Agriculture is Booming in Australia
EMERITUS PROFESSOR GEOFF FINCHER | September 2022
The agriculture sector of the Australian economy is booming. This boom has been made possible by, and may be extended with, investments that underpin associated sciences and technologies and through the development of ongoing incentives for the rapid deployment of emerging scientific discoveries.
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With a third year of record crop yields and prices on the horizon, Australian agricultural production is nudging $100 billion per annum. Agribusiness companies and private farmers are reaping unprecedented profits and attracting high levels of investment as a result of their huge growth potential. Companies such as GrainCorp, Elders and Nufarm continue to dominate the sector and, together with Treasury Wine Estates, the a2 Milk company and Bega Cheese, their market capitalizations are recovering strongly after the Covid-induced market downturn of 2020. The Australian Securities Exchange recently established a new agribusiness index (XAG) with a total market capitalization of more than $30 billion, to attract investment in support of the future growth of the sector. Recent sales of large farms across the country range from $12 million to an estimated $100 million. Nicola and Andrew Forrest are investing heavily in the sector through the vertically integrated beef, food and aquaculture company, Harvest Road.
A key enabling contributor to the success of Australian agriculture in the highly competitive international marketplace lies in the strong scientific support both for and from the sector. Farmers have remained competitive at the global level largely because of their willingness to quickly adopt emerging technologies. We adopted minimum and zero tilling technologies, new irrigation techniques in viticulture and a raft of precision agriculture practices for broadacre cropping at early stages of their development. Careful land and soil management by Australian farmers, coupled with the introgression of mineral-use efficiency and other genetic variations into major crop species, have enabled significant reductions in agricultural chemical usage such as fertilizers and pesticides.
But there are challenges ahead, the most pressing of which is the increased incidence of extreme weather conditions as the effects of climate change are manifested. Farmers have long realized the potentially adverse effects of climate change on their livelihoods and have led the nation in reducing greenhouse gas (GHG) emissions, while successive governments have procrastinated on the issue. It is encouraging to note that the newly elected federal government has initiated a major shift here by legislating the mitigation of climate change as an important national target and is also tackling the sector’s crippling labour shortage.
The National Farmers Federation estimates that, from 1996-2016 and largely through the efforts of the private sector, our primary industries have reduced GHG emissions by 63%. Harvest Road has already reduced emissions per kilogram of cattle liveweight to a level more than 10% below the national average and are vigorously implementing programs of planting trees on unproductive areas of their stations, replacing liquid transport fuels with solar power, and generating biogas from the excreta and other waste from its abattoirs. CSIRO scientists have discovered that adding tiny amounts of the dried and processed seaweed Asparagopsis as a supplement to cattle feed reduces levels of the dangerous GHG methane by more than 80%. This technology is now being commercialized through FutureFeed Pty Ltd. Vertical farming in multi-storey buildings or stacked containers also has the potential to dramatically lower carbon emissions, increase water- and fertilizer-use efficiency, and reduce or eliminate the use of herbicides and pesticides. High capital and production costs have so far limited the uptake of vertical agriculture, but one can be confident that this technology will grow in importance as our global population continues to rise.
As noted above, all these advances and advantages can be traced back to our ability to develop and rapidly deploy cutting edge science and technology. But are we injecting sufficient research funding to support the future needs of the sector? Our previous government allocated $13 million for two new Australian Research Council (ARC) Research Hubs and an ARC Training hub, to develop new technologies to fight crop diseases, to develop medicinal agriculture and to train specialized researchers in areas such as machine learning and artificial intelligence, robotics, molecular genetics, the science of climate change, biochemistry, agronomy, etc., each of which will accelerate future transformation of Australia’s agribusiness sector.
At the undergraduate level, universities around the country are reporting the burgeoning opportunities for Bachelor of Agriculture graduates and are supporting these opportunities with large investments in human capital and infrastructure. For example, the University of Melbourne recently appointed several senior academic staff members in emerging areas of agricultural research and technology, and in 2019 opened a new $100 million building to co-house its faculties of veterinary, agricultural and medical sciences. These facilities will supercharge the food security, animal health and agribusiness components of its undergraduate degrees, which focus on the roles of science and sustainability in meeting the challenges of changing climate, environmental sustainability and increasing demand for safe food production. The University reports that its graduates in agriculture are highly sought after across the country; overall employment rates are over 90 per cent. And many other universities across the country are pressing similar initiatives.
In summary, the agriculture sector of the Australian economy is booming, despite the challenges imposed by our distance from major markets, by current energy prices, by labour shortages and by the realities of climate change. The boom has been made possible and will be buoyed along in the future through investments that underpin associated sciences and technologies and through the development of ongoing incentives for the rapid deployment of emerging scientific discoveries.
Outside Opinion are proud to support the development of Australia’s science and technology research infrastructure through the provision of strategic advice to higher education institutions and their industry partners.
