Insight,

Chapter 7: Climate-smart food and agribusiness

AU | EN
Current site :    AU   |   EN
Australia
China
China Hong Kong SAR
Japan
Singapore
United States
Global

This report is produced in partnership with the Australia China Business Council under its landmark Green Channel initiative. Green Channel highlights the opportunities for Australian businesses arising from increased collaboration with China on outcomes addressing the climate challenge. 

Agriculture is both affected by climate change, and a contributor to troubling emissions. Governments around the world will not meet their climate goals without major changes to food production and consumption.

New generation technologies will help to mitigate emissions, but with growing global demand and competition for scarce resources the entire food system will need to transform and become much more resource efficient.

“Agritech is fundamental to the growth and transformation of Australia’s agricultural sector, an incredible export opportunity, and it will power sustainability, drought resilience and the transition to a low-carbon economy.”

Tracey Martin, Australian Agritech in CEO's Message to Members

 

By 2050 the world will need to produce 56% more food to meet demand while reducing environmental impact. Greenhouse gases are emitted into the atmosphere at every stage from paddock to plate, amounting to an estimated 14% of the global total.

Farming releases significant amounts of methane and NOx, two powerful greenhouse gases. Methane is produced by livestock during digestion due to enteric fermentation and is released via belches, stored manure and organic waste in landfills.

In Australia, methane emissions from livestock alone make up nearly 10% of total emissions. This makes Australia’s livestock the third largest source of emissions after electricity and transport. NOx emissions are an indirect product of organic and mineral nitrogen fertilisers.

Source: https://research.wri.org/sites/default/files/2019-07/WRR_Food_Full_Report_0.pdf  

As nations with economies deeply connected to agriculture and with a long history of collaboration, there is significant potential for Australia and China to collaborate to reduce emissions linked to food production.

Today, there is an opportunity to pursue a suite of eco-agriculture aligned initiatives. Australia and China remain natural partners as they tackle issues around drought, water resources and natural disasters. Industry members and groups across both nations are working hard on solutions, from disclosures and the use of blockchain to enhance traceability and transparency, to decarbonising farming infrastructure and equipment, to soil carbon storage.

Calls for the resumption of a roundtable dialogue are growing. At an agribusiness summit convened by ACBC in May 2022, Australian industry and business participants highlighted the importance of cooperation.

At that summit, China Chamber of Commerce of Foodstuffs and Native Produce’s vice president Yu Lu, joining from Beijing, emphasised the symbiotic nature of China’s market development with Australia’s agricultural sector and the opportunity for closer collaboration on decarbonisation initiatives across the food production, distribution and global trade sectors.

In a similar manner, China Meat industry Associations’ Michelle Hu spoke about the extensive reforestation projects underway in South America, reflecting a recognition within China of the impact of its demand on global supply chains and the environment.

“There is a clear desire opportunity for collaboration with Australia in these challenges as well. We just need to focus the resources to work together with our largest trade partner to achieve the best outcomes for Australia.”

Anthony Coles, ACBC Net Zero Working Group Chair

China’s agricultural evolution: carbon fix in sight

China’s agricultural policy objectives have evolved over the last three decades, reflecting the changing role of agriculture at different stages of the nation’s economic development. An emerging strong focus on carbon neutrality presents opportunities to collaborate.

Agricultural policy objectives were initially focused on boosting food production to satisfy a growing population, but have evolved to ensure food safety, boost farming income, increase competitiveness and improve environmental performance. Today, there is a sharp focus on advanced technology, high quality and self-sufficiency.

There is no single law specifying carbon neutrality in agriculture, but its growing importance is highlighted in China’s 14th Five-Year National Agriculture Green Development Plan (2021–2025)(Agriculture Plan), released in September 2021.

 

The Agriculture Plan itself was a collaborative effort, jointly issued by the Ministry of Agriculture and Rural Affairs (MARA), the National Development and Reform Commission (NDRC), the Ministry of Science and Technology (MOST), the Ministry of Natural Resources (MONR), the Ministry of Ecology and Environment (MEE), and the State Forestry and Grassland Administration (SFGA).

Around China, provincial authorities, state-owned enterprises and businesses are shaping their own plans to achieve the goals set out in the Agriculture Plan. New regulations clarify targets and mechanisms to measure progress.

 

In Australia, many farms have adopted sustainability practices including cutting reliance on pesticides and fertilisers (65%), grazing management systems (61%) and retaining crop stubble (85%).

Reshaping the agricultural industry and using innovative ways to become a net zero contributor is a strong focus in Australia’s Long Term Emissions Reduction Plan. Key policies and pivotal focus areas include collaborative research (in Australia and internationally), the development and scaling up of new agricultural technologies, using agritech to reduce methane emissions and adopting land-based solutions to store carbon in the soil.

An example of the way in which this plan is being activated is the Australian Red Meat Industry’s Carbon Neutral by 2030 Roadmap (CN30 Roadmap). The CN30 Roadmap, released in November 2020, describes the technologies and practices required for Australia’s agricultural industry to thrive in a carbon neutral future. This includes a target of 50% renewable farm energy sources by 2030.

At the recent ACBC Agribusiness Summit, Meat & Livestock Australia Managing Director Jason Strong shared the long journey to sustainability the Australian meat industry has taken since 2016, now guided by the CN30 Roadmap agenda.

“The Australian red meat industry has already made big inroads towards CN30. Net greenhouse gas emissions have fallen 57% since 2005, representing by far the greatest reduction by any sector of Australia’s economy. However, continued progress is vital.”

Jason Strong, Meat & Livestock Australia Managing Director, The Australian Red Meat Industry’s Carbon Neutral by 2030 Roadmap

 

The CN30 Roadmap provides industry stakeholders the opportunity to understand and use relevant information to inform current and future decision making and action. It is increasingly used in discussions with Chinese counterparts and businesses with a view to creating collaboration opportunities to support industry’s transition to a carbon neutral position.

