The most important number in specialty crop agtech is $5 billion in automation revenue in a single year. I’ve written before about the importance of automation becoming a category with more than $1 billion in annual sales. That metric is significant from a segment perspective because, across many technology categories, there is precedent for that level of revenue generating meaningful follow-on segments.
In automation, the opportunities include: (1) systems integration, which helps agricultural operators incorporate robots into their farming operations; (2) data and analytics, which take data from multiple robots and turn it into a recommendation engine for agronomic decision-making on future rotations; and (3) the manufacturing and service ecosystem, where at a certain scale it becomes worthwhile for manufacturers to build equipment close to their customers, regardless of where headquarters are located.
In enterprise data centers, as various forms of storage reached $1 billion in revenue, the supporting infrastructure around systems integration and data and analytics tools often grew to 25 percent to 50 percent of the size of the underlying category.
I then started analyzing what automation revenue projections could look like over the next five to 10 years and beyond. As I examined the amount of venture capital already invested, the amount and trajectory of current revenue from known players in the sector, and likely trends in venture capital and revenue growth, two things became apparent.
First, based only on known players and expected growth trajectories, agtech automation is poised to grow from approximately $310 million to $325 million in 2025 to $1 billion by 2030. That represents a 26 percent compound annual growth rate (CAGR). Growth during the past several years has been at least 25 percent to 30 percent, with some years showing larger spikes.
Second, if you look at expected agrifoodtech venture capital funding over the next five years and the anticipated percentage allocated to automation, a path to $2.5 billion within the next decade appears not only possible but increasingly probable.
How does the $1 billion materialize? Over the past 10 years, automation has attracted between $2.8 billion and $3.2 billion in investment, generating the momentum needed to reach $1 billion in revenue by 2030.
Much of that growth will come from non-harvest automation, including weeding robots from Carbon Robotics (Laserweeders) and Stout (mechanical weeders); spraying robots from GUSS, Ecorobotix and Verdant; thinning robots from Niqo (it is also worth noting that some weeding robots can eventually perform thinning tasks, and vice versa); harvest-assist platforms such as Burro; and autonomous mobility platforms, such as Bonsai/Farm-ng and Agtonomy.
These companies can drive most of the growth needed to reach $1 billion without new market entrants. Any new entrants—and some are expected—would accelerate the growth rate and bring the $1 billion milestone into reach sooner. That creates a clear path for automation to achieve $1 billion category status within five years.
Now let’s examine the path to $2.5 billion. Even with agrifoodtech venture capital declining 70 percent over four years—from $54 billion in 2021 to $16 billion in 2025—annual investment has stabilized around $16 billion after totaling approximately $16 billion to $17 billion during the previous two years.
For now, it is reasonable to model the next five years of venture capital at approximately $15 billion annually. That estimate falls within, but slightly below, the range of the past three years in case additional reductions occur. Based on that assumption, total agrifoodtech venture capital investment over the next five years would reach approximately $75 billion.
Next, we can examine what percentage of that funding is likely to flow into automation. It should not be surprising that after investment in vertical farming and alternative proteins slowed significantly, the percentage directed toward categories solving more immediate operational challenges increased. Automation, which addresses the ongoing labor challenge, grew from 1.6 percent of total investment to 5.6 percent.
If I had to project the trend, I would expect automation’s share of investment to increase rather than decline during the next five years. For modeling purposes, I used a flat allocation of 5.6 percent of the projected $75 billion. That results in approximately $4.2 billion in projected automation investment over five years.
Now we can make some assumptions about the impact of that $4.2 billion based on what we have seen in other segments. We know that capital efficiency increases as a segment grows from $0 to $1 billion and then from $1 billion to $2.5 billion. This progression makes sense. The first billion dollars in revenue supports the build-out of infrastructure, while subsequent billions can leverage the installed base and ecosystem created during the development of the first phase of growth.
Recall that the path to the first $1 billion in revenue was based on approximately $3 billion in agrifoodtech venture capital investment. Based on historical patterns, it is reasonable to model the next $4.2 billion as more than capable of generating an additional $1.4 billion to $1.5 billion in revenue. A simple straight-line projection from the original $3 billion investment-to-$1 billion revenue relationship suggests that $4.2 billion would generate approximately $1.4 billion in additional revenue. I believe there is potential upside beyond that estimate because progress generated by automation startups funded through the initial $3 billion investment should create gains that exceed the baseline model.
