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Australia: the World’s Value-Added Foodbowl?

Australia, way back over 200 years ago from the time of the First Fleet literally grew as a nation “on the sheep’s back”. As a nation Australia began to grow a broader agriculture sector which included a diverse combination of crops across particularly along the length of the eastern mainland states of Queensland, New South Whales and Victoria. That sector also included other animals in addition to sheep, with cattle and dairy farming playing a crucial role in the early economy.

Indeed agriculture does still play a crucial role in our economy albeit a much diminished one in recent decades with our comparative standing in various exports dropping markedly in some cases.

In the global community Australia is among the biggest exporters in the world of wheat, beef, wool and dairy and our three biggest exports are grain/oilseeds, meat and dairy that has obviously been the case for a prolonged period of time, given the industries on which Australia established itself as a fledgling colony and then nation state in the 1900s.

Agriculture in Australia now sits at only a 3% share of GDP in itself and last night Prime Minister Julia Gillard made a speech to the Global Foundation conference in Melbourne where Ms Gillard said she saw Australia becoming  a foodbowl power, particularly in the Asia-Pacific region, where a rapidly growing population needs increasing access to a variety of different food imports.

The Prime Minister in her speech last night said that Australia should harness our potential in agriculture, like we did in the past and like the mining sector is now harnessing the potential of our vast mineral wealth.

There is certainly a space for Australia to grow its agriculture sector again, particularly when faced with an economy that at present is powering along on resources which are finite, but the way we do it and the markets and niches we seek to develop as a nation are a lot more intricate than just producing and distributing food across our region and the world.

Prime Minister Gillard in her speech to the foundation did acknowledge that Australia would have to focus its efforts, for the most part, on exporting food products which are value-added, rather than simply trying to up exports of foods that have not undergone the value-adding process.

Australia as a nation simply cannot compete with nations in the region on many basic fruits and vegetables which can be produced in similar climates around our region with much lower input and final product costs than we can achieve in Australia.

We would also tend to be seeking more niche and higher-end markets with our value-added production, thereby in a way limiting just how much we can grow the sector, but still an improvement.

We would have to focus on sending more goods from Australia to countries in our region like China, which is booming and will have a bigger middle class market, as well as countries like South Korea and Japan, even though the latter continues to struggle with economic woes both prior to and exacerbated by the horrific earthquake and tsunami event that destroyed so many lives and areas of the economy with it.

Far from just focusing on Asia, there is huge potential for our food exports to go elsewhere, particularly to the United States of America and Europe in a bigger way than at present and that is being worked on at present in a fairly big, if little discussed way.

There is also huge potential to continue to expand the market for our top class wine, with very few countries in the world producing truly exceptional wines, making this market a great hope for Australian producers. This market could be expanded and is beginning to be delivered to Asia and for that to continue would be a massive boon for the economy.

In a way, it seems that the speech the PM gave last night was a subtle way of saying, “hey, here’s a way that we can keep the decline of manufacturing somewhat at bay if we do more food processing in Australia”.

If we add the processing of food products to the agriculture sector of the Australian economy, we suddenly get a sector that is approximately 12% of Gross Domestic Product, a significant sector by any measure when the services sector takes up over 2/3 of the overall national economy on its own.

So Australia can definitely look to becoming a major food exporter to both the region and the globe. There are various challenges, not the least of which is a water shortage along the Murray-Darling Basin food bowl and this will mean that the challenge to grow our food exports will be a medium to long-term effort, rather than a rapid expansion, which would be difficult in itself anyway even if external factors didn’t exist.

The vision is there, but helping to move the idea to a reality will be a long and enduring process that will require the political will of governments of both political stripes to oversee its development.

The Politics of Sweaty Palms and the Live Export Trade

Another day and another shocking video emerged overnight on Lateline, showing what is believed to be Australian cattle being mistreated in an overseas abattoir. This further shocking footage has led to Animals Australia and others, including some parliamentarians getting louder in their advocacy for the live export trade to cease altogether. This comes not a year after the live export trade was temporarily shut down by the Gillard Government, under Agriculture Minister Joe Ludwig, until the government saw fit to reinstate it under assurances from the respective parties, a ban that caused the industry some woes, largely in the Northern Territory.

A new package of oversight was worked on over a period of time between the key stakeholders in government and industry with a focus on processes in an attempt to ensure that the horrific images would not be replicated anywhere else in the future.

Of course these dreadfully disturbing images have now been repeated in an Indonesian abattoir, in footage just as sickening, if not more than the previous recording.

Nobody ever said, after the legislation in response to the original video, that the same sorts of images would never ever see the light of day again, would never force us to think had we gone far enough. Indeed it was always that the legislation would have an eye to improving the welfare and livelihood of cattle that Australians send overseas, to a country which slaughters their animals in a particular manner for cultural and religious reasons. To attempt as best as practicable to cut out the practises which have led to such barbaric deaths.

The question is, do we need to get sweaty palms over this and engage in the kind of politics of panic that such an event seems to invoke? Or do we deal with it in a pragmatic fashion, realising that our cattlemen need that market and that the Indonesians would be assisted in having our cattle available to them, being in relative proximity in our region?

There is a cultural and religious freedom element in this argument, as has been said in the past, the methods of slaughter are part of long held ideas about the Islamic culture. Do we seek to deny any nation that right or do we engage with them in much better ways of performing their traditions which have animal welfare firmly in mind?

Yes, we could certainly look at better ways of monitoring the supply chains and the situation in individual slaughter houses and that is probably a fair argument. However, on this count we can also go too far, by having officials in another country too often in an oversight capacity we run the risk as a nation of offending the sensitivities of the Indonesian people and in a way their sovereignty.

What we must do is ensure that there is a stronger level of training provided to and observed by all abattoirs, not just in Indonesia, but in other similar nations. We could perhaps observe more times a year than at present, each abattoir slaughtering Australian cattle and provide the kind of ongoing training and updated equipment, with the help of Indonesia that would allow for the killing of our animals to be done much more humanely on a more regular basis

What we do not need is a sweaty palms, knee-jerk reaction in panic to an horrific, but as far as we know isolated incident which would see all live trade, not just to our Indonesian neighbours, but to other nations which practise Islam cease altogether. Both not acting further and banning the live export trade altogether are harmful in their own ways for both our reputation overseas and our economy. Nobody wants to see the kinds of nauseating images we have been exposed to in recent times, nor do many want to see our live cattle not being exported. Cool heads, not clammy palms must prevail.

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