On the occasion of the first Global Conference on Smart Farming, held at the FAO headquarters in Rome in early July, we spoke with Nemanja Grgić, Associate Director of Food and Agribusiness / Corporate Sector Advisory at the EBRD, about the challenges of scaling smart farming solutions, and Jacopo Monzini, Senior Natural Resources Management Officer at the FAO Investment Centre, about accelerating smart farming in urban food systems.

Q1) Nemanja, from a Development Finance Institution (DFI) perspective, why do promising smart farming solutions often fail to move beyond pilots? Is the main constraint the technology, the business model, market demand or the wider investment environment?

The technology is rarely the biggest barrier. Many AgriTech solutions perform well in pilots, but the challenge is turning them into businesses that farmers adopt and investors back.

The business model is often the weak point. Even strong technologies struggle if the value for farmers or agribusinesses is unclear. Adoption also depends on trusted corporate partners that can integrate innovations into their value chains.

Finally, finance remains a major obstacle. Many startups fall into the “missing middle”: too advanced for grants, but still too risky for commercial investors. We therefore need more innovative and targeted financial instruments to address the specific needs of the food and AgriTech sector.

Q2) Jacopo, if you had an additional USD 100 million to accelerate smart farming for urban food systems, where would you invest first?

As Nemanja highlighted, the issue is less about inventing new technologies than helping proven solutions scale.

I would invest in the enabling environment rather than new technologies. Our work at the FAO Investment Centre with the EBRD shows that entrepreneurs need better conditions to grow.

My priorities would be renewable energy to reduce operating costs, particularly for controlled-environment agriculture; logistics and cold chains to cut food loss and improve market access; and better data and policy frameworks to strengthen investor confidence and ensure innovative farming systems receive adequate support.

Q3) Nemanja, what can public institutions and DFIs do to support commercially viable solutions and reduce barriers to scaling?

Advisory support is essential. Through programmes such as Star Venture and AgVenture, the EBRD helps startups strengthen business models, refine go-to-market strategies and become investment-ready.

As Jacopo mentioned, creating the right enabling environment is just as important. DFIs can also connect startups with corporate partners and deploy financial instruments that reduce risk and attract private investment.

No single institution can do this alone. Development banks, donors, investors and industry need to work together to help promising innovations become commercially viable businesses.

Q4) Jacopo, can you share your perspective on this?

I agree that finance is only part of the picture. The biggest obstacle is that many investors still lack confidence in the business case.

Smart farming projects often involve high upfront costs, uncertain operating expenses and limited evidence of successful large-scale deployment. Combined with a shortage of experienced operators, this makes risks and returns difficult to assess.

Governments and development partners can help by improving transparency through standardized performance metrics, strengthening links between producers and buyers to create more predictable revenues, supporting risk-sharing mechanisms and providing clearer regulatory frameworks.

Ultimately, investment will grow when smart farming is seen not simply as an innovative technology, but as a scalable and commercially viable part of the broader food system.

Q5) Nemanja, many AgriTech companies are too advanced for grants but still too risky for conventional finance. How can institutions such as the EBRD help bridge this gap?

This is the “missing middle” I mentioned earlier. Bridging it requires more than finance alone.

Institutions such as the EBRD can combine advisory support, accelerators and strategic partnerships with blended finance, risk-sharing instruments and co-investment. By absorbing part of the early-stage risk, DFIs can attract private capital while helping companies demonstrate commercial value and strengthen investor confidence.

The objective is to build an ecosystem that enables innovative AgriTech companies to become investment-ready and scale successfully.

To find out more about our work on urban logistics and the reduction of Food Loss and Waste (FLW), visit the Agtivate project page.