09 April 2014
This year two representatives from our business development team attended the Global Food Forum in Sydney on March 26th; Business Development Director, Andrew Newby and Business Development Manager, Mark Pearce. Like last year the political flavour of the GFF continued this year with a strong presence from the Australian government and ardent political and economic concern and debate from many of the key presenters.
Coles CEO, Ian J.W. McLeod expressed a relevant industry-wide concern about the productivity of Australian companies; he noted three factors as areas of concern:
· High labour cost – Australia is the 6th highest in the world
· Lower productivity – more hours for less output and
· Increased regulation growth – ten times faster than population growth
What’s the answer to overcoming these issues? McLeod says that with growing competition from international investment from multinationals Australian companies must improve efficiency or suffer the consequences.
Anthony Pratt, CEO of Pratt Industries and Global Chairman of Visy Industries praised the Abbott Government for its progress with implementing Free Trade Agreements with Japan and China. As a result of this he expects that within five years beef exports will grow by 86%, chicken products by 140% and dairy by 5.2 million tonnes. However, to achieve this Australia will need to dedicate some resources to developing a number of aspects of these FTAs, including:
· Developing long term policies such as sustainable farming
· Creative investments in innovation (i.e. processes, long-life products and genetics, etc.)
· Accelerated depreciation in order to reduce payback time and encourage innovation
The industry growth focus for this year’s food forum was clearly dairy with Fonterra focussing on increases in automation, energy reduction and cost-reducing investments as Murray Goulburn looks to invest $500 million in CAPEX over the next three years. Research has indicated that the next 20 years of dairy exports can increase tenfold with the corporatisation of farms and a potential growth in domestic dairy consumption.
An alarming insight that arose was the Australian media and their penchant for focussing on the negative aspects of Australian farming. While foreign investment is continuing its strong growth in Australia negative press has a tendency to scare off foreign investors. However the task can’t just be left to farmers; it is up to industry, government and farmers themselves to develop strategies to encourage investment and subsequently grow agriculture in Australia. As the Australian agribusiness sector grows there are increasing areas of excitement and interest, including:
· Pasture improvements
· Genomics for livestock
· Value adding and processing
· Health benefit products
· Development for Northern Australia
· Convenience foods and
· Meeting the taste requirements of the consumer
Minister for Agriculture, Fisheries and Forestry John McVeigh highlighted that the Queensland Government Growth Strategy followed four key pathways:
1. Access to resources – land, labour, capital and water
2. Improve productivity across the supply chain
3. Lower cost of production including transport
4. Market access: domestic, interstate and international
Similarly Philippa Purser, Managing Director of Cargill confirmed that, with the increase in distance between the location of food production and food consumption the necessity for high quality infrastructure is higher than ever before.
The global population boom and changing demographics present us with a Global Food Boom; a more enduring and sustainable economic boost than ever before. What Australia needs to work with this boom is leadership; visionary, bold and purposeful leadership to deliver what the Snowy Mountain Scheme delivered in the 1940s and 1970s, today.