Potential in the north of Australia

November 10, 2015

The potential of Australia’s untapped north is compared to America’s west 200 years ago as international and domestic investors meet in Darwin.

Businessman Romeo Roxas, who owns a cattle ranch in California and is in the process of buying for than $20 million worth of cattle station in the Northern Territory, commented in The Australian Financial Review yesterday about the potential in the north of Australia – comparing it to America’s west 200 years ago.

The Northern Australia Investment Forum, currently being held in Darwin from 8–10 November, is an invitation-only event offering international companies the opportunity to meet with proponents of projects in Australia and to hear from senior government ministers about what is being done to further enhance Australia’s investment attractiveness.

Read more about growing Australia’s north below.

NEW OPPORTUNITIES abound for Australia’s farm industries to expand food exports into Asian markets following landmark free trade agreements with Japan and Korea in 2014.

The Japan-Australia Economic Partnership Agreement (JAEPA) came into force on 15 January 2015, allowing Australian exporters to benefit from two rounds of tariff cuts in the first half of this year. The Korea-Australia Free Trade Agreement (KAFTA) took effect on 12 December 2014, and eliminates tariffs for 84% of Australia’s exports to Korea.

The past Minister for Industry and Science, Ian Macfarlane, welcomed the agreements as delivering long-term benefits to the national economy, particularly to research and agriculture.

“This is a huge opportunity as Japan is our second largest trading partner and Korea is our fourth, with combined two-way goods and services trade worth more than $100 billion,” he said.

Beef, dairy, honey, herbs, cordials, juices and soft drinks were just a few examples of homegrown food exports that will benefit from greater access to Asian markets, he said.

OVER 25 YEARS, the CRC Program has helped target and secure access to Asia for some of Australia’s biggest food export industries. Australian scientists working in areas such as plant and livestock genetics, food processing, soil nutrients, biosecurity, and improved supply chain management have been vital to establishing links with Asian universities and business leaders.

The Australian Seafood CRC developed new markets for dried, salted and brined products such as mussels, scallops and squid in Japan and Hong Kong. The former CRC for Beef Genetic Technologies used genomics to improve the quality of beef export products and secure new markets in Asia, and the Sheep CRC has made Australian lamb a premium product.

The Desert Knowledge CRC, which transitioned into the CRC for Remote Economic Participation (CRC-REP) and its research consultancy Ninti One, also worked on developing primary industry opportunities for Northern Australia that could benefit Indigenous communities. These include precision pastoral management technologies, potential bush food industries and barramundi aquaculture.

The Asian Development Bank estimates that Asia will account for almost half of the world’s economic output by 2050, and there will be strong global competition for the region’s markets and investment. Australia currently accounts for only 5% of global food trade, although our food exports are worth more than $30 billion a year. At current production levels, we could supply around 2% of Asia’s food requirements. But could we increase that figure significantly if Northern Australia was developed to grow, and transport, more crops for Asian markets?

IN 2014, THE COALITION government commissioned a White Paper on Developing Northern Australia – an area north of the Tropic of Capricorn stretching around three million square kilometres across Western Australia, the Northern Territory and Queensland.

A decade ago, agricultural production in Northern Australia was worth around $4.4 billion a year, and was dominated by beef, sugar and bananas. By 2010, this grew to $5.2 billion – around 11% of Australia’s total agricultural production – and included crops such as guar beans, chia, chickpeas, soybeans and wild rice.

In a submission to the Federal Government’s National Food Plan Green Paper in 2012, Australian-owned company SunRice emphasised the critical role of water in food production.

“This is a huge opportunity… with combined two-way goods and services trade worth more than $100 billion.”

“Australia’s food security is directly related to water security,” the SunRice submission said. “At the peak of the recent drought when water allocations to rice farmers were reduced to almost zero, rice production in Australia fell from an annual average above one million tonnes to just 19,000 tonnes. This level of production was far short of meeting even our domestic needs, and is a prime example of the importance of water in growing food to feed our nation and others.”

Rice is being grown again in the Burdekin region in north Queensland, and there are suggestions that improved genetics and better understanding of the northern climate could secure Australia’s rice industry against future dramatic production losses due to prolonged drought.

AUSTRALIA IS A GLOBAL leader in sustainable rice production, with around 1500 farms in New South Wales and Victoria feeding up to 20 million people a day around the world.

Potential in the north of Australia
Australian-owned company SunRice submitted a statement to the Australian Federal Government emphasising that our future food security relies on the availability of water.

