Aspirations for the agriculture sector

Last week The Australian newspaper ran an interesting story about award-winning pig farmers Aaron and Scott Scheid. 

Like many of our farmers, the Queensland brothers have worked out that a changing global environment demands new thinking and new strategies.  In particular, they understand the challenges of competing with cheap imports on the domestic market and plan to chase premium export markets.

The story reminds us that trade liberalisation is a two-way street; bringing both export opportunities and import competition from often lower-cost nations. Increasingly, our farmers and industry leadership groups are coming to realise that striving to put more product into price-volatile commodity markets is a strategy that ties us to cyclical fortunes and the increasing risks posed by climate variability.

In any case, how much volume can Australian growers and producers deliver with our limited water and soil reserves? Hopefully the attraction of greater levels of investment, further consolidation, the embrace of technology and improved road, rail, telecommunications and ports infrastructure will help us turn our poor productivity performance around at some point in the future. But the main benefit will be a welcome improvement in our price cost-competitiveness, not a capacity to produce markedly more.

Agriculture policy must be comprehensive, covering a diversity of issues including: market access; supply chain efficiency and productivity; natural resource management; workforce; energy; RD&E and taxation.

But if we are to fully realise our aspirations for the agriculture sector three areas of policy will be absolutely critical. The first is biosecurity.  Our key competitive advantage as a nation is our reputation as a producer of quality, clean, green and safe product.  The loss of that reputation would be devastating for the sector.

The second policy area is the pursuit of greater value capture.  We must do all we can to ensure our limited natural, human and financial resources are being allocated to the products which secure premium prices.  In other words, while volume will remain important, it’s value that matters most.

We all know it’s the private sector which drives economic growth and wealth creation.  But government has a role to play in the pursuit for premium markets and higher returns. Government must provide strategic guidance; creating the right investment climate and the right signals to investors.

The third policy is natural resource management. Our farmers are custodians of the land they work and no one understands the value of sustainable practices better than they do. But to achieve continuous improvement, they rely on the work of government: its investment in science and research; its management of invasive pests and weeds; and the health of the waterways farmers so heavily rely on.

 It’s time to lift the quality and tone of the debate around the issues which are crucial to our agriculture sector.  Our farmers deserve more than spin about commodity prices over which governments have no control.  Boondoggles may deliver populist capital for their political spruikers but they are of little use to farmers. The agriculture sector needs genuine leadership and certainty.   

I’m sure the Scheid brothers would agree. Premium pork markets should take priority over government pork barrels.

This piece was first published online on AustralianFarmers on 5 June 2017.

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