Time to branch out as Tassie ag blooms

10 January 2018
Grower News

He says, “Anyone who has looked out a car window over recent years will have watched the landscape change – the rollout of irrigation schemes and growth in perennial crops such as cherries, to the development of niche wineries, distilleries and boutique industries ranging from saffron and ginseng, truffles, and native pepper to artisanal smallgoods and craft beer.

“Despite these obvious changes in the landscape and our agrifood economy, the big contributors of the agricultural economy remain the commodities – primary agricultural products – namely milk, beef and potatoes.”

Dr Leith says that these are the trunk of Tasmania’s agrifood economy, and will be for some decades, at least. “But diversification within the sector is creating vibrant new shoots and branches; opportunities that may grow into strong limbs. This is particularly true as a growing middle-class, in Asia especially, seeks high quality ingredients and meals that they can access consistently and be assured are safe, healthy, and sustainably sourced. All this at a competitive price.”

He adds, these elements – efficiency, consistency, safety, quality, sustainability – offer opportunities and challenges for the Tasmanian agrifood sector.

The challenge is not just for famers but for all of us working in the agrifood sector and its offshoots: farmers, marketers, business managers and scientists, even the sniffer dogs at the airport who constantly protect the state from pathogens and pests that could decimate whole industries, Dr Leith says. “And, of course, the sector includes our politicians and public servants responsible for setting the necessary enabling policies. We must all continually lift our game and work together to secure the opportunities ahead.”

He suggests two priorities:

Collaborate locally to compete globally

It is widely recognised that Australian farmers are among the most efficient in the world, despite challenging climatic conditions and highly variable rainfall. Unlike many of their OECD counterparts, they are minimally subsidised, and thus have high operational costs. These and other forces have resulted in a cost-price squeeze that has led Australian farmers to ‘get big or get out’.

However, a new trend is emerging. Some folks in the sector are moving beyond price-taking – selling their crop for whatever their large customers (e.g. the retail duopoly) will offer. For instance, some agricultural businesses are working across value chains or partnering with tourism operators, smaller retailers, processors or other businesses to ensure they retain as much of the value of their crop as possible. Such local collaboration among businesses can be organised to ensure value made in the state stays within the state and successful agrifood business leaders in Tasmania appear increasingly interested in this way of working.

One example is the Tasmanian-based company Hop Products Australia (HPA). Twelve years ago the hops grown at HPA’s Bushy Park Estate were sold to large brewers as a bittering ingredient in commercial beer. The price was dictated by the market. Today, HPA grows some of the most sought-after flavouring hops in the global and rapidly growing craft beer market. They command a premium for these unique flavours. Although in its infancy at the time, twelve years ago the craft beer market was seen by HPA’s leadership as a huge opportunity to do something different.

The company invested in science, exploring and developing the genetics of hops to create new flavours. They built strong relationships with craft brewers, employing brewers to not only market their new hop varieties but to support its use in making great beer, from Sierra Nevada to the Hobart Brewing Company. HPA is owned by a family in Germany who have been hop traders for seven generations. Yet it creates prosperity for many Tasmanians who are employed seasonally or year-round, not to mention the craft brewers and those of us whose thirst is quenched by those unique hoppy flavours.

Embrace technologies as a means to an end and put the people first

Agricultural technologies have historically been thought about in terms of gains in on-farm production and efficiency, Dr Leith notes. The green revolution of the mid-to-late 1900s magnified this trend. Yet, although efficiency in production remains paramount, technology serves many purposes in the agrifood sector. Technology helps build and maintain relationships with producers, customers and suppliers, monitor environmental impacts and tell a good story about the products – what we do; how, and why.

He says that the challenge is ensuring these technological innovations are well-designed, fit-for-purpose and used effectively and efficiently. Do the soil sensors measure the right parameters to tell me when to irrigate or topdress my crop? Does the new software package really save me time and money? Is the drone sprayer really the best way to manage my weed problem? Is my marketing strategy working?

“In an age of technological advance, highly skilled people are our greatest asset, Dr Leith says. “This is because tools only inform and cannot creatively make decisions between diverse options. These days, critical analysis, insight and emotional intelligence need to be brought together to run a successful agrifood business.”

He suggests that to keep their businesses afloat, people need the nous to navigate change, to develop new business models and marketing strategies, and to lead diverse teams. They will often need to bring in external experts to set up complex technologies, understand and manage environmental impacts and evaluate investment opportunities.

Dr Leith believes that these are just some of the many skills that will be needed for successful agribusinesses to thrive amidst the technological, climatic and geopolitical disruptions that are likely to be the hallmarks of 21st Century agriculture.

A focus on people and the skills they will require underpins many of our efforts at the Tasmanian Institute of Agriculture (TIA), a research institute within the University of Tasmania. Right now, for example, we are running a social research project across the State to better understand the long-term goals of Tasmanian food producers and processors and how they are navigating their complex operating environment to achieve these goals.

The information gathered through this project will be used by TIA, Government, industry and other groups to identify ways to best support an agrifood sector that is innovative, productive and sustainable into the future.

Source: TIA