Herd mentality missing: Forrest

01 Aug, 2014 04:38 AM
Andrew Forrest. Photo: Glenn Hunt
We need to market ourselves as the one country. Leave it to our farmers to be very efficient.
Andrew Forrest. Photo: Glenn Hunt

AUSTRALIA'S agricultural business needs to market itself as one brand rather than increasing scale in order to be internationally competitive, says billionaire Andrew Forrest.

The Fortescue chairman said the dairy industry had been a "squandered opportunity", but disagreed that widespread consolidation was needed across the sector.

"I see small farmers with the same operating costs as these large aggregated groups," Mr Forrest said.

"We need to market ourselves as the one country. Leave it to our farmers to be very efficient."

The Business Council of Australia and consultant McKinsey on Monday released two papers highlighting the potential and competitive advantages in the agricultural sector. The reports used New Zealand dairy giant Fonterra as an example of how scale can generate success in agriculture.

Mr Forrest's comments follow the inaugural meeting of his 100-year Australia-China agricultural partnership group (ASA) in Sydney on Thursday, which agreed to market Australian agriculture under one brand.

The meeting was hosted by the BCA and attended by Agriculture Minister Barnaby Joyce and representatives of all state agriculture ministers.

The ASA will comprise 50 members from each country who will initially meet bi­annually and then annually. Members will include state and federal government ministers, business leaders and major food producers and distributors.

Trade and Investment Minister Andrew Robb said he welcomed efforts to promote Australian agriculture and bolster trade ties with China.

"Agriculture is one of our great strengths and we have an enviable and growing reputation for 'clean, green and healthy' produce. We should look to leverage the premium 'brand Australia' at every opportunity," he said.

Mr Robb said securing the best possible deal for Australian agriculture was a key focus of free-trade negotiations with China.

"The negotiations are well advanced...we have secured very strong agreements with Korea and Japan and, if we can conclude with China, this trade trifecta, already representing more than 50 per cent of our exports, can help take Australian ­agriculture to a whole new level," Mr Robb said.

Mr Forrest said that there had been a "complete mismatch" between China's need for large quantities of safe food and the disorganised and fragmented approach Australia had taken to meeting that demand.

"In the highest offices in the land [in China], food security is the number-one issue," Mr Forrest said.

"You should only have a short walk and not a long search to have Australian food and ­produce in Chinese supermarkets. You'd nearly starve before you find Australian food.

"A [divided] country does not inspire confidence. Today we drew a line in the sand...we are going to be completely proud of each other's companies and industries. One state will support another state."

National Farmers' Federation president Brett Finlay said the meeting was "an important milestone" to help ­Australia feed, clothe and house a rapidly growing Chinese population expected to hit 1.3 billion by 2050, but he urged a focus on the China FTA.

Mr ­Forrest said the piecemeal approach in agriculture reminded him of the lost opportunity in the early days of Australian iron ore. He said the intense focus on local competition then saw Brazil enter the market and take billions in export revenue that could have been flowing into Australia.

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Jock Munro
1/08/2014 5:22:40 AM

Come on Twigg get real! The Australian Wheat Industry had an iconic brand for 60 years and we were the best marketers in the world. The Rudd Government and the Liberals sat together in Parliament and abolished the single desk legislation amidst laughter and derision(See Youtube-Liberal Wheat Treachery). I cannot recall you preaching from the pulpit then Twiggy.
1/08/2014 5:35:38 AM

Seems to me Mr Forrest is seeing the forest and not the trees, good on you for identifying we need to work together to market our safe, clean, green premium product.
1/08/2014 5:53:40 AM

Steady on Jock. Twiggy is actually telling Government we need to reinstate the Single Desk principle. It is Andrew Robb who is failing to support that.
1/08/2014 5:59:04 AM

Thank you Mr Forrest and McKinsey for telling the clever farmers what we already knew. That is Australia does not need farmers to get bigger or get out. We just need to unite to do our marketing. In essence, we need to recognize how dumb we were in dropping support for our Single Desk approach to marketing. I don't know how many facts need to be told and retold before we open our eyes and just reinstall the Single Desk approach. Until we do we just hand over our declining agricultural assets to foreigners while farming here dives into oblivion.
1/08/2014 6:03:34 AM

To his credit, new MP Angus Taylor said a lot of this some months ago. Come out again Angus and let us see some progress down the road towards united approach to marketing Australian agricultural products. Bring back the Single Desk is what these high profilers are saying. They are correct.
1/08/2014 6:28:18 AM

While your at it twiggy ,get some real competition and processing capacity in the red meat sector,and not the duopoly on beef operating presently,we are getting less money for beef than we were 25 years ago while the us cow price hovers at record levels ,someone's getting the profits ,but it ain't us
1/08/2014 6:28:49 AM

So in a nutshell what we need to do is re-instate the co-op principle. Remember when "Dairy Farmers" was a co-op, or "Namoi Cotton Co-op". Co-operating for common good is something that Australian farmers are no longer good at. Now too much self interest is evident and a survival of the fittest (cash-flow) rules the markets. Imagine if their was one marketing body for all those cattle going on the same boats to asia. would that not increase the price of beef? Being big guarantees nothing but a harder fall...
. Mug
1/08/2014 6:37:00 AM

It is refreshing to see a good message starting to come through. The old adage of " Divide and conquer" is very clear as the buyers have their way. A united voice, while irritating the the young generation who think they are in control, is the only way to go. Strength in unity. That is how an army operates.
1/08/2014 7:05:49 AM

Look what is happening to the sugar industry. Foriegned owned companies have arrived, invested into the milling and now have decided that its better that they do the marketing. They have totally ignored the industry owned marketing company. The only reason thay want to do the marketing of the sugar produced at their mills is to benefit themselves. Certainly not the farmers. Yes we did have a "herd" approach but the non Auistralian's want to do it differently. They want the farmers to be peasant farmers, just like they have in Asia!
1/08/2014 7:11:25 AM

Well said Twiggy..... Australia has got some urgent fundamentals changes in its thinking to get its act together, and sadly the daily comments coming through this web page are a clear indicator or how pathetic a lot of the view points are. I think the idea of 'brand Australia' has a lot of merit
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