Advance Australia’s share

Advance Australia’s share

Australia must increase its productivity from existing resources or continue to lose market share where agricultural trade is growing most rapidly.

That’s according to Agribusiness Australia, which says greater investment in Australian food and fibre production is essential to lift output, and ensure the sector’s long-term prosperity.

Agribusiness Australia chief executive officer Tim Burrow says Australia’s current narrow farm-level focus is limiting and that structural change must occur to stimulate increased productivity, innovation, cost efficiencies, and improved returns at all points of the value chain.

“That required change will not happen if we continue with our current structures and levels of investment – we must actively foster new sources of investment (including those from offshore) otherwise opportunities for growth, increased market share and job security will not be captured,” Mr Burrow said.

Agribusiness Australia launched its Advancing Agribusiness in Australia platform, outlining what it sees as the “complex challenges and sensible solutions” confronting the agribusiness sector.

Mr Burrow and Agribusiness Australia chairman Mark Allison, at a function in Adelaide, have articulated the organisation’s views on the status of the nation’s agribusiness industry, where it needs to go, and what needs to be done to ensure it gets there.

Mr Allison said growth in global food demand (expected to increase by 70 percent by 2050 when the world’s population is forecast to reach 9.7 billion people) presented a major opportunity for Australia to increase its agricultural exports.

“But Australia’s productivity growth has slowed considerably due largely to a declining rate of innovation and change, the widening gap between the Australian community’s understanding of delivering food to a hungry world, and the amazingly sustainable and sophisticated way in which we now produce it,” Mr Allison said.

“Our competitors, such as New Zealand, Brazil, and South Africa, have all experienced strong productivity growth over the past decade.

“Over the past 15 years, Australian agricultural exports have been increasing at 5.2% per annum, yet over the same period, the nominal value of global agricultural trade has been increasing at 7-8% p.a. annually, and in Asian regions the rate of growth has exceeded 14% p.a.

“This means Australia is losing market share where agricultural trade is growing most rapidly, such as North Asia. There is no room for complacency – Australia’s proximity to Asian markets provides some advantages over other agricultural produce exporters in terms of lower freight rates, and shorter shipping times, but this will not guarantee future export success.”

Australia produces only about 1% of the world’s food from 9% of the world’s arable land, and very little of its water. Just to retain that 1% status, Australia will need to deliver almost a doubling of production by 2050 from the same amount of soil and water.

To achieve this, Agribusiness Australia says commercialisation of investments in innovation, and increased investment in research and development (R&D), as well as infrastructure, will be key.

“Public support for R&D has been declining since the 1970s, despite the large long-term benefits and strong evidence to productivity growth, and this mirrors our society’s march to urban living,” Mr Burrow said.

“A renewed community trust in our agribusiness sector’s sustainability, and productivity from research to retail needs to be gained, and this in turn will support a required increase in public investment in R&D and stronger international co-operation – the industry can’t rely on private investment alone.”

This story was first published in Leading Agriculture magazine.