A thriving food system starts on the farm. The aim is to create a resilient food-production environment that can withstand climate shifts and shocks, such as droughts and bushfires. A resilient, thriving farm and food-production should be highly efficient in its use of water, fertilisers, and pesticides, deliver healthy yields and margins, sequester carbon and restore nature. 

Transitioning to such a food system cannot be done without transforming land use and management practices. Many Australian farmers have already begun to lead this transition. Harsh climatic conditions, water scarcity, and poor soil health necessitated the adoption of practices such as managed grazing and regenerative agriculture. For this reason, Australian farmers are already global leaders in the use of several climate-smart practices. Nevertheless, there is great imperative and opportunity in continuing to scale climate smart land management in Australia. 

If an additional 20% of Australian farmers adopt land sector carbon farming methodologies and climate-smart agricultural practices, by 2030 Australia could:

• Increase the gross margin of farmers by 22% – the equivalent of $6.9 billion

• Generate $350 million in additional net revenue for farmers from carbon markets 

• Reduce its yearly national greenhouse gas (GHG) emissions by up to 9% 

• Increase the area of habitat for native biodiversity by up to 7% — 9.3 million hectares  

• Improve the soil health across 4% of Australia’s agricultural land- 13.3 million hectares.

To understand what is required to achieve adoption at scale, Deloitte surveyed Australian primary producers to gain insight into the barriers and enablers associated with implementation of climate-smart practices.

Upfront costs and delay in benefit realisation is the biggest barrier to overcome. 75% of farmers indicate they would implement new practices with additional financial support that could be provided through patient capital, co-funding and incentive programs financed by the industry and government.

The survey also clearly highlighted challenges with climate and nature data collection, measurement and sharing. Close to 55% of respondents cited data collection and exchange as an issue, which is exacerbated by complexities and inefficiencies associated with a lack of standards, measurement tools and frameworks. 

A consistent open-source measurement framework, a central technology solution for data exchange and a consistent approach to verification is needed to ensure the process is efficient, reliable, and globally competitive.

As a net exporter, Australia sends approximately 70% of its produce overseas. Statistics like these could make it hard to see food security as a relevant issue for Australia. Yet the ongoing trend in offshoring, coupled with the rising levels of imports of processed foods, meant our local food system has become less resilient to global shocks and thereby less reliable. Furthermore, the high cost of food relative to income means Australia tops Deloitte’s Food Frugality Index out of the 20 nations surveyed, so whilst we have a plentiful supply of produce there are many who struggle to afford the food they need.   

Strengthening sovereign capabilities across the food value chain can improve food security and temper price shocks, but where and when Australia produces or processes food onshore must be carefully considered. Trade-offs will need to be made. Sovereign capability of production and processing should only be built where Australia has an advantage, where it is cost competitive, and where value can be created. Examples include processing that is reliant on fresh inputs and where proximity to farm matters, or where provenance-based brand premiums can be created, such as in categories like wine, dairy, and meat. Onshore processing might also be beneficial where smart technologies can replace expensive labour, or where circular practices can offer a viable substitute for critical imports. Biofertiliser or biofuel created out of waste products and biomass are examples of such circular substitutes that build local resilience. 

The imperative for greater sovereignty is material for Australia. Applied selectively, strategic investment in our sovereign capabilities across onshore production and processing, smart technologies and food innovation, can increase reliability of our food supply, increase economic value add and lower emissions through shorter supply chains. 

Like other markets such as the United States and the European Union, Australia could benefit from a national critical input and food manufacturing strategy and redirect existing funding pools to a dedicated Food System Infrastructure Fund to finance the development of onshore capability.  

One of the areas into which a Food System Infrastructure fund could consider channelling funding is regional manufacturing precincts and circularity innovation hubs. 

Australia’s brand in global food markets has strong foundations. Our food is considered safe, green, clean and of high quality, and our on-farm management and innovation are leading edge. The nation has a unique food and agriculture story to share, but this story and the value Australia offers the world is not widely understood, nor cohesively summarised for international markets.  

The lack of a consistent narrative and a way to share reliable data on farm practices, emissions, and nature impact is diminishing Australia’s ability to be competitive on a global scale. A survey amongst Australian primary producers indicates that 44% of farmers feel Australia is losing its global competitiveness.  

The opportunity exists for Australia to secure its strong position and grow its premium value in export markets, by investing in its brand narrative and supporting data to underwrite the claims.  

Given its strength in innovation, it also has the potential to diversify its exports beyond produce into value added products and food and agricultural technologies. A stronger, evidence-based brand Australia that incorporates knowledge and intellectual property can have a material impact on economic contribution and resilience.