From sheep’s back to moonshot: Meeting the 2030 targets

By Richard Heath - Executive Director, Australian Farm Institute

For the majority of the 20th century Australian agriculture had an identity that was obvious and visible to the public. The wool boom (which reached its peak in the 1950s) gave rise to the saying that Australia was riding to prosperity on the sheep’s back.

From 1871 to the 1960s wool was Australia’s main export commodity sustaining regional economies and country towns. Wool generated wealth for the entire country, and as a result everyone in the country knew what Australian agriculture delivered and what it was about.

Since the end of the wool boom a single identity for Australian agriculture has been lacking, and with it a universal purpose or plan for development of the industry. The agriculture sector is now much more diverse than it was at the height of the wool boom, but that diversity has resulted in fragmentation and duplication of effort in promotion, public spending and advocacy for the industry as a whole.

Why is a unifying force, an identity, important? Despite the lack of a coordinated universal purpose the value of the sector to the economy has continued to grow. At around $60 billion (GVP), the value of our total agricultural output is now double what it was in 2000. However, there is no room for complacency. The vast proportion of growth in farmgate value has been through price growth rather than an expansion of agricultural activity and significant competition to Australian agricultural exports continues to grow. Climate change threatens stability of production and a lack of community trust in some agricultural practices is causing disruptive change.

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A focused, unified purpose for Australian agriculture that delivers transformational change could enhance prospects for the sector to accelerate growth by remaining competitive against other exporters and sustainably expand production in the face of climate disruption. Which importantly will not just retain the confidence and support of the broader community, but have agriculture embraced as a significant wealth creator for the entire nation. So where is that vision likely to come from?

In October 2018 the National Farmers’ Federation (NFF) released its 2030 Roadmap, a plan for Australian agriculture to become a $100 billion industry. The Roadmap contains ambitious but measurable actions set against five key pillars for growth. It’s not quite as catchy as riding to prosperity on the sheep’s back, but can a $100 billion target capture the attention of not just the agriculture sector but the broader community, and provide the unifying purpose and identity to drive the industry forward?

Big, bold targets provide focus, drive and purpose for an industry and lead to innovation and inspiration. When John F Kennedy announced in 1961 that men would walk on the moon and return safely to Earth by the end of the decade, the incredibly aspirational target provided a focal point for all those involved in the broad array of activities needed and success was achieved. Is $100 billion of farmgate output by 2030 an equivalent moonshot for agriculture? While it’s obviously a big number, in all likelihood it probably doesn’t mean a lot to most people, it’s certainly not as relatable as putting a man on the moon or even for that matter as visual as riding on the sheep’s back. But a deeper examination of the components of the Roadmap and the suggested actions required to reach the $100 billion target provides some truly ambitious, bold and relatable goals that arguably will be much more significant and transformational than the growth target alone.

So, what are the goals in the Roadmap and how audacious are they? First, let’s consider the drivers for growth and the need for action.

The projected 54% rise in food demand by 2050, most of which will be in Asia is not news. There is no debate that there will be significant increased demand for agricultural produce on Australia’s doorstep. However, having growing markets by no means translates to a growing Australian agricultural sector.

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One of the important factors for the US public embracing JFK’s moonshot was the fact that it occurred under the auspices of the Cold War when beating Russia to the same objective was as important as the objective itself. While we are obviously not in the same Cold War scenario, make no mistake we are in a highly competitive global race to supply the growing demand for agricultural products. For Australia to lose the race to supply the growing markets on our own doorstep would be a wasted opportunity of the highest magnitude.

Assumptions that recent growth will translate into continued growth are dangerous and could lead to complacency which will obstruct change. It will be a challenging task for the NFF to convince the community of the importance of a plan for continuing growth without talking down the immediate prospects for the sector.

The 2030 Roadmap has been structured around five pillars describing various components required for successful growth. Each pillar contains some drivers or insights, an aspiration to work towards, actions to be taken and the desired impacts resulting from those actions, and then most importantly a metric for success. Success metrics, particularly unambiguous and easy-to-understand statements with hard targets, are the ultimate test of a plan. The NFF has not shied away from attaching success metrics which will leave no room to hide in terms of how successfully the roadmap is delivered over the next 11 years.

It could be argued that many of the metrics on their own are more ambitious than the $100 billion target, however they are arguably more relatable and closer to the ‘put a man on the moon’-style shared vision than a number which has no relevance to most people. So, what are the metrics and what is their significance?

