Automation in Agribusiness | Text version

2026 eBOOK

Introduction

Automation is reshaping agribusiness. As drones apply fertiliser with pinpoint accuracy, robotic milking systems keep happy cows coming back for more and solar-powered irrigation systems slash energy costs, technology is proving its worth across Australia’s agri-sector.

The same story is unfolding globally, from robotic harvesters in Europe to AI-guided irrigation in the United States and precision viticulture in New Zealand.

Automation is key to securing the future of farming in ways that not only improve financial outcomes for agribusiness but also for those working in the sector, as well as the environment.
Innovation increases productivity and efficiency, with automated systems increasing throughput, consistency and data-driven decision-making.

It is also improving health and safety. In dairies, where crush injuries are common, for example, automation is putting distance between people and animals, while chemicals are increasingly delivered by drones, reducing the risk of exposure.

Labour constraints are one of the strongest economic drivers of automation uptake. In its 2025 Snapshot of Australian Agriculture, the Department of Agriculture, Fisheries and Forestry (ABARES) shows agriculture employed more than 315,000 people in 2023–2024, representing 2.2% of national employment, but close to 6 % of rural employment.

Automation enables agribusiness to do more with fewer people or redeploy staff into higher-value and more interesting work. This also improves retention and lengthens the time farmers can continue on the land.
Sustainability is more than a buzz word, too. From recycling wash-down water to using waste from breweries as feed supplements, automation integrates with circular systems that reduce waste and improve environmental outcomes.

This builds social licence, along with tech-enabled operations that demonstrate responsible farming practices, strengthening trust with consumers and regulators.

Over the past two decades, Australian farmers have embraced precision agriculture, from GPS-guided seeding and variable-rate fertiliser to application yield mapping – technologies that have steadily evolved into today’s highly automated systems.

Where GPS was once about driving in straight lines, it’s now about precision; applying the right input, in the right place, at the right rate. This has been supercharged by green-on-green technology, where cameras on boom sprays identify weeds in paddocks and spray only the target plant, leaving valuable crops untouched.

The latest wave of automation is arriving via drones, with clients using airborne technology to spray and fertilise crops. It’s efficient, safer and less labour intensive.

Automation isn’t just about efficiency and cost savings, however. It can also mitigate risk in an industry where factors such as rainfall and drought are beyond the control of those working the land. Technology such as tile drainage can protect crops from water logging, enabling farmers to maximise yield and make better use of their property.

With the value of Australian agricultural production growing from $61.5 bn 20 years ago to over $80 bn today, these advances have implications far beyond the farm gate. Production improvements become increasingly important as global prices soften.

The path to automation is not without its challenges, however. The financial hurdle, particularly for large-scale projects such as automated dairies or solar-powered infrastructure, is one of the biggest.

For smaller businesses, it can be hard to find the time, let alone the resources, to pursue innovation. Many are not even aware they can access a range of funding options to automate, such as government grants and research and development (R&D) incentives, as well as bank lending on favourable terms, particularly where the investment will also deliver carbon reduction or other sustainability benefits.

This report examines the impact of automation and the ways in which agribusiness can leverage innovation to fund a more sustainable future. We also introduce a new tool designed to help agribusinesses assess the financial benefits of investing in automation.

RSM’s F.A.R.M. (Feasibility of Automation Return Model) enables farmers to input capital costs, estimate operational savings and calculate payback periods, as well as integrate funding options for investment in innovation.

Automation requires perseverance; systems must be tested, adapted and refined, often over several seasons. But it is essential for the long-term viability of Australian agribusiness.

RSM Australia (RSM) has been future proofing businesses for more than a century. We remain committed to unlocking growth opportunities and providing solutions that not only encourage but also enable innovation. F.A.R.M. is another practical demonstration of that commitment. By working together, we can build resilience, profitability and sustainability in this vital sector.

The big picture: Why automate?

Toowoomba is a fitting base to observe just how much innovation is reshaping agribusiness. Within a short radius of the rural Queensland hub, you can find almost every kind of agricultural enterprise, from cropping and cattle to sheep and horticulture.

William Laird, Partner, Business Advisory at RSM has watched automation roll out at different speeds across the sector in what he describes as the perfect test bed.

Broadacre cropping has long been a leader in technology adoption – guided tractors, autonomous sprayers and precision seeding are now mainstream. But there are other areas of agribusiness muscling in on the action.Laird identifies several forces driving automation in the sector, with labour scarcity and reliability at the top of the list.

“In regional areas, labour can be incredibly hard to find,” he says. “Even when you do, you need people with the right skills. Driving one of today’s high-tech machines is more complicated than people realise.”
Advances in automation and AI are drawing younger generations back to rural areas they had been leaving in droves. They can see a future in technology and data and want to be at the cutting edge.

On the flipside, automation enables older people to stay on farms longer. “In Canada, for example, older dairy farmers have come back to the industry because the work is now less physically demanding,” Laird says.

