The future of Australian Agribusiness

To ensure the advancement of the Australian Agribusiness sector in terms of productivity and sustainability, it is imperative to leverage technology. Agricultural technology — AgTech — holds enormous growth potential, resulting in powerful impacts on the Australian economy.

To spotlight the latest developments in this sector, BDO hosted a series of events as part of the Agribusiness Australia AgTech Roadshow. At each of these panel discussions, Shifka Seigel of the Israel-Australia Chamber of Commerce, gave a keynote about the state of AgTech in Australia, coupled with the international perspective gained from observing the development of Israeli AgTech. She was joined at each event by a rotating group of industry leaders to highlight the current and future role of technology in Agribusiness.

Key focus for Agribusiness leaders

The AgTech market is poised to triple in size, with the sector worth $12.4 billion in 2020 and projected to reach $34.1 billion by 2026.

In just over a decade, AgTech in Australia has grown significantly, boasting 300-400 young startup companies, all seeking game-changing digital technologies to enhance their performance. There is a $20.3 billion opportunity to improve the Australian gross domestic product with these solutions.

Farming is vital in Australia and globally. Agricultural businesses will play a crucial role in ensuring food security in the coming years. AgTech could also have a significant role to play in achieving environmental targets.

One of the key forces shaping the direction of farming innovation in Australia is the difficulty of finding skilled workers. Tech-enabled farming methods, such as small-footprint vertical farming, are on the rise. These are being used to counteract the labour shortage and improve productivity.

"If you are using less land, you're using less water," Seigel explained. "Because you have a labour problem, everybody is looking to increase the productivity with that labour problem. In Australia, there's definitely more investment going into it."

A need for continued innovation and cross-border collaboration

To reach the next level of innovation, Australian businesses should learn to share data with their partners worldwide. Seigel indicated that in countries such as Israel, there is a willingness to collaborate from both government and industry, but collaboration requires open-minded information exchange.

Data exists to help agribusinesses work on the next generation of farming solutions. For example, researchers have been taking samples of the many soil types present across Australia. In the years ahead, frameworks will be needed to standardise and share this information at both a national and international level.

While data is the fuel for the next generation of tech thought and development, people remain at the heart of the Agribusiness sector. Innovation and research are driven by data, but people with specialised knowledge transform these concepts into practical solutions.

Advancements in the AgTech ecosystem

Startups from countries such as Israel see Australia and New Zealand as places to deploy new ideas, including automated vertical farming. The ecosystem is ripe for developing these strategies, due to ongoing labour shortages within the sector.

The match between start-ups and the Australian economy is mutually beneficial, as young companies need to expand globally to achieve their growth and development goals, while Australian farming needs innovation and expertise to create a more efficient and sustainable future.

Data-driven insights can aid everything from crop monitoring to animal welfare tracking. The panellists at the Agribusiness Australia AgTech Roadshow event series highlighted the potential for technology to spread to new areas of agribusiness, but always in conjunction with human insights and decision-making. "When it comes to the choice around which genetics I should grow in this field, or what's the right irrigation scheduling for this crop, based on historical information, I think we'll get there, but I don't think we're there yet," said panellist Graham Page of Elders Rural Services.

Seigel echoed this sentiment, saying "I don't think that it's possible without a human connection. You need that human person on the ground that can lead you along the way to that digital extension. You're not going to see that without a human connection."

Projections for the next steps of AgTech development

Digital literacy will need to improve in the years ahead, while technology itself will need to be simplified, self-explanatory and easy to use in the field. Tech advisers will play a vital role in the years ahead, making sure AgTech tools are simple enough for farmers to incorporate into their workflows.

Increased reporting and tracking based on environmental, societal and governance (ESG) factors will become another use case for data. Taking a broad view of sustainability means creating an industry where organisations can continue to make progress and profits, while feeding the country without depleting the environment for future generations.

Efforts to ‘make agriculture exciting again’ will depend on attracting the next generation of workers to farms. Young workers entering the workforce are moving away from farming, discouraged by the long hours and the perception that the field is outdated. Turning agriculture into an efficient, optimised field can demonstrate exciting career opportunities.

How the Agribusiness sector can further adopt AgTech and continue to thrive

In the past decade, Australian businesses have intensified their approach toward AgTech development. Not content to be spectators, they're developing new solutions to directly attack the challenges they see, such as the lack of available labour and the need to preserve the environment.

For the sector to advance, it must overcome the ‘tall poppy syndrome’ mindset. This involves recognising that the success or failure of the Australian farming industry is interconnected. Establishing a culture of knowledge sharing as the norm rather than the exception can enable businesses to prosper by fostering ongoing innovation and problem-solving.

Interested in learning more about the future of AgTech and how it can benefit you?

At BDO, we understand that AgTech holds enormous growth potential, which could significantly impact the Australian economy. That's why we specialise in helping businesses in the Food & Agribusiness sector to harness the power of AgTech to drive growth and profitability.

Contact your local BDO adviser to learn more.