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The Role of AgTech in Food Security

We’re a land abundant in food. In fact, we produce enough food today to feed around 60 million people. But that state of abundance can quickly diminish due to the very real threats of climate change and environmental factors, resource constraints and supply chain interruptions or contamination and disease.

Global food demand is forecast to increase 60% by 2060 and as the seventh largest global exporter of food we play a critical role in contributing to global food security. Massive innovation within the sector is required to deliver on this demand, a huge component of which will come from AgTech.

We explored:

  • Food security challenges we face in Australia
  • The impact AgTech developments are having on these challenges – including improving yields, sustainable practices and nutritional value
  • How we can scale solutions to have a global impact
  • Barriers AgTech businesses are experiencing within the sector – including funding, collaboration with research institutions and access to farmers for testing and trials


Andrew Gregor - AWB Strategy & Business Development Manager, Cargill Australia
J. Matthew Pryor - CTO, Observant
Sarah Last - CTO and Cofounder, MimicTec
Dr Markandeya Jois - Senior Lecturer at Latrobe University

The Insights

What threats do we face to food security?

Water security is the obvious threat. During the Millennium Drought the relationship between water, food, security and social upheaval became apparent. We weren’t managing our water resources properly and weren’t producing crops with due regard to what they really needed.

The provenance of food is growing in concern thanks largely to a sense of social responsibility demanded by consumers and the power of marketing.

The nutritional value of the food we consume is also under threat from the food manufacturing process. The large quantities of salt and sugar added during food production to preserve flavour is contributing to the obesity and Type 2 Diabetes epidemic we face.

What’s the size of AgTech in Australia and is there a list of top problems in Ag?

In 2012 there were around 134,000 farm businesses in Australia, 99% of which are family owned and operated. The average age of those farmers is late 50s. There are huge succession and generational change currently occurring.

In the broad-acre sector there’s approximately 25,000 farms. The beef industry accounts for 50% of all farms with agricultural activity.

Whilst it’s difficult to find numbers on how many students are currently studying agriculture in Australia, it was reported in 2013 that there were six jobs available for every new Australian agricultural graduate, in fields as diverse as agronomy, genetics, rural finance, farm management and research. Admissions recently are on the rise and in 2016 at The University of Melbourne, 198 places were offered, a 30% increase in enrolments on the previous year. A stark contrast from the 20 students who enrolled in the degree back in 2009. Some of the comeback in the popularity of Ag has been attributed to the end of the mining resources boom and the opportunities that Ag can offer – around one third of ag related jobs are based in the city.

We need to encourage young people to get engaged in Ag to solve the problems. It’s traditionally been difficult to attract high calibre other-disciplined students to agriculture. Canada and the US are experiencing a similar problem.

We need to shift thinking so that students when considering their future think “by going into agriculture, I will be solving the world’s number 1 problem – how we feed the world”. We need other minds outside of farming.

There are organisations that have lists of Ag specific problems including Food Agility, tasked with empowering Australia’s food industry to grow its comparative advantage through digital transformation. Other industry representative bodies such as MLA also have lists as does NAB.

What challenges does AgTech face?

A key challenge for AgTech is the own-ability of the technology. Technology solutions will only be successful if adopted at scale. Whilst early adopters will always get on-board, unfortunately there’s a huge number that will wait before adopting the technology for a range of reasons. This makes scale difficult.

We need to engage primary producers as a part of the problem and have them provide input and data and to engage in trials and research. Ultimately they need to take up the solutions too.

There’s a geographical distance between where the research is taking place and where it’s needed – often at least a 2.5hr drive. For start-ups this means their customers are a long way away. There’s no substitute for boots on ground and chatting face-to-face over a cup of tea. It means the customer acquisition process is long but it’s the reality of working in AgTech.

Bodies representing farmers, for example the Victorian Farmers Federation, do a great job but seem unsure of how to interact with AgTech start-ups. They’re generally enthusiastic and happy to introduce them to other bodies but they’re not particularly good at facilitating introductions directly to their member farmers, when access to farmers is what is ultimately needed.

The average farmer (assuming takeover at 25 and retiring at 65) gets only 40 cycles or shots at generating income in their farming lifetime. The seasonal nature of much of farming means the testing cycle is annual, unlike other start-ups like FinTech, that have unlimited test cycles. This also slows adoption.

