Why not earlier? It’s the obvious response to every announcement a seven-year-old
government makes. Last week, the Morrison Government promised to build dams and other
water infrastructure. It said it would modernise out-dated agriculture research and
development architecture. It said it would reduce the cost of exporting and make the export
approval process more efficient for our farmers. But we’ve heard all these promises before.
Many times.
We also heard there would finally be a strategic plan for our agriculture sector, but we’ve
heard that many times, too. Remember the 2015 Agriculture Competitiveness White Paper?
Don’t worry. Few do.
The Government continues to say it supports the ambition of the National Farmers’
Federation to grow the value of Australia’s farm output to $100 billion by 2030. It’s a
challenge that is now more difficult because three years after first making the commitment,
drought and COVID-19 have pushed down the value of farm output. So, with only nine years
to go, we’ll need to do more, not less. Yet despite its words of support, the Government has
not produced a plan to get us there.
Doubling farmgate value can’t be done by doubling farm output volume. Australia does not
have the water, soil, people, and money to do so. Rather, we must focus more on the return
we receive for our product, and lowering the cost of producing it.
Our agriculture sector has many strengths: the quality and experience of our farmers and
our reputation as a provider a clean, green, safe and high-quality food are chief, amongst
them. We also enjoy proximity to the big markets of Asia, and mature trading relationships.
But we also have challenges: limited labour, capital and natural resources, amongst them.
There are also emerging threats of a changing climate, and a deteriorating relationship with
our major trading partner. We continue to underperform on the innovation front, and we
are increasingly dependent on imports for our inputs to production and our crop protection
products. New competition is emerging, freight rates are falling and undermining the
advantage our proximity to markets gives us over many of our competitors. Add poor
productivity and patchy profitability and it’s obvious government has some work to do.
To reach $100 billion by 2030 we need an overarching strategic plan for the agriculture
sector; one which identifies and addresses the weaknesses, counters the threats, provides
guidance for investors and leverages the opportunities with well-targeted government
investment.
Government must also be more honest about our structural issues – that’s the first step to
addressing them. It remains a fact that 80 per cent of the sector’s output comes from just 20 percent of our farm businesses. According to the ABS, 60 per cent of farm entities have a
turnover of $200, 000 or less.
Poor natural resource-allocation is a problem and will remain a brake on farm output value if not addressed. Yes, producing a strategic plan is hard because it requires government to be honest rather than popular. But done well it will be popular because it can turn the increasingly difficult path to $100 billion, into a reality. Budget week was another missed opportunity.
