New report forecasts strong future for Aussie agriculture

ANZ's analysis has identified five major pathways to capture future global opportunities, which will require a massive multi-billion-dollar investment

Australia’s agricultural sector will require investment of up to $417 billion by 2030 to achieve its full potential, according to a new report released by the Australia and New Zealand Banking Group (ANZ).

The report, Greener Pastures 2: Critical Pathways to Capture Global Agricultural Opportunities comes a decade after ANZ’s inaugural report on the agricultural sector.

It declares Australian agriculture is in the strongest and most competitive position it has been in recent history, but also identifies five areas which will require major focus into the future: improving capital flows, embracing agri technology, fully utilising sustainability, improving trade relationships, and boosting advocacy and industry cohesion.

It sees a strong future for Australian agri exports, forecasting a cumulative gain until 2030 of between $82 billion to $153 billion – but investment in the sector is required from existing participants and external investors.

“ANZ estimates Australia will require around $240 billion investment to meet current forecast agricultural growth,” said ANZ's Executive Director for Agricultural Insights and the report’s lead author, Michael Whitehead.

“If Australian agri is to reach the optimistic benchmark of $100 billion of production by 2030, as targeted by some in the industry, then we estimate around $471 billion investment will be required.

“This is not out of reach. The sector achieved $212 billion investment in the 2010s, exceeding ANZ’s 2012 prediction of $151 billion.”

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Mr Whitehead believes the industry is in a robust position because of a combination of factors.

“Extended high prices for most commodities and good production seasons, combined with the evolution of the overall sector, has meant Australian agriculture has reached greater structural efficiency, resilience, and innovation,” he said.

“The resurgence of the family farm is also a major driver of industry growth, as leading farms become multi-generational, more innovative, and grow through consolidation.”

The report outlined impressive growth in Australia’s Gross Value of Production (GVP) over the last decade. In 2010-11, Australian agriculture’s GVP was $49 billion. At that time, the forecast was that the sector would grow by a base case rate of two per cent over the decade, rising to $58 billion by 2019-20.

With an average growth rate of 3.2 per cent, the Australian agriculture sector produced $61 billion by 2019-20, with the surge in demand for meat the main driver.

Below is a summary of the report’s key points:

Five focus areas for Australian agri across the next 10 years

Improving capital flows to agriculture

Capitalise on the growth of domestic super funds;
Enhance farmer education to be ‘investment ready’;
Accelerate the marketing of Australian agriculture investment opportunities globally;
Build agricultural investment education across Australian services.

Embracing agri technology

Widespread utilisation of agtech must move into mainstream agri;
Enhance opportunities to accelerate agtech implementation, analyse progress and create pathways for others in the agri sector;
Accelerate the opportunities for agtech to relieve labour shortages.

Fully utilising sustainability

Investors, both Australian and global, as well as Australian agriculture’s global customer base, will require sustainability and carbon metrics;
Provide the environment for producers to adapt their farming practices and operations to include new aspects of sustainability;
Ensure the agri sector is proactive in the climate conversation, including highlighting opportunities for it to play a positive role.

Improving trade relationships

Streamlining trade flows, including trade bureaucracy, quarantine, infrastructure, technology, and payments;
Enhance established trading relationships, including pursuing new free trade agreements;
Seeking new trade markets, as well as developing new opportunities in markets such as India and the Middle East;
Providing differentiated export offerings, such as tailored grain and meat varieties.

Boosting advocacy and industry cohesion

With farms growing in size while overall farmer numbers decline, peak agri bodies will need to plan for the future;
Planning could involve exploring the option of consolidation, as well as including more commercial partners and not compromising the interests of primary producers.