Australia to become ‘Food Superpower’

Panelists Duncan Fraser, Gary Helou, Ian Halliday, Angus Taylor and Geoff Elliott speak at the Global Food Forum at the Grand Hyatt in Melbourne. <Source: The Australian>

Australia: Asia’s next food bonanza

Australia would become a ‘food superpower,’ capitalising on a $2 trillion export opportunity in Asia, the Australia’s leading newspaper The Australian reports.

In a speech delivered at The Australian and The Wall Street Journal‘s inaugural Global Food Forum in Melbourne, billionaire packaging and recycling magnate Anthony Pratt called for sweeping industry regulation and tax reforms that would allow Australia to quadruple its exports and feed 200 million people.

The Visy Industries executive chairman also called for a new “coalition of the willing”, comprising federal, state and local governments, to put the national interest above political, sectional and regional interests and save the embattled food manufacturing industry, according to the reports.

At the conference, Victorian Premier Denis Napthine was also to reveal that Melbourne will stage the first Boao Forum for Asia conference on food security next year, bringing Asia’s business and government leaders to Australia to discuss the nation’s role in Asia’s looming food supply crisis.

The secretary-general of the annual forum, Zhou Wenzhong, has written to Dr Napthine expressing the Boao board’s approval for the forum, noting that the topic of food security addresses “one of the key challenges facing the Asian region”.

A US government-funded study released this week found that food production would have to rise by 60 per cent by 2050 just to keep pace with expected global population increases and changing demands. The middle class in Asia is forecast to grow from 500 million to three billion consumers over the coming decades, and Australia will have almost 20 times more arable land per capita than China, India and Indonesia.

Visy executive chairman Anthony Pratt believes that when it comes to food, Australia has the potential to be a super-power. <Source: The Australian>

Pratt says that feeding “a hungry world” will be Australia’s “greatest responsibility and opportunity in the 21st century”.

“We can quadruple our exports to feed 200 million people,” he told today’s forum. “We can bring together rich natural resources, innovative research and development, smart investors and risk-taking farming and manufacturing entrepreneurs.”

Pratt argued that transitioning from a “mining boom” to a “dining boom” will require changes in competition laws to allow consolidation among rural companies and the suspension of payroll tax for food manufacturers, as well as government incentives for innovation in agriculture.

He also wants accelerated depreciation for new manufacturing investments in food and for Australia to follow the American example on anti-dumping practices by putting the burden of proof on the offending party to prove “they are not doing it”.

Australia produces more food than it needs – enough to feed 60 million people a year. In last March, a leaked Coalition discussion paper revealed its vision of developing a food bowl in northern Australia that could double Australia’s agricultural output by adding flexibility to land-use controls and reducing unnecessary regulation and approval processes.

ANZ and consultancy firm Port Jackson Partners said last year that Australia could capture up to $1.7 trillion in additional revenues from agriculture exports between now and 2050 if it seized the opportunity of the Asia food boom.

Comparing the contrasting plights of the food and car industries when it comes to government subsidies and community concern, Pratt said: “In recent years, we have lost significant capacity in regional abattoirs, fruit and vegetable processing, flour milling, and baked goods, to mention just a few. And these losses, including many iconic brand names, such as Heinz and SPC, have received relatively little attention.

“But the food industry decline has had a bigger impact than the close-down of car factories. The irony is that we have a competitive advantage in food manufacture. We don’t have that competitive advantage in producing cars.”

BHP Billiton chairman and former Ford global chief executive Jac Nasser warned last week that the demise of Australian car manufacturing was inevitable.

Dairy giant Murray Goulburn revealed last week it would spend $120 million on building two new fresh milk processing plants, in Sydney and Laverton, after striking a $2 billion 10-year deal with supermarket giant Coles to provide fresh milk for Victoria and NSW markets.

While Murray Goulburn is promising better prices for its dairy farmers as a result of the deal, its critics claim it has simply locked in lower milk prices for farmers that will only make it harder for the industry.

Last July, the federal government launched Australia’s first national food plan, aimed at shaping the nation’s direction on food production and exports.

Napthine, who in June will lead a super trade mission to Indonesia, Malaysia and Singapore, believes the primary focus of the federal government should be to urgently conclude a free trade agreement between China and Australia.

“This has long been a critical barrier to many of Victoria’s leading food industries, particularly dairy, which has a distinct disadvantage relative to their New Zealand counterparts,” was to tell the forum.

“A free trade agreement must be our No 1 priority in our economic relationship with China. The time for Australia to act is now if food exports are to be the next engine room of growth for the Victorian and Australian economies.”

Pratt urged the food business sector to become more pro-active in helping governments “find their way through the inevitable compromises” in trade talks. “At the same time, our governments have to reach out more to the food business sector, from farmhouse gate to the table, and involve them in the hard international talk right from the outset,” he says.