Israel’s agricultural research and development has flourished over the years by having to cope. Soil salinity led to water-treatment technology, government demands for crops along the borders led to food production on unforgiving land, and the strong sun spawned technology that made photosynthesis more efficient.
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Farmers planted apple orchards in the Upper Galilee and olive groves in the Negev, while water technology in the arid Arava lowered salinity and created a friendly environment for crops.
Nowadays, Israeli farmers use recycled water at the highest rate in the world, saving clean water for drinking. Israeli companies are a world leader in drip irrigation, and three decades of crossbreeding has created a record milk-producing cow. In addition, Israel is still a leader in greenhouse growing and seed development
Still, the country hasn’t done enough to leverage its capabilities, says Ofer Zaks, CEO of the Israel Export Institute. He says that in recent years government support for agricultural R&D has eroded.
“In the past, a significant chunk of R&D activity was government financed, but today most of it is funded by companies, entrepreneurs and private investors," he says. "Entrepreneurs have a hard time getting financing to complete their projects, especially for penetrating the agricultural-inputs markets with their products.”
Zaks believes that Israel isn’t fully exploiting the export potential of its products and expertise – but the problem is also the potential clients abroad.
“Israel can’t be a food supplier, but we can produce technologies,” Zaks says. “And who's looking for these technologies and must implement them? The poorest countries. But it’s hard to integrate technologies, even simple ones, because of the enormous technology gaps.”
Zaks says that to increase exports, technology must be adapted to the capabilities of African countries where water and land are plentiful. He argues that nearly half the world’s crops go to waste, with the waste in developing countries occurring somewhere between the farmer and the market.
“Israel has excellent technologies for handling crops after harvest, including solutions for preserving and extending the shelf life of produce from when it’s picked until it reaches the market," says Zaks. "These include storage capabilities, methods of picking and packing … and smart packaging that keeps food fresh for a long time.”
Even the National Economic Council, which examined the issue over the past year, concluded that Israel wasn't exploiting the full business potential of its agricultural R&D. The council recommended establishing four technology incubators at an annual investment of $46 million for seven years. The government approved the proposal, and money is expected to start flowing from the budget in 2014.
“The difficulties with which Israeli agriculture has been coping for decades are the difficulties with which the world will be coping, so Israel has a relative advantage,” said Yoram Kapulnik, head of the agricultural research administration at the Volcani Institute.
"Having already dealt with a shortage of water and soil, and with desert areas, we have relative advantages. Israel has capabilities to help solve the expected food shortage. We can't solve the problem with farmland, but with knowledge."
The Agriculture Ministry sees the forecasts of a world food crisis as an opportunity to promote R&D as a growth engine for exports. But no one has taken the time to promote a national program.
This may be an opportunity for new Agriculture Minister Yair Shamir. His business background means he's familiar with venture capital funds, both government and private, and he can promote agricultural R&D to institutional and private investors while drawing up a national plan.
Another logical process would be to encourage private companies, including startups, to enter the fray. Israel has a technological advantage in spawning technology startups, and agriculture has plenty of upside.