Attempting to forecast how Australian agriculture will fare in 2017 is an exercise fraught with risk, but it’s probably fair to assume that for most involved in the sector, 2017 will not be as good as 2016. Very favourable seasonal conditions combined with high livestock prices meant that the gross value of agricultural production will exceed $60 billion in 2016, about 16% higher than the average figure for the preceding five years,according to ABARES.The last time such a big jump in the annual value of agricultural output occurred was in 2001-02, a period that also involved that rare combination of good seasonal conditions and high commodity prices. However, the onset of the millennium drought in 2003 meant that it was a further seven years before the gross value of agricultural output exceeded the level achieved in 2001-02.
Hopefully the coming seasons will not be a repeat of the mid-2000s, and the current state of both public and private water storages in the eastern states provide some reassurance that the sector is well positioned if a dry season is forthcoming. The $4.3 billion held in Farm Management Deposits in December 2016 which is an all-time high for the December quarter also provides some reassurance that the sector is well prepared with cash reserves if coming seasons are not as kind as 2016 was.
Likely developments in Australian agricultural policy in 2017 are perhaps marginally easier to forecast that economic prospects, due to the long lead-time associated with many policy matters. At the national level, the current Horticulture Code of Practice is due to be replaced with a new code by the end of April, and the Government has already engaged in extended consultation on this issue.
The potential to capture objective data at multiple points along supply chains that extend from ‘paddock to plate’ is creating multiple new opportunities to boost productivity and competitiveness by all participants. However, the lessons emerging from the USA are that attempts by post-farm supply chain participants to capture this data and limit farmers access to it will severely constrain innovation, to the detriment of the entire sector.
The recent emergence of open-access data platforms in the USA has created a competitive and innovative agricultural software sector that has developed decision-support tools that enable farmers to increase productivity. The cropping, horticulture, intensive livestock and dairy sectors have all achieved very impressive productivity gains through insights available from linking genetic, production and processing data. This same opportunity is now emerging for Australia’s broadacre livestock sectors, but will not arise if post-farm participants restrict access to data, or attempt to develop proprietary systems with the aim of limiting farmers marketing options.
A related issue also likely to generate increasing debate in the agriculture sector in 2017 is telecommunications access. Many of the potential gains from digital agriculture are not available without good internet connectivity, something which is sadly lacking for many agricultural businesses, even those located close to major regional centres. Contrary to all the glossy advertising claims by telecommunications providers, much of rural Australia has poorer telecommunications access than is the case in developing nations in Asia and Africa, as returning Australian travellers readily attest. The much-vaunted National Broadband Network is also proving to be a major disappointment, with severe data restrictions and poor reliability.
Getting data availability and telecommunications access right will be a major challenge if the benefits of digital agriculture are to be realised in Australia, and 2017 is shaping up as a critical year for both these issues.