Paterson points to one of his clients, a dairy farmer who recently invested $6m in an automated milking system.
“They could have patched up the old dairy for less money, but instead, they built a new, fully automated dairy,” he says.

Under automated systems, cows voluntarily walk in to be milked – 2.7 times a day on average – increasing yield without increasing stress.

The technology monitors each animal’s health and milk output, automatically diverting milk if an issue is detected. Feed is customised for each cow, and the entire process, from milking to waste collection, is logged and analysed in real time.

“From a productivity perspective, it’s impressive, but it’s also a great social licence story,” Paterson says. “The cows choose to be milked; they’re calmer, they get a feed and even a back scratch before milking – it’s a good-news story for animal welfare and for how we communicate the value of automation to the public.”

The sustainability loop within the dairy is also compelling, with recycled water used to clean the facility, effluent redistributed as fertiliser, and brewing by-products reused as nutrient-rich feed.

“That’s the sort of cross-industry connection we’re seeing more of,” he says. “A brewery’s waste becomes a dairy’s feed supplement – it’s sustainability in action.”

Economist Devika Shivadekar at RSM says the economic case for automation in agribusiness is compelling.
“Agribusiness stands to benefit from technological investment more than any other sector not because labour is cheap or plentiful, but because it isn’t,” she says.

While automation reduces demand for lower-skilled, task-repetitive roles, this does not necessarily mean job losses, especially in regions battling labour shortages.

“The bigger shift is in job composition,” she says. “There is growing demand for people who can maintain systems, interpret data, troubleshoot equipment and manage technology.”

Meg Lovegrove, Executive Officer, Australian Agritech Association (AusAgritech), says technology is reshaping the workforce.

AusAgritech represents more than 220 agritech companies across the agri-food supply chain, including food production, fisheries and upstream technology providers.

“With technology you can engage people who may never have considered agriculture before; developers, engineers, data analysts – these are all skillsets the sector didn’t traditionally attract,” Lovegrove says.

“Even something as simple as reliable internet makes a difference. Young people are more likely to come to farms and stay longer if they can stay connected.”

Managing risk

Automation can also help manage risk in an industry subject to the vagaries of unpredictable weather.
In 2023–2024, ABARES reported a significant fall in the headline productivity index, largely due to climate adjustments reflecting extreme heat and dry conditions, particularly in Western Australia.

“The weather plays a huge role in agriculture,” Shivadekar says. “If it’s too hot, if conditions aren’t safe, labour hours fall, efficiency drops and output suffers. Automation helps decouple productivity from physical limits.”

Paterson cites tile drainage systems as an example of how technology can be deployed to mitigate losses.

Subsurface drainage pipes remove excess water from the soil profile, preventing crop loss during wet years. “You might not need it every year, but it’s about de-risking,” he says. “When the big rain comes, it can save your crop and that can pay for the system in a season or two.”

Automation also helps farmers make better use of their land, rather than trying to expand in increasingly uneconomical ways.

“Land prices are very high so buying the neighbour’s farm isn’t always the smartest move anymore,” Paterson says.

“Instead, farmers are investing in making their existing land more productive. Technology lets them do that as they can get more out of every hectare.”

From the agritech company perspective, the biggest barrier to investment in the sector is funding, particularly accessing funds over a term long enough to validate products in real-world commercial conditions.

“Farmers want proof – they want to see something work across a season and often across many seasons,” Lovegrove says.

This creates tension for early-stage agritech firms as commercial trials are expensive, cash-flow intensive and time-consuming, yet essential for building trust.

“Free trials are still a cost for startups, and if a young company fails or is absorbed, producers worry about support disappearing with them,” Lovegrove says.

The risk of losing a whole season due to unproven technology also weighs heavily. “If a tech failure costs you a whole crop, that’s not a minor issue; it’s existential."
Shivadekar says while upfront costs can be a barrier to automation, the long-term benefits are compelling.

“Operating costs fall sharply and you reduce exposure to labour volatility, attrition and uncertainty,” she says.
Industry-led programs already demonstrate the scale of potential gains. The $52 million cropping automation program delivered by Hort Innovation – designed by growers for growers – targets labour-saving technologies across pollination, spraying, harvesting and packing. Indicative figures suggest:

Up to 90% labour savings in some automated systems
Around 80% labour reduction in mechanised pollination
Packing line automation saving up to $2.4m per year at a single farm

“These are not marginal gains – they are business-transforming numbers,” Shivadekar says.

Finding the right balance

In the United States, autosteer guidance systems are used by about 52% of mid-sized farms and 70 % of large farms, while soil and yield mapping has been adopted by more than 65% of large operations.

These technologies reduce labour hours per hectare, operator fatigue and input waste, shifting labour demand away from repetitive tasks towards planning, diagnostics and data interpretation.

Reviews of precision agriculture and AI applications suggest:

Yield gains of between 5 and 15%
Reduction in water use of between 10 and 30%
Fertiliser optimisation of between 10 and 20%

Despite the excitement around robotics and AI, Laird says semi-automation remains the preferred approach for most producers.

