Agribusiness Australia, e-news, 15 June 2021, featuring an editorial by Mark Barber

With a combination of recent good seasonal conditions, record prices for many commodities, increased demand and positive community sentiment, you can argue that Australian agribusiness has never been in a better place.

On top of that, we’re a target for increased investment, largely from superannuation and investment funds looking to capitalise on positive assets and a strong market.

So, where next?

As a developed country with good governance, particularly in terms of food safety and sustainability practices, we’re in a position to compete globally on ESG, the Environmental, Social and Governance factors increasingly used by investors to identify material risks and growth opportunities. The non-financial nature of ESG measures can leave the door open to unsubstantiated claims of performance or compliance. This is particularly so when the concept is in the development phase and companies are competing to come on board.

ESG is on the rise and becoming more sophisticated and systematic, and as we are in a positive cycle with more investors looking for an opportunity, we should expect in the not-too-distant future greater scrutiny and potentially regulation from the likes of the ACCC and ASIC.

Rather than wait for test cases to set the benchmarks, we can choose now to adopt more self-regulation and work with regulators to co-create frameworks and accountability that customers can understand and trust.

This is an opportunity for Australia, as a developed, mature, food-producing and export-dependent country to differentiate from its peers and create new sustainable competitive advantage.

These are exciting times for Australian agribusiness. There’s a lot of noise in markets about investment in Australia’s agribusiness value chains.

It’s tempting to talk a big talk, particularly on ESG, and that’s a major reputation risk when the promise doesn’t meet the delivery. A related risk is the burden of regulatory intervention. We can minimise that risk by developing a trusted system of self-regulation on ESG, be circumspect on the claims we make, be prepared to substantiate claims, and in doing so create further competitive advantage for the entire value chain.

Our 2020 State of the Industry report is clear on the role of ESG in creating value. It’s another thing we need to get right, to add momentum to the steep climb to achieving a sector value of $300 billion by 2030.

Mark Barber is currently Northern Zone Rural Real Estate Manager for Elders with responsibility for Northern NSW, Qld and Northern NT. Mark is also a Non-Executive Director of WaterNSW. Mark was an Investment Director at Laguna Bay Pastoral Company, overseeing the acquisition of over $300m of agricultural and agribusiness assets across Australia. He was also the Agribusiness Practice leader at ACIL Tasman (now ACIL Allens) which is one of the most respected Australian economic consulting firms and in this role was involved in most of the major agribusiness policy debates providing advice to both the private and public sector.

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