Australian agtech’s Asian advance

Both regionally and globally, Australia is a world leader in the development and utilisation of agtech. This reaches across the spectrum of new technologies, including sensors, drones, robotics and artificial intelligence, as well as the growing use of detailed data analysis. 

"Both regionally and globally, Australia is a world leader in the development and utilisation of agtech.”

The sheer scale of the benefits of implementing and utilising agtech across ASEAN are immense. ANZ modelling shows the use of agtech within ASEAN could see the regional food-production growth rate lift by 25 per cent by 2025, with overall food volumes lifting by 21 per cent to 252 million megatons  in 2025.

The impact on the overall GDP of ASEAN could be around $US65 billion -the equivalent of adding a new Myanmar to the region.

The result would be gains in efficiency and productivity for millions of farmers, leading to huge improvements in environmental sustainability along with the growth of secondary industries and new export opportunities.

The importance of the growing ASEAN market for the sector cannot be underestimated. The countries of ASEAN – ten in all - make up almost 10 per cent of the world’s population and the region as a whole enjoys an economic growth rate of around 5.1 per cent. 

Forecasts suggest the region could become the world’s fourth largest single market, with gross domestic product of $US10 trillion by 2030 - behind only EU, US and China.

As ASEAN leaders gather in Sydney for the ASEAN-Australian Special Summit, it’s important to remember this level of economic growth - complete with rising incomes and growing populations - will mean far greater food demand from consumers across the region. Australia stands to play a key role.

China blueprint

This growth is likely to play out in a pattern not dissimilar to China, where agri consumption has soared by around 170 per cent between 1996 and 2016.

With around 30 per cent of ASEAN’s food requirements imported compared to 17 per cent for China, this trend could see the region becoming a growing player in the global agri-trade.

For Australia, the agricultural export opportunities to ASEAN will span all sectors.  More affluent consumers will need more meat, vegetables, dairy products and noodles from Australian grains. They are also likely to drink more Australian wine and wear more clothing made from Australian wool.

The majority of member nations will require food imports not just to feed their populations but to continue to drive related domestic secondary industries such as milling, processing and retail, in turn boosting employment.

At the same time, the need for food imports needs to be balanced against the livelihoods of small farmers in the region.  Despite the growth in food demand, many of these farmers struggle to make a living in relatively challenging conditions. In addition, smallholder famers throughout the region face the challenge of being able to grow their crops or animals in a sustainable way.

Perhaps most importantly, the health of each nation’s farming sector provides the foundation to their food security policies. Whether as a standalone policy or as part of a broader framework, each ASEAN nation has its own criteria for providing their population with the certainty of a sufficient stream of food.

Efficiencies

Australia’s unsubsidised agricultural sector has long been forced to seek new efficiencies to remain profitable. As a result, Australian farmers are innovative and the sector overall has been ready and willing to embrace and enhance the latest developments in agtech.

Across ASEAN, the widespread arrival of agtech has the potential to significantly improve efficiencies across the entire supply chain, from farm production to processing and packaging. In particular, it could transform the speed and structure of cross border trade flows, where imports have too often been held up in ports.

Australia is in a prime position to play a role in this, by working closely with the ASEAN members to structure and drive a program to share and extend the benefits of agtech throughout the agricultural sectors of the region.

This could be viewed as an agtech version of the Colombo Plan – driven through a centralised strategy and timeframe. With Australia’s renowned agricultural higher education sector increasingly focussing on agtech research, the program could include training of ASEAN’s agri leaders.

The program would also provide the opportunity for world-leading agtech expertise to work on the field, particularly in less developed economies. Such a program could also ensure the supply routes of the Australia/ASEAN trade network become the most efficient in the world.

Australia has taken a leading role in generating prosperity and stability within the region in the past – the time is right to seize the agtech opportunity and lead 

Mark Whelan is Group Executive, Institutional at ANZ