The key issues for Australian agriculture in 2018

With a change of political leadership in the sector at the end of last year, the Institute approached the Agriculture Minister and the Shadow Minister to outline their views on some key topics facing the industry: what is the Government’s role in growing Australian agriculture into a $100 bilion industry by 2030; how should the MDBA address compliance regimes to ensure effective implementation of the Basin Plan; and what policies could be adopted to encourage the agriculture sector to adopt integrated digital value chain strategies?

The Hon David Littleproud MP

Minister for Agriculture and Water Resources
Federal Member for Maranoa

A $100 billion industry by 2030

Industry can double the value of Australia’s agricultural industry within 12 years, but it is vitally important we get the settings right to make sure farmers across the country can grab hold of the opportunities we have.

The Coalition Government is supporting higher farmgate returns so farmers can invest in improvements. We are encouraging farmers to invest in improvements through tax measures such as accelerated depreciation on assets such as water reticulation and fencing. We are helping farmers to increase their self reliance through improvements to the Farm Management Deposits (FMD) Scheme. In June 2017, FMDs hit a record of $6.1 billion, which is a sure sign of greater farm resilience and a stronger agricultural sector.

We also want to make sure there are more opportunities for our farmers to sell their produce around the world. We have already secured four new free trade agreements with China, South Korea, Japan and Chile and we expect the new Trans-Pacific Partnership agreement to come into force when trade ministers from the 11 countries meet in March. This will make significant improvements to our trading relationships in the region.

The Agricultural Competitiveness White Paper has laid the foundations for a resilient and competitive industry through increased funding for biosecurity, technical market access and rural R&D.

Murray-Darling Basin Plan

We all need to work together to make sure everyone in the Murray-Darling Basin is getting a fair go and the Coalition Government is determined to see the Murray-Darling Basin Plan delivered in line with the agreements already in place with the states.

In response to the review of compliance commissioned last year, Basin States agreed to give the Murray-Darling Basin Authority (MDBA) more power to police compliance.

The Authority’s review of compliance has made a number of recommendations to make sure all irrigators across the Basin play by the rules.

In December, Basin Ministers agreed the Authority should pull together tailored plans for each individual state that address regional challenges to improve compliance, enforcement and reporting.

The compliance plans will need the endorsement of the Murray-Darling Basin Council when it next meets in early 2018.

Policy development

Integrated digital value chains can create opportunities for the industry to track products from the farm all the way to the supermarket checkout, and could become a valuable tool for improving supply lines and the quality of the food we produce.

Meat and Livestock Australia is leading the development of the first industry-led digital value chain strategy, which will let us see first-hand some of the challenges and benefits of the approach.

The government-funded Accelerating Precision Agriculture to Decision Agriculture project highlighted the benefits of farmers having better connections to the internet so they are better able to communicate with their customers.

The Coalition Government’s investment in regional NBN, particularly the fixed wireless and Sky Muster satellite service, will vastly improve on-farm connections. NBN Co is likely to launch mobile Sky Muster receivers for utes and tractors in the near future, that will work on even the most remote farms.

To get digital value chain strategies working on a large scale, we need to consider how they would best be embraced in Australia. Industry also needs to encourage the private sector to invest by setting up more of the services that are needed.

There are current government-funded initiatives that support integrated digital value chains. Standards Australia is leading the development of an international standard for block chain and the Birchip Cropping Group project is running a project to develop farm data cooperatives.

The Hon Joel Fitzgibbon MP 

Shadow Minister for Agriculture, Fisheries and Forestry, and Shadow Minister for Rural and Regional Australia 
Federal Member for Hunter

A $100 billion industry by 2030

Goals are important in life. Most of us have set one: for increased exercise; lowering our golf handicap; weight loss; more family time or maybe business turnover. Goals are a good motivator but, in the end, only determination and the right strategy will see them fulfilled.

Goals can also be too ambitious or even too modest. If anything, recent pronouncements of a desire to grow the value of Australia’s agriculture sector to $100 billion by 2030 looks underdone. ABARES has done the work for us; $100 billion represents the same growth achieved for each of the past 20 years. Further, $100 billion would represent growth of 40% while the Australian economy is predicted to grow 60% to 2030. Further still, the economies of many of our developing near-neighbours will triple; many people of growing wealth will want access to high quality, safe and nutritious food, a leading competitive edge for Australian agriculture.

But let’s not become bogged down on the target. Agreeing on something will be a good start on the road to future success. There is no area of public policy more inviting of bipartisanship than agriculture. Sadly – and despite my best efforts – this bipartisanship has not been achieved. By focusing cooperatively on the production of food and fibre, we do good deeds: feeding and clothing the world; creating local jobs; and earning export income.

So let’s go forward together, focusing on achieving our aspirations: lifting productivity; pushing agriculture up the value curve; and securing sustainable profitability. Success will be determined more by those in the sector than by government: by investors; entrepreneurs; researchers; scientists; innovators; growers; and producers.

Murray-Darling Basin Plan

It is incumbent upon governments to consult and build consensus where possible. Too often politicians seek to give longevity and momentum to points of conflict as a means to establishing product differentiation from their political opponents. The management of water in the Murray-Darling Basin is a prime example. The current model was many decades in the making and represents a deal between the Commonwealth and the states. Playing to the crowd as the current Government is on water issues helps no-one. The Basin plan is not perfect, but it remains a miraculous outcome. Any adjustments should, and indeed can only, come from consensus and evidence-based recommendations, typically from the MDBA. On the other side of the equation, governments must maintain confidence in the Plan by taking the shrewdest and toughest possible approach to compliance.

Policy development

Government certainly has a role to play. The first is the provision of strategic guidance. Investors need to know what the Government’s priorities are. How committed is it to evidence-based policy and ‘market’ approaches? How it will seek to allocate our limited natural resources? Where and how will it be most inviting of foreign investment? How serious is it about protecting our competitive advantage by properly resourcing our biosecurity systems? Is it prepared to lead on the transition to better, more efficient and more sustainable land and water management practices?

The second is a commitment to supply chain and telecommunications infrastructure, research, development, innovation and extension funding.

The third is an ongoing commitment to expanding our export market opportunities.

The fourth is a commitment to a whole-of-supply-chain approach including the encouragement of the embrace of new digital technologies. To meet our aspirations, we need to produce productivity gains from paddock to market.

The fifth is the effective management of education, training and the availability of a workforce with the skills our employers need. The sixth key point is good management of the broader economy. Strong economic growth, a low inflationary environment and access to affordable capital are critical to the success of every business enterprise.

Projected increases in global demand for high quality, safe and green food represents a wonderful opportunity for Australia. But the gains won’t come without effort and the embrace of change. That’s our collective challenge.