Metrics:

   * Agriculture is ranked Australia’s most trusted industry.

   * Australia’s freight cost per tonne-kilometre is competitive with major agricultural exporting nations.

   * An average tariff faced by agricultural exports of 5%. A 50% reduction in agriculture exports experiencing non-tariff barriers each year.

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Retaining community trust is critical to underpin the political will required to drive nation-building initiatives such as improving supply chain infrastructure (with benefits that go well beyond agriculture). In aiming for Australian agriculture to be the country’s most trusted industry, the NFF are squaring up to one of the most disruptive forces currently facing the sector. Live exports, glyphosate use, GMOs and irrigation in the Murray-Darling Basin are but a few of the issues where agriculture is dealing with a significant trust deficit.

In 2018 the AFI addressed the issue of community trust through its John Ralph Essay Competition, on determining the right to farm, and at the annual Roundtable conference, which explored the intersection between emotion and evidence-based argument. One of the main learnings from these explorations was that in order to continue to chart its course without unanticipated and disruptive consumer-led change, agriculture cannot afford to be insular in its outlook.

Indeed, this pillar (like most of the Roadmap) is very outward-looking. The agriculture sector needs to play its part to achieve these metrics, but there is also a requirement from government and the rest of the community. Significant cultural change – both from the farm sector to be more cognisant of legitimate community concerns and equally from the community in being prepared to understand agricultural practice – will be required to deliver the shared respect and understanding necessary for success.

While becoming Australia’s most trusted industry is a metric that is mostly relevant to the sector itself, building internationally competitive supply chains will benefit regions and the whole Australian economy. Proximity to expanding markets is irrelevant if the most expensive part of the journey is getting produce from the farm to the point of export. Building better supply chains means creating lasting infrastructure that stimulates economic activity in regions. This is a goal that all Australians (and particularly those living in regional areas) should be embracing for the benefit of the country.

Metrics:

   * The net benefit for ecosystem services is equal to 5% of farm revenue.

   * Australian agriculture is trending towards carbon neutrality by 2030.

   * A 20% increase in water use efficiency for irrigated agriculture by 2030.

   * Maintain Australia’s total farmed area at 2018 levels. Halve food waste by 2030.

The looming federal election is already shaping up to be one in which climate change and environmental outcomes will be heavily contested policy areas. Agriculture has an unwarranted reputation in many quarters of being uninterested in environmental outcomes. The metrics for the second pillar could not be more overt in challenging that reputation and putting forward ambitious, some might say heroic, targets for environmental change.

This pillar describes targets which, if embraced, would require genuinely transformational change for the agriculture sector. The actions required to deliver them would lead to entirely new income streams and ways of thinking about delivering the desired environmental and social outcomes without penalising farm businesses and the agricultural economy. Delivering on these metrics would place Australian agriculture as a global leader in responsible, sustainable and viable agriculture.

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These metrics must also, surely, be able to be embraced by all in the community. Moving towards carbon neutrality and halving food waste are goals which everyone can understand and support. They are audacious, headline-grabbing statements with the potential to pull the farming sector and the community closer together on the kind of shared vision required to achieve the political outcomes to deliver on these metrics. In particular, payments for ecosystem services are a significant change to the way that environmental outcomes could be delivered in Australia and will require enabling legislation and strong political will to push through.

On the other hand, some environmental metrics, such as the increase in irrigation efficiency, will require just as much effort to address the broader trust issues around irrigation as it will to meet the efficiency target. Effectively communicating the benefit of irrigation to regional communities and to the nation will be the first step in achieving this difficult goal, made more difficult by the lack of good evidence to objectively assess the trade-off with environmental use.

Metrics:

   * Australia becomes a Top 20 nation for innovation efficiency.

   * Every Australian farm has access to infrastructure and skills to connect to the Internet of Things.

   * Australia’s farm energy sources are 50% renewable by 2030.

Australia has long been criticised for being poor at converting research outputs into innovative new products and services. The Accelerating precision agriculture to decision agriculture (P2D) report released in March 2018 characterised many of the contributing factors to this poor performance and recommended various pathways forward.

