Australia is a world leader in agribusiness, the business sector related to farming and agricultural commercial activities. Simply put, agribusiness is the process needed to bring a farm-produced product from a farm to your fork, or a paddock to your plate! Agribusiness is about supplying farmers with the things they need like agrichemicals, plant and animal breeding supplies, seed supplies, and then the tasks they will accomplish with them, producing crops and livestock.
Another mainstay of agribusiness is farm machinery and the manufacturers who produce them. One can also posit that the financial services, banks, and lenders who supply farm equipment loans and loans to buy arable land suitable for farming are another aspect of agribusiness, as are those companies engaged in farm product distribution and marketing. Processors, transportation, warehouses, wholesalers, and retailers and more all fit under the agribusiness umbrella!
The activities of agribusiness are characterized by the need for perishable base raw materials that are variable in quality and not always available, like seeds. The agricultural sector in Australia works under stringent regulatory controls for the purpose of environmental protection, consumer safety, and product quality. Agribusiness is often affected by increasing and decreasing costs and the adoption of developing technologies. All of this means that many of the traditional production and distribution methods are finding themselves to be outdated and are being replaced by coordinated linkages between agribusiness-related companies, the farmers, retailers and other links in the supply chain. This has led to the term agribusiness often being used to emphasize the way that these various sectors are interdependent throughout the production chain.
There are also critics to whom the term agribusiness is pejorative and used in a very negative sense. They connect agribusiness synonymously with what many have labeled “corporate farming”, which they see as wanton, industrialized, large-scale, and vertically integrated food production that is often portrayed as the natural enemy of small, family-owned farm businesses. This is an incorrect usage of course, in reality, family farms are still the backbone of Australian agriculture, and they also fall under the term of agribusiness along with the large-scale enterprises under corporate ownership. Moreover, the most successful family-owned farms are just as profitable as the corporate farms are, sometimes outperforming them and generating higher rates of return! The fact is both types of farming ventures have proven viable and all hands on deck are needed to feed a hungry continent!
Many of today’s larger enterprises began as small family-owned farms, and as they have grown they have maintained complex multi-generational ownership, operate across a wide swath of properties, and utilize corporate investors as well as management. So, it seems that the facts on the ground are that there is very little difference between a high-performing and profitable family-owned farm and a corporate farm, and the line differentiating them is growing more and more blurred. Despite the fearful clamoring of their foes, corporate agriculture will not be transforming the family farm model in Australia, it’s the other way around!
All of that aside, the industry is undergoing some significant changes. The global population is swelling to over 9 billion by the year 2050, making the task of feeding people an urgent and somewhat daunting necessity. The United Nations Food and Agriculture Organisation estimates that providing enough food for this ever more crowded world will require international food systems to ramp up in order to produce at least 70 percent more food than they are today!
Even though Australia’s domestic population is growing, agribusiness is still under monetary pressure because Input and compliance costs are quite a bit higher than our international competitors, and the rapidly shifting market signals are sometimes difficult to understand on the food value chain’s supply side. It’s an unfortunate truth that critical agricultural land is being sacrificed to the demand for more housing and development as the nation’s population grows and those farms existing on the edge of cities are being gobbled up by real estate developers with very deep pockets. While that is taking place, the changing climate is placing new limits on the range of sustainable production in some regions.
In order to remain competitive in this ever-changing playfield, it seems that Australian agribusiness needs to do more with less. To keep pace with increasing demands we must ramp up productivity and growth by improving production or yield, and fine-tune our management of existing arable land and food resources. That makes agribusiness the next frontier for the innovation economy, and like some of our farms, the terrain is vast.
Which brings us around to the changes and additions to farming equipment we will need. High-tech data-gathering techniques like GPS tracking devices, drones, walk-over weighing scales, GPS-guided tractors, irrigators that monitor plant health and water requirements, and other types of sensors will provide the tools we need to unlock new productivity.
It’s an exciting road ahead, but be sure that Australian agribusiness is alive and well and gearing up for future challenges!
We hope this article will be helpful to you. Stay tuned for upcoming articles.
READ MORE: A Deep Dive into the Mastering Decision-Making Process 6 Steps
If you like our article, please subscribe to BsyBee Design for the latest updates on design. If we forget anything, share your creative ideas in the comments section.
Follow us on Facebook, Linkedin, Instagram, Pinterest and YouTube.
