MUCH has been made of the overall increase in demand for agricultural products due to the rapid rise in global population, but the growth in the middle class in nations such as India and China will be even more important to Australia’s farmers.
That’s the view of Will Rayner, chief financial officer of farm lender Rural Bank, who said there will be increased opportunities and increased volatility in agriculture in coming years.
“There will be choosy customers in places such as India and China which is great news for Australian industries such as viticulture and wool,” Mr Rayner said.
“Even in industries such as grain, which traditionally are commodity based, with the advent of technology such as blockchain making it easier to prove traceability, there will be opportunities to generate premiums,” he told the Innovation Generation conference in Wagga Wagga last week.
He said global investors were aware of local opportunities, due to a strong economy and proximity to burgeoning Asian markets.
“There are a number of global businesses looking to get access to the Aussie economy at present. There is great potential but equally agriculture is becoming more and more volatile, on a number of fronts.”
“Firstly, we are plugged in to the global ag economy now and that can have big ramifications, for instance, every one cent fluctuation in the US / Australian dollar exchange rate means $220 million a year in implications for Aussie agricultural exports,” he said.
“There is also the weather, and without getting into a debate on climate change most would agree the weather is getting hotter and more variable so all these things will have to be factored in.”