Victoria would need to look at new investment and farming models to overcome the structural challenges facing its agricultural sector, according to Agribusiness Australia chief executive Tim Burrow.
Mr Burrow was speaking at the Melbourne launch of the group’s Advancing Agribusiness in Australia platform
He said said the sector recognised greater investment in Australian food and fibre production was required to lift output and ensure long-term prosperity.
“We live in a fragile world,” Mr Burrow told the breakfast
“In our world there is about five billion hectares of arable land, Australia has about nine per cent of that arable land.
“We have plenty of sunshine to go round, but Australia is not one of the ten countries that have 60pc of the world’s water.”
“We are happy little Vegemites and we produce about one per cent of the world’s food, feeding about 60 million people, in terms of protein and starch.”
But he said to maintain the figure of one per cent, Australia would need to almost double its production by 2050, from the same amount of soil and water.
Mr Burrow said a debate was required about the models that could help facilitate investment to boost productivity.
“Australia’s current narrow farm-level focus is limiting and structural change must occur to stimulate increased productivity, innovation, cost efficiencies and improved returns at all points of the value chain,” Mr Burrow said.
“This means new and potentially difficult conversations are required around foreign investment and bank debt, the role of the family farm, and how corporates fit in to Victoria’s future,” he said.
“One thing is clear, we cannot continue with the status quo.”
Mr Burrow said the platform outlined what Agribusiness Australia saw as the “complex challenges and sensible solutions” confronting the agribusiness sector.
Agribusiness Australia chair Mark 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 and 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 cent per annum
“Yet, over the same period, the nominal value of global agricultural trade has been increasing at 7-8pc annually, and in Asian regions the rate of growth has exceeded 14pc p.a.
“This means Australia is losing market share where agricultural trade is growing most rapidly, such as North Asia.”
Mr Allision told breakfast guests there was 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.”
To achieve success, Agribusiness Australia said commercialisation of investments in innovation, and increased investment in research and development (R&D), as well as infrastructure, would be the 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
“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.”