In Spain’s southern corner of Almeria, a ‘sea of greenhouses’ stretches for over 33,000-hectares, an ocean of plastic so bright it can be seen from space.
Almeria is one of Europe’s driest regions but over the last 35 years has built the largest concentration of greenhouses in the world and is now often referred to as ‘the vegetable garden of Europe’.
Yet with the region’s water reserves overexploited and depleted, these greenhouses face a race against time to develop and implement novel agricultural approaches that allow it to continue producing food into the future.
Water management is therefore a key focus of the country’s agtech scene, says José Luis Cabañero, founder and CEO of Eatable Adventures, a venture capital fund and accelerator based in Madrid.
“Agtech here is seen as greenhouses,” he says. “And we are seeing a nice number of companies focusing on water. That is absolutely needed.”
Planet Biotech, for example, is using pioneering technology to leverage plants’ natural response to water stress, thereby reducing their need for water and making them more resistant to drought and high temperatures.
Ekonoke, meanwhile, has caught the attention of big brewers like AB InBev and Estrella Galicia with its innovative approach to the hydroponic cultivation of hops that uses 15 times less water than traditionally outdoor grown hops with an overall carbon footprint that is 15 times smaller.
“Spanish agtech companies are at the forefront of innovation in the sector,” says Henry Gordon Smith, founder and CEO of Agritecture, an urban agriculture blog. He highlights Novagric as a further example, a greenhouse developer which has found a way to reduce water use by 40% through placing sensors in the soil to continually monitor water content.
Spain is no stranger to such innovation with the country ranked sixth in Europe and 14th in the world for agritech investment in 2024 - a total of €179m coming into the sector last year, according to a report by Eatable Adventures.
Threats to early-stage companies
But the sector is now facing a phase of uncertainty, with investment down 20% on 2023 and a 6% drop in the number of start-ups. The fall in funding means “the ecosystem, in general, is in a phase of uncertainty, especially after the investment boom observed in 2021 [and] limiting the emergence of new technology initiatives,” the report said.
While the drop in investment is largely in line with the rest of Europe, there are specific structural issues in Spain that often make it hard for smaller companies to generate funding, Cabañero explains.
The first is a lack of dedicated Spanish investment funds while even those based in Spain often prioritise investment in other countries such as Israel, he says. The other is that the Spanish government is “more focused on the industrial development than early-stage companies developing technology” and so has opted against using the country’s sovereign wealth funds to invest in pioneering agricultural technologies.
As shown in Almeria, one of Spain’s most urgent challenges is to reconcile its enormous agricultural output with its deteriorating environmental performance. A water shortage is the most urgent, but the sector’s contribution to Spain’s greenhouse gas emissions has also increased significantly over the last 10 years.
New policy approach needed
To help tackle these problems without hurting production, an OECD report last year recommended a new policy approach which puts innovation at the centre of a new agricultural strategy, although it advised “this will requires strengthening the institutional and regulatory framework that supports agricultural innovation and creating incentives to tackle the impediments for a more sustainable and resilient agriculture.”
As it stands, this is still lacking. There are few incentives – either economic or regulatory – to embrace environmental innovation, while the ecosystem through which knowledge is developed and shared remains fragmented.
“Spain is very good in the production of scientific knowledge and is one of the most successful participants in collaborative approaches at the EU level” the OECD concluded. “But research often struggles to reach the productive sectors.”
This is seen clearly in Almeria where greenhouses are typically simple plastics structures, often with no electricity and very little technology other than drip irrigation. “Spanish food production is basically still in the very, very early, pre-technological phase,” says Cabañero.
“If you compare this to the Netherlands, their greenhouses have electricity, they have non light cycles, they have full sensors. It’s a completely different scenario. They are high tech, high yield, high cost. On the Spanish side, its low cost, and no – or little – technology.”
A major factor hindering Spain’s agtech development is that that big agrifood corporations carry out little research of their own, meaning it is typically start-ups and investors responsible for triggering innovation which can then be adopted and catalysed by corporations.
Closing the gap?
Efforts are now underway to close this gap with the Andalucia Agrotech Digital Innovation Hub established in 2016 as an industrial hub to promote technological advancement and efficiency in agricultural.
This year, it was boosted by a new partnership with venture capitalists Startup Wise Guys in order to help “foster connections between emerging start-ups and large corporations, building a dynamic ecosystem where innovative solutions can flourish”.
But if Spain’s flourishing technology scene is to make a felt impact on its enormous agriculture sector, there will need to be more done to join the dots in this fragmented ecosystem of ideas.