At the 2026 ABARES Outlook Conference in Canberra, a panel of experts examined one of the most pressing questions facing Australian agriculture: how can innovation unlock the next wave of productivity growth?

Facilitated by our Advisory Board Chair, Victoria Taylor, the panel brought together leaders from across investment, research, and agricultural technology, including Sarah Nolet, Co-Founder and Managing Partner at Tenacious Ventures; Sam Brown, CEO of Agricultural Innovation Australia; Eduardo Barbosa, Research and Development Manager for Emerging Technologies at Hort Innovation; and Will Taing, Director at Beanstalk AgTech.

A strong history but a slowing trend

To set the scene for the conversation, Andrea Willis, Assistant Secretary in the Farm Performance and Information Branch at the Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES), shared an overview of Australian agriculture’s productivity performance.

Productivity measures how efficiently farms convert inputs such as labour, land, capital and materials into outputs, including crops, livestock, wool and milk.

Productivity growth underpins profitability, supports competition in global markets, and offsets the long-term decline in agricultural terms of trade. It also strengthens resilience by allowing producers to adapt to climate variability, new technologies and changing conditions.

Historically, Australia has performed well on this measure. Since the late 1970s, broadacre agriculture has delivered average productivity growth of around one per cent per year — stronger than the broader market sector of the economy.

However, the longer-term trend masks a significant shift. Between 1977–78 and 1999–2000, productivity growth averaged around 2.2 per cent annually. Since 2000, growth has slowed markedly, averaging about 0.7 per cent per year.

The data also revealed a “multi-speed” agricultural sector. Productivity growth varies widely between industries, regions and farm types. Cropping has seen some of the strongest gains, while beef and sheep production have grown more slowly.

Farm scale also plays a role. Larger farms have recorded productivity growth of around 2.1 per cent annually, compared with just 0.4 per cent for smaller farms, suggesting that scale can enable more rapid adoption of technology, capital investment and improved management practices.

Climate variability has also had a measurable impact. In cropping, productivity growth appears stronger when climate effects are removed from the data, highlighting how adverse conditions have contributed to the slowdown observed in recent decades.

Another key finding was the persistent gap between average productivity and the “productivity frontier,”  the level achieved by the best performing farms. This gap represents significant unrealised potential if innovations and practices could be adopted more widely across the sector.

A paradox in Australian agriculture

Yet this productivity story sits alongside a striking paradox.

Only a day earlier at the conference, delegates had heard that Australia’s farm-gate production value is forecast to exceed $100 billion this financial year, four years ahead of the 2030 target. If we include fisheries and forestry, the figure is projected to reach around $107 billion.

Agricultural exports are also at record highs, and while farm profitability has begun to ease after several strong years, the outlook remains broadly positive.

So, how can both be true?

Strong market conditions and Australia’s ability to respond quickly to global opportunities may be masking underlying structural vulnerabilities. Favourable prices, strong demand and agile producers can deliver impressive short-term performance, even if long-term productivity growth is slowing.

Productivity still matters because it underpins resilience, competitiveness and long-term profitability. It allows producers to manage risk and adapt to shocks. But productivity is only one piece of the broader story of agricultural performance.

Technology as a driver of productivity

When the panel turned to the future, there was strong agreement that technology, particularly automation, has the potential to drive the next wave of productivity growth.

Automation technologies are emerging rapidly across agriculture, from autonomous tractors to robotic harvesters and drone-enabled monitoring systems. Many of these technologies are designed to operate alongside advanced sensing systems, digital platforms, and artificial intelligence tools that provide farmers with richer, more timely information.

The real value lies not just in individual technologies but in how they work together to provide producers with better information and enable better coordination of decisions across the farm system, from planting and irrigation to labour allocation and logistics.

The most transformative gains may come from the compounding effect of multiple innovations working together. When technologies stack in this way, farmers can begin to rethink how their production systems are designed, rather than simply optimising existing practices.

Genetics and long-term innovation

Genetics is another major driver of productivity growth. Improvements in crop varieties and livestock genetics have historically delivered some of the largest productivity gains in agriculture. In Australia’s grains industry, for example, advances in plant breeding have been central to long-term productivity improvements.

However, the panel discussed how private investment models may struggle to support some forms of agricultural innovation. Genetic and genomic technologies often involve long development timelines, high levels of uncertainty and delayed returns on investment. These characteristics can make them less attractive to venture capital investors seeking faster commercial outcomes.

At the same time, automation and digital technologies can shorten feedback loops by enabling faster testing and validation in real farm environments.

This raises an important question: how can Australia ensure that long-term scientific innovation continues alongside the faster-moving development of technology?

Public investment remains critical, particularly for foundational research in genetics, genomics and biosciences that may take decades to reach commercial application but ultimately underpin major productivity gains.

Structural drivers and barriers to productivity

The panel also examined the broader structures that shape how innovation moves from research into real-world adoption.

Australia invests heavily in agricultural research and development. The Research and Development Corporation (RDC) system alone accounts for around $1 billion in annual investment.

If investment levels are high, why has productivity growth slowed?

One possibility is that the research agenda does not always align with the most pressing industry needs. Identifying clear demand signals from farmers and supply chains, and responding to them, remains an ongoing challenge.

Even when research addresses the right problems, the way it is translated into practice can affect its impact.

Australia’s traditional model involves conducting research and then disseminating the results to farmers through extension services. While this approach has delivered many successes, it may not always generate strong incentives for adoption.

Alternative models are emerging, including venture studios and commercialisation pathways that form companies around promising research outputs. These companies have a direct incentive to deliver value to customers, potentially accelerating the journey from discovery to practical application.

However, not all innovations fit neatly within commercial models. Again, technologies with long lead times or uncertain returns may still rely heavily on public investment, at least in the early stages.

Another challenge is how research is organised. Agricultural production is inherently systems-based, involving complex interactions between biology, climate, technology, markets and human decision-making.

Yet research is often conducted within narrow disciplinary boundaries.

At the Agrifood Innovation Institute at ANU, researchers are experimenting with multidisciplinary approaches that bring together expertise from fields such as plant science, economics, engineering and data science. These teams are designed to address complex, system-level challenges in the agrifood sector. However, funding structures do not always reward this approach, which can make it difficult to sustain genuinely integrated research programs.

All of this suggests that Australia may need to experiment more with different models of research translation and innovation diffusion.

The role of regulation

Another topic that generated strong discussion was the role of regulation in shaping innovation outcomes.

Survey data from ABARES indicated that the agricultural sector perceives government regulation and compliance requirements as a greater barrier to innovation than many other sectors of the economy.

Regulation plays an important role in protecting safety, environmental integrity and public trust. However, poorly aligned regulatory systems can slow the adoption of new technologies. 

This challenge is particularly visible in emerging areas such as autonomous machinery, drone technology and genetic innovation. For example, autonomous farm equipment may fall under multiple regulatory regimes covering vehicle standards, workplace safety and liability frameworks. Drone technologies must navigate aviation regulations that were not originally designed for agricultural applications.

Similarly, advances in gene editing and genetic technologies raise questions about how existing regulatory frameworks apply to new forms of biological innovation.

If regulatory processes are slow or unclear, innovators may choose to develop and deploy technologies in other countries with more streamlined systems.

Ensuring regulatory frameworks keep pace with technological change will be critical to maintaining Australia’s agricultural competitiveness.

Looking ahead: collaboration and coordination

Despite the challenges, the overall mood of the discussion was optimistic.

Australia has strong research institutions, world-class farmers, a vibrant agtech ecosystem and a long history of innovation in agriculture.

The challenge is how to bring these strengths together more effectively.

One theme that emerged repeatedly was the importance of collaboration and coordination across the innovation system. With multiple research organisations, RDCs, universities, government agencies and private companies working on similar challenges, there is a risk of duplication and fragmentation. Greater coordination could help align research investments, accelerate knowledge sharing and ensure that innovations reach farmers more quickly.

Universities, industry and government each have a role to play in building this more connected ecosystem. By synchronising research efforts, strengthening pathways for translation and ensuring that regulatory settings support innovation, Australia can position itself to capture the next wave of agricultural productivity growth.

As the panel discussion made clear, the future of productivity will not depend on a single breakthrough. It will emerge from a complex interplay of scientific discovery, technological innovation, investment, regulation and collaboration. Unlocking that potential will require not only new ideas, but new ways of working together across the entire agrifood system.