The problem is restating the “great opportunity” is just stating the obvious. Unless the sector can crack the combination of market access, capital flow, supply chain competitiveness, skills injection and generational change, the opportunity will slide by.
"Recent debates have been focussed on yesterday’s issues."
Grant Mitchell, Director Port Jackson Partners
But then the first businesses to succeed will steal an enormous march on their competitors.
Yet recent debates have been focussed on yesterday’s issues. Agriculture doesn’t need to be “picked as a winner” – the potential of the sector is already clear.
Greener Pastures, a Port Jackson Partners report commissioned by the ANZ, described the implications of Asian economic development for our agriculture sector. We described success stories in New Zealand, Brazil, Malaysia, Indonesia and, yes, Australia, that demonstrated what happens when a sector gets things right.
We were also very honest about the sector’s shortcomings. There has been a loss of focus on driving competitiveness and long term growth. There are growing labour and skills shortages in the sector – not least aging farmer populations. And there is an enormous challenge to mobilise the capital needed both to introduce new farmers to the sector and then fund the production growth the sector can deliver.
There are clear, sector-wide paths to address these challenges and in “Greener Pastures” we laid this out.
We recognised, for example, the sector’s capital needs can only be met by introducing innovative capital structures, with equal emphasis on equity not just debt. But these structures remain underdeveloped in the sector.
Solving the sector’s capital needs also means dealing with two other important issues:
- Agriculture related infrastructure. How can the public and private sector work together to mobilise capital and the improved logistics efficiency gains the sector needs?
- Foreign capital. How can Australia foster an environment that safeguards national interests while allowing the formation of profitable investment relationships? As the sector works to form new and long lasting trade relationships, it will be naïve to think investment relationships will not also become a priority.