The need for innovation in Australian agribusiness

It is a hard time for Australian farmers if you aren't innovative and well-capitalised. 

There are many factors influencing these fluctuating farm revenues. 

Global export demand keeps changing, as do tariffs and international trade relations, while input costs keep rising. Climate change brings more frequent droughts, heatwaves, and unpredictable rainfall patterns, further threatening agricultural productivity. Industry pressures, such as an aging farmer population and ongoing rural-to-urban migration, have also led to significant labour shortages.

Farm productivity has declined sharply, with levels now 75% lower than in the 1990s. In an environment shaped by these complex forces, remaining competitive—both domestically and internationally—requires agribusinesses to prioritise research and development (R&D) and embrace an attitude of continuous improvement. Innovation will be critical to overcoming these challenges and boosting resilience for agricultural enterprises in Australia.

What constitutes agricultural R&D and why is it essential for agribusiness success?

Agricultural R&D is an extremely broad category. It encompasses:

• Crop and livestock improvements
• Sustainable farming practices
• Agtech and digital tools
• Climate adaptation
• Biosecurity
• Food safety

R&D is essential for agribusinesses, as it leads to improved productivity, cost efficiency, market access and climate risk management. For example, automation can reduce labour requirements, improve plant methodologies, and seeds can improve yield, be drought-resistant, and reduce risk exposure. Sensors can identify bull location, measure water levels, and new feed can reduce carbon emissions, reduce antibiotic usage, and improve yield, among other benefits. Investing in R&D or adopting new technology has numerous benefits, both at the individual company level, nationally and on a global scale. 

For every $1 invested in agricultural R&D, Australian farmers receive an estimated $7.82 in return at the farm gate over a 10-year period according to a CSIRO report  regarding options for supporting agricultural innovation policy in Australia. Additionally, ABARES confirms that $1 of R&D investment yields nearly $8 in returns. 

Significant support is available to those wanting to undertake R&D activities. This includes government agencies like the CSIRO and the Department of Agriculture. Rural research and development corporations (RDCs), including GRDC, MLA and Dairy Australia. Universities and research institutions. As a focus area both nationally and locally, many government grants  are available, and businesses may be eligible to claim the R&D Tax Incentive, which can provide an additional tax benefit of up to 18.5%. This can improve cash flow and increase available capital. 

Engaging in continuous improvement is also an important part of developing an innovative future for agribusiness. This is distinct from R&D, which typically relates to a longer term project where the outcome cannot be known in advance. Continuous improvement involves incremental improvements to outcomes and often uses new technology, such as IoT devices developed through R&D activities. 

Whether it’s through R&D or continuous improvement, innovation is key to ensure agribusinesses play a critical role in providing food security and maintaining Australia as a global power. 

Want to unlock R&D tax incentives or grants for your agribusiness? Reach out to your local RSM office to speak with our specialists and explore ways to boost your productivity and cash flow. 

This article was first published on ACM Farm Weekly.