“Fully automated systems, where there’s no human involvement, are rare,” he says. “Farmers like to stay in control. They want to be able to change settings, fix things, and not be completely dependent on the machine.”

Semi-automated dairies, for instance, allow farmers to manage herds remotely while maintaining a hands-on connection with their animals. “It’s a lifestyle choice as well as a business decision,” he says. “The farmer can still be involved but without the same physical strain or injury risk.”

Targeted spraying technology is a prime example of efficiency and environmental benefits coming together.

“Spot-spraying systems use a fraction of the chemical that traditional boom sprays would,” Laird says. “They only hit the weeds, not the whole paddock. That saves money, protects the soil and improves yields. Healthier soil means healthier crops.”

Paterson says the benefits to both the bottom line and the environment from this level of precision are significant, cutting the use of chemicals by about 70%; reducing emissions as fewer chemicals are manufactured, transported and applied; as well as supporting soil health.

“Drones can carry a couple of hundred kilos, apply only where needed, and keep people away from the chemicals,” he says. “You’ve got one operator sitting in a shed sending drones out across the farm. It’s efficient, safer, and it saves labour.”

Even global agrochemical companies are diversifying as these technologies reduce chemical use. “They can see their markets shrinking, so they’re moving into data and equipment,” Laird says.

Overcoming the barriers

Working in an organisation that connects startups, investors, government, researchers and farming groups, Meg Lovegrove has a front-row view of both the opportunities and friction points of automation.

“In terms of innovation, Australia is absolutely world-leading – we're incredibly strong in agritech, particularly in small to medium-sized innovation businesses,” she says. “Where we lag is not capability, it’s adoption.”
She points to international benchmarks such as Agritechnica in Germany, where Australia recently hosted its first national pavilion.

“It was very clear that Australian agritech stands shoulder to shoulder with the best globally,” Lovegrove says. “The technology is there, the ideas are there, what we need is more producers feeling confident enough to adopt it.”
Some forms of automation, such as GPS guidance and auto-steer, are now mirroring global trends, but more advanced automation is still adopted cautiously.

“There is still a level of distrust around software and automation,” Lovegrove says. “If you tell a farmer that an app can control their water pump, they will look at you like you’re mad. But once you walk them through the return on investment, and trial it in practice, attitudes change.”

Laird says the challenge for many smaller producers isn’t interest, but capacity. Automation investments require time, planning and a clear financial case.

“Cost and risk are the biggest barriers,” Laird says. “No one wants to be the first mover, because tech is evolving fast. You buy something today and the next model might be around the corner. So, you’ve got to ask: What’s the payback period? What’s the risk?”

He recommends every agribusiness prepare a structured automation business case, assessing capital cost and financing options, expected operational savings and productivity gains, and payback periods, as well as eligibility for grants or R&D Tax Incentives. It’s also important not to forget training and implementation planning of the new technology. “Otherwise, it’ll sit in a shed for six months.”

A decision framework that examines what the business will look like with automation and what it will look like without it, three to five years hence is essential.

Laird argues more government support is required to help early adopters manage the risk of being first movers. “If everyone waits, nothing happens,” he says.

Paterson agrees, saying early adopters are critical.

“Someone has to go first, take the hits, make it work, and prove it up,” he says. “What’s different about agriculture is that farmers are happy to share; they’ll say, ‘Don’t do this, do that’. That’s why progress happens so fast once something’s proven.”

Building the labour force

Laird is quick to counter one of the other barriers to automation – the assumption that automation displaces workers. In practice, he says, it allows people to work on the business rather than in it.

“What we’re seeing is farmers becoming better business operators because automation frees them from the daily grind,” he explains. “When you’re no longer the backstop every time someone doesn’t turn up for a shift, you can finally focus on growth and reinvention.”

Lovegrove concurs. “Automation is not about replacing people; it’s about filling gaps where labour is absent and enabling farmers to maintain production without over-reliance on temporary or casual workers,” she says.

“In sectors like dairy, producers have been under pressure for a long time – milk prices haven’t shifted much but overheads have increased dramatically. Automation can be a game changer; it allows people to stay on farms longer and lifts productivity without increasing overheads.”

There is some disquiet, however, about the potential for automation to remove intensive agriculture from rural and regional areas.

“Once you can grow something entirely inside a shed, why does that shed have to be in the country,” Laird says. “Urban mushroom farms already proved the model. While city-based production cuts freight and emissions, it also risks drawing economic activity away from regional communities.”

With the right investment, Shivadekar believes automation and AI could have the opposite effect, encouraging decentralisation in favour of regional development.

“Regional Australia is an untapped opportunity for advanced operations, if infrastructure investment keeps pace,” she says.

“Remote operation happens in cities because the infrastructure is there, but capital cities are expensive. As margins compress, firms will look to regional Australia for lower land costs, stronger workforce attachment and better long-term economics.”

