Five trends, one lesson: embrace the future to protect returns

A new report hopes to spark discussion about what agriculture will look like in 2035, identifying five key themes that could disrupt the sector and affect investment strategies.

In 2015, Australia’s Rural Industries Research and Development Corporation (now known as AgriFutures Australia) and the CSIRO produced a report predicting five megatrends that would affect the country’s agriculture sector up to 2035.

Six years on, AgriFutures Australia has combined with AgThentic Advisory and Institute for the Future to produce an updated report, titled Future Forces: A 10-year horizon for Australian agriculture.

At the top level, the organisations identify five themes that will shape and disrupt Australian agriculture over the next 10 years: viral disinformation in the food system; interconnected digital infrastructure; new geographies of climate change; rewiring of the energy grid; and domestication of the cell, meaning an increased ability to ‘design’ biology as we see fit.

You can read more about the themes and their definitions in detail in the report, including some forecasts for how they might affect agricultural production.

Michael Beer, general manager, business development at AgriFutures Australia, says in the report’s foreword that the update was produced because it is “clear that the speed of change is increasing, as is the level of uncertainty and diversity of opportunities.”

The report starts with a few ‘what if?’ scenarios which are all relevant and thought-provoking – but for investors, one in particular will jump out.

This scenario describes an investment professional called Anthony, in a hypothetical situation where he takes a “crazy” punt on automated fishing and fish tagging technology, getting pushed out of his investment firm by his reticent colleagues before doubling down and setting up his own business.

He secures some partners from outside his previous network who buy into his vision, and his success is such that it ends with him pondering whether to buy what is left of his old firm (the implication being that the firm has faded into irrelevance).

This is obviously a bit of future-thinking fun, but the serious point underneath is the need to think about what trends will affect your assets and where the successful investment opportunities might be, lest you be left behind.

Even investing in ‘traditional’ farmland rather than dabbling in anything remotely like venture capital, many fund managers we speak to at Agri Investor are continuously seeking out new technologies they can deploy to increase efficiency, improve sustainability and, yes, raise returns.

This is coming to fruition directly for investors as more agtech-focused funds and investment strategies emerge, while developments like the prospect of directly linking management fees to sustainability outcomes will require technology to monitor progress, if not enable it to happen.

Future Forces’ authors say they are aiming to start a conversation about the future of agriculture with this report. We know for a fact that conversation is one that many investors are already having – and on that note, we’d love to hear your thoughts on where agriculture will be in 10 years and how you, as investors, are responding.

If by any chance you haven’t spent much time gazing at the horizon, Future Forces is a good reminder to put your thinking cap on.