01/THE BIG QUESTIONS FOR AUSTRALIAN AGRIBUSINESS
How can Australia best add value? Australia is one of the few countries in the world that can add value at every stage of the agricultural production process. What should we do with this expertise?
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ustralia has massive potential as an agricultural provider, but the assumption that Australia is going to be the breadbasket of Asia is based on a fallacy. We simply do not have not enough arable land. Australia is a big country, but compared to other countries with a large land mass we have a lot of desert. This need not be a problem. By focusing too much on commodities we risk losing the opportunity to develop the technologies and the value add on everything that goes from the farm all the way to the table. It is not enough to be a commodity provider in the modern world. A country with Australia’s technological prowess can aim higher. It’s about quality rather than quantity, about exporting our skills, so that we export not just value added products, but expertise and knowledge. When we think about food we tend to think about farmland. But we should also think about the processing, logistics, distribution, retailing – the transformation of produce into food, all the way from paddock to plate. The objective of food science and technology has always been to make more food available to more people for a longer period at a lower cost. Anything that helps achieve those aims is a valid objective for export. For example, instead of being an exporter of oranges, it’s far more effective to become an exporter of orange concentrates or orange bases. Instead of exporting raw milk, export the base for making other kind of dairy products or milk protein concentrates. We need to derive our opportunities from the knowledge that exists in this country, in terms of food science and technology. Australia is in the forefront of food and agriculture R&D globally. There is a plentiful supply of raw materials for the food industry, coupled with high quality research centres. But there needs to be more interface between industry and academia. The academic world needs to be more practical, and the business world needs to be more knowledge-centric. Unfortunately Australia has been dropping off the pace. A lot of multina-
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tionals once had technology development centres in Australia as a vector into the Asia-Pacific area. But many of them have been abandoning Australia, relocating their R&D and manufacturing overseas. Kraft, Nestle, Procter & Gamble, Coca-Cola – all used to have R&D centres here. But now costs are too high, and the skills and competency gap with other countries has narrowed. Many are setting up their R&D facilities in China, not just for that country but for the whole of Asia. But it is risky doing technology development in China, where there is no such a thing as a secret. Doing technology development there is the same thing as giving away your technology. The numbers show how Australia is lagging in food technology R&D. The food and beverage industry in Australia accounts for approximately a quarter of the industrial output of Australia, and about a quarter of employment. But only about 12 per cent of industrial R&D investment in Australia is in the food industry. So there is a big gap between the size of the food industry, and how much money is going to R&D on that. Australia will have to decide in the very near future what it wants to be. It has the potential to be one of the food technology poles of the Asia-Pacific, because it’s one of the few countries that has enough knowledge and experience from the farm to the dining table. And not only that, the consumers here are a demographic laboratory of the world in many ways. Unlike other migrant countries, Australia is not a melting pot. Australia is like a salad bowl – you can see all the ingredients. Multiculturalism has many advantages. We have a chance to see how Asian habits evolve in terms of food, how they evolve in contact with Western society. Conversely, it’s easy to see how Western habits are evolving in contact with Asian influences. Australia needs to identify opportunities for coupling the technology that’s already available here – developed in a number of research centres and universities – with the availability of those raw materials, and then opportunities