For those reasons, I believe that $4.2 billion in projected automation investment creates a clear path to $2.5 billion in annual automation revenue.
Now the next question becomes: What is required to reach $5 billion in revenue? A related question is what that level of growth would enable in terms of new business opportunities and, more importantly, what it would mean for job creation.
First, let’s examine the capital needed to reach $5 billion. Based on the results from the initial $3 billion and projected $4.2 billion investments—and the earlier rationale that capital becomes more efficient as revenue grows—we know it should require less than $7.2 billion, which is projected to generate $2.5 billion in revenue, to create the next $2.5 billion and reach $5 billion overall.
For modeling purposes, it is reasonable to assume that $5 billion to $6 billion in additional investment capital would be sufficient.
That leads to the next questions: Where will the money come from, and how should it be deployed? I have been examining both potential capital sources and opportunities to reallocate spending from existing programs into agtech automation. In that process, I identified several programs that rely on weak metrics or do not adequately measure success or failure.
The three major areas for potential reallocation are climate-smart funding, regenerative agriculture practice payments and federal economic development grants. Let’s examine each of those areas.
First, there’s the Inflation Reduction Act (IRA) Climate-Smart Agriculture Funding program, which represents $19.5 billion and is designed to expand existing conservation programs through the Natural Resources Conservation Service (NRCS). The funding supports payments for practices intended to reduce greenhouse gas emissions, improve soil carbon, reduce nitrogen losses or sequester carbon.
Major spending categories include: (1) $8.5 billion for cost-share practice payments through the Environmental Quality Incentives Program (EQIP); (2) $5 billion for regional partner-led conservation projects through the Regional Conservation Partnership Program (RCPP), including nonprofit and university partnerships; (3) $3.3 billion for multi-year conservation stewardship contracts; (4) $1.4 billion for wetlands easements through the Agricultural Conservation Easement Program (ACEP); and (5) $1 billion for conservation technical assistance.
While there is clear demand for the program—which should not be surprising given that it is a government subsidy—it provides what I would characterize as limited climate accounting while offering little improvement to grower economics. Success metrics are primarily based on carbon sequestration and funding deployment. The program is already being modified to allow broader funding reallocations.
Much of this funding would be better directed toward subsidizing grower automation purchases. Many climate-smart agriculture programs are positioned as efforts to improve farm economics. In practice, however, many of these programs do not establish or measure grower success metrics at either baseline or incremental performance levels, and those measures are rarely used in evaluating program outcomes.
The impact of automation spending can be measured more directly through labor outcomes, grower economics and job creation, creating a more concrete framework for assessing economic development results.
Second, let’s look at the USDA Partnerships for Climate-Smart Commodities, a 2022 Pilot Grant Program which is going to spend $3.1 billion on 141 projects for: (1) technical and financial aid to farmers; (2) monitoring, reporting and verification; and (3) market development (premiums for “climate smart” products). The Trump Administration reframed the program as “farmer first” and added a requirement that 65 percent of funds go to farmers (by putting in place lower admin cost caps).
So how is this program doing? Well, the original USDA targets were 60,000 participating farms, 25 million-plus acres and 60 million metric tons CO2e. The actual results two years in are: 14,000 farms, 3.2 million acres and 400,000 metric tons. As with the IRA program, there are no farmer success metrics established as targets or measured.
Now let’s take a look at the model for building the agtech incentives infrastructure to help support accelerating agtech purchases. It already exists and is part of the Climate Smart Funding efforts of the last 10 years. It’s the electric (EV) tractor subsidies program that uses California Air Resources Board (CARB) payments. The first program is FARMER, which pays for EV tractors that replace diesel FARMER, requires proof that the replacement tractor was turned into scrap and provides an average check size of $80,000 to $100,000. FARMER represents 85 percent of program payments through CARB. The second program is CORE, which pays to incent EV tractor purchases, represents 15 percent of program payments, and has an average check size of $50,000 to $60,000.
