Between now and 2050 the world’s food system will need to harvest 70 per cent more food to nourish an increasingly crowded world. As the global population trudges towards 9 billion by 2050 and land and water resources decline, never has the task of producing more from less been more imperative. Essentially, these figures reveal that the role of Agriculture on a global scale will no doubt become more paramount in the following years.
In fact, Agriculture is one of the fastest developing fields of the Australian economy, with copious untapped potential. The agricultural sector has actually observed five successive years of resilient growth, and with record output of $57.6 billion in raw produce forecasted for this financial year –which is up 8 per cent last year’s levels. Even if growth stagnates, the National Farmers’ Federation (NFF) reveals agriculture is on the way to be our country’s next $100 billion industry by 2030 – the size of iron ore and coal combined. As the graph below reveals, the terrain for growth in the field of agriculture is mounting.
Ultimately, the key to unlocking this productivity growth for Australian agriculture is innovation. Whether this is through new technologies, smarter farm management and improved business models, innovation will be fundamental in meeting increased demands.
Furthermore, increasing competition from overseas markets means that Australia cannot rely on just being a quality producer anymore, thus technology should be utilised to drive labour efficiency and more. From drones and sensors to GPS tracking devices, Australia’s march to a more innovative, digital economy could certainly assist in unlocking the next wave of productivity needed to keep Australian agriculture competitive.
However, how does the agriculture field go about leveraging this innovation and technology? Research and development (R&D) is one of the key drivers of innovation as it leads to the creation or improvement of products, processes or systems. Hence, innovation in terms of R&D could largely benefit the agriculture sector – particularly in regards to global competitiveness, lowering processing costs and future environment considerations.
Despite not traditionally being observed as a digital industry, the agriculture sector could still advantage from Turnbull’s mission to transform Australia into a more innovative and collaborative society. In specific, the government currently provides generous tax savings for eligible R&D activities under the R&D Tax Incentive. Swanson Reed provides specialist expertise transversely to a broad range of industries and has assisted many clients attain tax cash savings under the R&D regime. Contact one of our specialist R&D Tax consultants to find out more about the scheme.