Agribusiness

Australian ag will miss $100bn target without strategic change: Agribusiness leaders

Beef Central, 23/07/2020

A new report examining the state of Australian Agriculture warns that on current projections, the sector will fall $12bn short of its 2030 $100bn target, unless it revamps the way it operates.

Click on image to view full report

The warning comes from Agribusiness Australia’s State of the Industry Report released today.

Agribusiness Australia president and Elders managing director and CEO Mark Allison said an industry-wide approach was essential, not only on Australia’s farms but across the agribusiness value chain.

“The bottom line is that for every dollar that is created on farm, two are created through the supply chain,” he said.

“That is why we need to clarify, validate and build on the current farmgate target to encompass a $300bn value chain target, driving innovation and efficiency that benefits the entire industry.

“This will expand on the value achieved by farmers from R&D to the consumers, enhancing logistics and infrastructure, supporting manufacturing and food processing, and driving investment in retail and export markets.

“That’s why Agribusiness Australia brought together leaders of the top 50 balance sheets in agribusiness, to look at these industry growth targets, and address how we can achieve the industry’s potential,” he said.

Agribusiness Australia’s State of the Industry report shows that while Australian agriculture is vibrant and strong, the sector is not growing as fast as our competitors and is losing market share to emerging markets such as South America and the Baltic States.

To change this, the industry must:

  • build a transformational plan to invest efficiently;
  • Continue to attract new domestic and foreign investment to our most sustainable and high-
    growth commodities;
  • Invest intelligently throughout the supply chain to drive a more efficient multiplier effect;
  • Embrace environmental, social and government (ESG) risk identification and management,
    imbedding sustainability into all areas of the agribusiness supply chain, particularly in water
    stewardship, turning ESG into a sustainable competitive advantage;
  • Optimise the use of agtech to help reverse declining productivity growth;
  • Prioritise physical and digital infrastructure investment across transport, logistics and
    communications:
  • Diversify market access, harnessing global Free Trade Agreements while finding the right
    balance between commodities and niche markets; and
  • Find and attract a qualified, high-calibre workforce

Mr Allison said that this holistic long term, outcomes-based transformational plan will govern strategic decision-marking in innovation, investment in R&D and profitability across the sector.

“We need a national framework, focusing on agricultural R&D settings, infrastructure investment and the frameworks that will attract capital, particularly from foreign investors,” he said.

“A rebalanced agricultural Australian RD&E system that looks beyond individual commodities to a total value chain approach to investment will also deliver a broader benefit to Australian agriculture.

“As part of that, we must prioritise logistics, connectivity and transport infrastructure and ag tech investment; and embed sustainability into areas of the agribusiness supply chain.

“Above all, we need to bring primary producers, corporations, downstream organisations, representational organisations, RDC’s, CSIRO, universities, State and Federal Governments together to develop this long-term, detailed, directed, outcomes-based transformational plan.

“That’s what today is all about, reframing the future of the sector,” he said.

Speakers at a CEO Summit today discussed several topics on how Australia’s agribusiness sector could
adapt, to generate growth for the future.

John Lloyd, Agribusiness Australia board member and ex-CEO of Horticulture Innovation Australia, Case New Holland and a General Manager with Incitec Pivot, said that Australia needs a cross- sectoral, industry-led plan to overcome the barriers to growth, right across the value chain.

“A good national plan should be about two issues, beefing up Australia’s national accounts over a decade and supporting the social fabric of rural and regional Australia,” he said.

“It must outline where you want to be, and set investment and policy decisions to achieve that goal.

“For instance, Israel mandated they would recycle 80 per cent of waste water into agriculture – there was a policy decision, and an investment mechanism in innovation to achieve those policy goals .

“In Australia, there are industries that have the potential to grow by 50 to 100 per cent in the coming years, and there are those that don’t have that same potential.

“There is opportunity hive off investment dollars across the investment spectrum, from the RDCs, CSIRO, CRCs, Universities and the State Governments, directly into growth industries from farmgate through the value chain. That would give us a chance,” he said.

 

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Comments

  1. Kim Coulton, 24/07/2020

    This article is concerning because of the fact that our “rural leaders” are so out of touch with the grass roots farmers. Surely they must understand our primary need is RAIN. Without water all of the above mentioned is out of the question.

  2. John Carter, 23/07/2020

    I didn’t think we could move further from the real world than the recent MLA response to Ashley McKay but this does.
    After factoring in Covid 19,a world depression, a war with China caused by Canberra’s crazies, another major drought with no more dams ,my computer comes in at $53 billion, 433 million,152 thousand, three hundred and 53 dollars and 23 cents in 2030. There could be a margin of error of up to 98 dollars.

    • Brad Bellinger, 26/07/2020

      Well said John Carter ,however by my computer you are out by 112 dollars 50 cents.

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