As the mining boom declines and manufacturing faces a reluctant evolution, the Government has announced agriculture as one of the five pillars of the Australian economy with enormous potential for growth. Not since the early 19th Century has Australia placed such hope and importance on this industry.
To set the course for agricultural development, the Government announced last year it would conduct a comprehensive analysis of the Australian agricultural industry – the Agriculture Competitiveness White Paper.
An interim report presenting a summary of almost 700 stakeholder submissions, the Agriculture Competitiveness Green Paper, was released earlier this week. Although the Green Paper is an interim summary of ideas, it clearly represents the wishes of stakeholders and will likely establish the scope of the final White Paper.
The Green Paper outlines nine key policy principles and dozens of ideas aiming to shape the future of the sector. If implemented, the ideas will change the face of Australian agriculture forever. In our view, there are three key areas in the paper:
- 'Big Picture' initiatives;
- 'Work Smarter' changes; and
- 'Support' programs.
The 'Big Picture' ideas represent the most daring and ambitious proposals set out in the Green Paper. The submissions highlighted increased water infrastructure as being crucial to the future of the industry. They also set out opportunities to reduce transport costs, including pairing public rail with private networks produced by the mining industry, air freight hubs, and all-weather access rural roads.
The Green Paper posits that for agriculture to 'Work Smarter', regulations and restrictions on farming should be reduced or improved to allow greater growth and efficiency. Working with States and Territories to reduce regulation and amendments to Australian competition law to introduce a more flexible test of misuse of market power have been identified as crucial to this objective. Changes to tax and finance regulations were also proposed as a means of strengthening the industry and attracting new entrants.
Not as readily quantifiable, but equally important, the Green Paper proposes a number of 'Support' initiatives to support farmers and to assist the next generation of leaders in agriculture to enter the industry. Submissions encouraged establishing financial and business advisory services as well as counselling programs for producers, especially in times of drought and hardship.
Where to from here?
Like the industry itself, the Green Paper is bold and enthusiastic with high hopes for agriculture in an uncertain future. Once it is released, the White Paper will help navigate the industry over the coming decades.
Although the details remain unsettled, it is certain that Australian agriculture will be required to grapple with issues of foreign investment, competition, finance, corporate governance, and biosecurity in order to establish the strategy to launch agribusiness as one of the significant elements of the nation's economy.
Far from being a single-industry challenge, this will require the collective efforts of the economy to ensure that agriculture heads to better pastures.