What role is technology playing in the drive towards more sustainable farming?
Those who are unfamiliar with our sector often think of agriculture as being low-tech. Of course, nothing could be further from the truth, with technology having already transformed the way we work.
For example, I know from our own experience how much value technology like data analytics can add when integrated effectively into day-to-day farm practices. Inputs like fertiliser and chemicals are a considerable expense for all farmers, and if over applied can also negatively impact river systems and greenhouse gas emissions. But precision farming technology has come so far over the past decade that we are now managing our land down to a metre by metre basis across many of our properties in Australia and Brazil. This soil mapping is now central to our approach to maintaining good soil health, with the technology helping us maximise yields whilst reducing financial and environmental costs.
Looking ahead, there are also some exciting technologies on the horizon that have the potential to drive further change in the sector. Although many smaller farmers typically do not have the resources to invest in research and development, we hope that some of the work we are doing to pilot the application of emerging on-farm technologies, like autonomous vehicles, will offer new ways for the agriculture sector to operate more sustainably in the years ahead.
Recent rainfall along Australia's east coast has brought relief to rural communities and environmental systems following years of drought. How can the agricultural sector build greater resilience in this area?
What a relief! The widespread rainfall we saw over New South Wales and much of southern Queensland in recent months has offered some respite following one of the driest periods since official records began. Although it has been great to see farm reservoirs and river systems topped up across the region, we cannot afford to be complacent.
The availability of water has always been the most limiting factor in Australian agricultural production systems. By 2050, the government expects that Australia’s growing population and primary industries will cause national water usage to double1. With climate change already making our weather more unpredictable, it is vital that we use our most precious resource as efficiently as possible. As a sector, we need to take a long-term approach if we are to be better prepared for the next drought, when it inevitably comes.
Effective water management has been a major focus across our operations. At our Viridis Ag properties, for example, our farm management teams compare the amount of grain they produce to each unit of rainfall they receive. Those insights are helping to inform the use of techniques like retaining stubble left over from previous harvests or limiting where machinery drives across farmland, to drive meaningful improvements in the water holding capacity of the soil. Stemming water losses from run-off and drainage are obviously important, but producers also need to look at techniques such as these in the face of more frequent and intense droughts.
But it is not just about maximising productivity. As we have seen across regional Australia in recent years, extreme weather conditions like droughts and bushfires can also cause considerable social dislocation. I am very proud of the support our teams have provided to charities like batyr and Beyond Blue in the area of mental health, but we know many more farmers will face hardship in the years ahead if the agricultural sector does not adapt to our changing climate and the drier weather it will bring.
COVID-19 has seen listed and unlisted asset values impacted across the board. What has been the impact of the pandemic on agriculture as an asset class?
It has been devasting to watch the human toll of this pandemic rise around the world. Agriculture as an asset class has demonstrated huge resilience during this period. Demand for food and core fibre products, including hygiene products, has remained resilient – more than offsetting the softening in demand from the food services sector.
It is also important to consider the long-term fundamentals for agriculture. Global demand for protein is growing as the world’s population gets bigger and incomes in many regions rise. At the same time, the amount of arable land available for agriculture is declining. We see these structural trends acting as strong tailwinds for both commodity and land prices in the years to come.