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Australia's agriculture sector should take advantage of the growing middle-class in Asia

English.news.cn   2013-02-22 14:13:30            

By Christian Edwards

SYDNEY, Feb. 22. (Xinhua) -- Despite the partisan and oftentimes bitter politicking in Australia on the run-up to the federal elections just 10 months away, there is one issue where politicians have reached a consensus and that is for Australia to tap its agriculture potentials to cater to the needs of Asia's growing middle-class.

But while there is a clear advantage for Australia to benefit from the Asia's growing middle class, particularly in China, that pundits here are already calling Asia's 'food bowl,' the ANZ bank has calculated that the country would require more than $1.5 trillion Australian dollars in financing and infrastructure investment over the next 35 years.

Australia, historically sensitive to foreign investments in agriculture, has started to look north to its largest trading partner to achieve that growth.

In November last year Western Australia announced Kimberley Agricultural Investment (KAI), a subsidiary of Chinese company Shanghai Zhongfu, as the preferred bidder to lease and develop 13, 400 hectares of farmland in the state.

In this project, KAI plans to invest $700 million Australian dollars over the next six years to establish a sugar production base that would export 500,000 tons of sugar crystal every year.

An insight into official strategic thinking toward establishing Australian agriculture at the very heart of international markets was revealed this week when Australia was elected chairman of the G20's Agricultural Market Information System (AMIS) after intense lobbying.

Australia's Minister for Agriculture, Fisheries and Forestry, Senator Joe Ludwig lauded the election, saying that this would give Australia the chance to lead in dialogues on the global food market.

AMIS was officially launched two years ago by the G20 to improve data and information sharing for 'increased transparency' in global agricultural market.

Senator Ludwig said while AMIS was a relatively new initiative it had already proven its effectiveness by strengthening communication channels among member countries during the wheat and corn price spike in 2012. "Through our participation in AMIS Australia can promote coordinated international policy responses to market conditions," Ludwig said. "This will help the development of common strategies to deal with market uncertainty and avoid adverse trade responses."

With food security ever more critical as the shadow of recession looms across the western world, Asia continues to drive the global economic engine.

Mike Smith, ANZ's China-savvy CEO, has repeatedly called on Australia to develop a long-term view aimed at capitalizing on the rapid emergence of Asia's middle class, led by China's phenomenal growth. "We have the minerals and energy, we have the agricultural resources to meet the growing demand for quality food, and we have world class capabilities in areas such as education, medicine and professional services," Smith said at the banks general meeting in December.

Industry analysts here said that within 30 years, Australia and neighboring New Zealand are expected to double their agricultural exports.

The twelve-month AMIS appointment reflects both the wealth that could be generated if Australian agriculture can increase production and shift to higher-value products, and the emphasis that it should have food security.

Australia has an unsurpassed, almost fanatical approach to bio- security and food safety standards a record that has come into stark relief this week with food scandals now shaking Europe. "Australia takes a comprehensive approach to addressing food security, recognizing the importance of emergency assistance, as well as longer term strategies to improve agricultural productivity and to ensure that food can be moved to where it is most needed efficiently," Ludwig said.

Mick Keogh, executive director of the Australian Farm Institute (AFI), said that Australia's capacity to draw on that reputation will be critical as global competitors seek access to Asian Century markets. "Australia will be one of many countries competing for these markets, and therefore the development of 'brand Australia' will be an important and a necessary step in assisting all parts of the agriculture sector," Keogh said.

In fact if Australian farmers would be successful in their efforts over the next three to four decades, ANZ forecasts additional $1.7 trillion Australian dollars (in 2011 dollars) in revenues to be added to the Australian economy.

But the competition is certain to be intense. Australia is already lagging behind in agricultural reform and investments.

New Zealand is now the world's leading dairy exporter, having snatched the advantage on the back of China's growing demand for food safety exemplified by a booming milk market-- which in turn opened doors for reciprocal investments between the two countries.

Keogh said these are the issues that middle-class consumers have become increasingly interested in as their wealth grows, adding that it is about time that Australia and its agriculture sector make its presence felt in the international markets.

Editor: Zhu Ningzhu
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