ALBURY
FRIDAY, 18 SEPTEMBER 2015
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It’s a great pleasure to address the Nuffield family; a key breeding ground for Australia’s agriculture and agri-business leaders.
Our food and fibre sectors have enormous opportunities on offer. But the challenges are just as significant; the work of Nuffield and its scholars will be crucial to addressing them both.
The value of Nuffield’s work can neither be measured nor overstated.
But plenty of evidence exists that its contribution to Australian agriculture is substantial. It lays in part, in the quality of its scholars and the adoption and commercialisation of their ideas.
I acknowledge two of them; my parliamentary colleagues Bruce Scott and Andrew Broad. Of course, Andrew is with us this morning. I witnessed his Nuffield training at work when listening to his First Speech in the House of Representatives. It was a very good contribution.
The very existence of Nuffield reflects a long-standing appreciation that neither our geography nor our natural endowments guarantee us the total fulfilment of our aspirations in agriculture.
That would be a lazy and complacent view of the world; one which would lead us to ordinariness at best.
Australia’s food and fibre sectors are too important to our economy, too important to our communities, and too important to our food security and adequacy, to be left to an ordinary effort.
There exists much hype about the sector’s future and rightly so. But let’s take stock of some of the challenges:-
• Productivity in Australian agriculture has at best, plateaued.
• Over many years, government investment in R&D has contracted in real terms.
• The rate of adoption and extension is poor.
• Our share of global trade is in decline.
• Our workforce is aging.
• Our weather patterns are working against us.
• Our limited natural resources are more likely shrinking than growing.
• The allocation of those resources is in some cases, inefficient.
• We remain too dependent on commodity markets where we are typically price takers, subject to the vagaries of global markets
• Our infrastructure – roads, ports, rail, telecommunications – is underfunded.
These are the main hurdles to us fully capitalising on the enormous opportunities growing global demand for high-quality food and fibre products presents.
How well we respond to these challenges will determine the extent of our success and therefore, our future prosperity.
It’s an effort which will be led by the private sector; it is business which creates wealth, not government.
But it is a project which will also require a high level of collaboration; between government, business, farmers and our research institutions.
It will also require leadership from our politicians.
I said “politicians” rather than “government” very deliberately.
I did so because ultimately, success will require collaboration across the political divide. A bi-partisan approach which recognises the gravity of the challenges and the long time-frames we are dealing with.
We need to take agriculture out of the short electoral cycle, it is too important to our future not to.
The theme of this conference is: “Making Change Happen – Educate, Innovate, Exceed”.
It was Nelson Mandela who said – “Education is the most powerful weapon you can use to change the world”.
All of us – politicians and industry leaders alike – must embrace the responsibility to be the educators. To challenge people to a conversation absent of political spin and games.
Today I want to nominate 3 areas which more than any other, call upon us all to embark upon a mission to create a better informed Australia.
The first is foreign investment.
Some of you will be familiar with the ANZ Bank – Port Jackson Partners report entitled “Greener Pastures”. Amongst other things it suggested that to fully capitalise on the opportunities posed by growing global food demand, we will need $600 billion in infrastructure investment between now and 2050.
Given our population and capacity for savings much of that investment by definition, must come from foreign sources. It has been the case for all of our history as a nation.
We simply won’t fulfil our aspirations without a big lift in capital inflows and each and every one of us has to help the broader community understand that.
The second issue is climate change and sustainability
Surely there is no greater challenge to our food and fibre aspirations than our changing climate and resource depletion.
Our future in agriculture lays more in chasing value rather than volume. But volume will be important and the question becomes: how will we grow more with less?
Our growers and producers know our climate is changing and it is having an impact on agriculture. Only yesterday, Grain Growers reminded me that while climate change is causing the land available to grow wheat to contract, in Canada – one of our key competitors – it is expanding.
Unfortunately, over recent years our progress in dealing with the challenges of a drier continent and more erratic weather patterns has been hampered by the politicisation of the public debate.
An enormous effort is required to ensure we lift the productivity of our water and soil resources and it will only come with initiatives in a range of policy areas including carbon mitigation, adaptation, and market-based approaches to resource allocation.
The third issue is farm structure.
While significant consolidation has occurred in recent years, our farm sector remains fragmented and performance is mixed.
Around 80 percent of Australia's output by value is generated by just 30 percent of farm businesses.
Meanwhile, the smallest 50 percent of farms generate less than 10 percent of our product.
Even more extraordinary, according to the Productivity Commission, is that the bottom 25 percent of broadacre farms did not make a profit in any of the ten years to 2007.
Given the importance of resource allocation to productivity growth, we need to ask ourselves whether we can afford not to have a rational conversation about the implications of these facts for agriculture's future.
I’m aware there are those who hold concerns about the demise of the family farm.
But further rationalisation of our farm structure need not lead to a diminution of the role of the family farm. Our family farms are most often the drivers of innovation. In an environment with a focus on niche, high value products, the family farm is likely to thrive in an environment in which our financial, human and natural resources are allocated most efficiently.
There are many reasons I’ve fallen in love with the agriculture portfolio. It is complex, diverse, and of growing importance to our economy. It is also full of great people.
But what really has me hooked is the scope for reform – the opportunity to change things.
Not change for the sake of change, but positive reforms which allow us to make the very most of the huge opportunities before us.
But to secure reform we’ll need to speak in an informed way and with one voice.
I can think of no better group to lead the way than our Nuffield scholars and I wish you all every success.
ENDS
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