Opinion Piece - Imports, Energy Costs May Give Us Hunger Pangs - Wednesday, 15 July 2020

Opinion Piece - Imports, Energy Costs May Give Us Hunger Pangs - Wednesday, 15 July 2020 Main Image

By Joel Fitzgibbon

15 July 2020

“Australia could never have a food security problem because two-thirds of the food we produce is exported”. You’ve heard government ministers say it many times. But is it true? One thing is certainly true; one-third of nothing is nothing, and a growing domestic population, climate change, workforce shortages and high energy costs are driving an over-reliance on others and exposing food security risks. 

COVID-19 has at least increased community awareness of the extent to which we rely on others for a range of essential products including our fuel supplies and medical equipment. But unfortunately, the scale and value of our food production continues to breed food-security complacency.

Yes, our farmers and farming practices are world’s best but they are exposed to both strong global competition and they are heavily reliant on others for many of their inputs to production. If we are to protect our food security, we need to come to terms with our vulnerabilities. 

Farmers can’t grow food without seeds, fertilisers, pesticides, and veterinary medicines. Yet over recent decades Australia’s reliance on other countries for these on-farm inputs has grown substantially. China has become our primary provider of crop protection products.

Most alarmingly, Australia is about to lose its only remaining manufacturer of the key active ingredients necessary for the production of our crop protection products. Our local manufacturers, farmers and consumers will now be even more dependent on product from China. 

Nufarm will close its Laverton plant in Victoria in part because it can’t compete with imported product from China. The high cost of energy is another factor forcing Nufarm’s hand, yet the Morrison Government refuses to act. How many otherwise-competitive manufacturers will we have to lose before the Government acts?

Nufarm is not alone: many downstream food manufacturers are struggling too. While the reasons are many and varied, higher than necessary energy costs are a constant. Most Australians will be surprised to learn that while we export almost $50 billion worth of food product each year, we also import around $17 billion worth of processed foods.  The latter is growing at around 5 per cent annually. 

Many predict the post-COVID19 world will be a much different place. I hope not. While far from perfect, I thought it was going well. I don’t believe the virus calls for a dramatic shift in our policy settings although the shifting geopolitical situation will require us to be nimble.

But our COVID-19 experience should teach us that wherever the capacity to produce product or capability is crucial to our survival as a nation-state, the guidance provided by the economic orthodoxy should be challenged.

The economic textbook does not always guide our defence capability decisions. We’d never build surface combatants or submarines in Australia, if it did. Rather, we accept a less-than optimal economic outcome as the price for maintaining local capability and skills. Is our food security any less important to our sovereignty? I think not. Nor is fuel security. You can’t deploy sailors, soldiers, airmen or airwomen, without food and fuel!