APPARENTLY it’s not OK to describe Australia’s agricultural future as “the food bowl of Asia”. Agriculture Minister Barnaby Joyce says the term is ridiculous and sounds like a threat to our neighbours.
He claims we can be a food bowl, but we can’t feed all of Asia and should stop talking as if we can. Rather, we should be focusing on supplying premium food at a premium price.
I have searched for anyone, anywhere, who has used the “food bowl of Asia” term to indicate we can feed the whole of Asia. I presume Barnaby has met him, given the effort he gave to disagreeing with him. But my efforts to find him have failed miserably. All I have found is people who believe Australia can become a much more significant supplier of food to Asia.
For what it’s worth, I am one of those who define “the food bowl of Asia” as an aspirational term conveying that there is potential to sell a great deal more food to Asia. I also think it is a useful way of focusing attention on that potential, given that Australia’s greatest market opportunities in agriculture lie in Asia.
But as for only selling premium food at a premium price, is that the only option? Can’t Australian farmers be globally cost competitive? Are we internationally uncompetitive in one of the three industries in which we have a natural advantage?
It is true that Australia is a high-cost country. On top of the huge distances involved in getting our produce to markets, our taxes are high, labour costs are high, our labour rules are inflexible, we have intrusive environmental laws with high compliance costs, and we are infested with nanny state-ists and know-it-alls who think they know what’s good for us.
But these burdens are not unique. Many of our rivals deal with similar distances in getting their produce to market and, while our infrastructure is sometimes less than ideal, some of theirs is woeful. We also don’t have to contend with the economy-sapping impact of endemic corruption.
Our access to inputs is no worse than our international competitors either. Although most agricultural chemicals and a sizeable share of our fertiliser and machinery are imported, there are no tariffs and few entry barriers.
And several of our key competitors have their fair share of nanny state-ists and know-it-alls too.
Where we struggle to remain competitive is where there is a significant labour component in production or processing. Indeed, the more labour required, the less competitive we become.
But this is not new. Australia has a proud history of inventing labour-saving machinery, including the header harvester, stump jump plough, mechanical sheep shears, self-propelled rotary hoe and buffalo fly trap. We have also made major contributions to wheeled and tracked tractors, the milking machine, the sugar cane harvester and travelling irrigators, all significant contributors to reduced labour.
Currently we are on the cusp of a revolution in broad acre cropping with the introduction of driverless equipment based on GPS navigation and sophisticated sensors, and in milk production with the arrival of robotic milking systems.
Provided we continue to adopt labour-saving technology and embrace modern production methodology, there is no reason we cannot remain cost-competitive in commodities such as wheat, barley, milk and livestock exports.
Having said all that, there is nothing wrong with seeking a premium price. Indeed, we should aim to be both cost-competitive and worthy of a premium. But higher farm profitability can be assisted with either. And since the Minister for Agriculture rightly has an objective of increasing farm profitability, there is no justification for ignoring one of these.
Indeed, the government could do a lot more to boost farm profitability by reducing the costs of farming than through seeking premium prices. With so many costs attributable to government policy, the scope to make a difference is pretty substantial.
All of which makes arguments about the meaning of the Asian food bowl somewhat unimportant. Whether we are filling the bowl partially or completely, and whether it’s because the food is cheaper or better quality, what matters is that our food is in it.