To overcome bushfires and floods, Australian agriculture needs to innovate and collaborate
The value of Australia's agriculture and livestock, from shiraz to Wagyu beef, is inherently tied to the perception of Australia as a country of unspoilt beauty and bountiful and fresh produce.
Prior to this season's bushfires, Australian agriculture was predicted to grow by more than $3 billion a year to become a $100 billion industry by 2030, putting it alongside mining and construction as one of Australia's crucial industries.
Asia's rapidly expanding middle-class markets are willing to pay premium prices for high-quality Australian food into the future. But only if the quality and — equally as importantly — the perception of the quality of Australian produce is maintained.
Australia's superior agricultural exports in important markets will be challenged by the volatility that climate change injects into this narrative.
Consumers seeing more than tourism ads
Already in 2020, smoke from Australia's unprecedented bushfire crisis has sullied almost an entire vintage of Canberra wines.
Instead of tourism ads, potential overseas consumers have seen months' worth of footage showing raging fires, incinerated livestock and native species, and cities blanketed in smoke.
Major changes in Australian agriculture are needed to overcome these threats to the quality of Australian produce, both real and perceived.
Increasing the yield and efficiency of agricultural production will need to be achieved while relying on fewer resources and agricultural inputs.
Growers and producers, particularly after such a difficult year, and facing more unpredictable weather, will require more accurate agronomic insights, forecasting and risk assessment.
In short, Australia is going to have to innovate.
We're falling short
Research released this week by the United States Studies Centre at the University of Sydney has made clear that Australia is lagging behind New Zealand in one of the key enablers to future agricultural prosperity: the networks of those in AgTech, the nexus of agriculture and technology.
Social networks enable innovation, yet our research — in collaboration with LinkedIn — mapped the AgTech networks in Australia, New Zealand and the United States and found Australia significantly wanting.
To map the networks, we used proprietary LinkedIn data from a self-assembled list of the active AgTech firms in the three countries.
We found New Zealand's networks appeared to be more efficient than Australia's. In fact, while Australia's AgTech network is much larger than New Zealand's, it is roughly one-fifth as interconnected.
This means innovators in Australia are less likely to collaborate and share knowledge with each other, two fundamental building blocks leading to innovation.
New Zealand doing more with much less
Another challenge is attracting external investment. As the largest AgTech market in the world — estimated to be valued at $US10.2 billion, and accounting for roughly 65 per cent of global AgTech investment — connections to the United States are vital.
Despite the size disparity between the networks in Australia and New Zealand, the number of connections both countries have to this US market are on par.
Put simply, New Zealand is doing more with much less.
Australia and New Zealand both have strong global and domestic conditions for AgTech innovation. Both countries have excellent agricultural reputations, world-class research facilities, free trade agreements with much of Asia, years of acting as a testbed for new technologies, strong intellectual property rights, and relatively market-friendly regulations.
The most-distinct difference between the two nations is that from the size of its population to capital markets, New Zealand is smaller than Australia by practically every measure.
Yet despite — or perhaps because of — such differences in size, New Zealand's AgTech network appears further along in its development.
This is understandable when considering agriculture's contribution to GDP is more than twice as large in New Zealand as it is in Australia.
The stakes for success in AgTech are more than twice as high for New Zealand.
How can Australia compete?
The New Zealand government has recognised this and responded accordingly, with a whole-of-government prioritising of the sector, as evidenced by its AgTech industry body, Agritech New Zealand.
These New Zealand ventures have also differentiated themselves by not aspiring to merely saturate their domestic market. They are globally oriented from day one.
Global AgTech leaders make clear privately that foreign investors feel more welcome in New Zealand than they do in Australia.
So how can Australia compete with this?
It doesn't have to. Australia and New Zealand can both expand efforts to combine trans-Tasman strengths.
A coordinating body, the Australia-New Zealand Agritech Council, is in the early stages of development, and should be launched and fully supported by both governments.
Such a body could help build the networks of Australian and New Zealand AgTech in a way that facilitates global growth.
On a practical level, it will be easier to compel foreign investors to make a long flight if the two AgTech networks are working in concert.
A storied reputation for overcoming adversity
Australian policymakers should also look to incentivise sophisticated AgTech investors from overseas — particularly from the United States.
Foreign venture capital firms supply more than money — they also provide global networks and expertise in how to scale globally.
Lastly, the Australian Government should look at adopting an understanding of AgTech that goes beyond simply increasing crop yields and efficiencies.
It is part of the knowledge economy and is, therefore, not limited by Australia's crop or land sizes because the whole world is the market.
To better appreciate the full economic potential of AgTech, the Australian Government should consider supporting a study that would quantify the potential economic impact of AgTech as part of a wider perspective on the knowledge economy.
Australian farming has a storied reputation for overcoming harsh conditions to deliver some of the world's best produce.
In the face of myriad challenges, the health of Australia's AgTech networks will be crucial to keep this tradition alive.
Jared Mondschein is a senior fellow and senior adviser and Elliott Brennan is a research associate at the United States Studies Centre. They are both co-authors of Isolated AgTech in Australia? A social network analysis of an innovative sector.