Now, increasingly refined on-farm technologies such as robotics, sensors, genetic technology and the growing use and adoption of precision farming, are all likely to play a role in helping Australian farmers access higher levels of productivity - and profit.
Our latest insight paper AgTech – Advance Australia Agriculture, launched in Tokyo at an ANZ and Austrade hosted event, shows a 1.5 per cent annual growth in capital investment and 3 per cent annual increase in productivity driven by scale-generated technology has the potential to help the Australian agriculture industry grow to $A98 billion in size by 2030, meeting 2.1 per cent of global food demand.
In contrast, current trends of a 0.5 per cent a year increase in capital and a 1 per cent increase in productivity would see the industry grow to a $A74 billion industry, meeting just 1.5 per cent of global demand.
The choices facing the industry have significant implications. Under a high growth scenario the cumulative growth opportunity above today’s production level of $A63 billion totals almost $A418 billion by 2030 – compared with just $A177 billion in a low growth scenario.
With the impending influx of agtech, top of mind for many farmers will be securing a much-needed upsurge in productivity, which has stalled since the early 2000s.
Agriculture is now the only sector, except for mining, where productivity was lower in 2015-16 compared with 2000, but new technologies show a path to productivity.
To examine the role agtech might play and the opportunities created by the changing demographics of two of Australia’s largest trading partners, we met with several companies in Japan and China including Amazon, Fujitsu, Daifuku, Hitachi and Swire.
There are many giant global tech companies today investing heavily in agtech, seeking solutions in-country and around the world, including Australia.
Time is only a temporary barrier to some of the solutions our farmers and industry are seeking. The sector should be actively thinking about how it can utilise new data in a way which promotes increased productivity and profit.
Technology and data have the power to influence farm production but also supply chain efficiency and product positioning. Delivering more effectively to a consumer creates new value which in turn creates a bigger profit pool. This is an important incentive to drive investment and output to satisfy growing market demand.
The insights gained from our week in Asia led to a lively discussion amongst the delegation about the most-significant challenges facing the industry - and how agtech could solve them.
Farmers have great practical ideas on how agtech can improve their businesses, from driverless machinery, virtual fencing, to commodity and agronomic sensors.
The sector is focused on investing for practical and profitable outcomes. The question now is how it can cut through red tape and achieve the right balance of regulation which will position the industry as an exciting technology driven opportunity for the next generation.
Technology also has the potential to change the way we currently finance the working capital cycles for farmers into today’s economy.
The ability to produce real-time information about an inventory flow - from a farm production system to the value chain and on to a consumer - enables money to follow those goods in a more consistent and certain way, creating a visible end-to-end transaction which is well understood and aligned with customer needs.
If our discussions taught us anything it is agtech will help to meet the growing demand for Australian food and beverages.
Ultimately, technology can provide farmers with real time decision support leading to better informed judgments and improved productivity and profitability together with quality and timely delivery to consumers.
Its potential is endless and when you think about how technology has revolutionised other sectors such as retail and media, one can only begin to imagine the future state of Australian Agriculture in a technology and data driven world.
Mark Bennett is Head of Agribusiness Australia at ANZ