Articles.

Investing in Agtech R&D and the Future of Australian Agriculture

“It is true that the tide of the battle against hunger has changed for the better during the past three years. But tides have a way of flowing and then ebbing again. We may be at high tide now, but ebb tide could soon set in if we become complacent and relax our efforts. For we are dealing with two opposing forces, the scientific power of food production and the biologic power of human reproduction. Man has made amazing progress recently in his potential mastery of these two contending powers. Science, invention and technology have given him materials and methods for increasing his food supplies substantially”.  Extract from Nobel Peace Prize acceptance speech by Norman Borlaug (1970).

Food is a fundamental requirement for survival. When it becomes scarce, people will fight for it, yet when it is abundant, we waste it. According to a report from the PMSEIC Expert Working Group (2010), our food transport, distribution and storage systems are vulnerable to disruption. Global food security will demand the development and delivery of new technologies to increase food production on limited arable land and without relying on increased water and fertiliser use (PMSEIC, 2010). In addition, the frequency and severity of climate ‘shocks’ are expected to increase due to the effects of climate change adding complexity to an already challenging situation. 

Australia can make a significant contribution to addressing this challenge. As a nation, we have extensive experience in dealing with difficult and low input food production systems. Most of our backyard is dry and desolate, yet we produce huge amounts of food for both domestic and international markets. This technical and scientific expertise is valuable and well-regarded across the world. However, continued success in technology development and delivery requires community involvement. Although agriculture is one of our most productive and efficient industries, it struggles to garner community support (PMSEIC, 2010). 

It is becoming increasingly clear that innovative technologies being developed in the AgTech space will play a central role in enabling the agricultural sector to overcome challenges. But what is AgTech? And how will it help?

What is AgTech?

Agricultural Technology (AgTech) encompasses the development of cutting edge technologies that are utilised in the preparation and cultivation of crops. AgTech is not a new phenomenon; it has been an intrinsic part of farming practices since the genesis of agriculture. Modern AgTech has produced a wide array of technologies, think: aerial imaging, sensors for tracking the temperature and moisture of soil, automated systems for irrigation and gate controls, food tracking (farm-to-plate), cloud-based data collection and countless other innovations. 

Benefits of AgTech

Effective implementation of AgTech solutions can lead to:

  • an increase in productivity
  • lower food production costs 
  • reduce water usage as well as enable more environmentally sustainable processes. 

Improving the productive output of farming operations can lead to better economic outcomes for rural communities. Investing in AgTech initiatives can divert funding to population centres that are often overlooked in the search for productivity measures. The implementation of new technologies can also lead to the creation of new jobs in these communities. There is also the prospect that advanced AgTech solutions developed in Australia can be exported overseas, improving global food production as well as international relations.

Investing in R&D to reverse declining agricultural productivity growth

While the role of scientific advances in dealing with problems such as food supply are well recognised, global investment in agricultural R&D has decreased over the past 20 years (Royal Society, 2009). A similar trend has been observed in Australia where R&D investment has progressively fallen from a peak of five per cent of gross value of agricultural production in the 1970s to just above three per cent in 2007 (PMSEIC, 2010). However, increased investment will boost agricultural productivity and provide a key strategy to reduce the impacts of climate change, as well as reduce the greenhouse gas emissions footprint of the agricultural sector.

Supporting Australian AgTech

Carving out a place in the international AgTech sector will require long-term planning and forward-thinking funding programs to foster the necessary research and development. Doing so will equip Australia with a more dynamic and productive economy that is less reliant on the mining industry. 

A strong AgTech sector must be underpinned by robust research and development programs. With a long-term commitment to funding AgTech R&D, Australia could not only develop a competitive global presence but position itself as a world leader in innovative agricultural practices. 

Currently, government support of R&D is in the form of the R&D Tax Incentive. This generous tax offset is a critical element in managing the costs of any business’s R&D activities. In order to maximise the claim, you’re entitled to, applying for the R&D Tax Incentive scheme should only be approached with advice from recognised/registered R&D Tax experts. The team at Clearpoint Ventures has a deep understanding of the R&D Tax Incentive and can ensure that your claim meets the strict criteria set out by the program to maximise your returns. 

To find out more about how Clearpoint Ventures can maximise your R&D Tax claim, simply, contact us today for an obligation-free, 15-minute discovery chat.

References

Borlaug, N. E. (1970). Acceptance speech on the occasion of the award of the Nobel Peace Prize in Oslo. Available online at: http://nobelprize.org/nobel_prizes/peace/laureates/1970/borlaugacceptance.html, accessed 13 July 2010.

PMSEIC (2010). Australia and Food Security in a Changing World. The Prime Minister’s Science, Engineering and Innovation Council, Canberra, Australia.