Finding the right solutions

Australia invests more than $3bn annually in agricultural research and development but funding for extension and advisory services has fallen over the past two decades.

“That’s a real risk – we have strong innovation pipelines, but weaker diffusion capacity,” Shivadekar says.
Targeted micro-credentials, locally delivered training and region-specific adoption pathways will be critical, particularly in thin labour markets where displacement risks are amplified.

Global research by the United Nations Food and Agriculture Organization (FAO) and the Organisation for Economic Co-operation and Development (OECD) shows a consistent pattern: automation lowers routine labour demand while increasing the premium on technical and analytical skills.

Industry programs that redeploy workers into higher-value roles, such as quality assurance, compliance and biosecurity, are more likely to deliver better outcomes.

AusAgritech is developing a National Agritech Strategic Plan built around three pillars:

Accelerating commercialisation and adoption – bridging capital, capability and connection gaps
Strengthening collaboration across innovation, industry and government – promoting a more connected system where research priorities, public funding and market needs align

Embedding agritech into the future of Australian agriculture – investing in regional capability, a skilled workforce and domestic production that retains value and intellectual property

“Agritech isn’t separate from agriculture – you can’t have innovation without farmers and farmers need innovation to stay viable,” Lovegrove says.

Government awareness is improving, with dedicated agritech and innovation teams emerging within State departments.

“We’ve come a long way; now the challenge is ensuring that the technology we build actually solves real problems on the farm,” Lovegrove says. “If you’re building agritech and you’re not solving a producer problem, you’re not building the right thing.

The tool for transformation

RSM’s new automation decision support tool is designed to bring clarity to the table to enable more informed decisions about automation and AI investment.

Tim Linke, Partner, Corporate Finance at RSM who specialises in financial modelling says F.A.R.M (Feasibility of Automation Return Model) blends quantitative analysis with practical business insights to help companies weigh capital costs, operational savings, and payback periods – all within a structured yet flexible framework.

“The work we do around decision support helps businesses move beyond gut feeling and intuition,” he says. “This tool gives them something concrete, with qualitative and quantitative analysis behind it.”

Automation promises efficiency and savings, but the investment can be daunting, particularly where margins are tight and capital costs are significant.

“There’s no clear framework or case studies out there that help businesses understand costs and benefits of automation, so we built something that does exactly that,” Linke says.

RSM advisors are using F.A.R.M. to help guide clients:

Model capital investment and operational savings

Calculate payback periods
Compare options such as part-cash versus part-debt financing
Provide key financial metrics such as internal rate of return (IRR)
Identify whether a business is ready or not for automation.

By working through multiple scenarios, businesses can better understand when and how automation will become profitable and how quickly they should act.

“Being able to present the modelling to banks or other funders also demonstrates that you have done your homework and assists them in evaluating a funding proposal,” Audcent says.

Addressing the issues

As outlined earlier, one of the big concerns about automation is the potential loss of jobs, but Linke says the tool enables businesses to look at scenarios differently. “It’s not about redundancy – it’s about redeployment; how can human capital be redeployed into higher-value activities,” he says.

For example, employees freed from repetitive or low-value tasks could generate new income streams, develop new services, or improve customer engagement.

“It’s creating efficiencies in your business so people can do more important, higher-value work,” Linke says.

This approach helps businesses frame automation as a strategy for growth and innovation, not simply as a cost-cutting exercise.

Another challenge the tool tackles is the rapid pace of technological change. Many companies hesitate to invest in automation, fearing that today’s expensive technology will be obsolete tomorrow. The answer lies in the data.

“We look at what the cost of the kit looks like now versus when it was originally launched,” Linke says. “Then we build an indicative glide path to determine what these costs will look like in two years.”

He uses the example of battery storage for renewable energy. “Two years ago, batteries were too expensive to make sense. Now you can’t build a solar farm without them. Prices caught up with practicality.”

The tool models several scenarios to reflect these dynamics:

Immediate investment: Capturing operational savings sooner but paying higher upfront costs
Delayed investment: Potentially benefiting from lower equipment prices, but missing out on two years of efficiency gains
Do nothing: Calculating the cost of lost opportunity and unrealised savings

This level of analysis gives business leaders confidence in the timing of decisions, which is particularly valuable in fast-evolving sectors such as AI and robotics.

Supporting regional clients

While there is some hesitancy about automation, particularly among traditional family-run farms, Linke says F.A.R.M. helps agribusinesses evaluate the potential opportunity and benefits. “Our tool gives them a way to quantify the impact – what automation really means for their bottom line.”

RSM advisors use it in face-to-face meetings with rural clients on their home turf, taking an approach that is personal and conversational, rather than technical or intimidating. “We give them an easy way to look at it in a friendly space,” says Linke. “Once they understand it, they can decide either ‘it’s not for me’ or ‘maybe there’s something in this’.”

The tool also factors in grant support and R&D Tax Incentives, helping clients identify funding options that can offset investment costs. A service-led initiative, F.A.R.M. has been developed to help agribusiness weigh up the pros and cons of automation.