A multi-disciplinary approach is required. We need people from diverse backgrounds and fields thinking about food and agriculture. We need smart young people who are passionate about solving these problems.

Are farmers engaged in AgTech solutions and how can we increase that engagement?

When talking with farmers, AgTech providers should:

  1. Be honest about what they’re doing
  2. Ask questions
  3. Outline what they’re trying to achieve and the benefit to the farmer

The biggest gatekeepers are the bodies representing farmers who lack the willingness to put their reputations on the line. They are more likely to suggest that the AgTech provider go do a research project with a university first and then “once you’ve got that stamp we’ll introduce you to our members.”

This approach seems counter-intuitive from the farmer’s perspective, as until they see the solution working on a farm – lots of farms – they’re not interested in paying for anything.

Can the Extension Program help?

The Department of Agriculture & Water Resources is has funded a program, Stimulating private sector extension in Australian agriculture to increase returns from R&D.

The project, being led by Dairy Australia, is a collaboration involving nine partner organisations – six RDCs (Dairy Australia, Meat & Livestock Australia, Cotton Research & Development Corporation, Sugar Research Australia, Australian Pork Limited, Horticulture Innovation Australia), the Victorian and NSW governments, and the University of Melbourne.

One of the core criticisms of the project is that little support is provided to farmers to assist them in adopting new technologies, nor does it seem to be heavily pushed by farm advisors, the advice of which many farmers are highly dependent upon.

Rather than trying to extend new technologies through government based organisations or programs like the Grains Research & Development Corporation (GRDC), we should consider a commercialisation group or start-up that commercialises the technology and gets it into the hands of farmers. The gap lies in developing research and then getting it to farmers. We need a viable ecosystem of Agtech to resolve this.

Universities aren’t good at commercialisation (ouch!)

Recognition and promotions for researchers is based on publication of their papers, regardless of how well read these papers may be. Much of this is driven by the ERA (Excellence in Research for Australia) Ranking of universities based on the number of papers produced.

When applying for funding, researchers are assessed by committees based on their previous research – what did you predict? Did it work? Where is the market research?

All this amounts to an incentive to avoid in engaging risk-taking research.

Researchers are focusing on less difficult problems. If it’s too difficult you don’t get published and you disappear.

A better alternative is to fund researchers for a minimum research activity. This will shift the focus from concern about whether the hypothesis is going to work, to engaging in longer term research. Academics need to think differently and involve newcomers in their work as you don’t need to be a ‘professor’ to be innovative.

Universities place too much focus on accountability and ROI.

The progression of innovation through commercialisation in Australian agriculture is fundamentally broken. Step change doesn’t come from iterative improvement. We have to smash it to pieces and look to what works in other industries. Why should an industry funded, levy collecting body fund your risky idea? If the market doesn’t fund it then it’s not solving a problem that needs to be solved.

There’s a lack of diversity in skills in Ag and willingness to take input from other people. We need new models to better match people who are good at solving problems, including that knowledge that sits inside our research institutions, with people who are good at building businesses.

What is the role of philanthropy and generous support from big companies in pushing technologies out from universities for commercialisation?

Transparency is key. Every large corporate will want their pound of flesh and will have different expectations around delivery time.

We have a lack of thriving venture funds focused on Ag, though SproutX is soon to be offering funding. There needs to be investment at the varying stages of the lifecycle, from early stage through to Series A, listing, etc. We don’t have that infrastructure in place yet.

In the US family offices are significant funders of Ag and Agtech.

Tell everyone you know that technology in agriculture is the most noble place you could put your money. Especially tell your super fund manager! What are you investing in that’s going to improve the sustainability of our food production systems in Australia? It’s the fund managers that will move the needle.

Other sources of potential funding include crowdfunding legislation that has just been passed and a non-refundable carry forward tax offset equal to 20% of the amount paid for those investing in a qualifying early stage innovation company (ESIC).

In the 1980s we witnessed a shift to productising raw materials – for example, Incitec Pivot’s move to productise fertiliser. How do we have more conversations about ‘productising’ in AgTech?

Currently in Australia food consumers are taken for a ride in that packaging contains a minimum of valuable information. Food packaging labels aren’t strict enough. Changes here will be driven by consumer demand. Consumers are also exposed to so much information, for example social media, that it can be hard to ascertain what’s accurate and what’s spin.

