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.