How agritech will unlock potential

China is the largest livestock producer in the world and the sector is growing - as are emissions. Methane emissions from livestock are the highest in the world. Policymakers in China are increasingly concerned with how to curb the environmental impacts of livestock and are reaching out to other nations for assistance.

This is an opportunity for Australian agritech businesses to engage with Chinese farming groups to deploy Australian methane-reducing agricultural technology on a very large scale in the China market.

The Australian government has identified that emerging livestock feed technologies and supplements will play a key role in reducing methane emissions and is providing funding to support a Methane Emissions Reduction in Livestock program over the next six years. Promising livestock feed technologies include feed supplements in grazing systems, alternative forage feeds and genetic selection and breeding of low methane traits in livestock.  

The ability to communicate and verify practices will become increasingly important. The National Farmers’ Federation in Australia is developing an Agricultural Sustainability framework, backed by the government. This will improve assurance measures for export markets.

Using certification and blockchain for digital traceability and consumer confidence

Traceability and proof of provenance are essential in ensuring food has the sustainability credentials claimed.

Blockchain is set to play a significant role, allowing participants along a supply chain to record and check the path produce has taken. This can start from the source – farms and producers – carrying through to transport and logistics, manufacture, distribution and retail. It will also provide a record for regulators.

Certification further empowers consumer demand to drive change and gives confidence to the entire value chain. Rigorous third-party verification programs for claims and carbon accounting ensures integrity.

FutureFeed is building a digital traceability program on blockchain technology to enable quality control and aggregated data, taking into account various factors including life cycle assessments. This will form part of the seaweed dry feed producer’s certification.

This recent legislation is predated by efforts going back almost 50 years. Since 1978, China has planted trees under its Great Green Wall project in a bid to stop the Gobi Desert from expanding and eroding its land. As for farmland, conservation tillage constitutes the main path to increase carbon sequestration. Since 2005, the central government has made the development of conservation farming an important part of agricultural policy. These policies have been supplemented by agricultural science and technology innovation.

In October 2021, the State Council set out a comprehensive deployment plan for the major work of carbon peaking and carbon neutrality. This includes an action plan for agriculture, which proposes to promote carbon sequestration in agriculture and rural areas. The plans are contained in the Working Guidance for Carbon Dioxide Peaking and Carbon Neutrality in Full and Faithful Implementation of the New Development Philosophy and the Action Plan for Carbon Dioxide Peaking Before 2030.

Australian farmers’ shifting practices

Soil carbon storage is a key focus in Australia’s Long Term Emissions Reduction Plan, identified as a new frontier in the emerging carbon economy.

Farmers in Australia are changing land management practices, in turn increasing the living and decomposing organic matter in soil. Practices include shifting from crops to pastures, rotational grazing and retaining native vegetation. 

While soil carbon storage provides Australia an opportunity to reduce emissions, the cost of sampling and measuring soil carbon is a barrier to wider uptake. The greatest challenge Australia has in unlocking the full potential of soil carbon storage is measuring the carbon in the soil. The government is accelerating funding toward research and development in this area, specifically seeking to develop technologies to lower the costs of soil carbon measurement.

“Collaboration is absolutely necessary because you are talking about a ‘global commons’ problem and one that is in a real sense a zero-sum game. Yes, countries and regions can move the dial very significantly alone, but they can’t by any means solve the problem. Collective action and collaboration are more efficient because each participant can feed back on the innovations and discoveries made by others.”

Paul Jefferiss, UK National Committee on China Sustainability and Climate Lead, ex BP Global Sustainability & Climate Lead

 

China and Australia are already collaborating in this space, with leading agritech drone suppliers World of Drones and XA building a solid business in Australia’s farming community.

Conservation farming, which forms part of China’s Agriculture Plan, is an area that Australia has spent decades deploying and would be useful ground for collaboration between China and Australia’s agricultural industries.

Indigenous knowledge

Indigenous Australians have cared for their land for thousands of generations. Australian Indigenous programs to heal land, and thereby increase its carbon storage potential, with native, strategic revegetation, are world-leading.

There is much to learn from Indigenous programs such as Carbon Positive Australia.

What next?

The synergies and similarities of the challenges and opportunities faced by China and Australia bring an extraordinary chance to work together.

The agricultural industry is undergoing a transformation that takes in the supply chain in its entirety, from food production to waste.

Two mature sectors in Australia and China have an historical opportunity to combine knowledge, expertise and hard-won experience to forge a sustainable food future.

As the climate challenge moves nations beyond transactional relationships of bi-lateral agreements, there is an opportunity to engage in deeper, more impactful partnerships that can address global issues while strengthening domestic capacity.

By working more closely with its largest agribusiness customer, Australia can improve the performance of its world-leading sustainable agriculture sector and move into markets with new green products produced to meet the needs of a regenerative circular economy, a more demanding consumer and a tighter global regulatory regime.

DOWNLOAD
THE CLIMATE CHALLENGE
In this report, we explore opportunities for Australia and China to work together and share knowledge to achieve net zero.

Download

14.51MB, 51 Pages

Subscribe to Climate
LATEST THINKING
Insight
The deadline for Commonwealth entities to train their people in Artificial intelligence (AI), including generative AI, is fast approaching.

21 January 2025

Insight
Australia’s competitive banking landscape, prudential settings and the accelerating challenge (and cost) of technology uplift are tipped to drive further consolidation in the sector in the coming decade.

16 January 2025

Insight
The Australian Securities and Investments Commission (ASIC) has reissued Regulatory Guide 133 Funds management and Custodial Services: Holding assets (RG 133).

15 January 2025