Spring 2020, Vol. 17, No. 3

Leveraging Australian agriculture’s competitive edge

Australian agriculture continues to depend on global markets for prosperity and growth. While our share of global agricultural markets has been declining, exports still remain a vital component of the growth story of Australian agriculture. 

This spring edition of the Farm Policy Journal contains four articles which explore how Australian agriculture remains relevant to export markets and global opportunities.

These articles align with a future of targeted, strategic export markets. Australian exports may not be a dominant force in terms of volume, but Australian agriculture should still aim to be a valued trade partner providing desirable goods and services. 

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Playing to advantages: Raw agricultural product exports driving value creation in Australia

Jared Greenville, Andrew Duver and Mikayla Bruce, ABARES

Australian agriculture has benefited significantly from increasing our exports in areas of competitive advantage. This has been reflected in a focus on exports of raw agricultural products (such as grains, live animals, wool, and fruits and vegetables), along with minimally transformed products such as meat. This position has led to as good, if not stronger, export performance and value creation for the Australian economy than would have likely otherwise occurred.  In future, new opportunities for value creation may arise by shifting this balance. Market access, responding to emerging consumer preferences and access to imported inputs (agricultural and others) will be important for accessing these opportunities. Nevertheless, it is likely that Australia will continue to drive value creation through trade in raw products.

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Challenges and opportunities of premium markets in agriculture 

Mick Keogh, ACCC

ACCC Deputy Chair, Mick Keogh, delivered a keynote address to the International Farm Management Conference on 4 March 2019, where he spoke about the challenges and opportunities of premium markets in agriculture. 

Consumer trust should be a major focus for Australia’s agriculture sector as farmers increasingly target premium markets for their produce. Most of the growth in the total value of Australian agricultural output in recent decades has come from an increase in the average value of products, rather than an increase in the volume of output. Australian farmers and processors have increasingly altered their production and processing systems in order to target higher value or premium markets. It is important for the agriculture sector to ensure there are robust checks and balances in place so that consumers are getting the premium products they are paying for. 

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Australia’s role in global grain trade 

Professor Ross Kingwell, AEGIC

Australia’s grains industry is buffeted by climate variability which weakens its ability to be a reliable grain exporter. Yet Australian grain production remains sufficiently efficient to allow the industry to stay strongly focused on exporting. This means the industry is trade-exposed, so it constantly needs to balance market downside risks against commercial upsides, whilst exploring opportunities to diversify its market exposure. Australia sells the bulk of its grain to a handful of markets and to date that has been the most lucrative use of Australian grain. Yet because Australia is likely to be an increasingly minor player in global grain markets, plausible future features of Australia’s grains industry are a focus on serving strategically important markets, complemented by opportunism, and occasional rationing in years of widespread drought.

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Past success and future opportunities for Australian agricultural research, development and innovation in a globalised world

Anna Okello, Todd Sanderson, Daniel Walker and Andrew Campbell, ACIAR

Australian agricultural outputs have a long-held global reputation for quality and safety, commanding high prices – and buoyed by strong trade relations – in the Asia-Pacific region and beyond. Underpinning the productivity of Australian agriculture is a robust agricultural innovation system, founded upon world-leading research and development capacity in industry groups and public research institutions. Many countries in the Asia-Pacific region look to the depth and breadth of Australian scientific expertise to assist the development of their own agriculture, fisheries and forestry sectors.

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