DON McGauchie worries that Australian agriculture hasn’t got the grit to take advantage of the opportunities the 21st Century is offering it.
The ag leader told the recent Australian Farm Institute (AFI) Roundtable that the nation’s agriculture had necessarily developed a lot of resilience, but he was concerned about its ability to perservere.
Perseverance and resilience are two aspects of “grit”, the quality that American education researcher Angela Lee Duckworth has identified as being more relevant to student success than IQ .
Resilience in the face of adversity is an essential quality of Australian agriculture, and something woven into its DNA. But Dr Duckworth defined grit as “not just having resilience in the face of failure, but also having deep commitments that you remain loyal to over many years”.
Mr McGauchie is concerned that coherent purpose, and the commitment to fulfil it, is lacking in Australian agriculture in times that demand long-range investment in ideas, time and money.
“I believe that we should be much more ambitious than we are,” he told the AFI audience.
“We’re not just here in order to survive.”
Within 15 years, the Asian middle class is projected to be four times larger than the entire population of the Europe and the United States combined.
“We should be talking about doubling food production by 2050, and boost exports by up to $1.7 trillion over the next four decades,” Mr McGauchie said.
“That is undoubtedly an ambitious goal, but I think we should be even more ambitious than that. I think we should double food production, in real value, in the next 20 years - by focusing on quality and quantity, but particularly on quality.”
Mr McGauchie has some experience in this area. As chairman of AACo, he has steered the company away from its roots as a commodity producer of cattle, towards vertically-integrated beef production.
The transition included construction of the $100m Livingstone Beef abattoir near Darwin, now running at a profit.
“We never lost our perseverance, notwithstanding that I had a lot of people tell us that it would never work.”
AACo has also proven that quality can deliver remarkable rewards. English retail icon Harrods sells AACo Wagyu steak for the handsome sum of £250 a kilogram (AUD$536/kg).
But Mr McGauchie questions whether the perspective that is swinging AACo off its traditional mooring exists in Australian agriculture as a whole.
“Doubling food production in two decades would require clarity of planning, and purpose, the like of which we haven’t seen for a long time in this country," he said.
“We will need to recruit a whole new generation of farmers. We will need to plan, and invest, and act, on a vast scale. We will need to stop being one of most expensive places in the world to process food, and instead become one of the best.”
Australia has global brand recognition for food quality and safety, but that won’t necessarily translate to prosperity unless agriculture makes long-range investments in people and process.
Instead, Mr McGauchie told the AFI gathering, Australian agriculture has been stagnating for the past two decades. There has been acute underinvestment in infrastructure like road and rail, and productivity growth has fallen as farming fails to recruit new blood.
“I think we are in dangerous territory. We need to anticipate and adapt to change, being open to the kinds of creative adjustments necessary to keep up with the demands of modern agriculture.”
“Creative adjustment” means the capacity to invest in innovation and quality management, Mr McGauchie explained, and to operate at scale - adding that this is “not a euphemism for corporate farming”.
“Many family operations have survived for generations by anticipating and adjusting, and having the capability to continue to do that.”
He sees hope in a rising generation of skilled young managers, but thinks the challenge of the times is to put the necessary capital underneath them. “I’m talking about investing in the future of agriculture, rather than the past.”
That requires the right perspective on the future, and Mr McGauchie feels that in some quarters, that’s lacking.
“Some people have a dam fixation,” he said. “The prevailing view seems to be that the answer to every challenge is to build a new dam. If only life were that simple.
“We need to focus on costs, productivity, infrastructure and innovation.”
That will demand that Australia reverses investment trends entrenched over past decades, Mr McGauchie said. That reversal is essential if, “in a sustainable way, we are to make the most of every acre of land, and every litre of water we have”.