Innovation, sustainability and collaboration in agribusiness
This edition of the Agribusiness Bulletin looks at the implications of innovation, sustainability and collaboration from fork to farm on the Asia Pacific agribusiness landscape and what’s being pursued closer to home.
The Agribusiness Bulletin
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Innovation, sustainability and collaboration in agribusiness
Responding to the themes explored at the 2018 Financial Times’ Global Food Systems summit around “Innovation, Sustainability & Collaboration from Fork to Farm”, we have considered the implications of the topics discussed on the Asia Pacific agribusiness landscape and what’s being pursued closer to home. Megatrends in the industry, government influence and new technology advancements were all touched on during the summit, with an underlying theme around innovation and sustainability. Certainly, sustainability is high on any agribusiness agenda with the world population expected to reach 8.5 billion in 2030.
Currently, half of the world’s population does not eat a sufficiently nutritious diet while in certain regions, up to 40% of food is lost or wasted. At the same time, demand drivers are shifting. Consumers are interacting more with their food, and increasing awareness is driving food consumption decisions. A higher emphasis is being placed on freshness and quality rather than cost, forcing the optimisation of supply chains through cutting-edge solutions which enable real-time purchasing, routing, and pricing decisions.
When you combine the disparity of food consumption around the world and changing consumer preferences with volatile weather events and ambitious climate goals, agriculture faces a myriad of challenges requiring a systems-level transformation.
In Australia, our Rural Research and Development Corporations (RDCs), comprising of Commonwealth statutory bodies and industry-owned companies, are the driving force behind innovation and improving the long-term sustainability of Australia’s primary industries. Some recent examples of developments coming from the RDCs include:
- Smartcane Best Management Practice (BMP) program documents, benchmarks and ultimately looks to improve on-farm practices by providing solutions (from experienced local facilitators), providing farmers with the latest research and identifying technology practices available. Smartcane BMP is also aligns with the Great Barrier Reef protection regulations, which focusses on key farming practices in order to reduce the likelihood of nutrients and pesticide run-off into the reef, a predominant region for Australia’s $2.5 billion sugar cane industry
- One of the Cotton Research and Development Corporation’s (CRDC) three goals outlined in its Research, Development and Extension Plan 2018 – 2023 is to improve cotton farming sustainability and value chain competitiveness. In order to improve the sustainability of cotton farming, the CRDC has set a target of 6.6% of farm native vegetation to be managed for conservation with a carbon footprint of 325 kg of CO2e per bale
- Similar to the Smartcane BMP, Farm300 was a program funded by the Australian Government, and managed by Meat and Livestock Australia in partnership with the Australian Farm Institute, Australian Wool Innovation and Dairy Australia. The program helped cattle and sheep producers increase on-farm productivity and profitability while reducing greenhouse gas emissions through intensive training and workshops for a select number of a producers. Following the completion of the program in 2015, a number of case studies, producer resources and coaches were made available to the industry
- The Australian wool industry is changing its practices in response to changing consumer preferences based on the ethical issues surrounding mulesing, a process to prevent flystrike. Following a growing wave of opposition of the practice, Australian Wool Innovation (AWI) is supporting producers through various means including significant investment into alternative flystrike prevention methods and resources to assist with planning for non-mulesed Merino enterprises. This is not a new issue with the industry working over the past decade to prevent flystrike through alternative methods. However, with increasing demand for non-mulesed wool, AWI is actively assisting woolgrowers as they consider moving to a non-mulesed enterprise.
On the farm, various initiatives are promoting innovation and sustainability in the industry. Western Australia’s Department of Primary Industries and Regional Development has made funding available to assist applicants transform their concepts into solutions.
Also, following the rapid growth of the drone industry, the Queensland State Government released its Queensland Drone Strategy presenting the opportunities and challenges the technology presents in June 2018. Producers are certainly recognising these benefits within their operations with a notable uptake in the use of drones by producers. Further to this, Brisbane will also host the 2019 World of Drones Congress that will focus on the commercial applications of drones, including in agriculture.
Sensor technology is also rapidly developing with agricultural applications ranging from crop production to animal welfare. An example is Central Queensland University’s Precision Livestock Management team who have utilised GPS tracking technology to monitor animal behaviour (in ewes), allowing for quicker detection and treatment of a sick animal.
Whether at the individual producer level, or work conducted by wider industry bodies, Australian agriculture has shown enthusiasm towards experimentation and implementation of innovative and sustainable solutions. The vast range of challenges presented in the industry pose a threat. However, Australia’s position as a world leader in agricultural innovation and product quality provides the opportunity for the industry to adapt to the changing landscape of the industry and expectations of consumers.
Rob McConnel, Partner, Financial Advisory
Ben Haire, Senior Analyst, Financial Advisory
Published: November 2018