Opinion | The Gauge
There have been many words written and many words spoken about the booming Asian middle class and the opportunities that presents to Australian farmers.
But how do we capture this opportunity?
First, we need refocus our thinking on being profitable high-quality food and fiber producers and marketers.
The challenge then is to re-position the Australian food and fiber industry to satisfy domestic and export market demand for reliable supply of safe, quality products sourced from value chains with sustainable use of resources and responsible production practices.
But it all starts with the farmer.
Over the past 20 years we have moved from an industry focused on the domestic market with some specialist exporters.
Food and fiber is now an export industry with more than two thirds of production sold overseas and virtually all growth prospects are export related.
This has increased the growth and returns to agriculture but has made the entire rural economy more vulnerable to trade and climatic shocks.
Our policy and capacity has not changed to reflect this dramatic transformation and is now a real and pressing economic risk - which is well known to some of our trading partners.
Australia's competitors have moved decisively to secure the economic benefits offered by strong growth in Asia.
The evidence reveals a clear trend for other national agricultural exporters to win a higher proportion of the growth in demand for agricultural products in Asia.
But as a country with high input costs for agriculture and manufacturing, Australia can no longer compete internationally on a lowest cost basis.
We also need an increased focus on food and fibre fraud and integrity, which is now a serious risk to our international brand, which in turn requires more effort on chain of custody and provenance systems.
Consumers are demanding these as well.
Addressing on-farm competitiveness issues in isolation from the competitiveness of post farm gate value chain firms, especially manufacturing, will not halt the decline in trade performance.
In the past decade, successful Australian firms have moved towards competing as food and fibre value chains to meet demand for reliable supply of responsibly produced quality food and fibre.
The commercial food and fibre sectors are collaborating vertically and horizontally to compete.
But it is not only essential for the production sector to refocus on food and fibre; government must also refocus its regulatory structures around food and fibre production, processing and marketing.
Government needs to re-orient out-dated institutions to engage effectively with the modern food and fibre industry and its trade requirements, and accelerate changes for Australian businesses to compete more successfully and capitalise on the opportunities for increased food and fibre exports.
Australia's response will require an integrated approach that is based on differentiation of food and fibre products based on premium quality and supported by increased access to high value markets that ultimately leads to more profitable returns for all participants across the value chain.
It will also require action to remove costs and other impediments across food and fibre value chains and provide a regulatory regime that strengthens Australia's reputation with consumers in Australia and around the world.
Transitioning from the traditional department of agriculture structure to a modern department of food, fibre and agriculture will benefit farmers, firms right across food value chains, as well as regional communities and the nation.
- Troy Setter is the CEO of the Consolidated Pastoral Company
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The story Troy Setter: We need a modern department of food, fibre and ag first appeared on Farm Online.