ROADNIGHT MUSING – JULY 2025

Q+A WITH ROBERT POOLE AND ANDREW COLLIVER

Robert Poole is a Partner at advisory firm Corporate Value Associates (CVA). Over his career Robert has lived the journey of Australian agriculture from his family farm through to corporate Australia. Part of this journey has been to be an eyewitness to agriculture’s sustainability journey, including the earliest development of Landcare, animal welfare, the Murray Darling Basin Plan and the earliest days of emissions trading. 

Andrew Colliver is the Managing Director Investments at Roadnight Ag – a private debt funder that helps farmers and suppliers in the agricultural sector achieve their growth plans.

Robert and Andrew sat down recently to discuss the current state of sustainability in the food and fibre sector.

Robert Poole and Andrew Colliver

Andrew (A): If you had to sum up the theme of the next five years of agriculture – what would you say?  

Robert (R): I’d say a time of cost management and focus on productivity. Agriculture has been through a time of significant capital gain (increase in land values) with generally higher prices and good weather conditions. Those times are over with capital gain having slowed and, like the rest of the economy, agriculture has been through a very high inflationary period squeezing margins. For example fertiliser is approximately double the price of 2022.

A: In 2018 you wrote Talking 2030 the roadmap for agriculture’s goal to double farmgate revenue to $100 billion by 2030. That included a target of 5% of revenue from eco-services. Are we any chance of achieving that goal?

R: No chance. Unfortunately, the systems and drivers needed to deliver eco-services revenue to farm businesses remain significantly under-developed.

A: You have been working with consumer research lately – what is the attitude of the Australian consumer re: cost of living and specifically sustainability?

R: I have been fortunate to be leading some significant consumer research in recent months and have been able to speak to large number of everyday Australians about how they engage with agriculture and food. The one thing that struck me was the dramatic impact of the recent cost-of-living crisis and the fact that not one consumer in my sample was willing to pay more for food to fund sustainability outcomes. This attitude had always been somewhat known, but the recent inflationary period has made this even more stark.

A: Is sustainable farm business profitability still included in the definition of overall sustainability or ESG?

R: I think the original definition of sustainability included the profitability of the farm business as a component of the definition. However, in recent years the profitability element of the definition has dropped away and the ESG definition has tended not to include economic sustainability. The mechanisms to deliver sustainable profitability is nuanced because we have big export sectors like grain and beef and domestic-focussed sectors like pork, poultry, eggs and vegetables – noting the recent ACCC inquiry released 20 recommendations for change.

A: How does support for agriculture’s sustainability compare to other sectors such as stationary energy?

R: I think the energy transition (coal and gas to renewables) has dominated the sustainability debate in the past 10 to 15 years. This has arguably created an over-emphasis on emissions reduction and stationary energy. Sectors like transport, housing, waste management (circularity) and agriculture have been under-invested and policies have not been developed specifically for those sectors. Governments have massively subsidised the energy transition.

A: What global examples show leadership in sustainability and eco-services?

R: There are some global examples of commercial partnerships between farmers and organisations that include financial drivers, sustainable farm plans and technical support. I was pleased to see the recently announced program from Fonterra, Mars and Nestle that rewards dairy farm businesses for taking certain actions towards emissions reduction. Companies like Tesco, Cargill and Danone are also building similar programs overseas based on cost of production+ business models, including farm advice and technological support.  More needs to be done to develop nationally consistent systems that drive sector-wide change.

A: Farmers have been effective stewards of the land and environment for a long period of time. The Landcare programs of the 1970’s-1990’s were effective, but the value created has not necessarily been recognised. Who should pay for the ongoing change management of the farm system towards sustainability? 

R:  Whilst there has been some support in the past for farmers undertaking sustainability-linked activities e.g. grants, the farm business has borne the bulk of the cost of change even though they are not the sole beneficiary. From my recent farm systems work, it is clear payments that reflect the time and cost of change management and ongoing maintenance of farm and eco systems – are necessary for uptake of new technologies and maintenance of eco-services e.g. in biodiversity management. In one case study, farmers could no longer afford or justify the emissions-based intervention once cost-recovery payments ceased.

Tax payers, consumers, shareholders and farmers must ultimately share the costs according to the outcomes sought and flow of benefits.

A: Agriculture is a significant employer and exporter, and provides 93% of all food consumed in Australia. What is the role of Government in the future sustainability system for agriculture? 

R: They need to shift some of the focus and budget from renewables towards supporting systems change in other sectors of the economy like agriculture and circularity. Governments need to examine permanent systems for eco-payments for farm systems interventions that deliver outcomes with respect to emissions reduction and bio-diversity management. Like Fonterra has demonstrated, it is also possible to develop fully commercial schemes with less reliance on Government.

A: Now that the Albanese Government is re-elected, mandatory scope 3 reporting which will include agricultural emissions, will be locked in for food and fibre processors and grocery retailers. What does this mean for these reporting companies and farm businesses?

R: If companies are allowed to undertake very rudimentary, emissions-factor based reporting, then these new requirements will be a simple, non-event for all involved. However, if “best-practice” is defined as more detailed farm-level analysis, with clear menus of actions and outcomes – then much more work and thought needs to go into the systems and costs associated with this reporting.

A: What is the role of technology in this discussion i.e. digital compliance/reporting? 

R: I think this is a very important question. Much more needs to be done to develop the systems of work that drive eco-services across the food and fibre value chain. Compliance needs to be modernised and simplified to reduce the cost of compliance on farm.

A: At the farm gate level, what would you recommend farmers do to prepare for future development in sustainability reporting and interventions?

R: The core elements should already be in place, for example using farm management software and recording of key inputs and outputs such as feed, fertiliser and chemicals. Work with trusted partners and get good advice if you plan to enter into new arrangements or schemes. Hopefully more partners will emerge that are prepared to recognise the time and costs of sustainability interventions – in the meantime keep great records and care for the land like farmers always do.