Why agtech is Australia's next $100 billion industry | AFR.com
Date Posted:12 September 2016
Somewhere off the coast of Tasmania lies a small sensor. Its job is to measure the water level, salinity and temperature of the surrounding ocean. It sits faithfully in the cold, transmitting its readings into the cloud. But it isn't alone. There are many others like it, also transmitting their findings, creating a vast set of data.
Oysters are filter feeders - they pick up whatever is carried by the water in which they live. So if heavy rainfall brings too many toxins, they end up in the oysters, which are rendered unfit for consumption by humans. This costs the industry AU$34 million a year.
The network of sensors provides data which, in real time, measures the threat to oyster farms across Tasmania. That, in turn, equips farmers with the best possible information to make decisions about their produce. Oysters can be harvested early or left to grow with confidence, and millions of dollars of produce which would otherwise have been wasted can be saved.
The sensor network belongs to a small Australian technology company with big ambitions. It wants to help farmers everywhere increase their yields through better data measurement and analysis. It is one of six startup case studies profiled in StartupAUS's latest report, Powering Growth: Realising the potential of AgTech for Australia. The report, co-authored by KPMG and supported by the Commonwealth Bank and the Queensland Government, looks at the potential impact of technology on Australia's agriculture sector.
The key question it asks is this: What will it take to make agriculture Australia's next AU$100 billion industry?
The world is an oyster
That figure, predicted by the National Farmers' Federation, almost doubles the value of the sector by 2030. The opportunity is there. Global food demand is forecast to increase 60 per cent by 2060, and the growing middle class of China and India will consume both a greater amount and greater variety of food. Australia has an established brand and strong trade relationships with the emerging market. We have an extremely valuable opportunity here to develop technologies that make a real difference to the economy's bottom line, while also helping rural Australia realise the economic benefits of the digital technology revolution.
We can't simply double our farmland. We already use just over half our landmass for agriculture, and much of the rest is inhospitable and barren. In fact, 85 per cent of the growth of the sector would have to come from increased yields and cropping intensity. That kind of increase in production is simply impossible without technology.
Therefore, each oyster saved is an oyster earned. Or, perhaps, exported.
We have diverse climates and world-class research. Solutions and products developed here will not only directly help Australian farmers, they can also be exported to the world at scale. The global market for agricultural technology is projected to be US$189 billion between 2013 and 2022. It isn't just an opportunity for agriculture, the tech sector also has a lot to gain in this space.
Getting hands dirty
To get there, startups will have to get their hands dirty - literally. AgTech solutions are dispersed, exposed to the harsh Australian elements, jostled and trampled by cattle. It is our rural and regional communities where the impact of these technologies are most felt. AgTech is perhaps the most tangible example of how technological innovation and entrepreneurship has an impact right across the diversity of Australian experience, not just the laneways of inner cities.
Still, while the potential is high, there are obstacles we will need to overcome. Powering Growth conducts roundtable discussions with over 60 stakeholders across government, industry, startups and investment, and compares the Australian AgTech space with seven other global players. It identifies three key areas in which we are lacking - capital, connectivity and direction - and provides the practical steps needed to address those challenges.
AgTech provides a window into the transformative effect digital technology can have on traditional industry. Agriculture has at its heart a powerful connection to the physical world. It is by its nature remote, and by its nature subject to the elements. If there is any industry that could be considered hostile for tech startups, agriculture must surely be it. Yet critical to its prosperity in the coming decades is technological innovation - cloud analytics, AI, drones, big data and autonomous vehicles.
Australia's tech sector has a powerful role to play in development of Australia's economy at large. Powering Growth describes the first step of an exciting journey.