Ag must keep up with the pace

04 Apr, 2014 03:00 AM
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8
 
Every minute, there are 158 new mouths to feed (and) the world's population is condensed into Asia

THE world is changing at an extraordinary pace, Thos Gieskes told the NTCA conference last week, and agriculture is being caught up in massive global shifts.

Mr Gieskes, chief executive of Rabobank's Australia and New Zealand operations, delivered a series of slides and figures that show the conditions of human life altering unimaginably within decades.

Every minute, there are 158 new mouths to feed. Sometime in the 1980s, the Earth's population exceeded the land available to feed it. By 2050, on current trends, there will be just 0.5 hectares of land per person on the planet.

Most of the world's population is condensed into Asia.

Here, population alone is not the only issue.

China has been transformed from a nation of farmers into an industrial powerhouse at 12 times the speed of the Industrial Revolution that began in the United Kingdom in the 1700s, and at 100 times the scale.

As with the United Kingdom, China's revolution has led to rapid urbanisation and increasing affluence, and a population seeking greater quality, and more protein, in its diet.

Australia's proximity to this colossal, and growing, demand for food is showing clearly on our export charts, which are now clearly dominated by shipments to Asia.

Export destinations: Rabobank

But Australian produce represents just 6 per cent of Asia's food imports, against 21pc from the United States and 10pc from Brazil.

"Knowing this is our most important market, and that growth and demand will come from this market - shall we go for value, or shall we go for volume? To my mind it is obvious that you should go for value."

"Initiatives like sustainable beef are all pointing in the right direction."

Land per capita: Rabobank

The rising value of food has attracted another player, Mr Gieskes said: the Mafia. About 15pc of turnover in the European food sector is linked to criminal activity.

"The Mafia has found food markets to be very lucrative. If you are in the drug trade, you only have a small number of customers, and if they use too much they won't be your customer for very long."

"In the food trade, you have a large consumer base, and as a criminal you face much lower penalties."

Meanwhile, technology is advancing at a bewildering rate. It would take 57.5 billion 32 gigabyte iPads to fit the data now generated each day around the world; 10pc of all photographs in existence were made in the last 45 days.

With technology comes potential new ways of growing food - urban high-rise farms, artificial proteins - that may overturn conventional notions of farming in a very short time.

The next 30 years are rich with opportunity, and hazard, for Australian agriculture, Mr Gieskes said.

"The story will be vital to get the value out. Without the story, you are like everyone else, and probably more expensive."

"Why in 30 years can't northern beef be the most recognised brand throughout Asia, and the world?"

Value or volume: Rabobank

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READER COMMENTS

Sam_Trethewey
4/04/2014 7:02:09 AM

Really interesting piece Matt!
Agribusiness
4/04/2014 11:17:16 AM

Actually, as our farmers are the most efficient globally, they are actually setting the pace. Its Aussie Agribusinesses that need to lift (e.g. say, NAB reaching the heights of the Dutch Rabobank). Ever noticed how it is Aussie agribusinesses that are more targets, not the initiators, of takeovers, mergers & acquisitions? The restricting problem is not access to capital. e.g. Rabobank wouldn't fund dodgy business case. So how globally good are the business cases our Ag+Execs putting up, compared to foreign ones? That'd be real interesting insight. Even Colesworths show symptoms of this disease.
Western QLD
4/04/2014 3:07:56 PM

We have been talking about feeding Asia for the last 30 years. Rabobank's prediction the last two years our world population has grown by 166,089,600 people. Who feeds them. Because we have a massive over supply here apparently this is the reason for the appalling low prices we are getting for our beef and produce. Extreme caution should be taken, producers should not double production to feed the world Without a true rural backing from Goverment as this will only lower farm gate prices even further. Thus making the next generation of produces unviable.(Or is the food mafia all ready here)
Jacky
4/04/2014 4:31:34 PM

Rabobank never loaned people money on depreciating assets did they?
wtf
4/04/2014 5:01:32 PM

Another example of the swift network failure. Imagine if you could access your trade competitors financial transactions, letting you see what they are getting paid? Could that be an advantage on negotiating the next deal? no wonder the EU is seething at the USA for doing so, how about our politicians ask some questions
John Hine
4/04/2014 5:11:16 PM

Fully agree with the value not volume point. We will struggle to compete on volume with Brazil Ukraine etc. Wait until Africa gets organised. We will also need cooperatives or farmer owned companies to identify the niche markets and get the scale needed even for value products.
Mranda
5/04/2014 8:44:10 AM

Considering there is such an opportunity for growth in the sector, the Australian government needs to get behind agriculture with everything it's got instead of hindering it by increasing regulation and overemphasising minor issues such as (dare I say it - animal welfare) that markets will take care of. The rest of the world is already realising the value of Australian agribusiness and it's time Australia stopped taking it for granted.
Cass
5/04/2014 2:18:58 PM

Simple fact: It's a finite world. There's a limit to how many times another green revolution can lift food supply. Oversupply in some places can't cancel out all those new mouths. China's cold-hearted but clear-headed one-child policy has given population control a bad name. Sooner or later the planet will have to take us in hand, and it won't be pretty. If the earth was a farm and the farmer was looking over it, he/she would declare a plague.

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