Farming value: How will agriculture reach $100 billion by 2030?

How much will the agriculture industry be worth by 2030? That’s the $100 billion question. And what role does inflation play in reaching that goal?

How much of a role will inflation play in getting agriculture to $100 billion by 2030? PICTURE: Zoe Phillips.

How much will the agriculture industry be worth by 2030?

One industry expert has forecast if the value of Australian agriculture does not reach at least $91 billion by 2030, the industry will be going backwards.

The sector is well on its way to reaching a $100 billion industry goal set by the National Farmers’ Federation, following news the value of Australian agriculture is forecast to reach $73 billion this season.

But with a number of industry bodies setting ambitious goals for the sector – with differing figures – which number should farmers pay attention to?

And by accounting for inflation rates each year, the industry could reach the lofty $100 billion goal organically without having to grow the value of the sector.

The Food and Agribusiness Growth Centre (FIAL) published a report in 2019 that showed the combined value of agriculture pre- and post-farm gate could amount to an impressive $200 billion in value, surpassing the $100 billion NFF goal.

Food and Agribusiness Growth Centre managing director Mirjana Prica said the FIAL forecast “exceeds all previous estimates for the sector’s growth, more than doubling those made by the National Farmers’ Federation”.

“The difference can be explained largely by the fact that our work encompasses pre- and post-farm gate and is value-add, taking into consideration value along the entire supply chain,” Ms Prica said.

“FIAL’s Capturing the Prize report found the sector has the potential to more than triple its current $60 billion annual value to exceed $200 billion per annum on a value-add basis by 2030.”

Ms Prica said in the past the agrifood sector has operated “as numerous independent industries”.

NFF chief executive Tony Mahar said the ABARES annual figure, the NFF’s $100 billion goal, and the FIAL $200 billion goal were “three very different goals” but “highly complementary”.

“The NFF’s target is for $100 billion in farmgate return by 2030. This goal has been adopted by the Federal Government, the Federal opposition and industry,” Mr Mahar said.

“The FIAL goal is also focused on post-farmgate, specifically value-adding opportunities within the food processing sector”.

National Farmers' Federation chief executive Tony Mahar. Pictures: SUPPLIED

Mr Mahar said the FIAL report did not include fibre production, such as wool, cotton or forestry.

The NFF $100 billion goal is in 2030 monetary value, Mr Mahar said.

FIAL’s $200 billion is from 2019, and does not account for inflation.

Thomas Elders Markets analyst Matt Dalgleish said accounting for a 2.5 per cent inflation rate in an average year to 2030, “then the value of the $73 billion expected in 2021 would be $91.2 billion”.

“We would nearly make the $100 billion target just due to inflation,” Mr Dalgleish said.

“The average inflation rate per year over the last two decades has been between 2.5 per cent and the Reserve Bank Australia target is to keep it between 2-3 per cent.”

Mr Dalgleish said if the agriculture industry grew “just enough to keep up with inflation at 2.5 per cent per annum, we hit $91 billion in 2030”.

“So in real terms, if we make it to $100 billion, we’ve only gained $9 billion,” Mr Dalgleish said.

“Anything less than $91 billion and in real terms, we’ve gone backwards.”