The World’s No. 2 Farm-Drone Maker Wants a Robot for Every Farmer

October 25 — According to a report this morning (25th) by the UK’s Financial Times, the SoftBank-backed Chinese agricultural drone company XAG wants “every farmer to have their own robot.” Facing a shrinking agricultural workforce and rising temperatures, XAG argues that crop-spraying drones which need no pilot can help farmers meet both challenges.

By revenue, XAG is the world’s second-largest agricultural drone maker after DJI. The company has launched a series of products built around automated drone docks: after landing, a drone can automatically be cleaned, charged and refilled with spray, and the system can plan spraying routes by itself.

XAG senior vice-president Gong Yaqin points out that labour shortages and an ageing agricultural workforce are the two big problems facing Chinese farms, and that many farms struggle to find a drone pilot with time to come and spray. Climate change is making weather more extreme and agricultural automation more urgent. “In the future every farmer will have their own robot. This will bring revolutionary change, because we believe the biggest obstacle holding back the drone industry right now is pilots.”

Gong notes that pilots tend to want to finish one field as quickly as possible and hurry to the next, and that farms in remote areas find it hard to attract pilots at all.

Another force pushing agriculture towards automation is the rapid loss of farm labour. “AI companies talk about valuations and market size in terms of how many people they can replace. We are the opposite: how much labour will be lost over the next five years is how big the market is.”

Gong estimates that about 12 million people move from the countryside to cities in China every year. At that pace of population movement, China will need 3 million drones in the next three years; to cover all of the country’s farmland, demand could reach 12 million.

XAG’s drones, agricultural robots and farm sensors are sold in nearly 70 countries, including the United States, Brazil, and markets across Africa and South-East Asia.

Founded in 2007, XAG began as a consumer model-aircraft brand and is now preparing a listing in Hong Kong. According to Caplight estimates, XAG was valued at about $1.5 billion (roughly 10.03 billion yuan at current exchange rates) in a 2023 funding round, with SoftBank holding 12.9%.

Gong expects that, to cope with labour shortages, farms outside China may need 5 million to 10 million drones over the next decade.

The United States strictly limits sales of new Chinese drones, and has fallen from XAG’s largest overseas market to second place, with Brazil now first. Gong believes it will be “even harder” to develop the US market in future. Even so, XAG recently won regulatory approval to sell its latest drone model in the US.

He also notes that, under the threat of climate change, even farmers most attached to traditional methods are starting to change their attitude to drones and other new technology. “Technology, weather and labour shortages are intertwined… the situation farmers face has become very complicated, and the pressure on them is enormous.”