
That’s why the ITRI, Taiwan Fertilizer, Known-You Seed, CH Biotech and Tien Heng Machinery are working together as key actors in different parts of the value chain.
 
CH Biotech chairman Chen-pang Wu noted that precision agriculture differs from previous focuses ‒ first on quality and then on the use of smart technology. In the past, technology and farming facilities were introduced in Taiwan mainly to minimize the effects of typhoons and earthquakes. But this “plant factory” model is essentially about growth regulation and, without adequate induction, crops often fail to grow to their full potential.
 
Many elements must be put in place to realize that potential. Big data around a cash crop has to be built systemically, to identify promising seedlings. Crop-specific greenhouses, complemented by the right agricultural chemicals and machinery, will cater to different stages of growth. During the various growth stages, environmental factors will be regulated, including light, humidity, air temperature, and soil temperature. By exposing crops to favorable and harsh conditions alternately, and by pushing them to their limits, precision agriculture induces crops to grow those parts with the most economic value (e.g. fruits). This process helps to create high-end agricultural products of the highest quality and commanding the highest prices.
 
With the help of the Internet of Things (IoT) and artificial intelligence, precision agriculture will grow production and sales faster than other farming models, according to the Taiwan Agricultural Research Institute, Council of Agriculture. Research & Markets, a leading market research firm, estimates that precision agriculture will likely grow its global output value at a compound annual growth rate (CAGR) of 13.38% from 2018 through 2023. Research & Markets also estimates that by 2022, the precision agriculture market worldwide will be worth US$11.23 billion (NT$346.3 billion).
 
CH Biotech research shows that a comprehensive introduction of precision agriculture solutions will help to maximize the unit area production of crops by varying factors, such as coffee (an increase of 51x), tea leaves (15x), cucumbers (191x), bell peppers (49x), cherry tomato (63.9x), grapes (60x), and cabbages (26x).
 
Xing-gian Huang, director of the ITRI Central Region Campus, noted that the greenhouse systems developed in the Netherlands, Japan, and other advanced countries are mostly based on a temperate climate. To address the issues of high temperature, humidity, and strong sunlight in tropical and subtropical climates, the ITRI has developed smart greenhouse modules, equipment, and systems that are power-saving, water-efficient, and highly productive. With its smart greenhouse technology, the ITRI will work with the other alliance members toward the goal of precision agriculture.
 
Lung-Mu Chen, chairman of Known-You Seed, said “I remember feeling a bit upset when I saw a melon could fetch one million yen in Japan. What consumers don’t know is that the seeds of many melon varieties come from Taiwan. Once our alliance is up and running as expected, I believe we will do better than Japan in pricing.”
 
Chen also voiced his concern that climate change is increasingly affecting the growth cycles of crops. For example, the low flowering rate of lychees led to a supply shortage last year. A combination of the right facilities, the right agricultural chemicals, and quality seeds would turn climate-related risks into competitive opportunity.
 
Looking ahead, the Precision Agriculture Alliance will develop system solutions tailor-made for various crops, and promote them throughout Taiwan. Ultimately, it aims to grow the agricultural output and per capita yield exponentially by playing an important role in Taiwan’s efforts to upgrade agriculture.