There has been a significant amount of buzz around agricultural technology – AgTech – with incubators and accelerator programs popping up across Australia. Has this turned into tangible investment, or has it fizzled out? AgTech enthusiasts, including Kerryn Underwood, KWM Special Counsel, joined scientists, researchers, venture capitalists, entrepreneurs, academics and the odd farmer or two at the inaugural AgTech Summit to discuss investment into the sector and more. While the program was broad and varied, we’ve harvested three key themes that emerged.
It’s all about connections…
Whether presenters were talking about consumers and growers, investors and innovators, the outback and cities, machines and devices, remote farms and the cloud or even the food-energy-water nexus, each were passionate in the call for better connections to be made and nurtured. Jaala Pulford MLC, Victorian Minister for Agriculture and Regional Development, who opened the Summit, recognised that it is critical for all levels of government to connect by sharing data and learnings from initiatives.
Non-alignment of government agendas was, as pointed out by Dr Mirjana Prica of Food Innovation Australia during her presentation on clustering, one of the (many) barriers to effective innovation and growth in Australia.
Other notable observations on the power of and need for effective connections came from:
- Queensland’s Deputy Director-General of Innovation who believes that Australia needs to learn from Israel about how to build and nurture a culture of connection. On a mission to Israel with 10 AgTech start-ups, Paul Martyn described how the AgTech sector in Israel has benefitted from connection with defence and the military as drivers of technology and that Australia needs to pivot its existing talent toward Ag challenges.
- Dr Andrew Moore, Leader of Digiscape Future Science Platform at CSIRO, who observed that climate change, global population increases and geo-social behaviours are all threatening existing business models. Businesses that connect data driven information with conversion outcomes will disrupt existing platforms.
- the participants in the Leader’s Debate about sustainability and global demand, and what Australia needs to become an AgTech leader by 2030. There was heated agreement that venture capital is pivotal to ensuring success but that the challenge was to connect funding sources with viable innovators. The role of Research Development Corporations (RDCs) in making these connections was acknowledged but there was concern the RDCs weren’t consistently connected with what the market wants. RDCs need to ask what they can do to stimulate investment in Australia and ensure their methods (including in IP ownership and licensing) connect with international market expectations.
- the roundtable discussion on accelerating precision agriculture where internet and telecoms connectivity was described as a ‘choke point’ for AgTech. The participants discussed the importance of a reliable mobile network to facilitate real time access to devices and to data from IoT while on the farm.
And it’s also all about the data…
From Jaala Pulford’s opening comments that digital agriculture is central to productivity growth through to NAB’s recommendation that AgTech solutions be directed to consolidating data, data - and how to manage it - was a hot topic.
Data drives applications: drones, agbots, predictive and automated feeding, watering and planting, precision farming and livestock management. Sharing clean, accurate data increases productivity, decreases waste, improves conversion and accelerates finance and business transactions. In the centre of a global digital revolution, the release of the “Accelerating Precision Agriculture to Decision Agriculture (Enabling Digital Agriculture in Australia)” report is especially relevant. The report involved all 15 Rural RDCs and can be accessed here.
Richard Heath of the Australian Farm Institute said that digital agriculture was still immature in a number of areas, including strategy, culture, governance, technology, data, analytics and training but that with targeted investment, its potential could be realised, leading to a boost in agricultural GDP of up to 25%. Judging from the audience questions and some commentary, one of the barriers to effective exploitation of data is the question of trust. The question extends beyond confidence in the accuracy and currency of the data itself to the circumstances surrounding collection and use of the data and a concern that data not be misused by big Ag business or for ancillary or unrelated commercial purposes. Those who participated in the Precision to Decision project were positive that legislative change was needed rather than following the NZ approach of a voluntary code of practice. We think that there may well be valuable learnings for the Agri community in how to manage consolidated data from the recently released Open Banking Report, despite the obvious differences in the character of the data itself.
This will be a particularly fascinating area of development to watch over the coming months and combined with cyber-security issues arising out increased reliance on cloud based IoT will keep everybody talking.
Ripe for the Picking
Unsurprisingly, everyone was united in agreeing that NOW is the time is now to boost investment in AgTech businesses. This is partly driven by a desire to ensure that Australia remains a competitive global player in agriculture and capitalises on the chance to become the “Delicatessen” of China; partly the conviction stems from observations that current domestic, global, geopolitical, social and trade environments mean that the industry is ripe for disruption.
Tempering all that enthusiasm though was what appeared to be a fairly consistently held belief that commercialising innovation and accessing capital is particularly challenging in Australia.
Some of these reasons are not unique to the Food and Agri Sector. Dr Bronte Adams from Innovation Science Australia noted that of seventeen metrics identified for succeeding in innovation, Australia does well in only five.
However, the reality is that investment in AgTech start ups is diminishing. Michael Dean, co-founder of AgFunder presented segmented research on various sub-sectors and showed that there was low investment across the board at the seed stage, which is devastating to the development pipeline and would damage talent retention. Comparative figures show that while there has been support for 261 Ag start-ups in the US, Australia could point to only 21. Population differential doesn’t account for such a distinction: Israel clocked up 22.
Venture capitalists also bemoaned the lack of activity in the Australian market. To some extent, Australia is hampered by a small market and uncertain returns on investment, but there was general agreement that by being flexible and agile, RDCs in particular could help to stimulate investment. Big Ag players were also called on to encourage innovation. A great example of that was demonstrated through the support from Bosch of the Monash University AgTech Launch Pad.
Topping off two days of excellent and varied presentations, only some of which are covered here, was a Showcase of Talent, with start-ups and accelerated companies including Tie Up Farming, Out of Box, Biochite, AgUnity, Goterra and Roots presenting their innovations to the audience.