An Australian Century is food for thought.

Asian markets alone will not save Australia.  International competitiveness and global scale will.  In particular, we must see ourselves as part of the global food system and plan to invest accordingly.

An Australian Century captures that sentiment nicely.  It puts greater emphasis on the need to be pulling the right economic levers domestically, whilst thinking globally – Asia and beyond. 

Talk of an Asian Century is appealing.  In particular, there is an overwhelming expectation on China making us wealthy.  However, abundant food exports are not a forgone conclusion because of our proximity to the Asian region.

The overriding limitation of our new national vision is it aspires to produce more of the same for some.  The risk lies in the political proposition Australia will now ride a food commodity boom and sell its way out of trouble.  Food markets do not operate like the resource markets we have been supplying.  When it comes to global food production, only a very small percentage is traded across borders.  Asia will buy Australia’s food commodities when it is convenient or cheaper to do so.

So let’s be clear.  Nowhere in the world does there exist a mass-market for food from Australia.  We are not anyone’s food bowl and we never will be.  Australia’s current contribution to the global food system is less than one percent.

Spruiking absolute numbers is cruel for those least likely to benefit, as the emerging situation in Asia is very complex.  The devil is in the detail.  For many it will be the realisation that opportunities in Asia are very limited.

My Australian Century includes getting our food industry in a competitive position to also do business with those we are not already close to.

The economies of many other countries are developing at amazing pace. Some will sustain their growth well past the bulk of Asia’s peak.  As we will soon find out in Asia, these new markets will be incredibly discerning about what foods they allow to be imported and in what form.  This will be driven by the nuances of local middle-class consumers and strong domestic policies.

In my Australian Century there is a re-balancing of public money invested in Australia’s long-held tradition of producing and exporting bulk foodstuffs.  The time and money required to sustainably re-intensify the primary production of food under Australian conditions is immense.   The world will not wait and many countries will close their productivity gap much quicker than Australia.
 

Future attempts to raise agricultural productivity will increasingly need to be funded by those most likely to gain in that sector, by developing new investment relationships with other companies in the global food system.

The emerging change in the composition of where and how food is purchased and consumed presents the most profitable and timely opportunity for Australia’s food industry.  Consumers put greater importance on convenience and packaging.  Food experience is the one key trend consistent in all emerging food markets.  Consumer purchasing behaviour now points directly to the non-price characteristics of food and so requires the innovation of Australia’s food processing sector in particular, to create tailor-made solutions and take advantage of these new preferences.

Arguably, Australia does not value its food processing sector.  While it is in survival mode, Australia’s competitors are in expansion mode.  We have been outpaced and outflanked in emerging value-added markets.  The result is we now import more value than we export.  Trying to becoming a food quarry and commoditising our food products will not economically mitigate these issues.

In my Australian Century we pursue a whole-of-chain approach to food innovation and transformation.  Australia’s food industry is characterised by its imagination and sophisticated thinking.  Anticipating and providing tailored food solutions is the best wealth-creation strategy Australia has.  We make the necessary structural and economic adjustments to allow this to happen.

Still, it is only those businesses with the strongest leadership that will make the hard decisions needed to survive.  It is the ambition and foresight of these people that will ensure our food industry will expand and prosper – whitepapers or otherwise; Asia or otherwise.