FARMERS and food suppliers should switch focus from feeding the world to ensuring they extract maximum value from the products they produce, beef producers in Darwin heard last night.
Luke Chandler, Rabobank’s head of food and agribusiness, told guests gathered in the city for the Northern Territory Cattlemen’s Association (NTCA) conference today, that the nation’s primary producers were about to hit a new wave of pressure from an increasingly competitive global environment.
Mr Chandler’s assessment comes as NT cattlemen look to increase live cattle exports to four-year highs and Australia’s largest beef producer AACo unveils more details about its new abattoir south of Darwin.
Mr Chandler said while some competitive factors such as exchange rates and wage costs were largely beyond the sector’s control, many other challenges could be successfully remedied through concerted and coordinated industry and government action.
A food and agriculture sector that has better access to global markets, ready access to investment capital, more efficient logistics infrastructure, differentiated products and processes, a more sustainable environmental and social impact, and more affordable production inputs will clearly be a future force to be reckoned with and an engine for economic growth into the future, he said.
Mr Chandler said that while Australian and New Zealand agribusiness sectors were facing increasing competitive pressures along the supply chain, New Zealand producers were focusing their attention on the golden opportunities being created by rising demand for food and agriculture products in the burgeoning Asian region.
While Australia’s export customers present opportunities, they will also become the nation’s primary producers most fiercest competitors over time, Mr Chandler said.
“The potential of countries in South America and Eastern Europe is obvious, but interestingly even some major food-importing countries and regions such as China and the ASEAN-5 also appear to be playing a greater role on the export landscape,” he said.
“While these countries exhibit vast demand for food and agriculture imports from outside the region, equally they have been generating large and rising intra-regional trade flows, facilitated by a strong commitment to liberalising trade within the region.”
Mr Chandler said that on that basis, the completion of new free trade agreements (FTAs), was vital in maintaining a competitive position relative to other exporting nations.
“With the approaching ratification of the Korea-Australia FTA (KAFTA), the Australian government has secured access to Australia's third-largest export market and Asia's fourth-largest economy,” Mr Chandler said.
“Critically for food and agriculture producers, Korea is currently Australia’s fourth largest beef market and the largest market for sugar exports.
“As more and more competitors engage in FTA negotiations, the timing around Australia and New Zealand’s own negotiations is becoming increasingly critical.”
Mr Chandler said one of the keys to ensure long-term supply arrangements with export customers was ‘soft’ infrastructure development, such as the building of closer working relationships with counterparts in foreign markets and the greater exchange of technology and education.
“It goes without saying that this level of commitment carries with it certain risks that can only be alleviated through an improved understanding of market dynamics, but at the same time, closer relationships also allow ad hoc barriers or issues to be identified and potentially resolved before they become trade limitations,” he said.
“A continuing commitment to supply chain integrity and product quality is also seen as a key element of improving global market access for Australian and New Zealand food and agriculture products.
“Australia and New Zealand’s brand of clean, green, disease-free beef helps to alleviate food safety concerns which can often lead to trade restrictions in foreign markets, as has been experienced on various occasions by competitors such as those in Brazil, the US and India.”
