Cultivating Success: 'Land of Plenty' Report Champions Australia’s Potential as a Food Superpower

The Australian Food and Agricultural Taskforce (AFAT) has released a position paper, “Land of Plenty – Transforming Australia into a food superpower” (Position Paper), which highlights that ‘there is a clear opportunity for Australia to become a food superpower and build a second engine of economic growth that mirrors the resources sector’. However, AFAT highlights that Australia’s food system is at a “tipping point” and that change is required ‘to accelerate the transformation toward a more thriving, resilient food system.’ 

The Position Paper has been endorsed by the National Farmers’ Federation (NFF), with NFF Chief Executive Officer Tony Mahar stating “It’s great to see a well-researched report back-up what we already know about Australian ag: It has huge potential, and with the right support, can be a $100 billion industry by 2030.”  In 2019, the NFF developed, in conjunction with key industry stakeholders, a plan (link) to support the vision of the Australian agricultural sector exceeding $100 billion in farm gate returns by 2030 (2030 Roadmap).  The Position Paper reiterates that farmers must be supported and also recommends further actions to unlock Australia’s potential. 

Climate-smart Farming practices

The Position Paper states that the goal of Climate-smart Farming (CSF) practices is to develop a resilient food production system in the face of climate shifts and natural disasters.  Australia is already a “global leader” in the use of CSF practices and has extensive experience in the adoption of CSF practices such as “managed grazing” and “regenerative agriculture”. 

AFAT found that if an additional 20% of Australian farmers adopted land sector carbon farming methodologies and climate-smart agricultural practices by 2030, the gross margin of farmers could increase by 22% and Australia could reduce its yearly national greenhouse gas emissions by up to 9%.  Australia could also increase export earnings from IP, research and technology by codifying and marketing Australia’s CSF practices, agritech and biotech solutions.  However, barriers to the adoption of CSF practices include delayed benefit realisation and high implementation costs. 

These barriers could be mitigated through co-funding and financial assistance.  Capital support from “value chain actors” (e.g. financial institutions, processors/retailers and government) could help farmers bridge productivity dips during the transition through low-cost financing by providing “patient capital” and/or incentives.  The Position Paper noted the example of the Danish-Swedish multinational co-operative, Arla Foods, which commits €500m (AUD$826m) annually to incentivise farmers to meet environmental goals and cut emissions, aiming for a 30% emission reduction to meet its 2030 Science Based Targets Initiative (SBTi) target. 

The Position Paper also notes the duplication, inefficiencies and inconsistencies in capturing sustainability and emissions data and recommends the implementation of a consistent open-source measurement framework, a central technology solution for data exchange and a consistent approach to verification to simplify reporting and unlock greater collaboration and funding opportunities across the value chain. 

Sovereign supply chains and fostering innovation

The Position Paper notes Australia’s dependency on agricultural inputs, labour equipment and processing capability, and that high manufacturing costs lead to produce being shipped overseas for processing/production and then being imported back into Australia as value-added processed products.  This increases “global risk exposures” and lengthens the supply chain.

Accordingly, AFAT concludes that “sovereignty of food supply chain in Australia deserves a rethink given how inextricably linked food security is to national security” and recommends the development of regional manufacturing precincts and circularity innovation hubs.  The Position Paper proposes that onshore processing plants “be built where Australia has an advantage, where it is cost competitive and where value can be created.”  Shortening supply chains by developing onshore capability will not only lower emissions, but also increase food supply reliability, drive premium value where Australia has a competitive advantage and enhance “brand Australia”.

Diversify export markets and bolster competitive positioning

The Position Paper recommends building upon Australia’s brand in global food markets by developing a brand narrative and supporting tools that would allow Australia to strengthen its position in international markets, and diversifying export markets by expanding into the export of intellectual property, agritech and biotech solutions.  This could include codifying and marketing Australia’s CSF techniques and leveraging Australia’s carbon market framework and potential to deliver land-based carbon sequestration to attract foreign capital. 

The Position Paper draws on a number of international examples from New Zealand, the Netherlands and Denmark where a coordinated approach has assisted leading food innovators in the development of inventive solutions. 

Please reach out to us if you would like to discuss any of the recommendations in the Position Paper or any other Food & Agribusiness related issues.