The future of farming in Australia: an opportunity for Dutch agtech firms

Rolf Karst, Investment Director for the Australian Trade and Investment Commission (Austrade), based in the Netherlands, discusses what makes Australia such an attractive market for Dutch agtech companies in the lead-up to evokeAG, Asia-Pacific's premier tech event taking place in Adelaide, Australia from 21-22 February 2023.

Australia is a compelling destination to develop, commercialize, and scale the next generation of agriculture and food technologies. Since 2019, Australia has committed over A$6 billion to help farmers and food producers build production and supply chain resilience, as well as access new markets across the world. Australia's goal is ambitious: to generate A$100 billion in agricultural production by 2030 through its Ag2030 plan.

Australia currently produces enough food to feed 80 million people and is a major exporter of agricultural products. Australia exports around 72% of its agrifood production overseas. In 2021-22, the export value rose to more than A$64 billion.

Its regional free trade agreements give growers preferential access to the dynamic markets of the Asia Pacific. Trade agreements are currently being negotiated with the UK and EU, providing Australia with increased access to international markets.

But Australia's growth potential and access to major global markets are not the only factors that attract international agtech companies. Australia's diversity of climates, agricultural R&D credentials, and its location in the southern hemisphere, which allows for full-year product testing, all play a role. It is a good testing ground to trial and develops innovative solutions with strong commercialization potential.  

Major companies such as Nestlé, Fonterra, Ferrero, and Goodman Fielder are just some of the international food producers already doing business in Australia. Italy's Ferrero is a fantastic example of a global company working in collaboration with Australia's research institutions and industry associations to help commercialize hazelnut cultivation and meet global demand. The company has planted over 1 million hazelnut trees in Australia to date.

In a similar fashion, the Dutch company Commonland became a founding shareholder in Wide Open Agriculture (WOA) in 2015. WOA leads the regenerative agriculture movement in Australia. In partnership with local and international organizations, WOA now grows lupins and oats on more than 300,000 hectares of regenerative agricultural land.

Australians are early adopters of technology
Australia's sometimes challenging physical environment means that to achieve the target growth of A$100 billion in agricultural production by 2030, growers must adopt new technologies and practices to drive consistent productivity growth. This is further supported by the Australian government through its recent National Agricultural Innovation Policy Statement.  

Australia's innovation ecosystem comprises farmers and food producers, as well as over 300 startups, scaleups, and enterprises, a large pool of accelerators and incubators, industry groups, and top universities and research institutions.

A well-established legislative and regulatory regime provides assurance that IP developed through R&D and innovation activities will be protected. Extensive R&D tax and Venture Capital tax incentives are available. However, Australia has identified that further investment from venture and seed funds is crucial to growing the depth and quality of Australia's agtech sector.

Among Australia's farmers and food producers, there is a real appetite for science- and technology-based solutions to address key climate-related challenges and also respond to ever-changing consumer demand for food that is healthy, convenient, and traceable.

Innovative solutions help drive sustainability in Australia's agrifood sector
Australia has a national target to achieve net zero emissions by 2050. Prior to this, Australia's peak organizations and businesses had already started implementing ambitious industry-wide sustainability and emissions reduction strategies. Australia's wine industry is working towards net zero direct emissions by 2035; Australia's red meat industry has set a target to be carbon neutral by 2030, and the dairy industry aims to reduce GHG emissions intensity by 30% by 2030. These initiatives are self-propelled by the industry but are also increasingly being demanded by consumers.

This drives Australia's growers to think about how to achieve these targets and what technologies can assist them with the move to more sustainable practices. Australia's agtech innovation has traditionally been weighted towards management software, but that is changing. Now, international companies will find opportunities in some of the following areas:

  • Farm robotics, mechanization, and equipment
  • Food safety and supply chain traceability technology
  • Novel ingredients, functional food, nutraceuticals, plant-based meat, and cultured meat and dairy
  • Novel farming systems: indoor farms, aquaculture, and insect, algae, and microbe production
  • Biotechnology: on-farm inputs for crop and animal agriculture, such as genetics, microbiome, breeding, and animal health.

A recent McKinsey study found that these new technologies will lead to a significant increase in productivity and yield, enhance climate resilience, reduce supply chain waste, create more healthy, nutritious foods, and provide consumers with food transparency. This is not only important for Australia to reach its sustainability and production targets but will help meet the global challenge faced by the agricultural community to produce more while using less as the population grows.

Such precision farming is precisely what the Netherlands does best. While small, the Netherlands is the second largest agrifood exporter in the world. Land and labor are expensive, so innovation was needed to compete. Cutting-edge innovations have led to high yields, minimal water usage for crops, a near-elimination of greenhouse pesticides, and higher energy efficiencies. Here, there is a major opportunity for Dutch agtech firms to collaborate with Australia's farming and agricultural community as they look to sustainably grow their production output to A$100 billion by 2030.

Austrade will host a European business delegation at the upcoming evokeAG Conference taking place in Adelaide, South Australia, from 21-22 February 2023. For more information, contact rolf.karst@austrade.gov.au directly.

 


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