AU: Growcom welcomes debate on food production in the “Asian Century”
The Prime Minister last night said Australia could become a potential "food superpower," helping to feed increased populations in Asia through building Australia’s food-processing industry to supply Asia’s growing consumer markets.
Growcom Chief Executive Officer Alex Livingstone said the prospects for industries such as horticulture were bright but only if government’s fundamental policy settings were tweaked to ensure the growth of food production and exports.
"We look forward to evidence of reform in this area in next week’s Federal Budget,"said Mr Livingstone.
He said that the opportunities for horticulture lay in providing expertise and exporting fresh, high quality produce rather than processed goods.
"Exports of processed fruit and vegetables have been stagnant since the 1980s. Ninety-five per cent of the value of food exports occurs in the bulk sector," he said.
"Processed fruit and vegetables have revealed no comparative advantage and processed vegetable exports have even declined since the end of the 1990s due to Australia’s high wage structure and, more recently, the high Australian dollar."
Mr Livingstone said that the major opportunity for Australian horticulture in Asia was the growing population and urbanised middle class that is seeking high quality produce. This opportunity is further enhanced by Australia being counter seasonal to most of Asia.
"However, Australian farmers can currently supply enough food for Australia but less than 1 per cent of the Asian population at current population levels," he said.
"Australia needs a strategic approach to identifying and developing new high value and high growth export markets.
"To maximise our opportunities in the Asian market, Australian fruit and vegetable producers need to understand its intricacies and must selectively target high quality and high value products to deliver to specific Asian countries."
Mr Livingstone said that the profitability of the horticultural sector relied on increases in productivity. As a result, an increase in research, development and extension investment is required by government in order for supply to grow in line with increasing demand.
"In Australia public funding of agricultural RD&E has been in decline for several decades and this reduction in funding has been linked to declining growth in agricultural productivity. In order to increase on-farm productivity and sustainability, increased funding and support for agricultural RD&E is vital for the survival and expansion of the industry," he said.
"There is an urgent need to improve the profitability of the horticulture industry to ensure that it is in a position to capitalise on emerging opportunities. Currently the Australian market suffers from massive distortions and an imbalance of market power. Domestic producers are subject to a range of market behaviours designed to maximise profits at the retail end to the detriment of the production end of the value chain.
"If producers are to be able to respond to the output from the RD&E effort, they must have sufficient capital to adopt new practices and incentives to do so. This requires the ability to invest over a relatively long timeframe with a reasonable expectation that current profitability will be sufficient to cover the investment in new equipment, varieties and practices.
"To exploit the potential growth in export markets for fresh fruit and vegetables, the government must also push for consistent market access regulations across Asian countries as they have a significant impact on production processes and agrochemical practices. Harmonisation of phytosanitary standards and regulations for fresh produce are crucial for an optimal trading environment between Asia and Australia.
"An energised horticultural industry will offer many benefits to Australia’s economy including growth in job numbers in rural and regional areas."
To read Growcom’s comments on the federal government’s White Paper, Australia in the Asian Century, Click here
For more information:
Alex Livingstone
Tel: +61 (0)418 786 413
www.growcom.com.au