Here’s what’s holding Australia’s agtech sector back from reaching its full potential
Food & Agriculture
Food & Agriculture
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Despite Australia being a global leader in agriculture, the agtech sector remains some way from hitting its full potential.
In 2017, the National Farmers Federation (NFF) set a goal of Australian farm output reaching $100bn by 2030.
Last year, the federation provided an update on its target and predicted it would only reach $84bn by 2030. It noted there was significant work to do over this decade.
It is hoped that agtech can play a part but Australia’s industry remains a relatively nascent one.
Australia is 76th in the world for innovation efficiency according to the Global Innovation Index. Furthermore, agtech venture capital investment is less than 2 per cent of that seen in America.
Rabobank analyst Wes Lefroy pointed to a survey the agribusiness bank did a year ago showing only 23 per cent of farmers were utilising sensor technologies.
“That to me is a signal that the potential is greater than it is and we have just scratched the surface,” he told Stockhead.
Lefroy is no pessimist and believes steps are being taken to address issues hindering the uptake of agtech.
Major issues he pointed to included the ability of the tech to solve specific problems farmers were facing and the integration between technologies.
“A lot of technologies just don’t talk to each other,” Lefroy explained.
“There might be different technologies to collect data, use data, process, analyse and actually execute the problem.
“Those [technologies] don’t talk to each other so the farmer has to use their skills to work through each of these steps to overcome the problem.
“We’re seeing more open type platforms that allow these to talk to each other to make them simpler to use.”
Lefroy noted that agtech start ups were now spending more time with potential customers to help in understanding what their problems were.
Agricultural innovation is primarily driven through universities and Research and Development Corporations (RDCs). Last year the Department of Agriculture ran an inquiry into how to modernise and improve the system.
The advisory panel will make recommendations in the second half of this year.
Peter Williams, a partner at law firm McCullough Robertson, said last week that RDCs had a proven record of identifying issues, with the path towards commercialisation rocky to navigate.
“There has been a bottleneck in the transition from research to commercialisation which has been largely caused by inadequate funding and a lack of cohesion with the entrepreneurial sector,” he said.
“Growing Australia’s agricultural sector to a $100bn industry by 2030 will require not only unprecedented collaboration between government research organisations and industry, but a new focus on attracting external investment to better facilitate the commercialisation of research in the agtech space.
“All stakeholders must come together to give Australia the agtech industry that our natural competitive advantage deserves.”