What does Mexican agriculture need to truly exploit its potential in international markets?

It is nothing new to say that Mexico has tremendous potential to compete in international markets in agtech. This conversation has been going on since I can remember but we have not seen its full potential deployed. How can this be done? What is missing? My experience launching Rising Farms might help partially answer some of these questions.

Rising Farms was born in 2020 with the need to somehow, transform the agricultural industry in Mexico. This is easier said than done. We are not there yet, but we will get there. I have seen flashes of how can this transformation start with the following 4 pillars:

● Scalability: the high costs of construction of new facilities in the greenhouse industry have slowed down its growth. Very few good players have the money to grow fast and take advantage of the economies of scale that come with it. Organic growth of 1 or 2 hectares per year will not make a difference in the big picture. If the know-how is there, the potential can be scaled faster. According to a database from Queretaro state, there are 116 operations of less than 1 hectare, meaning the industry is pulverized in very small producers. Additionally, I remember that some years ago, reading a study from the Dutch embassy that stated that 60% of the protected agriculture industry in Mexico was non-operational due to different reasons, made me realize how can we take advantage of this and lease those facilities instead of constructing our own. That is how our business model started.

● Access to Financing: my experience has been that almost no one lends money to startups in agriculture. How can new ideas come forward and entrepreneurs thrive if the industry is unknown to banks, investment funds, and investors? They see the agriculture industry as high-risk so money goes somewhere else. Not owning several assets as real state collateral stops the due diligence processes to raise funds. Compared to access to financing in the United States, Mexico is just starting to change that mindset. More money needs to go to agriculture, with controlled risk, new ideas can revolutionize an industry that has not changed much in the last 20 years. Same dynamics, same products. Risk is controlled when the right know-how is there.

More money needs to go to agriculture, with controlled risk, new ideas can revolutionize an industry that has not changed much in the last 20 years

● Sophistication: not because it’s agriculture it means the industry does not need processes, structure, and operational excellence. I have seen too many producers who operate informally and lack the structure this industry needs. Investing in top talent is the main barrier to sophisticated agriculture. If we want top quality products we need top quality teams. High-developing teams are born from people who have the know-how and the potential to lead. Very often, job candidates are either excellent in the technical aspect or leadership skills but not in both. Companies need to invest more money in talent, I see that in agriculture very commonly, the less they can pay the better and this means brain drain is too common to stabilize processes and continuous improvement. A phrase from the book "Good to Great" by Jim Collins says "People are not your most important asset, the right people are".

● Real Sustainability and Social Transformation: first let’s say that sustainability and social impact are mostly used to “greenwash” marketing campaigns more than to truly impact corporate strategies. Audiences are tired of “green logos” and inspiring phrases that do nothing more than they already did but with a new selling speech. The agriculture industry is sustainable by nature with enormous efficiencies like water (using less than 90% of traditional farming methods) so I believe the impact is not there but in the social pillar. Agtech is very intensive in manual labor, at Rising Farms we currently employ more than 400 people with a rotation of more than 15% per month. Why is rotation so big? Because there is nothing different from one employer to the other. People do not feel like they belong and social problems in their families are alarming. Substance abuse, violence, and other issues keep on pressing the feeling of belonging in a company and something needs to be done differently. I commonly hear “People are lazy”, “people do not want to work”, and “There are too many job offers and people are not afraid to lose their jobs”. There is some truth in that but I rather believe that we do not understand completely what drives a field worker in Mexico. It is not salary (but of course more than basic needs need to be met), it is not one position or the other (but position profiling is important) it is that companies manage field workers the same regardless of their age, psychological state, culture, language, etc. How can someone feel like they belong if there is no differentiation for them?

I do not want to sound negative, on the other hand, I want readers to understand the huge potential that exists and how we can use these opportunities to take the agricultural industry to the next stage. It is not magic; greatness is not a function of circumstance, greatness is largely a matter of conscious thought.