Value of Australia’s agricultural exports to rise to $1.7 trillion by 2050

THE value of agricultural exports from Australia could lift to $1.7 trillion between now and 2050 to meet growing world food demand if Australia takes the right action.

Angus Taylor, the author of a new report by Port Jackson Partners for the Australia and New Zealand Banking Group, highlighted the huge potential of the sector and the severe impediments standing in the way at a Committee for Economic Development of Australia lunch in Adelaide.

Greener Pastures: The Global Soft Commodity Opportunity for Australia and New Zealand, quantifies the size of the opportunity open to Australia and New Zealand agriculture due to the shift in global economic growth to Asia.

It predicts Australian agriculture will be the next sector to significantly benefit from Asian-led growth with a doubling in sales to achieve an extra $710 billion in agri-exports in the years to 2050. With favourable conditions and targeted actions, this could rise to $1.7 trillion in the same time, the report said.

The Greener Pastures report said rising incomes and changing diets in developing countries meant the world would demand at least 60 per cent more agricultural output by 2050 than in 2005-07.

“I set out to determine whether agriculture will follow the mining book and what has Australia got to do to make the most of the opportunity?” Mr Taylor said.

“We do see that there is a very big export opportunity, but I was quite startled at the data for the past 15 years which shows the industry has hit the wall.”

Mr Taylor said six urgent challenges facing the industry were strong access to human and physical resources (land and water), access to capital, adoption of new practices, a renewed focus on research and development to boost productivity, better access to overseas markets and clever supply chains.

“At the heart of it is the capital constraint because we need many billions of dollars,” he said. “Part of it involves opening up new areas in Northern Australia and Tasmania, while farmer succession is hurting us more than anything.”

Mr Taylor said the biggest challenge of all was the leadership challenge with the need for good leaders in the sector trumping all other challenges.

The report said $1 trillion in additional capital was needed to drive production growth and support farm turnover in Australia.

But the industry is facing intense competition for the opportunity from a number of countries including from new agricultural players such as Brazil, Malaysia and Indonesia.

“Targeted action by policy makers, industry participants and investors are needed to focus on the growth of volume and value based on building competitive strengths in both Australia and New Zealand,” it said.

Source: Rural Editor Nigel Austin, The Advertiser http://www.news.com.au/business/value-of-australias-agricultural-exports-to-rise-to-17-trillion-by-2050/story-e6frfm1i-1226515319362