“It’s there to help start conversations and support clients through the next steps,” Linke says.
The aim is not just to improve business efficiency but to give time back to people. “Time is what it’s all about – time to focus on more valuable work, time to innovate, or even time to enjoy life more,” he says.

Using the R&D tax incentive

For many Australian farmers, innovation has always been part of the job. Whether experimenting with soil treatments or designing machinery that can handle the realities of rugged terrain, “tinkering” is part of farm life.

But what many don’t realise is that some of this tinkering could qualify as research and development (R&D) and potentially deliver thousands, even millions, of dollars in tax benefits.

While the IT, biotech and life science industries have long leveraged the R&D Tax Incentive, Larissa Lai, Partner, R&D Tax and Government Incentives at RSM, says agriculture has lagged behind.

“The R&D Tax Incentive is Australia’s primary mechanism for incentivising innovation,” Lai explains. “It’s designed to help companies recover a portion of their eligible R&D spend, either as a tax offset or, for smaller companies, as a cash refund.”

But she has found awareness of the tax break surprisingly low in the agribusiness sector, particularly among family-owned businesses. The registration of R& D activities under the tax incentive program must be submitted within 10 months of the end of each financial year – once that window passes, so does the opportunity for an R&D tax offset or a refund.

“We met a business at FarmFest in Toowoomba who’d spent around $6m over a few years on eligible R&D activities, yet they hadn’t claimed a cent,” Lai says. “They’d been told they weren't eligible by their local accountant. It’s heartbreaking, because they would have been able to get a cash refund of more than $3m.”

Transforming business

The R&D Tax Incentive benefits depend on the company’s size. For businesses with an aggregated turnover under $20m, a refundable tax offset of either 43.5 or 48.5% of eligible R&D expenditure is available, which is often paid in cash if the company is in sufficient tax losses. For larger companies, a non-refundable offset reduces tax payable, with the rate linked to the intensity of R&D activity within the business.

“If a small agribusiness spends $3m on eligible R&D and isn’t yet in a tax paying position, they could receive about $1.3m in cash,” Lai says. “That’s a huge boost to cash flow and an enabler for future innovation.”

For cash-strapped family farms, this can be transformative. “They often think they can’t afford to innovate this year but once they understand the incentive, they realise they can fund those improvements now, not ‘some day’.”

One of the biggest misconceptions in agribusiness is that R&D only applies to lab-based science or brand-new inventions. “In fact, the definition is really broad,” Lai says. “You don’t have to be creating the next iPhone; you just need to be developing or testing a hypothesis in a systematic way where you’re generating new knowledge and the outcome isn’t known in advance.”

Eligibility for the R&D Tax Incentive is divided into two categories:

Core R&D activities – “You need a hypothesis or objective you’re testing through a series of experiments,” Lai says. “The results can’t be known in advance, and you must be generating new knowledge, maybe a new process, a new device, or a new way of doing something on-farm.”
Supporting R&D activities – These enable or directly assist the experimentation, such as project management, background research, or prototype fabrication.

The biggest challenge for many farmers isn’t eligibility. It’s record keeping.

“Ag businesses aren’t known for daily timesheets,” Lai says. “But keeping at least weekly or monthly records of who’s working on R&D projects, what they’ve done and how much time they spend is crucial.”

Documentation, such as experiment notes and invoices, is also important for businesses if the Australian Taxation Office (ATO) asks for evidence related to that work.

If you’re improving a process, developing equipment, or testing a new method, chances are, you’re already doing R&D – you just need to capture it,” Lai says.

Provided a business meets the criteria, registering for the incentive is relatively straightforward. Businesses register their R&D activities via the government portal, receive a registration number and then claim the offset in their annual tax return.

Because the program is self-assessed, those applicants who are eligible for the refundable R&D tax offset receive their benefit within four to six weeks of lodging their tax return.

Driving innovation

Interest in R&D claims has grown sharply over the past five years, with the impact of Covid-19 a major catalyst.
“We’ve seen more education and awareness, but also more financial pressure,” Lai says. “As capital markets tightened, many businesses started asking, ‘How can I get more money in the door?’ The R&D incentive became part of that conversation.”

At the same time, technological advances – from AI-enabled tractors to sensor-driven irrigation systems – have blurred the line between traditional farming and high-tech innovation. “Suppliers are getting more innovative, which pushes growers to innovate too,” Lai says. “It’s creating an ecosystem of experimentation.”

One RSM client Lai worked with developed an automated harvester specifically designed to collect olive leaves, rather than fruit, for olive-leaf extract used in health products. “They needed to harvest in a way that maximised the oil content in the leaves,” she says. “So they built a machine that did exactly that.”

Another client created an automated spraying system that can target pests with precision, reducing waste and improving yields.

Drones are also "R&D in action”, with farmers using them to map their properties, identify water-efficient planting areas, or detect pest infestations early.