We have witnessed consumers drive change in the egg market. In 2009 free range eggs accounted for just 5% of all egg sales. They now represent almost 40%.

What’s ethically and socially responsible is making sure that there is a straight line between the consumer and the producer and not something that’s going to get ‘filled in’ by savvy marketing.

There’s a balance that needs to be obtained between the nutritional value of food and the economic and social benefits of processing food. That is where FoodTech comes in to play. How do we make processed food healthy? Food technologists need to start making food ‘complete’. We are yet to understand the long term implications i.e. 30 years from now, of processed food and the link between chronic diseases.

Scientists are currently using a type of worm that shares half the genes of humans to screen some of these long term affects, however more needs to be done.

The demand for information on food provenance

Traceability and provenance have been topical in several Ag sectors for more than twenty years, for example, fibre. However, the technology hasn’t been available, or at the right cost, thereby limiting take-up.

It’s important to consider who the customer is for the farmer. It’s not the end consumer, rather typically Coles and Woolworths. They have no incentive to have universally traceable food, in fact they’re incentivised to do the opposite in pushing their own labels.

There are currently logistical difficulties with tracking some foods – for example livestock. Once a cow ends up on the abattoir floor at a large processor it can be difficult to track what part belonged to which cow. There’s a lot of industries configured at moment that don’t benefit from that level of transparency.

Latrobe University is developing Fitbits for use on livestock. Whilst this can assist with traceability to a point (up to the abattoir), it’s of particular benefit in detecting health of livestock and potential biosecurity risks.  Animals like cattle are very predictable in how they move around and how much they graze. By tracking their behaviour, we can easily identify an issue remotely when there’s a deviation in the routine of a particular animal. Developments between CTI and Latrobe have got the cost of these Fitbits down to $2 per unit and are looking to implant in to the existing ear-tag on animals.

This in an example of appropriating technology that already exists and applying it to agriculture. Technology isn’t just solving problems – it’s commanding minds to solve problems in a different way.

The ongoing success of the Masterchef movement is playing a big role in getting people to re-engage with where their food comes from. Take for example the movement around the imperfect carrot. This is fantastic for AgTech as it will push traceability down the supply chain.

How do we make AgTech sexy (like FinTech)?

AgTech is earlier in the cycle than FinTech. There is funding available and details of this are regularly published by AgFunder in the US. There is around 150 AgTech start-ups in Australia and there’s also a lot of established Ag companies working in technology.  

We need the same level of industry and government support that the FinTech community has experienced. We need to get it on the government agenda, particularly in Victoria where Food & Fibre is our biggest export.

Maybe we need a Kaggle for Ag.

The notion of picking ‘winners’ from a research perspective to fund is flawed, as we don’t even know that they’re going to win at the point of funding.

What is different about problems in agriculture as applied to any other industry?

The problems associated with integrity of the provenance of a good as it moves around the globe, can for the most part, be solved by technology. Freight providers like UPS have few problems tracking a good as it moves through all sorts of logistical routes. We need to identify what it is about agriculture that makes it harder to solve? Is it that the product may not retain its shape or format as it moves through the supply chain?

Should we be bringing agriculture closer to the city to inspire people from diverse backgrounds to help solve these issues?

Perhaps to the outer suburbs, though it depends what you want to bring to the city. No one wants a huge poultry shed, even if it is state-of-the-art, on their doorstep.

In Germany, where they have free land use – hotels next to farms, next to houses – this would not be considered as a viable reason to not bring it closer to the city. A history of free land use means that consequential issues that may arise from a poultry farm positioned next to a housing estate, like rats or odour have already been addressed. This is less a question of technology and more about social policy.

There is an argument for local micro-production and using technology to make it smart and acceptable in the suburbs.

How can AgTech be applied to improve supply chain traceability?

You’d be reinventing the wheel to use AgTech for supply chain traceability. The government currently captures comprehensive supply chain information and has infrastructure in place for biosecurity purposes.

Where we are currently seeing issues is in food that is produced for the animal consumption rather than for human consumption – and component contamination. The difficulty with processed foods where there’s ten ingredients in a can comes in determining which is the contaminated one? We need greater transparency around where raw materials are coming from.