Our rice farmers are the world’s most water efficient, using 50% less water than the global average to produce each kilogram of rice. They were also Australia’s first farm sector to develop a biodiversity strategy and a plan to reduce greenhouse emissions. Rice was an early, and enduring, success story for the CRCs. The CRC for Sustainable Rice Production started in 1997 at the Yanco Agricultural Institute, near Leeton in the Murrumbidgee Irrigation Area, and concluded on 30 June 2005. It is a classic example of how a CRC can fast-track research results by working with partners in academic research, industry, government and – in this case, specifically – rice research colleagues in China and Japan. In just over seven years, the CRC’s many achievements included better pest controls, improved plant breeding systems, better milling and drying techniques, sustainable irrigation levels, a groundwater management program that was adopted as a UNESCO benchmark, new rice-based food products, and an assessment of salt tolerant wild rice varieties that could be grown in Northern Australia.

In 2003, the CRC’s director Dr Laurie Lewin was awarded one of Australia’s most prestigious science awards, the Farrer Memorial Medal, for his work with the CRC in breeding new rice varieties that are better suited to Australian conditions. In his recipient’s oration, Lewin stressed the importance of genetics to future global food security.

“Recent improvements in plant breeding have been rapid and it is now an exciting time to be involved in this science,” he said. “The rice genome has been sequenced and breeders now have a range of exciting tools to meet the important challenges. It is only 50 years since the Watson and Crick model for DNA was published, but the new genetics has given access to new tools including genetic markers and genetic transformation techniques.”

THE CSIRO ESTIMATES that the area for potential irrigated agriculture, supported by groundwater, in Northern Australia is between 50,000–120,000 ha. But water is only part of the solution to developing northern agriculture and new markets in Asia.

In a Food and Fibre Supply Chain study with the Australian Bureau of Agricultural and Resource Economics, the CSIRO identified three challenges to expanding agriculture in the north to supply Asian markets: sourcing capital investment, cost-efficient production and supply, and establishing new and viable export markets.

GrowNORTH is a research and development consortium that evolved from a Federal Government pledge to develop a northern agriculture CRC, prior to Macfarlane and Prime Minister Tony Abbott announcing plans to create five Industry Growth Centres under the Industry Innovation and Competitiveness Agenda.

“The north isn’t likely to become Asia’s food bowl, but it has the potential to become a reliable and important exporter of high quality food and seriously smart research skills.”

GrowNORTH CEO Mike Guerin says that harnessing the economic potential of the north proved to be “a wicked problem” – a social planning term that means there are complex and often conflicting interdependencies – in the past, chiefly because of “imposed ideas” that ignored geographic, social and climatic differences.

“Large-scale agriculture in the north is a high risk investment, and there have been failures in the past largely because of inadequate planning, financing and management. There’s also been a tendency to ignore, or attempt to work against, what makes the north a unique region,” he says.

“Sustainable development in the north is possible, but it must benefit all Australians. It can’t be viewed as a kind of frontier goldrush for lucrative Asian markets. The north isn’t likely to become Asia’s food bowl, but it has the potential to become a reliable and important exporter of high quality food and seriously smart research skills.

“If we get it right – and we accept that we will need to take the time, resources and patience to do that – Australia can gain a global reputation for using transformative research and economic modelling to create a world-class example of sustainable regional development.

“We will be a world leader in sustainable development, and researchers will come to the north to see how it’s done.”

GUERIN SAYS RESEARCH must look at “bigger picture” issues
in the north, rather than narrowly focusing on advancing single industries.

“We need to look at infrastructure, community support, building a skilled workforce that lives in the north, environmental outcomes, competing land uses and ways that agricultural diversity can benefit local economies,” he says.

“It’s a huge undertaking, and there will be valuable lessons along the way, but the benefits will be significant.”

Rod Reeve, managing director of the CRC-REP, says that building
robust local economies across remote areas in the north is vital to the region’s development. The CRC is working on plans to create more than 100 new Aboriginal and Torres Strait Islander businesses in the north over the next decade, as well as more than 1200 small-to-medium enterprises.

It also aims to increase the productivity of remote pastoral
industries by around $300 million, and has developed a technology that could revolutionise the way cattle are managed in rangelands across the world. Reeve explains this technology as a remote sensing system that allows pastoral station managers to track and weigh cattle at watering points across a huge area, and to manage nutritional feeding programs.

“It’s an innovative system that gathers data on things like the numbers and profiles of the herd, conditions for market, growth rates and whether cows are pregnant or dry,” he says.

“All this can be done remotely, and potentially could replace the expense of aerial mustering which stresses cattle and makes them lose condition.”

The technology was developed by Ninti One and is in the final stages of a pilot study prior to commercialisation and local manufacture.

“We’re hoping it can be manufactured in Alice Springs,” says Reeve. “All the technology has been tested and developed in remote areas in the north, so it would be great to see its commercialisation go on to benefit a local economy.

Rosslyn Beeby





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