Data, technology and tackling the four Cs
Four interwoven challenges: climate, COVID-19, conflict, and cost have disrupted agrifood supply chains and led to skyrocketing costs for farm inputs, all set amongst fears for global food security and the transition to a decarbonised economy.
A panel of experts at evokeAG. 2023 told the audience that technology is central in tackling these challenges – creating resilient supply chains and in helping us make food production more sustainable but also in demonstrating sustainability credentials. It came with a caveat: technology needs to be fit for purpose, farmers can’t assume that consumers will pay more, and we need to encourage on-farm adoption.
The cost of conflict
Reflecting on the impact of the conflict in the Ukraine, head of global agribusiness advisory group The Shelman Group, Mary Shelman said it’s demonstrated the need for more resilient supply chains with multiple sources for both food and inputs.
“A lot of the products that flow out of that region (the Ukraine) were going into areas that are food insecure, populations are being challenged when the costs go up, and there’s concern in terms of food and nutrition security,” she said.
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Food and agribusiness consultant, Tim Hunt, who facilitated the panel discussion noted that supply chain resilience is not easily achieved.
“It always strikes me that that concept of building more resilient supply chains makes sense in itself, but it doesn’t come for free,” he said.
“There’s a reason why global food supply chains are configured as they are because largely it’s quite cost effective.”
Tim asked the producers on the panel if they’d pay more for a secure supply of inputs like agrochemicals, to develop a domestic industry to reduce reliance on China.
Co-Founder and Managing Director of Tasmanian Agricultural Company Sam Trethewey said while he’s strategically turned to a low-input farming system, price is a key driver for farmers.
“We are the second least subsidised agricultural economy in the world … would a farmer buy a local product for x amount over an imported product at this point in time I don’t think they will,” Sam said. “They buy on price.”
Yindyamarra Research Fellow at Charles Sturt University, Jack Jacobs told the conference the relationship with China will be the “defining relationship” of this century.
“We need to find the points on which we need to take a key stand that align with our values,” he said. “We also need to look for points of engagement with China, indeed points of healthy competition to try to take some fire out of the conflict or potential conflict.”
Jack said trade and innovation is one avenue to strike the diplomatic balance, and the agrifood tech industry is a key player.
“We need to see how through trade relationships we can look at alliances … through shared innovation we can start build up relationships in our region that create a buffer zone and take the heat out of the situation down the track.”
Sustainability: who pays
Drawing on her background as a strategic advisor on food system trends, Mary told the conference that while consumers want more information about how their food is produced, they’re not prepared to pay more for it.
“The conversation around sustainability is really a license to operate,” she said. “Unless you can demonstrate … that you are on a path to more sustainable production, you will either be out of their consideration set or regulated out of business.”
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With sustainability a core focus of his beef cattle business, Sam Trethewey, agreed.
“Cheap food comes at a cost and if the consumer’s not paying for it then the environment pays … I think we are seeing that around the world and systems are breaking down,” Sam said.
Executive Chairman of private investment company, the Macdoch Group, Alasdair MacLeod said the whole question about sustainability is incredibly important, and the point that we have to recognise in Australia is that we have an enormous competitive advantage, but we have to get a few things right.
He also argued there needs to be a clear understanding of what sustainability looks like – financial, environmental, and rural and regional communities.
“It’s more than emissions, we need to be thinking about how we maintain biodiversity, what are we doing about soil health and water quality,” he said.
“I believe there is a sweet spot where you maximise what’s going on with your natural resources and profitability. We need to get farmers thinking about how we get to that point.
“That’s why Macdoch Foundation has initiated Farming for the Future, a world leading research project to help farmers find where the sweet spot is for their business.
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Technology to solve the challenges
Alasdair argued Australia’s claims as a leader in sustainability need to be backed by data.
“If we are going to hang our hat on Australia having the most sustain agriculture industry in the world then we have to get better at data.
“Sooner or later, someone is going to say … ok prove it … and I’m afraid we are not quite ready to do that yet,” he said.
“That’s why Farming for the Future is so important, as the project seeks to understand and quantify the nature of the relationship between natural capital and farm business profitability, and other private benefits. The data that is collected for our research will enable us to understand how we get better on farm data and how we relate that data to our businesses in order to deliver some of those private benefits.”
Technology is going to have to solve that problem for us … so that farmers can collect that data for us in a painless and seamless manner.”
Mary emphasised that being more sustainable means we need changes at the farm level but that it comes at a cost.
“What are the levers to get these fantastic technologies out there? Can you have preferential loan rates if data is collected? Can you have upfront payments to cover a transition period?” she asked.
Mary challenged the room to consider other price models to encourage information collection and sharing.
“Does the price have to be in terms of product value, or can you have a model of the product value plus the value of the information that goes along with that,” she asked.
With his background in establishing agritech accelerator SproutX, Sam lamented that there’s a lack of agritech currently being used on farms.
“As exciting as this space is it is not hitting the farm. I don’t think you can blame the farmers, it’s not an adoption problem it’s a relevance problem,” he said.
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The Macdoch Group’s vision is for Australia to be a leader in building natural capital and Alasdair urged the conference, “We need to be very careful that we don’t over-rely on technology, and keep thinking about how working with nature can help continue to deliver resilient farm profitability.
Meanwhile, Jack urged the agtech sector to tap into First Nations knowledge of country and of land resilience.
“There’s an opportunity to listen here to Indigenous peoples about what does and doesn’t work on the ground,” he said.
Did you miss this session at evokeAG. 2023 in Adelaide, Australia? Watch the Plenary Session facilitated by Tim with Alasdair, Jack, Mary, Sam here.
Want to hear more about the opportunities for agrifood tech in Australia? Save the date for evokeAG. 2024 on 20-21 February 2023 and sign up here for event updates and fresh stories about global leaders, farmers, startups and innovators driving collaborative change.