Even growers adapting existing technology, such as repurposing machinery or agricultural products in new ways, could qualify for the tax incentive.

“One farmer used a sulphate-based powder developed for pest control and discovered it changed the flavour profile of their bananas,” Lai says. “Given no one had researched the impact of that powder on the improved flavour profile before, testing and trialling this correlation likely qualified as R&D.”

Financing the future

When it comes to funding innovation, many farmers still turn to a familiar source, their bank. The good news, says Justin Audcent, Partner, Corporate Finance at RSM, is the banks are not only open to financing new technology and automation, they are encouraging it – particularly when it supports the achievement of carbon reduction and other sustainability goals.

“The banks are keen to lend,” he says. “They have a large exposure to agriculture and want to support the clients that are forward-looking – the innovators.”

That innovation can take many forms, from solar power and electrified equipment to carbon capture projects and precision agriculture technology. A number of major banks offer interest rate discounts and incentives for sustainable ventures and seek to provide flexible loan terms that match the expected cash flow returns. Loan terms could be anything from three years for smaller projects to 10 years or more for large-scale investment in farm-wide automation systems.

One of the biggest developments in recent years has been the rise of sustainability-linked loans. These include “green loans”, term loans at discounted interest rates where the purpose is to fund a project that delivers carbon reduction or other sustainability benefits. However, interest rate discounts may also be available for a wider range of borrowings – including asset finance and working capital funding – if a farming business meets certain agreed key performance indicators (KPIs).

“A number of the major banks have these arrangements which are linked to quantifiable, forward-looking KPIs,” Audcent says. “If you meet those KPIs, it translates directly into a discount on your standard interest rate.” He adds that “on-farm automation often delivers not only efficiency and cost benefits, but also contributes to achieving sustainability goals that can form part of the KPI framework”.

KPIs are negotiated on a case-by-case basis but may include measures in relation to:

Water use reduction – lowering water consumption through precision irrigation or recycling systems
Carbon capture and emissions reduction – implementing soil carbon projects or reducing diesel use through solar energy installations, battery storage and electrified farm machinery
Chemical use reduction – cutting back on fertilisers and pesticides through targeted spraying

Building the business case

While demonstrable sustainability outcomes are important, Audcent stresses the fundamentals still apply when submitting an application for funding. “At the end of the day, there has to be a robust business case,” he says. “If you’re borrowing money for automation or other technology investments, the project needs to deliver a clear benefit in terms of profitability and cash flow.”

Banks expect borrowers to demonstrate how the investment will generate cost savings – in labour, energy, fertiliser or other input costs – or increase revenue, for instance through improved quality or higher yields. They will want to see projected cash flows indicating the business can comfortably cover interest and repayments and that the investment pays for itself within a realistic timeframe.

With agriculture subject to a number of uncontrollable factors, a robust business case should also consider the ability to meet loan repayments in various ‘downside’ scenarios. In this context, risk management measures, including insurance and contingency planning, will also be important in the bank’s evaluation of a loan application.
Banks view innovation and sustainability as part of their overall credit risk assessment, preferring to back farmers who are improving soil health, reducing inputs and investing in energy efficiency.

“They want clients that are doing the right thing – running robust, efficient businesses that can survive and be successful into the future,” Audcent says.
If a farming client isn’t looking at new technologies and new ways of doing things, that’s when banks start to worry.

Those are the businesses that risk becoming less efficient and less competitive over the next five to 10 years.”

Beyond the banks

While bank debt remains the default funding route for most family farms, larger agribusinesses, especially those involved in processing and manufacturing, have accessed other sources of funding, including project finance and private equity.

Audcent cites one example where RSM helped raise $40m of project finance for a new animal feed mill. “We raised $20m of debt funding from a major bank and a further $20m of equity funding from private investors. It was a case where the project stacked up from a commercial and financial perspective – all the pieces were in place except the capital,” he says. “We worked with the founders to derisk the project so far as practicable and came up with a funding structure that could deliver the returns required by everyone.”

That type of structure isn’t common in traditional farming, however, where family ownership and control are often paramount. “Most family-owned farms don’t want external investors – it’s about maintaining control. They’ll usually look for debt funding instead.”

Nonetheless, Audcent highlights the growing role of private debt funds as an alternative to the major banks. While not all such funds will lend to the sector, a number have a specific focus on lending to agribusiness. They typically have more flexibility in structuring debt arrangements, including repayment profiles. However, there is generally a higher lending margin than for a standard bank term loan.

Tapping the grant well

The key to unlocking government grants to fund automation is understanding what government is trying to achieve.

Right now, says Edward Day, Senior Manager, Government Grants at RSM, those priorities are clear: decarbonisation, sustainability and innovation. Programs are increasingly designed to push industries, including agriculture, toward low-emission technologies, smarter resource use and improved resilience.

“With the move to net zero and the rise of low-emission technologies, there’s a lot of funding available for organisations putting in new ways of working that will significantly reduce emissions,” he says. “That’s where we’re seeing the strongest support.”

