Balancing the technology – productivity challenge for agriculture
16 January 2025
Opinion piece from QRIDA's Economist, John Gillespie
Drawn to efficient, cost-effective and smart solutions, more and more primary producers are plugging into the agricultural technology revolution.
While I’m looking forward to seeing the latest agtech innovations at the AgriFutures Evoke Ag conference in Brisbane next month, we also need to focus our minds on a different kind of invention – innovating a way for farm businesses to use technology to improve productivity, without impacting the very communities they operate in.
The first part of this challenge is that for rural and regional businesses to survive, technological innovation and adoption is crucial because it gives Aussies a competitive advantage in the global productivity race.
After all, it was Aussies who last century invented the labour-saving combine harvester, allowing farmers to both cut and separate crops with one machine, as well as the culturally iconic ute, merging the practicality of a truck with the comfort of a car.
Australian farmers are building on this rich history of innovation by using
Unmanned Aerial Vehicles (UAVs) for various tasks, including spot spraying weeds, checking stock watering points, and aerial mustering.
These examples demonstrate how innovation can improve productivity and profitability. When businesses improve productivity, they produce more with less. This means input costs for materials, labour and capital reduce and, if businesses maintain the same return, their profits increase.
Governments across Australia know this, and that’s why they continue to help primary producers invest in agtech, like the Queensland Government’s low interest Sustainability Loans delivered by QRIDA which can be used, for example, to help graziers invest in pneumatic crushes and fruit growers upgrade to computerised grading machines.
However, since around 2010, Australia’s improvement in productivity has slowed, while productivity in our competitor countries has improved.
This is due to other countries operating with more relaxed compliance frameworks and significantly lower wages, energy costs and material input prices. Our comparative decline in productivity has significant trade consequences for Australia, as it could lead to more food and fibre being imported into the country rather than being grown on home soil.
For this first part of the technology-productivity challenge, my tip is for Australian businesses to be more productive both from an operational and market perspective.
Operationally, businesses need to have a strong understanding of their key performance indicators including labour efficiency, material use and operational costs.
Then, from a market perspective, businesses can focus on producing what consumers want and what they’re willing to pay a premium for.
This brings us to the second part of our challenge – while we increase the productivity and profitability of the agricultural industry, we are also trying to grow dynamic regional economies with increased employment.
Implementing innovation through technologies such as robotics can be seen to reduce employment. However, unless we embrace the productivity advantages offered by these innovations to improve efficiency, our global competitiveness will diminish. These new technologies are also creating new types of jobs in agriculture including robotic and software engineers and the like, offering exciting new career pathways in agriculture and helping reduce the impact of more manual and time-consuming jobs on the property.
Importantly, as in life, it’s all about how we balance the implementation of these new technologies to improve productivity while we continue to support and grow jobs in our regional communities. Opportunities to establish first and second stage processing and small industry-focused technology fabrication in regional areas has the possibility of further enhancing regional employment opportunities that improve farm profitability through cost reduction, as a result of freight efficiencies and proximity to customers.
Whatever the solution, it will require governments, industries and communities to brainstorm, band together and strike the right balance.
