What does the future hold for Australian agriculture?

As farmers invest in their properties, workforces and operational equipment, they need both to protect their assets with farm insurance and to be aware of coming opportunities and challenges. With new trade agreements, a booming Asian market, climate change and a whole range of other factors playing a role in how the industry develops, what can agribusinesses anticipate about the coming years?

A mixed bag

Australia's farmers have a great opportunity for a sustainable, profitable future, according to a new report from the Australian Council of Learned Academies (ACOLA). Nonetheless, to take advantage of the growing global demand, which ACOLA said could enable Australia's exports to double within the next 35 years, the industry will need to overcome a number of obstacles. Fortunately, there are resources that could help with coming challenges, ultimately helping the sector further refine its operations and fuel productivity.

In particular, the report highlighted the competitive advantage Australia has in its reputation for 'safe, clean and green food' - a key point of difference that the sector should uphold carefully to ensure it remains a selling point for the country's products. That, mixed with increasing demand for high-value items both at home and in Asia position the industry well for the coming years.

Nonetheless, Australian agribusinesses will have to be especially attentive to how they manage key resources, including soil and water, the report concluded. Additionally, with an ageing demographic, smaller rural workforces and community concerns, farmers will need to leverage technology and other strategies to increase productivity, maintain new standards for safety and labelling, and adapt to shifts in foreign investment, property ownership and more.

Investing in agility

One of the core areas farms should focus on in the coming years is operational productivity, with the report finding most enterprises are currently near the limit of their technical efficiency. For many, this could mean investing in new technology or equipment to maximise their yield. At the same time, the last few years have seen limited investment in research and development programs to develop the kind of innovations that have always helped Australian agribusiness remain at the cutting edge of the field.

Research may also assist with overcoming challenges, such as climate change and periods of drought. This goal will also require support from public and private entities, including well-planned infrastructure and capital investment on all levels to maximise resource usage.

Importantly, ACOLA observed that the booming market in Asia and around the globe in general is likely to inspire other nations to expand their agribusiness sectors, aiming to supply the products highly in demand and most profitable for enterprises. With that in mind, Australian farms should begin focusing on learning more about the prime markets at home and abroad. Familiarising themselves with consumer preferences, local distribution processes, trade agreement opportunities and other factors could give Australian companies a leg up as other countries enter the market as well.

ACOLA also recommended forging strategic partnerships overseas, such as with marketing agencies, customers and distributors.

High-tech farming?

Clearly, the role of technology was a central theme of the report, with innovation at the core of efforts to help optimise resource usage, maximise operational efficiency and respond to consumer preferences and quality concerns.

Some of the technology ACOLA sees on the horizon for farmers may even seem futuristic to some, fully leveraging the "Internet of Things" down on the farm. Already, many of today's farms use automated milking machines, advanced sensory data in tractors and equipment, and a number of other technologically advanced tools and solutions. The future is likely to continue this trend, giving rise to more robotic machinery, sensors and networks for knowledge exchange, the report noted.

Whether or not 2015 becomes the 'year agriculture drones take off', as Fortune Magazine predicted, technology of all kinds enables farmers to continue refining and advancing their operations. As they make strategic investments, they should remember to get in touch with their farm insurance advisor to ensure all their assets are covered.