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How Australia can become Asia's food bowl

sia has the fastest-growingpopulation in world. Thiswill increase the demand

for food, but greater urbanisation,westernisation and rising personalwealth is changing the form in whichfood is consumed.

There is a rising demand for moreanimal protein in the diet, moredairy products and a greater varietyof fresh fruit and vegetables. Thereis also more demand for value-addedfood: food that is convenient, safeand which has been produced moresustainably.

While it is the objective of mostsovereign nations to be self-sufficientin food, in much of Asia it will beexceedingly difficult to produce en-ough food. There are major resourceconstraints in the form ofarable landand water. Farmers are often unableto access appropriate technology, andthe lack of infrastructure imposesmajor constraints on the eicientdistribution of food.

Opportunities and challengesTo the south, Australia is well

positioned to take advantage of theemerging opportunities. However,Australia must also nd a way toaddress the many impediments thatthreaten to restrict market opportun-ities in the future. .

Agriculture is the most volatilesector of the Australian economy.Seasonal variations, primarily inrainfall, have a direct impact onproductivity. While productivity perarea continues to grow, the rate ofgrowth has slowed considerably. Thisis because the public is contributingless to research and developmentexpenditure, and because manyfarmers can't make the necessaryinvestments in technology, equip-ment and machinery, due to theirdiminishing equity position and lackof condence.

Theeconomiesofscale,whichoncefavoured greater farm aggregation,are becoming more elusive. As inputcosts continue to rise and prices

26 | Australia's Engagement with Asia

Peter Balttilooks_atiAustralias ipotentia

trend downward, the terms of tradeare eroding.

While more accurate longtermweather forecasts may providefarmers with the information tomake betterdecisions, the full impactof climate change is expected toplace a considerable burden on thepublic purse. Huge investments ininfrastructure will be necessary inmuch of the country to provide aregular and reliable source ofwater.

Australia must find away to address the many

impediments that threaten torestrict market opportunities

in the future.

if the potential for agriculturein north Australia is to be realised,transport and logistics systems willneed to be enhanced to ship theproducts to population centres.

Selling GMConventional plant breeding

systems are likely to give way tothe increasing use of genetic mod-ification. Many consumers haveconcerns about the introduction ofgenetically modi edplants.

But ifthe technology can be shownto reduce the use of agriculturalchemicals and fertilisers, water andfossil fuels, and to deliver positivebenefits to health and nutritionthrough enrichment, consumerresistance should diminish. This iseven more likely if the use of GMreduces the costs of production andif that cost reduction flows throughto consumers.

The high value of the Australiandollar is putting pressure on producers both domestically and abroad.Domestically, competition betweenthe two major supermarket chainsis driving food prices lower, oftento the point where farmers protmargins are so small they cant investin new technology and new product

! t9 feed./i*_'srrld[v 9'9VYlil9TP*L'3I.l9."-.development.

And more liberal terms of tradeenable many food ingredients to beimported at prices well below thecosts of production. This is forcingmany food processing plants toclose, with a commensurate negativeimpact on employment, farmers andrural communities.

The food bowl of AsiaAs markets evolve, there is an

increasing demand for higher qualityproducts. Beyond the tangiblecharacteristics of the product itself such as size, shape, colour andappearance consumers are nowalso expecting sustainably producedfood. Australia leads the world in theimplementationofqualityassurancesystems, but the uptake ofsustainablefarming practices has been slow,despite Australia having one of themost fragile ecologies.

To access world markets, Aust-ralian food producers have to showthat their product has been producedusing good agricultural practice.But competition between globalretailers is continuously raising thebar, imposing additional costs onall food producers. These costs areseldom recovered, and this absenceof sufficient financial incentivesprovides the major barrier to the morewidespread adoption of sustainablefarming practices.

However, there is a longtermpublic benefit in supporting themore sustainable use of resourcesand encouraging the more wides-pread adoption of integrated cropmanagement.

lfAustralia is to become the foodbowl ofAsia, we need to start makingchanges now.

THE CONVERSATIONPeterBatti'sa professorat theSchool

ofManagement, Curtin University.

2012 Peter Batt. Posted 25 April 2012.me Conversation I http://theconversation.edu.au

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