THE huge appeal of ‘Brand Australia’ has placed agriculture in the box seat to capitalise on the lucrative fast-emerging middle class Asian market but growing our food export performance will be a balancing act.
That was the consensus of agribusiness and food leaders who took part in an insightful panel discussion on the next platforms for export growth at the National Farmers Federation congress in Canberra this week.
Executive chairman of recycled packaging empire Visy, Anthony Pratt, kicked off the discussion with a presentation on why he believes Australia can more than double its food exports to $100 billion worth in the next seven years.
Founded in Australia, Visy is today one of the world’s largest world's largest privately owned paper, packaging and recycling companies and Mr Pratt is known for his passion for sustainable agriculture and food security - the majority of Visy customers being in the food sector.
Visy has more than 120 sites across Australia, New Zealand, Thailand and Vietnam and trading offices across Asia, Europe and the USA.
Mr Pratt said eliminating food loss and waste would mean Australia could supply twice the markets from the same farm footprint.
Reinvesting more of the national income in research and development for water efficiency, robotics and other productivity tools would bring more competitive food solutions to a hungry world, he said.
And increasing student intakes in agriculture science, and then deploying them into highly-skilled, well-paid jobs within Australia, would be a third key step.
“I am convinced that if we all strive together to grow Australia's food industries, channel our technology and expertise, and really drive our export performance, we can truly transform our nation to become the world's leading high-value food producer and we’ll not only help feed the world but make money and create Aussie jobs doing it,” he said.
Australia was in a prime position to capitalise on the forecast three billion people moving into Asia’s middle class in the next 15 years, Mr Pratt said.
“As a first world country and the only western country in Asia, along with New Zealand, Australia’s food brand is all about safety,” he said.
“All parents want safe food for their children. So when a food contamination scandal erupts, like the melamine-in-milk catastrophe, or toxic shellfish poisonings, people crave safety and certainty.”
Australia already had enviable food production and export credentials and capability, Mr Pratt said.
As examples, he listed Northern NSW dairy co-operative Norco’s modernisation of the dairy value chain into Asia by bringing Chinese customs clearance into Australia, adding days of shelf-life to fresh milk, and Teys Meats, who had repositioned Australian premium Angus towards the high-value markets of Asia.
“The increasingly-wealthy Asian middle class wants more safe, quality protein that our high-value dairy and meat can deliver,” Mr Pratt said.
“And let’s not forget that great latent market of India. There’s another billion people who want their kids to have a share of our safe nutritious food like infant formula.
“We are only just beginning to tap the real potential that a modern, integrated, exported-focussed food sector can bring.”
Food exports is clearly where Australian farming needs to focus, according to Mr Pratt.
The United States has much the same land area as Australia, but 15 times our population, he said.
That huge internal market means America doesn’t rely on food exports to keep its industry strong.
“Australia is the opposite. Our farmers are great producers but our domestic demand is relatively small,” he said.
“Doubling our value-added food exports could also double the number of jobs in food growing and manufacturing to half a million people – way more than mining or any other sector can.”
However, the rest of the world would not likely stand still while we’re doing it.
“While we’ve been rightly congratulating ourselves about the Government’s good work with Free Trade Agreements, we need to be continually cross-checking on our relative position in the food-agri development race,” he said.
“Fifteen years ago, Australian food exports represented three per cent of the global food supply, today we supply only two per cent.
“Although Australia has an absolute freight-cost advantage with Asia, more distant exporters like Argentina are having more success at capturing these emerging markets.”
Two important levers to improving food export performance were productivity and expertise, according to Mr Pratt.
The Australian Competition and Consumer Commission’s agriculture commissioner Mick Keogh agreed.
“Going down the quality track without being at the forefront of productivity is setting yourself up to be overtaken,” he said.
“We have to look at the quality requirements from the market demand side as well as understanding costs to our business.”
Mirjana Prica, managing director of Food Innovation Australia, said being connected to the customer was key.
“There is no point increasing quality or yield if you don’t know where it is going,” she said.
Vice president of the National Farmers Federation Fiona Simson said simply producing a lot more of the clean, green product Australia is known for was not necessarily going to increase value to farmers.
“However, we do have to ensure we can guarantee supply and continue to innovative in that space,” she said.