1 December 2020
It’s early August 2020 and Victorian Premier Daniel Andrews has just finalised the arrangements for Stage 4 restrictions in Melbourne.
Daily Covid-19 cases hover between 400 and 700, sometimes more. Cases in regional Victoria are growing, and just a few days ago there were a record 15 deaths in 24 hours, one of them a person in their 30s.
Right now, it’s almost surreal to think ahead. The challenges for Victorians—their future employment, shopping for the essentials, delays in the supply chain—today seem immense enough. Yet those challenges also point ahead.
Amid the global uncertainty that has developed as a result of the Covid-19 pandemic, there’s been a consideration of issues related to food security, sovereign capability and Australia’s trade relationships.
The pandemic has had a devastating effect on Australia. For some, it has meant an untimely goodbye to a loved one; for others, the loss of their livelihoods or their savings. While acknowledging the sadness and hardship that so many Australians are experiencing, there’s also a moment of opportunity to ensure our national security and our future prosperity.
One part of our economy where there’s the greatest opportunity is agriculture.
Our agriculture industry faces three interrelated challenges: the need to facilitate the industry’s growth, safeguard its long-term security and mitigate the risks of trade concentration. As well as protecting us against the effects of a future pandemic, addressing these challenges will help secure our national economic stability, create jobs and moderate risk.
Agriculture has been part of Australia’s identity and economy for many thousands of years, from the agricultural systems of Australia’s First Nations’ peoples to the post-settlement establishment of the wool, wheat and sugar industries.
The agricultural supply chain powers 1.6 million Australian jobs (NFF 2017). Agriculture accounts for about 2.6% of employment, 11% of our goods and services exports and 2.2% of value-added GDP (Jackson et al. 2020). In 2018–19, agriculture was a $62.2 billion industry (NFF 2018).
We’re a net contributor to the global food supply chain, exporting around 70% of the total value of our agriculture, fisheries and forestry production (Jackson et al. 2020). Our producers supply high-quality premium products into lucrative markets. Our beef and wine are prized for their excellence by the world’s foodies. Our merino wool is widely sought by the world’s leading fashion houses. Our wheat feeds millions around the world every day.
Unfortunately, environmental conditions and less intensive R&D have caused agricultural productivity growth to slow over the past few years, according to the Department of Agriculture (Jackson et al. 2020).
There’s a case to be made that growing Australia’s agriculture industry could benefit our nation in numerous ways by creating jobs, contributing to research and innovation, providing more opportunities for international trade and contributing even further to our economy.
In 2017, the National Farmers’ Federation (NFF) set the ambitious goal of growing Australian agriculture to a $100 billion industry by 2030. To achieve that, it identified better investment in research, technology, innovation, sustainability and growth in new markets as of particular importance.
A 2019 paper for AgriFutures echoed several of the NFF’s drivers for growth, arguing for better use of data and technology and investment in R&D and pointing to off-farm investments that will be required to underpin growth (AAC 2019).
Government policy and funding will play a significant role in promoting growth in agriculture. The state and federal governments will need to help make agriculture part of the school curriculum and create pathways into further study and careers in the industry. Universities and vocational education institutions in agricultural research will need funding for new collaborations to drive the innovation that will be critical for future sustainable and efficient farming systems.
The federal government has a role in helping to open up new trading markets and reduce barriers to exports, as well as ensuring that the National Broadband Network and communications technology are fit for purpose in regional Australia. A farmer can’t make better use of ICT when their connection is poor or non-existent.
As a first step for agricultural growth in a post-Covid Australia, the federal government must articulate a vision and lay out a pathway for that growth. Then we must fund it, safe in the knowledge that an investment in agriculture will pay dividends for our children and grandchildren.
Securing Australian agriculture
When considering national security matters, our first thoughts invariably turn to military capability and international diplomacy. However, as the Covid-19 pandemic has demonstrated, a secure and strong agricultural industry is as much a part our national security as shipbuilding or regional deal making.
Dr Anthony Bergin highlighted national security concerns in agriculture in a paper for ASPI in 2018 (Bergin 2018). During the same year, in delivering the Sir John Crawford Memorial Address, the Secretary of the Department of Foreign Affairs and Trade, Frances Adamson, described the relationship between food production, trade and Australia’s role in regional security. Adamson also pointed to the importance of a secure domestic food supply (Adamson 2018).
National security and agriculture are deeply intertwined. Their relationship includes factors related to meeting domestic nutritional needs and long-term food security, food-supply issues around the world, biosecurity matters and the need to guarantee that farmers have the resources and policy settings they need to continue producing.