Several federal and state initiatives support innovation in agriculture, particularly where it overlaps with automation, AI and environmental outcomes.

The Future Drought Fund

This multi-billion-dollar federal initiative aims to strengthen Australia’s resilience to drought by funding innovative practices, trials and technologies in water efficiency, crop management and regional adaptation.
“Future Drought Fund programs often require collaboration between farmers, researchers and industry,” Day says. “That’s part of what makes them complex but also powerful. It's about testing new ideas that have impact beyond one property.”

He cites the case of a Queensland company that had developed an innovative approach to weather, drought, and climate risk mitigation through the shared management of 11 properties dispersed across different weather zones.
Returns were shared based on a given participant’s landholding as a percentage of the whole. A guarantee of some form of return regardless of their specific yield built economic resilience into farms allowing them to endure through changing climatic and market conditions.

“Our role was helping them bring together a consortium of farmers, grower groups and academia to expand the model nationally, beyond weather zones across varying climatic zones,” Day says. “We helped them to define roles, agree parties’ contribution and timelines, and to articulate a compelling narrative for government funding. That’s the key question every applicant has to answer.”

The National Reconstruction Fund (NRF)

Launched in 2023, the NRF focuses on building sovereign capability and supporting industries with long-term growth potential.

“The NRF targets seven priority sectors, including value-add agriculture, fisheries and forestry,” Day says. “It’s about helping businesses move from proof of concept to commercialisation, developing innovative products or processes that strengthen Australia’s industrial base.”

The corporation arm typically invests between $10m and $30m in the form of equity, debt or guarantees. The NRF also supports the Industry Growth Program, offering matched funding of $50,000 to $5m towards the commercialisation and growth journey of smaller firms developing innovative products, processes and services across the priority sectors.

Applicants first access a government-funded advisor to help prepare a growth plan before they can apply for capital support. “It’s a structured, genuine pathway for developers of innovative agritech,” Day says. “If you’re building the technology that helps farmers, rather than just using it, you’re in the sweet spot.”

Making the system work

Navigating the grant maze can be daunting, with different rules, documentation requirements and deadlines for each program. Some allow stacked funding, where state and federal grants can be combined, while others prohibit it. Understanding these nuances is where expert support adds real value.

“For someone whose main job is running a dairy or managing a feedlot, it’s a lot to take on,” Day says. “You might have to prepare risk registers, business plans, costings, partnership letters, all under tight deadlines. Having guidance can make the difference between a winning submission and a wasted effort.”
Timing is critical in grants. You can only begin the project once funding has been awarded. “That’s another common misunderstanding compared to the R&D Tax Incentive, which allows historical expenditure to be claimed after the fact.”

While the largest grants often go to collaborative or technology-development projects, smaller projects are not excluded, with smaller grants of $10,000 to $50,000 available.

“If you’re trying a new drought-resilient crop or improving water efficiency on-farm, those are good entry points,” Day says.

He points to state-funded transition programs, such as those supporting businesses affected by changes in government policy or encouraging farms to change farming practice to sequester carbon or deliver land restoration outcomes, as examples of where strategic alignment pays off. “If your business direction supports what government is trying to achieve, there’s usually money on the table.”

Importantly, agribusinesses need to flip the narrative. “People often ask, ‘Can I get a grant to help me?’” Day says.

“But the question should be: ‘How can my project help the government deliver its goals?’ Once you flip that mindset, you start seeing where the real opportunities lie.”

For producers and innovators ready to think strategically, the grant space can accelerate transformation. “If you’re developing something new – whether it’s a smarter way to irrigate, a low-emission technology, or an automated process that boosts productivity – there’s probably a grant somewhere that wants to help you do it,” Day says.

Conclusion

From automated dairies to drone fleets and data-driven crop management, automation is transforming how Australian agribusiness operates.

Despite the momentum, many producers still aren’t aware of the financial and advisory support available to help them automate. “They’re so busy doing the work they don’t have time to look up grants or R&D incentives,” Laird says.

The F.A.R.M tool is designed to help agribusiness unlock the future. It provides a practical checklist to help agribusiness evaluate technology, funding eligibility, costs and benefits, and their readiness for the next step.

“Farmers are incredibly adaptable,” Laird says. “They might need their kids to show them how to use the TV, but they’re driving million-dollar machines with satellite guidance and onboard computing. Once they see that technology has real utility, they’ll learn it and run with it.”

While the early adopters pave the way, Paterson believes others will follow when they see the benefits in productivity, safety and sustainability. “That’s how agriculture has always evolved: one practical success at a time.”

Automation may demand capital, patience and courage, but for those willing to invest, the rewards are tangible – stronger yields, safer workplaces and more sustainable practices that ensure a rewarding future for the next generation.

Case studies

Bringing the cows home

Automation may not be the cheapest option, at least in the short-term, but the rewards are worth the investment – and often go well beyond the financial.

