Being an essential component of national food security, it is no surprise that agriculture makes up the world’s largest industry. Circulating a staggering US$5 trillion a year, agribusiness serves and employs the largest number of people worldwide.
However, populations continue to rise and the Earth is facing more drastic changes to the environment. Ultimately, this makes cultivating enough food to feed the world and future generations increasingly difficult. Thankfully, innovations in the evolving ‘agritech’ industry are aimed at troubleshooting these obstacles.
Agritech Opportunties between Australia and Latin America – Market potential
Among global agritech leaders is Australia. Experts consider the country to have one of the most innovative agriculture industries in the world. As a result, Australia has a firm grasp on helping countries worldwide achieve production expectations.
Generally, one of the richest and fertile regions in the world for agriculture is Latin America. However, given environmental, political, and economical challenges, the region’s production is slowly declining. Recently, relationships between Australia’s booming agritech industry and Latin America’s vast agriculture sector recognized the potential for a mutually beneficial relationship. We give an overview of each region’s sectors, obstacles to overcome, and how a partnership could benefit, not only the industries, but also foreign businesses and investors.
The importance of Latin America’s agriculture sector
Latin America is home to one of the largest collective agriculture sectors in the world. In 2015 alone, 16% of global agriculture exports came from Latin America. This figure has the potential to continue growing, given that much of the land has been left untouched thus far.
The region’s strongest players include countries Brazil and Argentina. Both countries have a substantial surplus in their agriculture industries, while all others in South America are experiencing a mild surplus. Nevertheless, all countries present lucrative opportunities to expand and innovate their agriculture sectors.
Growth in the market is inevitable. With increasing populations and greater economic incentives flowing in, agriculture in Latin America has a promising future. As a matter of fact, the Organization for Economic Cooperation and Development (OECD) predicts the region’s industry will grow by as much as 17% in the next 8 years. Furthermore, 53% of this growth will come from increases in crop production. However, given increasing environmental challenges, these predictions are on shaky ground.
Obstacles facing Latin American farmers
Primarily, environmental issues are at he root cause for concerns. A number of areas are experiencing difficulties with droughts, floods, mudslides, unpredictable blooming times, and destructive pests and crop diseases. Moreover, deforestation continues to displace animals and natural vegetation, which prompts the spread of disease and increases population density in remaining areas. Consequently, these farms face an unpredictable yield each and every season and the guarantee of erratic changes in income.
As the agriculture sector remains uncertain, many people from smaller, rural towns are moving to Latin America’s largest cities. Farmers began losing hope and doubted the future success of the industry. To combat these feelings of lost hope, Manuel Otero, the director of the Instituto Interamericano de Cooperación para la Agricultura, is calling for a ‘revitalization’ of the agriculture sector. This revitalization comes in way of agritech for Latin American campos. With greater access to technologies, farmers can protect the yields they already have, and even increase production and quality of the crops.
With limited government resources for the agriculture sector, innovations within the agritech industry in Latin America is unlikely. The cheapest, and most beneficial, solution is to partner with an experienced, developed country. Australia has the means and the resources to supply the region with all their agritech needs, ultimately, feeding the future.
Australia’s agritech industry
Australia has one of the most innovative agriculture industries in the world. According to local farmers, difficult growing conditions and small populations force the country’s industry to get creative when it comes to efficiently and effectively producing crops.
Financial backing from the Australian government further incentivizes and encourages industry ingenuity. On average, the agriculture sector receives AU$600 million in government funding on a yearly basis. With such extensive financial and institutional support, the Australian agritech industry is now a respectable and globalized sector. To date, the country boasts over 140 different agritech startups, and a stark increase in foreign investor funding.
New breeding techniques (NBTs) for crops is one of the most common sectors of innovation in the country’s agritech industry. NBTs provide the world with more resistant and stronger genetic codes for crops being grown. Moreover, they encourage sustainable and more productive farming habits.
Opportunities for Australia in Latin America
One challenge Australia faces is that, while it continues to innovate in the agritech industry, it is slow to commercialize it on a global level. While international funding and recognition are increasing, global exportation of ideas and technologies are lagging behind. The key for Australia is to find a viable market whose agriculture future will soon rely on agritech innovations and inventions. Latin America is that market.
Since Latin America is facing such drastic environmental challenges in their agriculture sector, changes need to come, and fast. Experts believe a partnership between Australia and Latin America would be greatly beneficial for the agriculture industry. The marriage of Australia’s new technologies and Latin America’s ancient farming techniques create a harmonious and successful process. Ultimately, production will increase, benefitting Latin American farmers. Moreover, Australia benefits monetarily from exporting their technologies and developments, but also develops its relationship with Latin America.
Since agritech fosters the production and quality of food, this contributes greatly to an increase in food security. Historically, Latin America faced some challenges in this regard for some time. Moreover, food insecurity in the region is increasing, jumping to nearly 10% in 2017.
Support and partnerships with Australian agritech companies could help remedy this issue. Agritech is already helping regions like Africa and Saudi Arabia is securing food reserves for their large populations. Given Latin America’s touchy past with food security, the guarantee agritech provides could greatly benefit the region and its people.
Cultivate new opportunities for your business
The opportunities for collaboration between Australia’s agritech industry and Latin America’s agriculture industry are just getting started. Trade partnerships and agreements between the two regions set the stage for future collaboration and success for both parties. Those who will make out the best from these deals are the ones that invest early.
If you are interested in getting involved in this lucrative partnership, contact our office. Our experienced team of professionals can guide you and your business through the seemingly difficult and taunting back-office procedures and regulations. With a strong, confident team backing your business, commercial success is practically guaranteed. Contact our team now to receive personalized assistance.