Business

North's agri-food industry should prepare now for 'global revolution' says KPMG report

Launching the report are (from left) Ian Proudfoot, global head of agribusiness at KPMG; Trevor Lockhart, chief executive of Fane Valley; Stuart Irwin, partner and head of agribusiness at KPMG in Northern Ireland; and Eoin Lowry, agribusiness editor at the Irish Farmers’ Journal

THE north's agri-food sector needs to prepare for one of the biggest periods of disruption in its history, led by technological innovation and backed by an inflow of capital.

That's the view of Ian Proudfoot, global head of agribusiness at KPMG, who was speaking at a briefing in Belfast to launch the Irish Farmers' Journal/KPMG Agribusiness report.

A respected thought-leader in agriculture based in New Zealand, he said: “The global agrarian revolution is coming – in fact, it's probably already here. Agriculture has become the most interesting sector in the world and we're seeing more change than we've ever seen before.

“Innovators and entrepreneurs are challenging the way things have been done in the past and are exploring how technology can be applied to growing crops and livestock in new and different ways.”

He said digital will be behind much of that disruption by re-writing the rules of the traditional agri-food supply chain.

Mr Proudfoot said every participant in the industry now has the ability to build relationships directly with the consumer, bypassing the traditional chain of communication.

He said producers need to be open to new technology and think of ways to integrate it into their system; think about the products they grow and make sure they meet the demands of consumers; make sure the industry is telling the story of how it grows products sustainably, so it is attractive to both consumers and talent.

“Being open to change is the more effective way to remain relevant; preserving, and hopefully increasing, the value generated for the products a farming business grows.”

The global survey - based on a representative sample of agribusinesses in the main agri-producing regions of the world - focused on innovation and compared the results over the last three years.

Globally, innovation was seen as the most important factor in driving future business growth with 41 per cent of respondents to the survey saying it was key (up from 22 per cent in 2016 and 21 per cent in 2015).

However, 40 per cent also cite innovation as the most significant challenge facing their businesses in the coming years (up from 24 per cent in 2016 and 20 per cent in 2015).

With regards to R&D, 95 per cent of respondents said it is important to their business (up from 78 per cent in 2016 and 82 per cent in 2015). Spend on R&D as a percentage of turnover has increased over the last three years from less than 30 per cent of companies spending between 2 per cent and 4 per cent of turnover on R&D to over 47 per cent in 2017.

Stuart Irwin, partner and head of agribusiness at KPMG in Northern Ireland, said: “Advancements in technology are changing the world of agribusiness so it is no surprise that research and development is so important to the companies operating at the heart of the sector.

"The industry is being disrupted and while the pace of change is presenting challenges, there are huge opportunities to be gained for those who can grasp them.”

In terms of investment, 83 per cent of respondents said they plan to invest in the next 12 months, most (58 per cent) in capital projects. Some 42 per cent plan to grow their workforce over the next year, but 57 per cent said a lack of skilled people is an issue.

Overall, 36 per cent of respondents feel that government could do more to support R&D innovation. Just over a quarter, 28 per cent, of respondents felt government support was satisfactory.

Enjoy reading the Irish News?

Subscribe from just £1 for the first month to get full access

Business

Today's horoscope

Horoscope


See a different horoscope: