Article – Australian producers can spread brand across Asia

by 28 November 2014

15 November 2015
David Hornery
The Australian

THIS week’s Asia-Pacific Economic Co-operation summit in Beijing has covered a range of critical topics including regional economic integration and the creation of an Asia-Pacific free trade zone, the promotion of integrated partnerships and infrastructure development.

Commentators will emphasise the increasing role of China, but when it comes to the food and agriculture sector, and the region’s changing dietary habits and demand for high quality produce, the challenge is a pan-Asian one. So is the opportunity for Australia.

As growing markets for food exports, Japan, Indonesia and Korea remain particularly significant for Australia. Perhaps equally these markets are also potential providers of capital into Australia’s agricultural infrastructure and as partners with our many world class producers.

Experts predict Asian food demand will double by 2050 to $US3.1 trillion ($3.5 trillion). This presents a food security challenge that will further catalyse trade and investment.

This greater competition for food resources is a challenge all nations will have to confront. For Australia, with Asia now representing almost 60 per cent of our agricultural export trade (up from 45 per cent in 1993) the opportunity is unique and substantial.

Leveraging Australia’s brand and our world-leading food safety standards, the opportunity is as much about the quality of what we produce, and the premium markets we can access or own, as it is about the quantity of our production.

If we look at the emergence of these trends in one country, Japan, we see a nation that now imports about 60 per cent of its food, yet 50 years ago was 80 per cent self-sufficient. It is by far Asia’s largest food import market with $US65 billion of net imports. With an ageing and shrinking population the Japanese are collectively consuming fewer calories, yet they remain Australia’s No 1 trade partner for food.

Australia has been the first major agricultural exporter to break through Japan’s import barriers and under the Japan-Australia Economic Partnership Agreement more than 97 per cent of Australia’s exports to Japan will receive preferential access or enter duty-free when the agreement is fully implemented.

JAEPA sends a clear message to Japanese investors that Australia is an attractive investment destination.

Australia has always been reliant upon foreign capital. Long term, structural foreign direct investment creates jobs, contributes positively to the incomes of Australians, and boosts our competitiveness. In the agricultural sector it will provide access to overseas markets and fund expansion in our productive capacity.

One example of productive capacity waiting to be unlocked can be found in Northern Australia, with 17 million hectares of arable soil and 60 per cent of Australia’s fresh water resources, yet we only capture 2 per cent of that. Capturing 5 per cent would provide sufficient water to develop Northern Australia’s productive capacity.

As a supplier of high quality agri-food exports into huge and growing markets, Australian producers and processors will increasingly realise that competition comes from afar, not from home.

Competing as a nation to build brand Australia across Asia is what is required to realise the collective agribusiness opportunity.

Courtesy of The Australian

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