As an example, one of the program participants, Monarch Tractor, made EV tractors that received significant CARB dollars. The business model for Monarch was selling 40 horsepower (HP) tractors for $85,000 and receiving a $50,000 to $60,000 payment from CARB. Even after receiving $155 million in VC funding and significant CARB funding to help support their EV tractors being purchased by growers, Monarch was unable to raise more capital and was acquired by Caterpillar after attempting to pivot from a tractor company to an IP company.
Now let’s look at the success metric for these two programs. The program win was based on emissions reductions tied to the number of hours the EV tractor was driven. But here’s where the EV tractors meet the road. It’s very hard to prove these emissions because it appears that the system was largely based on an honor system of self-reporting and top-down economic models that are not verified through any bottom-up analysis. I have seen some of these EV tractors in their native habitat at growing operations. They are very rarely in use because of the lack of a compelling use case, but the same unused tractors are getting credit for success metrics because of the factors mentioned above.
Next, let’s look at the Regenerative Pilot Program, USDA’s $700 million program that was announced Dec. 10, 2025. It is being run by NRCS as a fiscal 2026 pilot that redirects and sets aside funding inside two existing conservation programs: $400 million through EQIP and $300 million through CSP. The stated goal is to move USDA conservation funding from isolated practice-by-practice payments toward whole-farm regenerative conservation plans focused on soil health, water management and natural vitality. It is a large conservation delivery pilot layered on top of EQIP and CSP, with a stronger emphasis on whole-farm planning, soil health testing, bundled practices and public-private supply chain partnerships.
To date, many of the success metrics for similar practice payment programs seek credit for approving a budget and spending the money. You can excuse farmers for not being overly impressed with passing a budget and actually spending the money. That’s basically table scraps for any grower operations team. The real key is measuring the success of the spending. For many pilots and launched programs around regenerative practices, success is measured only through the allocation and spending stage. It never makes it to actual grower metrics that improve their economics. As above, reallocating some of this capital toward automation incentives provides a much better set of metrics for rural economies.
I am in the middle of an analysis of federal economic development grants. For now, know that there appears to be $4.7 billion to $5.2 billion a year in federal grants through programs such as Community Project Funding (EDI) ($3.3 billion in fiscal 2024), the Economic Development Administration ($1.1 billion), Revitalization Grants ($320 million) and USDA and DOE economic development ($800 million). The next action item is to identify which of these apply to rural economies and how the success metrics are measured to determine how competitive the economic development impact of automation incentives is compared with existing programs.
So now we come to the final topic: What does it mean when we get to $5 billion in annual automation revenue? First, it means that we create three separate but related billion-dollar categories of opportunity. The first is systems integration work—the work of integrating the robots into grower operations, supporting them and providing repairs. At $5 billion in automation revenue, this category could easily be worth $1 billion to $2 billion in annual revenue. The second is data and analytics built around all the data produced by the $5 billion in robots being operated on farms for multiple non-harvest tasks. The third is manufacturing and support. At a certain level, it will be worthwhile for manufacturers to consider bringing manufacturing for their robots to California because of the volume of business they are creating for their products here.
Each of these three could generate $1 billion in annual revenue. In addition, there’s an AI optimization layer that’s hard to measure in revenue terms, but we know it will emerge as the core automation category grows.
Furthermore, $5 billion in annual revenue means that 42,000 to 50,000 new jobs are created based on comparisons with other technology segments. And unlike many rural sectors, these are not construction jobs to build solar farms, energy production facilities, lumber processing operations or mining facilities. These are permanent, ongoing jobs, and they are highly skilled and well paid. This is why we all need to start looking at agtech automation not only as something that creates successful startups and helps solve the real and ongoing labor challenges, but also as a key piece of rural economic infrastructure.
We have a clear path to $1 billion based on existing results and an equally clear, emerging path to $2.5 billion based on forecast venture capital and automation sales growth. We need an additional $5 billion to $6 billion in funding to reach our target of $5 billion in annual automation revenue. The combination of climate-smart funding from the IRA and the USDA Regenerative Pilot should be reallocated toward an EV tractor subsidy-style program to help accelerate the push to $5 billion in automation revenue. The sooner we get there, the sooner the new $1 billion categories emerge and scale, and the faster the 42,000 to 50,000 new jobs are added to support rural economies wherever specialty crops are grown.
