Australia’s ambitious agribusiness strategy
The Australian Government has set an ambitious goal of reaching $100 billion in farm gate output from its agriculture industry by 2030. Despite the challenges posed by droughts, bushfires, floods, COVID-19, and global trade disruptions, the agriculture industry has demonstrated remarkable resilience and growth, with a 21% increase in 2020-21. The gross value of agricultural production is forecast to reach a record $86.8 billion in 2021-22, up from $67.1 billion in 2019-20. However, to achieve the Ag2030 goal, the industry must continue to increase its annual growth rate by harnessing emerging opportunities and improving productivity and efficiency.
The government has committed over $6 billion across 7 key themes under the Ag2030 plan, which aims to provide the necessary foundations for the industry to achieve its goal and help farmers build resilience and access new markets worldwide.
The 7 Themes of Ag2030
- Trade and exports: The government is focused on strengthening agricultural ties with major and emerging export markets while simplifying business processes. Initiatives such as the $328.4 million Busting Congestion for Agricultural Exporters package and an additional $127.4 million for the digital transformation of agricultural export systems are helping to reduce red tape and improve the competitiveness of Australian exporters in the global marketplace. The $85.9 million Agri-Business Expansion Initiative (ABEI) supports agribusinesses in expanding and diversifying their export markets, with short-term Agriculture Counsellors deployed in key markets such as the United States, Saudi Arabia, and the Republic of Korea.
- Biosecurity: Recognizing the importance of maintaining Australia’s clean and green reputation, the government has made record investments of over $590 million in biosecurity measures over the past 18 months. These investments focus on strengthening the biosecurity system to protect against exotic pests and diseases, which is crucial for maintaining market access and keeping costs low for producers. Key initiatives include increased frontline resources, innovative trials and projects, and collaboration with neighboring countries to build local capacity in detecting and managing threats.
- Stewardship: The government is committed to ensuring that Australian farmers are rewarded for their stewardship of land and water. The Agriculture Biodiversity Stewardship package aims to create a well-functioning voluntary biodiversity market, providing new income streams for farmers who protect and improve biodiversity on their land. The National Soil Strategy and associated measures, such as the $214.9 million investment in practical actions to support soil health, encourage farmers to make informed decisions that improve agricultural productivity and climate resilience.
- Supply Chains: To support fair, strong, and resilient supply chains, the government is working to improve competition and fairness across domestic supply chains. Codes of conduct have been established for various agricultural industries to address imbalances in bargaining power and ensure transparent dealings. The government is also investing in the Modern Manufacturing Strategy and addressing critical supply chain vulnerabilities to strengthen the resilience of agricultural supply chains.
- Water and Infrastructure: Investing in regional infrastructure, transport, digital connectivity, and water security projects is crucial for supporting the efficiency and growth of the agriculture industry. The National Water Grid Fund is helping to identify and build new water infrastructure, while the extended On-farm Emergency Water Infrastructure Rebate Scheme assists farmers in preparing for and responding to natural disasters and severe weather events. The government is also investing in regional connectivity and digital infrastructure to ensure that agricultural communities have access to reliable and affordable services.
- Innovation and research: Innovation and the adoption of new technologies are key drivers of productivity and competitiveness in the agriculture industry. The government is modernizing Australia’s agricultural innovation system through initiatives such as the $2.8 million investment in Agricultural Innovation Australia (AIA) to promote a cross-industry approach to innovation. The establishment of 8 Drought Resilience Adoption and Innovation Hubs across Australia fosters the development and adoption of innovative practices. The government also continues to invest in research and development through the Rural Research and Development Corporations (RDCs) and other targeted programs.
- Human capital: A skilled and resilient workforce is essential for the success of the agriculture industry. The government has introduced the Australian Agriculture Visa to address workforce shortages, providing access to skilled, semi-skilled, and low-skilled workers across a broad range of agricultural industries. The visa complements the Pacific Australia Labour Mobility (PALM) scheme, which remains the primary means of meeting workforce needs in the primary industries sector. The government has also implemented measures to support agricultural workers during the COVID-19 pandemic, such as the Agriculture Workers’ Code and changes to visa arrangements for backpackers and seasonal workers.
Budget committments
In the 2022-23 Budget, the government committed over $600 million to a wide range of initiatives supporting trade, exports, biosecurity, and regional communities across agriculture, fisheries, and forestry. This builds on the more than $300 million committed in the 2021-22 Mid-Year Economic and Fiscal Outlook and the $850 million committed in the 2021-22 Budget. Key funding highlights across the 7 themes include:
- $127.4 million for the Digital Services to Take Farmers to Markets initiative to streamline trade processes and reduce the cost and time of exporting.
- $61.6 million to boost biosecurity in northern Australia, focusing on safeguarding against lumpy skin disease and other emerging animal diseases.
- $27.3 million to support the establishment of a well-functioning voluntary biodiversity market.
- $328.3 million over 5 years to further support the Modern Manufacturing Strategy and address critical supply chain vulnerabilities.
- $97 million for the Healthy Rivers – Healthy Communities grant program to support stronger regional economies and communities in the Murray-Darling Basin.
- $30 million to establish the National Centre for Digital Agriculture and provide funding for the 8 existing Regional Innovation Hubs.
- $94.5 million for activities to improve the drought readiness and resilience of Australian farmers and communities from the Future Drought Fund.
The Australian Government’s ongoing commitment to supporting the Ag2030 goal is evident through its substantial investments across the 7 themes of the Delivering Ag2030 plan. By setting the right foundations and creating an enabling environment for the agriculture industry to thrive, the government aims to help farmers build resilience, access new markets, and drive growth and job creation in rural and regional Australia.
However, achieving the $100 billion goal by 2030 will require a sustained and collaborative effort across industry, government, and communities. By working together to address challenges, seize opportunities, and implement innovative solutions, Australia’s agriculture industry can continue to grow and prosper, cementing its position as a key pillar of the nation’s economy and society.
Looking ahead
At Farrelly Mitchell, we guide our clients through transformative agribusiness strategy, leveraging our expertise in business planning, mergers & acquisitions, market entry and development, and financial modelling to ensure a seamless transition to the public markets. We support a diverse range of clients, from industry startups to established enterprises, offering services that encompass due diligence, risk analysis, and value creation & implementation.
Our team is dedicated to fostering sustainable growth and maximising value for our clients by navigating the complexities of agribusiness strategy development and execution. Our comprehensive approach ensures that our clients are well-equipped to meet their strategic objectives and ensure that their agribusiness strategy is implemented optimally.
