Rising food demand to drive Australian agricultural exports, says report
ANZ Banking Group has released a major report detailing opportunities for Australia and New Zealand to become the food bowl for developing Asia over the next 30 years.
The ‘Greener Pastures: The Global Soft Commodity Opportunity for Australia and New Zealand’ report, prepared by Port Jackson Partners for ANZ, has found that the two Trans-Tasman nations could more than double the real value of agricultural exports by 2050.
Forecasters expect world food demand to rise by 60 per cent in response to rising incomes and changing diets in developing countries.
Australia and New Zealand could increase revenue by $710 billion and NZ$550 billion respectively by 2050. This could increase further to $1.7 trillion and NZ$1.3 trillion respectively with favourable conditions and targeted actions.
The report states that $1 trillion and NZ$340 billion in additional capital to drive production growth and support farm turnover in Australia and New Zealand respectively.
Despite the potential for agriculture, one of the report’s conclusions is that becoming a food bowl for Asia will not happen of its own accord. It highlighted that in recent years Australian agriculture had increasingly moved into a cycle of low productivity growth and lower profitability, while in New Zealand major success stories were limited outside dairy.
To rejuvenate the agriculture industry, the report recommends:
- Selectively reinvigorating industries with high potential that have lost momentum, for example Australian grains and oilseeds.
- Sustaining and strengthening high growth industries, for example dairy in New Zealand.
- Fostering new agricultural industries around high growth opportunities, for example new varieties of soy, safflower and bio-fuels in Australia.
- Strengthening the quality and impact of extension services to increase yields and attract further investment into the sector.
ANZ’s deputy chief executive Graham Hodges said that Australia and New Zealand “have the resources and the geographic proximity to benefit strongly from Asia’s growing population and expanding middle class”.
“The report shows that the size of the prize is significant. With favourable conditions and targeted actions the opportunity could be significantly higher.”
Mr Hodges said there were many challenges facing Australia and New Zealand if it wanted to cash in on Asia’s booming appetite.
“The danger we face is that we are not alone in seeking to exploit the global soft commodity opportunity. Other countries like Brazil are also actively competing for the opportunity and if we are serious about wanting to develop vibrant, globally competitive agricultural industries, we will need all stakeholders to work together to deliver on the opportunity,”
The Australian Food and Grocery Council has welcomed the report’s findings, however argued that greater investment was also needed in the food manufacturing sector.
AFGC chief executive Gary Dawson said that the food processing and manufacturing industry was the vital link between the farm gate and consumers by taking farm produce and transforming it into the food people eat.
“The call for greater foreign investment is as relevant to the Australian food manufacturing industry as other sectors across the agri-food sector,” Mr Dawson said.
The report has been slammed by Nationals Senator Barnaby Joyce as “another depressing and fallacious inference” that the development of Australia’s agricultural sector can only be achieved through consolidating local farms into foreign-owned conglomerates.
“The future for regional Australians is not swinging off a spanner as a service provider on foreign corporate farms,” Senator Joyce said.
“It is to have a government that removes the impediments that currently exist as farmers pick up the political tab for so many peripheral causes. Additionally government must develop the policy for Australian families to attract capital to develop our own farm.”