3 July 2014
North Queensland Register
MARKETS and economics as a driver of northern agricultural development is a key focus of Northern Australia Food Futures conference being held at Darwin from November 3-5.
Agronomists and technologists abound, but there are very few economists and market analysts in the north.
Research shows we can grow lots of crops, but making a profit is the key. Food Futures features the most recent market and economic analysis work to underpin northern agricultural development. This includes the Flinders Gilbert Study – Dr Peter Stone and Food and Fiber Study (Dr Andrew Ash). A keynote speaker will be Luke Chandler, Market Analyst for Rabobank Australia on market opportunities.
The success of northern farmers is very much about market and economic drivers. The most outstanding example of successful northern agriculture is the Vietnamese growers in Darwin. They now turn over around $60 million, despite initial barriers of a lack of English, a lack of finance, a lack of experience, a lack of knowledge, and no government support. Markets funded and drove their success. David Hanlon from The Right Mind, has been the most prolific economist and business analyst across northern Australia and across sectors for the last 35 years, will be part of the market and economics debate.
The most common development pathway is to make land and water and infrastructure available to investors. Food Futures features Peter Stubbs from WA’s Ord stage 2 development, making resources available for investors. Adding an additional development pathway based on market and economic drivers, is the focus of Food Futures.
Markets and economics are clearly the drivers of success. This analysis should drive what research, which crop, which area, what infrastructure. We don’t want government picking winners, rather have a suite of investment opportunities, with the right resources and infrastructure. Making land and water and infrastructure available is crucial. Who would have predicted the growth of sandalwood, chia or poppy? These investors just need resources to get on with the job. But we do need a suite of sound economic opportunities for northern agriculture in addition to just making land and water and infrastructure available.
We have done very little on making a profit. Economics needs to drive research programs. Too much research has been done by technologists in the absence of economic rigor. The proposed CRC for Northern Agriculture has a strong plank of economics and market drivers for research. Michael Guerin, CEO of the CRC Northern Agriculture bid will speak at Food Futures.
A good example of mis-directed research is 40 years of long grain rice research in the Top End compared to little on aromatic rice, Long rice gives a gross income per hectare of $2000/ha. Sale price is $300/ton so freight at around $100 ton i.e. 30 per cent of sale price. Aromatic rice gross income is $4000/ha and a sale price around $600/ton – freight is only 15pc of sale price. Australia imports 200,000 ton of aromatic rice valued at $120 million. Aromatic rice could succeed as part of a broadleaf grass 2 crop annual rotation in the north here it is best grown. Steve Donnelly of Blue Ribbon and Bob Williams of NT DPI will discuss these developments at Food Futures.
Soybean to Indonesia is another example. Indonesia imports 2 million ton of soy from US, Brazil and Argentina, valued around $2 billion. We have done very little research to capture a share of this market. Freight to Surabaya will be around $100/ton, around 10pc of sale price. Surely it is worthwhile doing some work to develop this large market opportunity. Dr Andrew James of CSIRO will present at Food Futures on breeding tropical adapted soy varieties for use in tofu and tempe markets in Indonesia. Terry Mills, former NT Chief Minister, will lead a panel of key Indonesian business people on agricultural opportunities with Indonesia.
Courtesy of the North Queensland Register
3 July 2014