A MINOR setback in the overall value of Australia’s farm sector did not dampen the enthusiasm of Agriculture Minister David Littleproud, who opened proceedings at his first Outlook conference heading the portfolio.
A 5 per cent decline in the sector’s gross value is forecast for 2017-18, down to $59 billion from last year’s bumper cropping haul of $60b, according to the Australian Bureau of Agricultural and Resource Economics and Statistics forecast.
Exports are expected to fall 4pc to $47b.
But the former rural banker and new Agriculture Minister David Littleproud said the future was optimistic with 1.2pc growth forecast for both the overall sector and exports, tipped to reach $63b and $50b by 2023, respectively.
“This shows we’re headed in the right direction,” Mr Littleproud said.
He highlighted the importance of trade agreements to improve market access to Japan, China, Korea and more recently, Indonesia.
“Exports are key to farmgate returns.We are a trading nation and that is our future.”
Mr Littleproud noted that 70pc of Australian produce is exported, 52pc of which go to Asia - a figure forecast to grow to 69pc on the medium term.
The Minister highlighted priority policies: the Murray Darling Basin Plan and the Nationals’ pet topic, decentralisation.
Several months of political turmoil in Canberra has threatened bipartisan support for the $13b water reform, culminating with the Greens passing a disallowance motion in the Senate that prompted NSW and Victoria threatening to withdraw their support.
“One of my most pressing challenges is delivering the Basin Plan on time and in full,” Mr Littleproud said.
“The disallowance motion was a setback, but I am committed to working with all governments and we will get the Plan back on track. I have no doubt about that.”
Decentralisation remains a priority, Mr Littleproud said.
“I’m passionate about the future prosperity of regional Australia and I’m excited about the social and economic benefits decentralisation can deliver.
“We’ll have more to say on the relocation of government agencies (from Canberra to regional centres) in coming months.”
Mr Littleproud pointed to recent public investment in private farm infrastructure.
“A key achievement since I took on agriculture has been passing legislation to establish the $4b Regional Investment Corporation to deliver concessional loans and water infrastructure loans directly to regional communities and farm businesses.”
ABARES executive director Dr Steve Hatfield-Dodds said the price projections delivering the muted farm outlook is influenced by two key factors: a weak global crop market and increasing US beef production.
The majority of ag sector growth will be driven by increased demand in our from population and economic growth in out key markets.
“Global crop production is trending down from the very high levels of 2016–17, but is expected to be enough to keep stocks high and prices low out to 2022–23,” Dr Steve Hatfield-Dodds said.
“The US beef cycle has moved to a phase of increased production, intensifying competition in Australia’s export markets. For the period to 2022–23, we project this will keep prices below the recent highs associated with US production bottoming out in 2015–16.
The value of the livestock industry is expected to grow 2pc in 2017–18, driven by global demand.