Australia’s share of Asian agricultural imports has declined rapidly in recent years as other nations have expanded their exports into the region, according to Mick Keogh, the newly appointed ACCC (Australian Competition and Consumer Commission) Agriculture Commissioner.
He told an Australian Agriculture Outlook conference in Sydney in late May that Australia’s market share of 6 per cent for north Asian agricultural imports and 9 per cent for ASEAN (Association of Southeast Asian Nations) were falling quickly.
He said, the recently negotiated free trade agreements with Japan, Korea, China and ASEAN along with potential agreements with India and the Gulf Council states would create important new opportunities for Australian agriculture and allow for improved competition in those markets.
But it would mean that these nations would be stronger competitors in the domestic market – something that had been forgotten in all the excitement of new trade agreement.
Strategies for success in this more competitive and globalised agricultural trade environment lay in identifying Australia’s competitive advantages and adopting strategies to maintain or enhance them.
These included Australia’s hard earned reputation for safety and biosecurity, on-farm technical efficiency, its abundant land resource and diverse range of environments, logistical efficiency in moving farm produce to market, robust legal and administrative framework and highly skilled workforce.
Mr Keogh identified three areas – biosecurity, research and development and digital information systems – where concerted efforts were likely to bring long term benefits.
This was important due to the progressive downgrading of state government agricultural agencies heightening the risk of an incident going unreported or the response being delayed.
A second area of concern was a biosecurity breach within a vertically organised supply chain as the focus shifted to higher value consumer products and away from bulk commodities.
“It is critically important that both the farm and post-farm sector have a common approach in encouraging governments to maintain and improve biosecurity surveillance and response capability,” he said.
“Recognising that future production growth will largely need to come from productivity growth, the future of public agricultural research, development and extension investment becomes more and more important.
“Some armchair experts have opined that the continuing decline in public-sector agricultural research, development and energy investment in Australia is of no great importance, as the private sector will step into the gap left as the public sector retreats.
“Unfortunately, I think this is a highly simplistic and badly misguided view, built largely on some misinterpreted data out of the United States and a lack of understanding of the uniqueness of Australia agriculture.”
Mr Keogh said the public sector remained a critical source of basic and applied research because the cost of global registration of new products made development unique to a small market like Australia unprofitable and impractical.
The consequence was that if the public sector left the agricultural research, development and extension field in Australia then the availability of new technologies would quickly dry up and the rate of productivity growth would decline quickly.
“I believe the entire sector needs to consider these additional costs as a long term investment and to understand that Australian agriculture’s ability to implement and maintain these systems is a critical element of the current and future competitiveness of the sector.
“Many other nations can produce grain or livestock at a lower cost but few if any can offer the quality and traceability systems that are available for Australian products.”
Mr Keogh said Australian agriculture also needed to consider the lesson rapidly being learnt that those supply chains operating with relatively open information sharing along the chain were the ones that were succeeding.
Currently considered by many to be just another cost, open data systems that enable seamless information exchange between supply chain participants could be the key to generating significant value from industry systems, he said.
– JOHN CARSON