There’s a well-documented relationship between food supply and civil unrest—a point Adamson made in her 2018 address. While Australia has no food-supply concerns (we grow more than enough food to feed ourselves many times over), the Covid-19 pandemic has highlighted the need to arrest the decline in both food manufacturing and manufacturing more generally to maintain our sovereign capability to meet the challenges of the future. More can be done to create new food-manufacturing opportunities and to assist current food producers to modernise.
Equally, Australia must also do more to ensure that, if similar disruptions to global supply chains occur again, we have the domestic capacity to provide our agricultural industry with the inputs it needs to continue meeting market demands. Such an effort would involve initiatives to increase our own domestic ability to produce fertilisers, crop-protection products and essential equipment—the things that farmers need on a daily basis. It will also involve ensuring that industry has access to an available labour force; this is currently a significant vulnerability for Australian agriculture and the subject of much discussion in this time of border closures and internal restrictions on movement.
Australia enjoys a highly secure domestic food supply. Our biosecurity safeguards are strong. Our position as a global food exporter helps us build deep diplomatic ties with nations near and far. However, there are risks that we must mitigate, including a variable climate and volatile commodity prices. While we export an enormous proportion of our food and fibre, we’re dwarfed by bigger nations with higher outputs and by a highly competitive global trade market. Our capacity to set prices is limited (Jackson et al. 2020).
Those risks are broadly acknowledged by both the agricultural industry and policymakers, and they can in part be mitigated by growth in the sector.
Further take-up of long-term sustainable farming practices can account for climate volatility, droughts, floods and long-term changes in the environment. By strengthening our national and international approach to climate change, we can also assist producers with government partnering to achieve this.
Improving access to a wider variety of global marketplaces will help ensure the long-term future of Australia’s agricultural industry. Recent actions against Australian beef and barley exports have an impact of hundreds of millions of dollars to our economy and will cause untold damage to those producers.
Our agricultural exports are, however, concentrated in certain markets. This is noted on the Department of Agriculture’s website: ‘17 destinations accounted for 75 per cent of Australia’s agricultural exports. In 2017–18 only 13 destinations accounted for the same proportion’ (Fell 2019).
That trade concentration is a risk to our agricultural industry, and through it the Australian community. The Department of Agriculture analysed the disadvantages of trade concentration in a submission to the Joint Standing Committee on Trade and Investment Growth in February 2020, in which it acknowledged that trade concentration sharpens the consequences of a disruption in key markets (DAWE 2020). There’s a clear need to diversify our trade relationships.
Currently, the Australian Government’s position (made clear in the Agricultural Competitiveness White Paper) is that, while government’s job is to remove barriers to trade, the onus is on farmers and agribusinesses ‘to decide where and how to sell their products’ (DA 2015). In the White Paper, it was recognised that additional overseas agricultural counsellors were needed in established and emerging markets.
There’s an opportunity here for the federal government to take the next step beyond lifting barriers and help facilitate the development of trade relationships between Australian businesses and trading partners. The government has the opportunity to play a leading role in actively introducing Australian producers to new marketplaces and also has a strategic interest in doing so. While trade delegations to the same small handful of countries may assist in growing individual penetration in those marketplaces, they’re of lesser strategic value in the current environment than growing the overall extent of our trade activity.
There are challenges to diversification that should be acknowledged: distance, the location of our competitors and a need to navigate complex overseas jurisdictional issues in each country. Further, Australia would be better placed to implement diversification strategies based on growth— a strategy that has been adopted by other developed nations. The Canadian Government, for example, has adopted a growth diversification strategy that aims to increase overall overseas exports by 50% by 2025 (GAC 2019).
For Australia, growth in trade should work hand in hand with overall growth in Australian agriculture.
For the long term
By the time this publication is released, it’s my hope the Covid-19 caseload in Victoria will have subsided and that we can start the work to rebuild our community and our economy.
In his August National Press Club address, my colleague Richard Marles MP said, ‘The Covid-19 crisis has placed Australia at a crossroads. It will bring about the most significant reimagining of our country since the Second World War.’
Agriculture has always been part of our national history and a source of prosperity. Growing the industry is an economically sound way to address several national security challenges, including food supply and security, international partnerships and strong and secure trade relationships.
It will also ensure that the traditions of farming and rural and regional life that have been part of our identity for thousands of years can continue well into the future.
This essay was first published in ‘After Covid-19 Volume 3: Voices from federal parliament’, edited by Peter Jennings and Genevieve Feely for the Australian Strategic Policy Institute.