Dutch do it. Lessons from the Netherlands for the Australian Agri-Food sector
Having witnessed first-hand what the Netherlands is capable of with only 185th of the landmass of Australia, our target of $100bn agri-food farm gate value by 2030 seems almost modest.
As the last Western country to suffer a serious famine, during the final years of WW11, and the fact that half of the country is below sea level, innovative farming and water management systems have long been critical necessities for the Dutch. But theirs is more than a desire to stave off food shortages, the Dutch have a commitment to sustainable agriculture; “twice the food using half the resources”.
So what do we need to learn as a country that has the third largest agricultural area in the world from one that, despite its small size, produces more food exports than any other country, other than the US?
A lot. The Dutch are achieving 810 times more agri-food export earnings per productive hectare of land than Australia does.
Notably there are three broad pillars to the Dutch success.
- The power of collaboration
Of the many lessons we can take from the Dutch, the most useful and relevant is the power of collaboration. Whether it’s co-investing in geothermal wells to heat greenhouses, creating food processing and logistics precincts, or industry-led investment in research facilities – there is a default mindset of partnering to do things faster and with greater scale.
The Netherlands has a strong culture of collaboration, co-operation and being business friendly with the government playing a significant role. The Dutch actively cluster complementary businesses and institutions, with companies such as Unilever and Friesland Campina building corporate innovation centres at leading agricultural research institution, Wageningen University & Research. A more recent example is the recently opened World Horti Centre that has 107 companies and 1,200 students onsite, and attracts 25,000 visitors a year to see their leading research and technology and access industry infused higher education course in horticulture. The key is a melding between science-based and market-based activity.
More needs to be done in Australia to foster collaboration between academics and entrepreneurs. There are no core secrets to unlocking success. It’s just a matter of the right people connecting in the right spirit, and the government getting behind the entrepreneurial businesses that are willing to take a lead.
- Sustainability and social licence to operate
This is not a revolutionary concept but the intensity of focus is palatable in the Netherlands. Dutch agriculture is not an out of sight out of mind experience. Most farms have skyscrapers on their horizons and offices workers have farms on theirs, with a population density of 411 people per square kilometer. A great example is Piggy Palace who openly source ideas from the public for improved welfare for their pigs via their Facebook site, live streaming their operations, including the pig mudslide, on their website. Kipster Farms is another progressive business with an innate social mindset driving their goal of being the most animal-friendly and environmentally- friendly poultry farm in the world.
There is also a pronounced focus on the circular economy “Who can turn my waste into value?” is a perennial question. Kipster’s 24,000 birds are doing their bit to peck through some of the 400,000 loaves of bread that go uneaten each day in the Netherlands
Investment in agriculture and technological innovations will power productivity and enable a change of course for Australia’s food system. The real value gain for Australia is to evolve from the current commodity production capability and mindset to focusing more on how we best create export earnings through selling our know how. Commercialising IP and solutions is not giving away our competitive advantage to be used against Australian producers. The world expects more from Australia in terms of its contribution to the global agri-food production. Imagine if Australia’s largest export earner in agri-food sector was agri-food technology and services too– these are drought and biosecurity immune sectors that would help diversify our economic dependency on shipments of beef, grains, cotton and wool and reduce our economic variability brought about by climatic volatility.
Australia has the foundations for a strong agri-food tech industry, and are ahead of the Netherlands when it comes to coordinated support for start-ups.
The question now for Australia’s Agri-Food industry is what changes we need to make to create an industry that is just as focused on creating value from intellectual property and technology as it is on producing commodities?
The only thing preventing Australia from taking a seat alongside the global leaders in Agri-Food exports is our mindset when it comes to collaboration and taking risk together.
When we asked the Dutch what Australia needed to do to replicate their collaboration, the advice was simple: go ‘Dutch’ and just do it.
Read the full report Going Dutch: Opportunities for the Australian agri-food sector
About the author
Ben van Delden is a Partner and KPMG Australia’s Head of AgriFood Tech sector. He specialises in advising clients from startup to Governments on seizing the opportunities that technology presents to agriculture – the least digitalised industry in the world.
In June 2018 in partnership with AgFunder Inc Ben led 13 Australian and Malaysian executives on a 7 day KPMG AgriFood Tech Traction Tour of the Netherlands.
Contact +61 3 9288 5894