MAKING inroads into Asia requires lateral thinking, writes MARK BENNETT
We all know Australia is well-positioned to become a major food supplier to Asia - and how rising incomes and changing diets in places such as China and India offer a great opportunity for us in Australia.
What is less clear is how our farmers can seize the opportunity because so far, for a variety of reasons, the profit has not been seen at the farm-gate.
A report commissioned by ANZ highlights not only how large this opportunity is, but also the challenges Australian agriculture is facing. It also suggests the steps that should be considered to make the most of what's on offer.
At an industry level this includes accessing the right export markets, getting the right skills and people in place, having better technology and improving the way we tackle R&D.
But change is also needed on our farms. Capital is an issue and investing to achieve efficiency gains and improvements has been difficult. Coupled with labour shortages, land and water challenges and rising costs, our farmers have their work cut out for them.
Rightly, our farmers are lamenting how to break the cycle of high debt and high costs, but it's a vicious circle that requires further capital investment to support turnover and future growth.
We should therefore be considering more innovative ways to obtain capital investment. Farmers will reinvest retained earnings and also look to banks for further support, but alternatives such as equity partnerships or corporate sector funding should be considered.
Increasing the investment in our farms is vital if we are to improve our productivity and access export markets like China and India.
Our industry must also look beyond domestic sources of capital, with some being sourced overseas, together with new accommodating business models and structures.
And farmers will also need to focus on business management, ensuring they have good financial data to aid decision-making and advice from the right specialists.
While the list of issues agriculture needs to address is daunting to think about, we should all have a conversation about what needs to be done.
- Mark Bennett is head of ANZ agribusiness