Australia’s agriculture industry has the ambitious target of becoming a 100 billion Australian dollar industry by 2030. One of the ways to support this is through innovation and research, providing Australian producers access to technologies to increase productivity and competitiveness in the market. There has been increased interest in Agricultural Technology (AgTech), particularly as the productivity of Australian farms has seen limited growth in recent years.
What is AgTech and why is it important for Australia?
The AgTech market includes products, services, or applications that improve the processes and efficiency of farming practices, with digitalization at its core. The range of AgTech available has grown over the years and includes precision agriculture, which uses big data to assist in farm management decisions, GPS and field mapping services, sensors for farm monitoring, and robotics and drones for crop planting and irrigation. The global AgTech market is currently dominated by North America. However, there are many opportunities for growth in Australia due to the country’s established agriculture industry and the already high adoption rate of AgTech among farmers.
Recently, there has been a slowdown in the productivity growth of Australian farms, which in turn can negatively affect profitability and resilience in the global marketplace. For example, the total factor productivity of beef farms in Australia has fluctuated over the last 20 years, even declining in some years. With Australia being a major beef exporter globally, continuing productivity growth is vital in maintaining its position in the market in the future. While beef farming is just one example, Australia’s grain, dairy, and horticulture markets could all benefit from AgTech.
AgTech investment in Australia
Agriculture productivity drivers include the adoption of technology, more innovation, and continued research and development (R&D). The question of whether there is enough public and private R&D funding in the agriculture industry in Australia has come up more frequently. While public-sector agricultural R&D funding decreased between 2020 to 2023, private-sector funding grew over the same period. Although this could indicate more market-viable products on the horizon, the discoveries and developments that public sector funding supports are still necessary to underly these commercial solutions. Precision agriculture, for example, requires continued public sector developments in GPS and satellite mapping, particularly important for Australian farms due to their remote locations.
Productivity gains are not only bound by investment, however; the adoption of AgTech is just as relevant. While producers in Australia are generally open to using technology in their farms, the high cost of AgTech is the leading barrier for farmers. Although the costs of implementation may be a barrier, if used efficiently, AgTech has the potential to increase productivity and maximize the profitability of farms across Australia. This will be increasingly important if Australia wants its agriculture industry to thrive both domestically and in global markets.
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