Bendigo resident Stuart Chignell has long harboured dreams to develop a business in the burgeoning aquaponics sector. The idea has been dead in the water for two years, but there is a glimmer of hope in India.
In two weeks, Bendigo’s Stuart Chignell will head to India to scope out sites that could see a long held dream begin to take shape.
It would come after years of planning, setbacks and frustrations.
“I’ve done everything I can to make it work here in Australia. I hit the wall two years ago. I had not so much given up as said ‘I can’t do anything more for now’,” Mr Chignell said.
“I didn’t want to go down that path of developing it here, cashing in on it overseas, then bringing it back here. But that seems to be the way we (Australia) want to do things,” he said.
The idea, the start-up and the challenges
The idea was to use aquaponics, which combined the sciences of aquaculture and hydroponics.
“Aquaponics is a very simple idea. It’s been around for ages,” he said.
At its most basic level, the idea was that you fed fish in one tank, then pump water into another, where plants cleaned the water. From there, water was pumped back to the fish.
There was lots of work going into up-scaling the concept, but the sector was still very much in its infancy, Mr Chignell said, in part because of difficulties adapting systems outside of labs for commercial use.
Aquaponic’s main benefit was that systems could save a lot of water.
”At the moment almost every agricultural area around the world is limited by water. If you take an area that has got a lot of water, like Daylesford, you will have potato farmers who might only crop 15 to 20 per cent of their land,” he said.
“Even in that high water area, they don’t have enough water to make full use of their land.”
In dry areas, the challenges could be more pronounced.
Aquaponics could save at least 95 per cent of the water used on plants.
Mr Chignell said there was potential to grow a lot of food with minimal amounts of water.
He had previously co-founded the group Fish Farmers with his wife Sarah to explore that potential, researching and developing an commercial aquaponics system.
“Despite crazy family circumstances and shoestring budget we developed some incredible innovations that lowered the capital cost of aquaponics systems and increased the efficiency of oxygenation,” he said.
The plan had initially been to build the first system in the Hepburn Shire, then show farmers in the Murray Darling Basin.
That idea came close to fruition a few times in Australia, but Mr Chignell said there had been setbacks ranging from investors pulling out at the last minute to problems with government agencies.
Part of the problem, he said, was getting financial backing in Australia.
“In financial markets here, the idea has to be proven beyond doubt before you get a chance to get any venture capital. Of course, once you’ve got that, you don’t need venture capital,” he said.
“The government was basically not interested. You hear a lot of talk about innovation and supporting start up businesses and so on, when you try to do it there’s not much there,” he said.
While he did not have data on how many Australian companies had hit similar roadblocks, the Victorian Chamber of Commerce and Industry’s Dugald Murray said said anecdotal evidence suggested that did happen.
He said that anecdotal evidence was a concern.
Mr Murray, who is the VCCI’s executive director of public policy and corporate affairs, said there had been conversations, at a policy level, around whether Australia had the culture for venture capital to help start ups succeed at an early stage.
While he was not familiar with Mr Chignell’s idea, Mr Murray said that broadly speaking, the government and industry had begun conversations on ways to stop start-ups being seen as risky.
“Part of the challenge for businesses at the venture capital end of things is that they might be able to access finance, but it is on such poor terms that they just can’t go ahead with it,” he said.
“So I think there’s a system approach that is needed to deal with this issue.”
Mr Murray said one thing governments could do was change the narrative around the types of start ups it wanted to encourage.
“It doesn’t even need to be that there’s government funding available, though that helps. It’s about government putting out a clear narrative around the way in which it wants to see ventures take off in Victoria,” he said.
“I think we are seeing that at the moment around the government and opposition, around innovation.”
Start-ups also often faced a number of specific challenges, Mr Murray said.
“Sometimes they (business owners) have never been in business before, which can mean a huge learning curve. Start-ups carry more risk, so they might not have cash-flow for ages,” he said.
Mr Murray said often this meant start-ups were financed by the owners, who were trying to maintain their lives and those of their staff when they had no cash coming in, .
“If you add a really complex regulatory system on top of that, it can be really challenging,” he said.
Mr Murray said that it was important that the right regulations were in place, but said that often businesses were having to send off the same or similar information to every regulator.
For Mr Chignell, opportunities off shore were beckoning.
He would travel to India in less than two weeks to scope out a business opportunity in the state of Haryana.
He would meet contacts there and together they would get a sense of whether the project would be viable.
“India has got a massively growing population and they are looking ahead to find new ways of feeding themselves, rather than importing food,” Mr Chignell said.
For now, the plan would be to get a sense of things on the ground and then rebuild his financial model based on information from those in India.
“If that spits out, on paper, that we have a viable business, we will go for it,” he said.
He will then return to India to project manage the build, install the systems and train the staff.