A recent report released by the Australian Bureau for Agriculture Research and Resource Economics and Sciences reveals that agriculture plays a major role in Australia’s environment and economy, accounting for 55% of land use, 74% of water consumption, and 10.8% of goods exports. Production value increased by 34% over two decades, with 70% of production exported. The country boasts impressive sustainability credentials—fertilizer application rates are 90% lower than the Netherlands and 81% lower than France. Yet despite these achievements, productivity growth continues to decelerate.

The ABARES Snapshot of Australian Agriculture 2025 reports that agricultural productivity growth has slowed significantly—from an annual average of 2.18% in the 1980s–90s to just 0.72% since 2000. This mirrors global trends and falls well short of the 2% annual total factor productivity growth target set by the 2024 GAP Report. In addition, ABARES found that climate change has reduced average farm profits by 23% between 2001 and 2020. To counteract this productivity slowdown, the 2024 Global Agricultural Productivity Report recommends scaling integrated ‘innovation bundles’—combinations of technologies, practices, and enabling conditions tailored to local needs—which offer promising pathways for boosting productivity while preserving Australia’s commitment to natural resource stewardship.

Four key areas offer opportunities for bundled solutions to address Australia’s productivity growth challenges: 

Precision Agriculture and Sustainable Intensification

The ABARES report reveals that most Australian broadacre cropping farms have already adopted key soil health practices—85% retain stubble, 68% minimize tillage, and 65% optimize fertilizer use. These impressive adoption rates have contributed to Australia’s strong environmental performance, with remarkably low on-farm emissions per unit of agricultural output compared to other major agricultural producers.

Despite these sustainability successes, the productivity growth slowdown suggests that sustainable intensification alone is insufficient. The decline could potentially be attributed to changing market conditions, policy environments, climate variability, or other structural challenges. Looking forward, bundled approaches that combine technological innovations with financing mechanisms, peer-to-peer learning networks, and digital advisory services could help address these complex challenges and reinvigorate productivity growth.

Knowledge-sharing and R&D Investment

With Australian agricultural R&D funding reaching $2.98 billion in 2023-24, Australia has made significant investments in developing new agricultural technologies and practices. The ABARES report emphasizes that “productivity thrives in free and open markets, where structural change is unobstructed, and market failures are corrected. It also benefits from investment in agricultural R&D which allows for the adoption of new farming methods and technologies.”

However, the persistent gap between R&D investment and slowing productivity growth suggests adoption challenges exist. Translating research innovations to on-farm implementation requires comprehensive innovation systems that bundle extension services with demonstration projects and farmer-to-farmer learning networks. Digital platforms can also play a crucial role in bridging this “Valley of Death” between innovation and implementation, ensuring research delivers tangible productivity improvements.

Climate Resilience and Integrated Production Systems

Australian farmers currently manage climate risks through financial strategies and enterprise diversification. The ABARES report reveals climate variability reduced farm profits by 23% between 2001-2020, with impacts varying across regions. More proactive bundled approaches—combining weather forecasting systems, risk-sharing financial instruments, integrated farming systems, and water efficiency technologies—could build resilience directly into production systems.

These bundled solutions are particularly relevant given the ABARES finding that “cropping farms face greater climate risk than livestock farms” and that in drought years, livestock farms can “partially offset drought impacts in the short-term by increasing livestock sales.” With agriculture accounting for 74% of Australia’s water consumption, bundling water-efficient technologies with improved governance frameworks offers another promising approach to building climate resilience while enhancing productivity.

Market Access and Trade Enhancement

With 70% of agricultural production exported, Australia’s productivity growth is inextricably linked to international markets. The ABARES report reveals that grains, oilseeds and pulses have been the fastest-growing export segment, growing at an impressive 9% annually in real terms between 2004-05 and 2023-24.

However, the report identifies concerning trends toward “fragmented reporting landscapes and inconsistent sustainability criteria across markets,” which could restrict trade and market access. Fostering public-private partnerships, like the Australian Beef Sustainability Framework highlighted in the ABARES report, can help address these emerging trade barriers. By combining industry-led sustainability frameworks with streamlined reporting systems and targeted trade policies, Australia can maintain and expand its market access while advancing sustainability goals.

The ABARES Snapshot of Australian Agriculture 2025 provides valuable insights into both the progress and challenges of agricultural productivity growth. By implementing bundled approaches that combine technologies, policies, and practices, Australia has the potential to reverse its productivity slowdown while maintaining its impressive sustainability credentials—offering valuable lessons for achieving the global 2% productivity growth target and realizing returns for farmers, the economy, and society.