The Netherlands’ agri-food exports three times that of Australias
Bordering with Germany and Belgium with a North Sea coastline, the Netherlands is one of the world’s most densely populated countries. The small European nation has a total of 43,000 square kilometres of land, equating to 1/185th of Australia’s land mass or roughly two thirds of Tasmania. However, the country produces more agri-food exports than every country in the world except the United States.
According to a new KPMG report titled ‘Going Dutch: Opportunities for the Australian agri-food sector’, Australia has 249 times more productive agricultural land than the Netherlands and yet reaps only a third of its export revenue. The total value of the Dutch agri-food export sector is $144 billion in comparison to Australia’s $63 billion, raising the question; what can Australia learn from the Dutch?
The Dutch have been innovating for hundreds of years. The land on which they live is either just above sea-level or is reclaimed from swamps or marshes sitting below sea-level. As a result, the Dutch have had to use incredible creativity in farming and water management systems to ensure not only food security but also survival.
That innovation in combination with an international mentality has fed into the Dutch economy throughout the past half a millennium. The Dutch East-India Trading Company – for whom Abel Tasman was working when he named Australia ‘New Holland’ in 1644 – was the world’s first publicly-listed company. Today, the country boasts a stable business environment rife with entrepreneurialism and derives half of its GDP internationally.
So how does a country with such a small amount of agricultural land produce such a vast amount – exactly, 810 times more agri-food export earnings per productive hectare of land than Australia does – of agri-food exports? The answer according to KPMG is based in three broad pillars: collaboration, sustainability and social licence to operate and technology.
By leveraging their situation, the Netherlands has overcome their greatest disadvantage; size. By focusing on the ‘how’ rather than the ‘what’, the Dutch have grown their solutions-based agricultural field to export knowledge over commodities. The largest part of their agri-food exports is technology and materials coming in at 9.4% of total exports.
“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,” states the report.
The government, education and business institutions all play a large role in fostering an innovative, and drought resilient, environment for agricultural businesses. The Dutch have actively “reduced dependence on water for key crops by as much as 90%”, using the “world’s best practice techniques to grow with remarkable efficiency”. This ties in with the country’s commitment to sustainable and social licences.
Twice the food using half the resources; that’s the Netherland’s motto when it comes to agriculture. Being below sea-level, the Dutch have less of an option to turn a blind eye to the effects of climate change than Australia and have adapted their practices accordingly. This has turned out to be a profitable – and mimicable – mentality, seeing that food security and water scarcity are potential issues for a warmer future.
“Having seen what the Netherlands are capable of with a country 1/185th the size of Australia, the $100 billion target by 2030 for Australia agri-food farm gate value seems almost modest”
– KPMG Australia
Sustainability has long been engrained in Dutch business practices. “Dutch agriculture is not an out of sight out of mind experience. Most farms have skyscrapers on their horizons and office workers have farms on theirs, with a population density of 411 people per square kilometre.” This proximity forces the Dutch to adapt to and thrive under tightening global standards.
The third pillar according to the author of the report, Ben van Delden, Partner and KPMG’s AgTech Sector Leader, and one that is increasingly important for Australia in the future is technology. “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.”
The report concludes by saying that growth is on Australia’s doorstep if it ‘goes Dutch’ and incorporates these three pillars into its agri-food practices. Leveraging cooperation, co-innovation and creating an ecosystem which promotes a thriving, sustainable and technological agri-food industry will take Australia well beyond its goal of $100 billion by 2030. “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.”
