Ian Scutt AgLink Australia CEO
In the 2021/22 season, Australian agricultural production was valued at $83.1 billion AUD, a record for the industry. The major component of this figure was contributed by farmgate outputs which was estimated around $73 billion AUD, around 3% of Australia’s GDP. This was supported by high commodity prices (influenced by poor production in Russia and Ukraine), good growing conditions across large sectors of the country which coincided with poor conditions overseas. To put that in perspective, the US reported $134.7 US billion (~ $196.3 billion AUD) of farmgate outputs which contributes 0.6% of the US’s GDP. Despite this outstanding achievement by the Australian industry, the goal set by the National Farmer’s Federation (NFF) of $100 billion in farm gate outputs by 2030 is a daunting task. Admittedly, this target was set in 2018, well before unforeseen circumstances such as the pandemic.
As the world population continues to grow, agricultural land becomes more scarce, the effects of climate change continue to be experienced and wars influence export markets; the agricultural industry could become the largest case study for the law of diminishing returns. To counteract this, creativity and innovation becomes increasingly crucial along the entire agricultural supply chain as the industry strives to achieve output targets. This was identified in the ‘RoadMap to 2030’ report released in 2018 with ‘Unlocking Innovation’ being one of the key pillars.
As the ‘Regional Connectivity Program’ enters its 2nd round with commitments of a further $140 million over the next two years (this being added to the 1st round of the program funding of $118 million) to infrastructure projects in regional areas, more growers will be able to access the Internet of Things (IoT) increasing the viability of digital solutions and agtech for growers. This is a cause for optimism for the ‘Roadmap to 2030’.
While nation-wide connectivity may not make Australia global leaders in agtech and digital agriculture overnight, it will certainly increase the industry potential and willingness to consider more on-farm digital solutions.
Agtech or agricultural technology refers to the different technologies which can be seen along the agricultural supply chain. Agtech does not just refer to digital software which is used for farm management but also hardware such as satellites, sensors, and robotics many of which require the IoT to integrate into a producer’s system.
Traditionally, Australia has been behind global competitors in terms of development, investment, and adoption. Unfortunately (and to the frustration of those applying agtech) many innovations to date have been developed without understanding the problem that is trying to be solved. This, however, has improved in recent times and coinciding with an increase in digital literacy and appetite to solve ‘real’ on farm issues.
Australia will continue to see material investment in agtech whether that be start up’s or from major global organisations looking to diversify their offering to the agricultural market. Agricultural chemical companies such as Bayer, BASF, Corteva, UPL and FMC who are heavily invested in this space are likely to play an increasing role over coming years in the Australian market.
The comparison between agtech in 2012 to where it is now in 2022 has seen it go from targeting early adopters to now a widespread segment within the Agricultural industry, a trend difficult to ignore!
By Ian Scutt
AgLink Australia CEO