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Australia’s next $100b industry

Article by :- Ben Van Delden, Partner, KPMG AgTech Sector Leader

The Australian share of the AgTech industry is ripe for the picking.

Our next steps will determine how Australia, a country with proud agricultural heritage, is viewed by the worldwide industry.

The question facing Australia is: do we want to be builders, buyers or bystanders in the AgTech market? In countries such as Canada, England, Israel and New Zealand, government is already playing a key role bringing together researchers, producers, technology providers, startups and investors to develop AgTech industries.

Numbers paint a clear picture of the sectors potential: 

Australia is home to over 123,000 agribusinesses, directly employing over 300,000 people and in 2015 venture capital investment in Agtech rose 336 percent.

But by far the more vivid image is that of Australian farmers struggling to make ends meet on the land because they lack access to the technology and data analytics needed to compete with the yield efficiency of their international counterparts. Technologies such as autonomous vehicles, precision sprayers, virtual fencing, smart gates, sensing devices and robotics are already transforming how we farm and the trust we have in the food we eat. The next major transformation in agriculture will come from connection to the Internet of Things, in so doing we will draw consumers closer to growers and integrate supply chains to improve yield and reduce wastage.

The Internet of Things allows us to peer into the future of agriculture by providing the tools to enable farmers to address climatic, operational or any number of other dilemmas. 

It isn’t enough however to suggest that the agribusiness industry should be thinking of innovative ways to solve problems, after all farmers have been doing this since the dawn of farming itself. We must invest in the development of technology that will facilitate the rapid capture, analysis and exchange of valuable data, so farmers at any tip of our vast country can take advantage of real time data enabled analysis to make better decisions to improve crop yield.

Smart Agriculture, where sensor devices throughout the supply chain are connected to the Internet, will enable farmers to produce higher quality crops with greater yields for the same or less chemical, fertiliser and water inputs. 

Smart Farming is not just an economic enabler for Australia, but key to ensuring that agriculture, beef and dairy in particular, retain their social licence to operate.

This data becomes increasingly valuable in line with the speed with which it can be acted upon. 

Picture a drone flying above countless crops, feeding real-time crop growth images and data back to a farmer and agronomist who are able to adjust his or her plans and actions immediately. In the United States this sort of analysis is already possible. In Australia, the lack of mobile connectivity across rural Australia inhibits such a rapid response. The quickest that most Australian farmers can feasibly capture, transfer, interpret and act on data from the land is the next day, compare this to real time analysis US farmers re accessing.

Despite the fact that we lag behind other countries, technology is still changing the way Australians farm. Over the last decade and a half, nearly 30 percent of jobs have disappeared from the industry; this is predominantly because of technology facilitating a production model less reliant on man power. It would be wrong however to assume this decrease in employment is shrinking the value of the industry. In fact our $57 billion agribusiness sector has the potential to nearly double in size to become a $100 billion industry by 2030.

Bearing this in mind, it’s important that we stay proactive. Allowing foreign innovators to define the landscape of change will inevitably prove less favourable than designing solutions which are tailored to suit Australian farmers.

One key in this is the engagement of young, passionate agriculturalists. The farming techniques that we employ today were scarcely imagined when the current generation of Australian farmers, whose average age is 57, were doing their training. This is not the generation who will ultimately drive the industry forwards long-term, but their experience, knowledge of the land and custodianship of our agribusinesses will be vital in securing the interest of excited, tech savvy farmers of tomorrow. We have an industry-wide responsibility to hear their ideas and support their efforts in changing the face of Australian agribusiness; and we will collectively reap the rewards.

Now is not the time for Australia to decide to be buyers or bystanders in the global AgTech market!

Read Powering Growth: Realising the potential of AgTech for Australia, a collaboration between StartupAUS, KPMG, Queensland Government and the Commonwealth Bank of Australia. This report makes a series of recommendations aimed at growing the AgTech sector in Australia to provide producers with the tools, data and knowledge to make more informed and timely on-farm decisions and improve productivity and sustainability.


Posted on September 11, 2016

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