Recognising the problem is only the first step in what is likely to be a difficult pathway to develop a better commercialisation culture. Delivering cultural change, rather than changing a process or technique, is always challenging. Nevertheless, a cultural change must be made if the sector is to capture some of the billions of investment dollars starting to flow into countries like Israel and the Netherlands, rather than Australia, because of their greater ability to successfully convert research into commercial outcomes.

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Access to connectivity infrastructure has long been an impediment to farm businesses adopting innovation on-farm. Rectifying this fundamental barrier provides another audacious goal that will deliver not just for agriculture but for all Australians; desirable, but once again heroic. Given the impediments that Australia’s geography and dispersed population create for universal connectivity, many would say that the ambition of reaching a $100 billion industry is far more likely than every farm having access to the Internet of Things. This goal is another moonshot that will take focus and innovation in equal measure.

Including a success metric based on a hard target for renewable energy sources is another interesting move for the NFF. Getting ahead of policy uncertainty and declaring a path forward for the sector to determine its own energy future is taking charge of the policy environment in a way that many both inside and outside agriculture would welcome. However, in a divisive policy area it also risks exacerbating division and alienating supporters.

The AFI has estimated the annual cost of energy to Australian agriculture to be just under $6 billion, meaning that at current output nearly 10 cents of every dollar earned by the sector is used to pay energy costs. Being competitive against other agricultural exporters relies on cost of production being manageable, so while energy policy is difficult it is not surprising that the NFF have taken an aggressive stance.

Metrics:

   * Double the number of tertiary and vocational agriculture graduates by 2030.

   * Increase the available work force by 25%.

   * Achieve gender parity in the agricultural workforce, and double the number of women in management roles.

   * A mean score of 5 for every Physical Capital sub-measure in the Regional Wellbeing Survey.

   * Zero farm fatalities. Close the gap between the psychological wellbeing of farmers and the broader community.

The growth needed to hit $100 billion will simply not happen without vibrant regional and rural communities, an agricultural workforce that is strong in both number and diversity, and a steady supply of suitably skilled graduates for agriculture. Given that all these things have been declining for some time (or have never existed in the case of a diverse workforce) this obviously presents significant challenges.

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Making farms safer and regional communities more attractive will help to build the workforce. However, a more general cultural change towards the desirability of agricultural work and rural lifestyles is needed to achieve this pillar.

Metrics:

   * 90% of family farms which have 2+ generations working in the business have a documented succession plan.

   * Year on year increase in equity investment in Australian farm businesses.

   * 90% of Australia’s farmers employing multiple financial tools to manage risk.

Succession, financial literacy, risk management and the attractiveness of agriculture to alternative capital are all areas of continual frustration. For decades, researchers, consultants, industry bodies and farmers themselves have opined as to why the sector does not do these things better. Is it realistic to set such ambitious targets for all of them in the next 11 years?

This pillar will really test the concept of having big audacious goals that provide focus for everyone to work together in order to address previously intractable problems. Like all the pillars, if the metrics are achieved then transformational change will result, as equity investments become attracted to professionally run, risk-managed businesses with strong succession plans.

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AFI research on Risk management in Australian agriculture has identified that the sector faces a much broader range of risks now than it has previously, with many new institutional risks such as consolidation in supply chains posing real threats to farm business viability. As these institutional risks tend to be more insidious than the better-known production risks, the AFI has recommended that industry bodies (such as the NFF) have a role in monitoring the emergence of new risk categories and ensuring that appropriate response strategies are in place.

The NFF has challenged the sector with a series of difficult tasks to deliver on its 2030 Roadmap. The headline target of $100 billion for farmgate output pales in comparison to the transformational requirements of many of the metrics by which success will be measured. When considered holistically the Roadmap charts a path for growth and prosperity, but it has done so without retreating from the need to also deliver a sustainable and trusted industry that will continue to develop well past 2030.

Meeting the aspirations of any one of the pillars in the Roadmap will take a level of dedicated effort, cross-sectoral collaboration and community support that has not been associated with agriculture in recent times. Meeting the aspirations of all five pillars is undoubtedly a moonshot. The plan provides an opportunity for agriculture to unite around not just one common purpose and identity but indeed a whole series of them.

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It is possible the plan contains too many targets and will simply prove to be too many fights on too many fronts. If it is to be achieved, then at the very least any sense of complacency about the future of the sector based on its recent growth will need to be put aside.

If complacency is removed, and the purpose and vision of the Roadmap embraced, $100 billion will soon be well and truly in the rear vision mirror.