For Capel dairy farmers Mark and Dorothy Haggerty, automation is securing the future of a family business while improving animal welfare, safety and decision-making. After more than six decades on the land, the family has moved to a fully automated robotic dairy.

“Our dairy had done 25 years and needed to be replaced if we wanted to stay in the business,” they say. “Automation was the next step to help us ease staff pressures, but also make a monumental leap in technology available to us through the robotic system.”

The family milks around 900 cows, supported by a broader mixed farming operation that includes grain production run by the next generation. While automation represents a significant capital investment, effectively doubling the dairy’s debt, the decision was grounded in experience.

“It is a big investment, but we’ve done big investments before,” the Haggertys say. “You do your homework properly, you do your budgets, and you forecast as much as you can.”

Labour availability was a major driver. Like many regional businesses, the dairy has felt the tightening labour market, particularly since Covid. “You can’t just have unskilled labour. You need skilled people, and that’s getting harder to find.”

The effect on the cows, however, was the biggest driver. As part of their research, the Haggertys visited a robotic dairy in Victoria and the difference in animal behaviour was unmistakable.

“They were very relaxed. Cows love routine. People are all different, have different vibes, different ways of doing things. The robots are just the same, every time, and that relieves stress for the cows.”
In the voluntary milking system, cows choose when to be milked. Fresh cows, producing more milk, may enter the dairy three or more times a day, while others come in less often.

“It’s up to them how they want to do it. She comes in, gets milked, gets fed, and then she’s back out on fresh grass again.”

The robotic system also collects a level of data that was previously impossible to manage manually. “Each quarter is milked individually, and you get data on every quarter; body condition scanning, feed intake, weight loss, heat detection – it tells you everything.”

Rather than trawling through hundreds of animals, the system highlights cows that need attention. “It’s all right there on the screen saying, ‘these are the ones you need to look at,’” the Haggertys say. “That’s incredibly powerful.”

Safety was another major consideration. Traditional milking carries an ongoing risk of crush injuries, particularly to hands and arms. “Automation just takes that away – it makes the milking process so much safer.”

Automation will also change the nature of the work. “One farmer we visited said it didn’t cut down the work, it was just different work, and he wasn’t tired anymore.”

Infrastructure upgrades have gone hand-in-hand with automation. The farm recently installed an underpass so cows can safely move between paddocks without crossing public roads.

“On the first day, a handful needed encouragement. By the next, almost all went through on their own. Now even new heifers just follow the others straight through.”

For this farming family, the robotic dairy represents continuity rather than disruption.

“This doesn’t take us away from the cows – it actually lets us look after them better,” Haggerty says. “My mind is buzzing with excitement about what we can achieve. From an animal welfare point of view, and safety and data, this is where we want to be.”

Cracking the code

This egg processor was struggling to meet the market. The pulping plant relied on machinery that was nearing end-of-life, prone to breakdowns and costly to maintain. Production was inefficient and inconsistent, resulting in a liquid egg mix with a shelf life of only 12 days, well below the 40-day industry standard.

This limited the company’s ability to produce value-added products, supply interstate and export markets, or diversify into higher-value offerings such as egg whites, scrambled egg mix, or yolks.

ith RSM’s help, the company applied for a grant to upgrade its facilities, with an economic impact assessment finding that $1m would generate an indirect economic benefit of $22.5m and support up to 28 indirect jobs.
Edward Day, Senior Manager, Government Grants at RSM, says the advanced egg-separation technology sorts and repurposes cracked eggs, using centrifuge systems to separate yolk and white for use in premium protein and food-service products.

“They went from a simple operation selling mixed egg products to a diversified producer with high-margin outputs,” he says. “It’s exactly the kind of innovation government wants to support – reducing waste, improving efficiency and creating local jobs.”

The upgrades will allow the business to transition from producing a single product line to offering up to six value-added products: egg white, premium egg white, salted yolks, sweetened yolks, scrambled egg mix, and hard-boiled eggs.

The investment delivered across four key objectives:

Modernisation – Equipping the plant with processing systems that convert second- and third-grade eggs destined for waste into high-value food ingredients
Diversification – Expanding product offerings and enabling tailored production runs for free-range, barn-raised, or caged eggs to meet consumer demand
Efficiency – Reducing maintenance and storage costs, minimising downtime and eliminating reliance on interstate suppliers
Export opportunities – Extending shelf life from 12 days to more than 40, enabling access to markets interstate and overseas

One of the most significant outcomes is the potential to reduce waste dramatically. About 10 tonnes per week of thirds – eggs too damaged for retail – previously went to landfill. With the new technology, these can now be safely processed into whole-egg mix, reducing waste and improving sustainability.

The upgrade is also expected to reduce the amount of imported separated and scrambled egg mixes, supplying the local market with product that is fresher and has a longer shelf-life at a competitive price.
In line with the phase-out of caged eggs by 2032, the company is also investing $20m to transition to free-range production.

Automation in Agribusiness | Text version 2026 eBOOK