Like most other Tasmanians, I am looking forward to the visit of Chinese President Xi Jinping next week.
This will be an exciting opportunity to showcase our beautiful state on the world stage. We hope the visit will cement in his mind and in the minds of those in his vast entourage where Tasmania is and what we offer in the way of clean, green industries and investment potential. Never again will we be confused with Tanzania!
There are expectations of some trade spin-offs, and that will be most welcome. Tasmanian farmers have been trading with China and the rest of Asia for many years; and we have strong and lasting relationships in the Asian region. We’re keen to build on and expand those relationships as a result of greater awareness of our capacity to supply a range of unique, high value products.
Tasmanian farmers export the vast majority of their agricultural products. Of the more than $3 billion worth of goods Tasmania exports every year, around, about $1 billion (or one third) comes from the agricultural sector. Of that, more than $120 million is destined for ASEAN countries. Food accounts for more than $96 million of that total, primarily dairy and seafood. China and Hong Kong are now bigger markets for us than Japan.
So we already have a very positive and productive trading relationship with China.
However, we’ve moved on from unrealistic expectations that Tasmania, or even Australia, will be transformed into the food bowl of Asia. We will be part of the Asian food bowl, not the totality of it.
With consistent business and technology improvements, Australian farms could potentially double the export value of their produce by mid-century. Doubling the physical volume of agricultural produce is another matter.
There are divergent views on whether Australia has sufficient land and water, or adequate infrastructure and technology, to increase its primary production to a scale where it could viably be seen as a major provider of food for the Asian population. The accepted wisdom is that Australia’s food production is sufficient for about 60 million people. By mid-century, the middle class in Asia alone is expected to hit 3 billion people.
It remains to be seen whether there will be sufficient technological advancements to enable Australia to open up sufficient land and water resources, and whether we can attract sufficient investment to construct the new infrastructure necessary to generate exponential increases in production. Even if we doubled current production levels, Australia could not feed even half of Indonesia’s 250 million population, let alone Asia.
Federal Agriculture Minister, Barnaby Joyce, agrees.
“We only produce about 1 per cent of the agricultural product of the world and to start saying that this country… is going to be a predominant player on the global stage is not correct,” Mr Joyce said recently.
“When we start talking about ‘we’re going to be the food bowl of Asia’ – at the very best we feed about 60 million people now. If we doubled it – well, 120, 150 million people. We couldn’t even feed half of Indonesia.”
Mr Joyce says instead of focusing on feeding everyone, Australia should make a name for itself as an exporter of premium produce, targeting the growing global middle class.
This is a very accurate description of the markets we seek as Tasmanian producers. We have existing products that suit Asian (and specifically) Chinese consumers, and we are actively exploring partnerships and opportunities to grow our product range.
These include our very successful trade in cherries, berries and other summerfruits. We’ll also be looking to increase supplies of commodity products such as dairy powders, where there is already strong demand. The search is on for 300,000 dairy cows across Australia for the production of baby formula, and we expect a proportion of those to be sourced from Tasmania. To support strong demand in this market, the University of Tasmania is working on a system where a microchip containing information about all aspects of production could be added to baby formula.
However, we know that for Australian agriculture to expand, to prosper, to reach its potential, there is a need for significantly increased investment. The domestic investment pool is shallow; we have a small population; Australian superannuation fund managers don’t want to invest in agriculture. So we welcome foreign investment.
It is likely that joint-venture farming opportunities will be developed, with Chinese businesses currently actively looking for opportunities in Tasmania.
These potential trade deals will create hundreds of new jobs and give a big boost to Tasmania’s exports.
Once again, Tasmania is punching above its weight on the world stage. The exposure that will come from the Chinese President’s visit is immeasurable. This will set the stage for our growth and development across the next decade. Tasmanian farmers are ready to step up to the plate and meet these new challenges.
TFGA chief executive Jan Davis
