Australia’s farm exports are forecast to reach nearly $45 billion this financial year.
That’s a 37 per cent increase since 2010-11 – and the figures are edging closer to Australia’s top export earner – mining-iron ore – which is currently tracking at $49 billion.
It also surpasses the Number 2 on the list – coal at $37 billion.
Addressing the recent ABARES Outlook conference in Canberra, the Minister for Assisting the Minister for Trade and Investment, Senator Richard Colbeck, said Agriculture is now recognised as one of Australia’s five “super-growth” sectors.
Other sectors include tourism, international education, gas/energy and wealth management.
“The size of these five collectively match that of mining at its peak,” said Senator Colbeck.
“Together these sectors are predicted to add more than $250 billion (to the Australian economy) over the next 20 years.
“With the right tail winds there is a very real possibility we could see much more than that added to the economy and there is every reason to believe now is the time to capitalise on Australia's advantage.”
Senator Colbeck told the conference exports to Asian markets, in particular, are expected to grow even more as a result of the entry into force of free trade agreements (FTAs) with our three major markets in North Asia, and eventually the TPP.
And Asia is not the only success story.
“Last year US demand for Australian beef was so high that export volumes exceeded the US’s WTO beef quota,” Senator Colbeck said.
“Our producers had recourse to the special beef quota negotiated under the Australia-US Free Trade Agreement for the first time since it came into force.”
Senator Colbeck said Australia is perfectly positioned to grow its exports in key sectors, with access to more than 600 million people in neighbouring countries alone.
“Of great significance is that this population has age profiles that align to our service strengths, particularly tourism and education, and a growing middle class seeking what we have to offer and that’s protein/food, energy and wealth management,” he said.
“The increasing middle class of our major trading partners means the demand for protein is increasingly rapidly.
“The world wants what we have got. And the more we play, the stronger we get.”
Free trade agreements are now in place with Korea, Japan and China.
And the Trans-Pacific Partnership trade pact, signed by Australia and 11 other countries earlier this year, would provide further benefit to exporters.
Follow-up is vital
“The Government has recognised the importance of active implementation and follow-up of these FTAs,” said Senator Colbeck. “It’s not simply enough to negotiate a great agreement – we need to explain to producers how to use it.
“Accordingly, we have invested significant resources in explaining to business the opportunities these agreements have opened up, through FTA information seminars across the country, and through the creation of an FTA Portal, which provides easy access to clear technical information on how to use FTAs.”
Senator Colbeck said good progress is also being made in bilateral negotiations with India and “reinvigorated” negotiations Indonesia.
And the Government is also moving toward establishing a comprehensive, high-quality FTA with the European Union. (EU).
“This is important for the agriculture sector, as the EU is the only one of our top ten export markets with which we have not already negotiated an FTA or with which we do not have FTA negotiations in train,” Senator Colbeck said.
Strong international demand
ABARES Executive Director, Karen Schneider said a relatively weak Australian dollar, newly signed free trade agreements and strong international demand are expected to provide ongoing support for Australian agriculture in world markets.
Ms Schneider told the ABARES Outlook Conference these factors would underpin future opportunities for agriculture in export markets.
“The weaker dollar has supported average export prices in Australian dollar terms across the board, and contributed to favourable farmgate prices, she said. “We’re forecasting the gross value of farm production will reach a record high of more than $60 billion in 2016-17 and support exports of around $45 billion.
“The recent trade agreements finalised with major regional trading partners and new market access protocols will provide opportunities in both new and established markets.”
Ms Schneider also discussed the domestic factors affecting farm performance and trade opportunities.
“On the home front the challenge is increasing productivity to remain competitive in global markets,” Ms Schneider said.
“We’re likely to face more intense competition in global markets from countries such as Brazil and Argentina, which have invested significantly in reducing costs and boosting productivity in their beef and grains industries.”
Philip Evans of the Boston Consulting Group told the Outlook conference Big data would provide big opportunities for agriculture in the future.
Mr Evans said it was up to businesses to take advantage of the technology available to them.
Customised and intelligent management
“The world is becoming its own map: that is to say, we are acquiring the ability to map all the relevant data with extraordinary granularity, interpret it, and deliver that knowledge back into the world at precisely the point where it is of greatest use,” Mr Evans said.
“Every metre of land, every animal, every plant, becomes the object of customised and intelligent management. The technology is already here – what we need is institutions and management practices able to take advantage of it.”
Mick Keogh of the Australian Farm Institute, said big data had the potential to revolutionise decision-making in Australian agricultural businesses, through the adoption of digital agriculture.
“The transition of agriculture from a skills-based industry to an information-based industry is well underway, with some segments – such as the broiler industry – already well down the track in developing information-based management systems,” Mr Keogh said.
“Other segments are heading in the same direction, and it is likely that over the next decade we will see widespread adoption of a range of different digital technologies and platforms in Australian agriculture.”
About the conference
The ABARES Outlook conference is Australia’s premier information and networking forum for public and private sector decision-makers in the agriculture sector. The conference was held in Canberra on March 1-2.