The 'land shift' needed to drive Australia's growth

The 'land shift' needed to drive Australia's growth


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Mindshift: Chris Sounness is the CEO of the Birchip Cropping Group. He worked with 50 business, education and community leaders on the National Outlook 2019 project.

Mindshift: Chris Sounness is the CEO of the Birchip Cropping Group. He worked with 50 business, education and community leaders on the National Outlook 2019 project.

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Chris Sounness is the CEO of the Birchip Cropping Group. He worked with 50 business, education and community leaders on the National Outlook 2019 project.

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Opinion 

The need to deal with extreme climatic conditions has always been at the forefront for family farms across Australia.

For many across our sector the reality is the past 20 years has tossed up an extreme event with regular monotony requiring ingenuity and grit to get through.

The Australian National Outlook 2019 project initiated and led by National Australia Bank and CSIRO brought together more than 50 leaders from around Australia from the business, education and community sectors.

I along with the other participants worked to create a scenario where Australia can stride towards the positive future that each of us desires, rather than bumble along for suboptimal outcomes.

The report identifies five key shifts needed to achieve a positive outlook:

  1. Industry shift- Boost productivity in established industries, prepare our workforce for jobs of the future, and invest in innovative, high-growth industries
  2. Urban shift - Increase the density of our major cities, create a wider mix of housing options, and improve our transportation infrastructure
  3. Energy shift- Adopt low-emissions technologies in electricity and transport, triple energy productivity, and pursue opportunities for low-emissions energy export
  4. Land shift- Invest in food and fibre industries, find new and profitable ways to use our land, and build resilience to climate change
  5. Culture shift - Restore the trust in institutions, companies and politics.

Each shift is very achievable but require us all to make a difference.

The Land Shift 

A land shift is front of mind when thinking from an agricultural perspective, and will need to play a prominent role in helping maintain nearly 30 years of continuous economic growth in this country.

We need to achieve this land shift while working in an environment where farming is annually presented with a climate challenge, and the farmer's resilience is tested.

It can be achieved by increasing financial capital, natural capital, and social capital. With this capital trifecta we can build the fortitude needed for a prosperous and viable agribusiness sector.

A region is resilient when individuals run profits that have enough financial reserves to handle an external shock, the environment and the natural resource base is enhanced, and the local community can thrive.

Rarely have we got the balance right between all three.

Over the past 30 years, social capital across regional Australia has become depleted. To rebuild the three capitals in an environment where the scientific evidence points to climate extremes occurring more regularly is challenging but one that can be achieved.

Farmers in the medium to low rainfall environment of southern Australia have always had three main tools in their kit bag: diversification, technological innovation and risk mitigation.

Farmers have diversified their risk by growing different crops in a longer crop rotation, made hay a significant part of the rotation, run livestock to complement crop growing and looked at alternative industries and or businesses.

Some farmers direct market their produce, run a feedlot or venture into Agritourism - all of which provide benefits to Australian agribusinesses and regional economies.

Technological innovation has been the mainstay of Australian farming. Farmers currently invest $700 million in research and development through the levies they pay. Over time this has delivered improved crop varieties and advances in animal genetics, identified better farming systems, and given farmers better tools to handle the risks.

However over the last couple decades the return measured through productivity growth has slowed to 1.06 per cent. During the National Outlook exercise, we identified that productivity growth has the potential to reach 3pc. This could happen through farmers, scientists and the private sector developing shared solutions and increasing investment in R&D is vital.

The digital revolution has yet to sweep through agriculture, which means the opportunity is real. But we have constraints around connectivity, industry capability and trust. BCG has reviewed current research found that up to $120/ha of extra returns could be available across the value chain with successful implementation of agricultural technology, including using satellite imagery for variable rate technology, traceability and provenance attributes for consumer confidence and biosecurity.

We can capitalise on these risks, however we need to ensure that social capital is present and available in rural communities. This requires decisions that create employment opportunities in towns, so the vibrancy increases and their resilience strengthens.

The National Outlook paints a scenario where there is a clear opportunity for this to occur. However if we choose to continue down our current pathway, opportunities will be lost and we risk having increasingly disaffected rural communities.

A good first step is reading the National Outlook, released today, to identify opportunities to start enabling one, or all of the five, shifts to occur.

The Australian National Outlook 2019 and the Technical Report can be downloaded at www.csiro.au/ano

- Chris Sounness is the CEO of the Birchip Cropping Group

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