The target of reaching $100 billion in farm gate output by 2030 would require $8.7 billion to be pumped into Australia's agriculture, fisheries and forestry industries every year for the next nine years.
An AgriFutures report found the industry attracts around $1.2 billion of investment per year, with farm gate output valued at $63 billion.
Data modelled in the report shows that current investment in agriculture could limit the growth of the industry to just $84 billion in farm gate value by 2030.
The report, written by Natural Capital Economics, warns that without a significant increase in private sector and government investment, agriculture would fall well short of its potential economic value.
AgriFutures Australia managing director John Harvey said attracting sufficient capital was critical for fuelling growth.
“From purchasing machinery, to expanding production, to adopting new farming practices and innovating — access to capital is critical,” he said.
Mr Harvey said while Australia was regarded as a global leader in agtech research and innovation, farmers needed better access to capital in order to deploy technology at a paddock level.
“The use of precision agriculture technologies, sensor-based applications and IoT are fundamental to fuelling sector growth. All these innovations require capital.
“We know agriculture offers investors, like superannuation funds, an attractive ‘point of difference’ to add to their portfolios to create a more diverse and balanced investment profile.”
The report outlines a roadmap for the industry to adopt including exploring alternative farm ownership models and facilitating access to overseas capital.
Natural Capital Economics director Jim Binney, who was also an author of the report, said if the roadmap was implemented it could result in sources of investment capital broadening from the current reliance on loans and their own equity to also include investment from other sources.
NSW Farmers president James Jackson said the NSW farming sector would need certainty to thrive and to meet its own goal of $30 billion by 2030.
“We know there are a number of constraints on our ability to reach $30 billion by the end of the decade,” Mr Jackson said.
“One of the main ones is access to capital, both through bank lending and private equity investment.
“Our success on a global stage will be a key factor in our journey toward $30 billion.
“Farmers know there is an ongoing need to invest and innovate to expand to new international markets.“Constraints on short-term finance, long-term strategies for expansion and supply chain improvements are challenging for farmers.”Mr Jackson said the farming sector could be bolstered through both direct and indirect investment, with research and development, freight and logistics upgrades and rail and port investment also key.
The report concluded Australia needs new investment models and equity partnerships with less reliance on traditional debt and equity finance to continue to drive the sector forward.
“We need to continue to innovate, attract large transformative projects and think differently about how we attract investment,” Mr Harvey said.
“This is not just the realm of big business, it is something that everyone in agriculture needs to be aware of, and act now.”
