IF AUSTRALIA wants to make serious money from agriculture it needs to abandon new foreign investment controls on farmland, wake up to the importance of genetically modified (GM) crops and develop an aggressive value-adding mindset.
These recommendations (and many more) aimed at cultivating investment in the agri-food sector and lifting farming's export potential are headlining a Business Council of Australia (BCA) report championing how the sector should cash in on huge market growth on our doorstep.
Despite Australia's respected agricultural credentials, the agri-food sector currently represents just four per cent of the nation's GDP, with many food manufacturers moving offshore rather than expanding in recent years.
The BCA warns major competitors including the US, Argentina, Brazil, Canada, South Africa and New Zealand are already taking decisive action to realise the opportunities emerging, particularly in Asia.
NZ intends to lift its export earnings to be worth 40pc of GDP within a decade.
Economy-wide reforms were critical to the future competitiveness of Australia's agri-food sector, including better strategies to encourage foreign business investment and build industry competitiveness.
The BCA report highlights Australia's reputation as a preferred source of high quality, safe and premium food for fast expanding markets in our region, but is critical of an over-reliance on bulk commodity sales which represent 88 per cent of food and beverage exports.
With global food demand set to grow 77pc in the next 35 years, Australia needed "a more modern outlook and a comprehensive reform agenda" for the agriculture sector and food industries.
"The definition of agriculture is much more than raw materials, but realising this opportunity requires a shift in the mindset of government and industry," said BCA chief executive Jennifer Westacott.
"Massive opportunities" existed to lift returns to farmers and business, create new jobs and broaden the reach of the sector into the Australian economy.
The BCA's Building Australia's Comparative Advantages Agrifood study highlighted the role GM foods would play in improving nutritional quality in developing markets and the productivity of crops in response to climate and pest challenges.
"Government needs to build consumer understanding and cultivate consensus across the supply chain, providing factual evidence about GM foods to address community concerns and relevant regulatory constraints," the report said.
"Every legitimate scientific and regulatory body that has examined the evidence (including the World Health Organisation and the European Commission) has concluded the approved GM crops are as safe as their conventional counterparts."
The BCA has also focused on the need to develop northern Australia's agricultural and business capacity, plus the need for more streamlined and commonsense planning rules so food processors and transport infrastructure could develop.
Also in the BCA's sights is the fragmentation of farmland into unproductive "hobby farms", and the need for buffer zones to protect land from urban or industrial growth so agricultural producers can develop efficiently, too.
Coca-Cola Amatil managing director Alison Watkins who leads BCA's agriculture and food manufacturing committee, said moving down the agri-food value chain would make farmers and early stage processors more in "in touch" with consumers' needs and able to extract greater value from their sales.
"Australia's never going to feed the world, but we can respond to the needs of a sizeable a portion of the world's fast growing population by being much more than a supplier of basic commodities," said Ms Watkins.
Drawing on her current experience with food company SPC and when previously developing GrainCorp's malt and oilseed processing ventures, she said Australia must learn to "drive the attributes that drive value back to the agriculture sector".
"Yes, a lot of food processors have gone offshore to NZ, Thailand or China - and you definitely have to be within a certain cost band to stay here as a profitable manufacturer - but if you deliver clean, safe Australian-made product in an innovative premium package, there are endless opportunities."
Managing director of the big Murray Goulburn dairy business Gary Helou agreed, pointing to exceptional demand for milk powder based nutritional products and other dairy goods.
"Consumers are flying into Australia to take Australian-made products off our shelves," he said.
Mr Helou noted one of the big advantages of encouraging a more sophisticated value-adding culture was that transforming farm products into valuable foods invariably involved regional businesses based near the farm source, resulting in"secure jobs and vibrant local communities".
